Using Veritas to Construct the "Per…

29-04-2017 Hits:88636 BoomBustBlog Reggie Middleton

Using Veritas to Construct the "Perfect" Digital Investment Portfolio" & How to Value "Hard to Value" tokens, Pt 1

The golden grail of investing is to find that investable asset that provides the greatest reward with the least risk. Alas, despite how commonsensical that precept seems to be, many...

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The Veritas 2017 Token Offering Summary …

15-04-2017 Hits:82314 BoomBustBlog Reggie Middleton

The Veritas 2017 Token Offering Summary Available For Download and Sharing

The Veritas Offering Summary is now available for download, which packs all the information about Veritas in a single page. A step by step guide to purchasing Veritas can be downloaded here.

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What Happens When the Fund Fee Fight Hit…

10-04-2017 Hits:82202 BoomBustBlog Reggie Middleton

What Happens When the Fund Fee Fight Hits the Blockchain

A hedge fund recently made news by securitizing its LP units as Ethereum-based tokens and selling them as tradeable (thereby liquid) assets. This brings technology to the VC industry that...

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Veritaseum: The ICO That's Ushering in t…

07-04-2017 Hits:86700 BoomBustBlog Reggie Middleton

Veritaseum: The ICO That's Ushering in the Era of P2P Capital Markets

Veritaseum is in the process of building peer-to-peer capital markets that enable financial and value market participants to deal directly with each other on a counterparty risk-free basis in lieu...

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This Is Ground Zero for the 2017 Veritas…

03-04-2017 Hits:83122 BoomBustBlog Reggie Middleton

This Is Ground Zero for the 2017 Veritas Offering. Are You Ready to Get Your Key to the P2P Capital Markets?

This is the link to the Veritas Crowdsale landing page. Here is where you will be able to buy the Veritas ICO when it is launched in mid-April. Below, please...

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What is the Value Proposition For Verita…

01-04-2017 Hits:85244 BoomBustBlog Reggie Middleton

What is the Value Proposition For Veritas, Veritaseum's Software Token?

 A YouTube commenter asked a very good question that we will like to take some time to answer. The question was, verbatim: I've watched your video and gone through the slides. The exchange...

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This Real Estate Bubble, Like Some Relat…

28-03-2017 Hits:56350 BoomBustBlog Reggie Middleton

This Real Estate Bubble, Like Some Relationships, Is Complicated...

CNBC reports US home prices rise 5.9 percent to 31-month high in January according to S&P CoreLogic Case-Shiller. This puts the 20 city index close to an all time high, including...

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Bloomberg Chimes In With My Warnings As …

28-03-2017 Hits:84594 BoomBustBlog Reggie Middleton

Bloomberg Chimes In With My Warnings As Landlords Offer First Time Ever Concessions to Retail Renters

Over the last quarter I've been warning about the significant weakness in retailers and the retail real estate that most occupy (links supplied below). Now, Bloomberg reports: Manhattan Landlords Are Offering...

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Our Apple Analysis This Week - This Comp…

27-03-2017 Hits:84284 BoomBustBlog Reggie Middleton

Our Apple Analysis This Week - This Company Is Not What Most Think It IS

We will releasing our Apple forensic analysis and valuation this week for subscribers (click here to subscribe - lowest tier is the same as a Netflix subscription). As can be...

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The Country's First Newly Elected Lame D…

27-03-2017 Hits:84139 BoomBustBlog Reggie Middleton

The Country's First Newly Elected Lame Duck President Will Cause Massive Reversal Of Speculative Gains

Note: Subscribers should reference  the paywall material here for stocks that should give a good risk/reward scenario for bearish trades. The Trump administration's legislative outlook is effectively a political desert, with...

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Sears Finally Throws In The Towel Exactl…

22-03-2017 Hits:90644 BoomBustBlog Reggie Middleton

Sears Finally Throws In The Towel Exactly When I Predicted "has ‘substantial doubt’ about its future"

My prediction of Sears collapsing once interest rates started ticking upwards was absolutely on point.

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The Transformation of Television in Amer…

21-03-2017 Hits:88207 BoomBustBlog Reggie Middleton

The Transformation of Television in America and Worldwide

TV has changed more in the past 10 years than it has since it's inception nearly 100 years ago This change is profound, and the primary benefactors look and act...

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I would like to take the time to quantify the value of strong, hardcore fundamental research and dispel some myths at the same time. This is not a short post, but I feel it is an important one. If you don't have the patience to read through the whole article, hit next and/or scroll down to the big pretty pictures. Now, let's take a look at what some of the big institutions have been doing lately, but before we do that I would like all to revisit a post I made in February... "Are you hooked on name brands?"  It was quite true then and actually quite prescient now as we look back upon the course of events. 


Now, on to the present, a quick perusal of Bloomberg reveals

Name Brand Investors in the News:

  • ·       Mitsubishi UFJ Financial Group Inc. took a $506 million paper loss on its $9 billion investment in Morgan Stanley yesterday after the rejection of the U.S. financial rescue plan sent banking stocks tumbling. As part of the deal, the Tokyo-based lender agreed to buy $3 billion of Morgan Stanley's common stock for $25.25 a share. The second-largest U.S. securities firm plummeted 15 percent in New York Stock Exchange composite trading to close at $20.99... ``It's increasingly difficult to know what's going to happen,'' said Naoteru Teraoka, who helps oversee $21 billion at Chuo Mitsui Asset Management Co. in Tokyo. ``The U.S. bailout plan was the big change we hadn't had before, but that's gone now, so things can only get worse.'' ... ``If it had waited just a bit longer, Mitsubishi UFJ could have bought Morgan for a much lower price,'' said Mitsushige Akino, who oversees the equivalent of $468 million at Ichiyoshi Investment Management Co. in Tokyo.  Or if they read my blog!
  • ·       Western investors have also gotten burned. Goldman Sachs Group Inc. sold $5 billion of common stock to the public last week for $123 apiece, only to see its stock tumble to $120.70 yesterday. Billionaire Warren Buffett bought another $5 billion of preferred shares with a 10 percent dividend.
  • ·       A $1.3 billion investment in Washington Mutual Inc. by David Bonderman's private-equity fund TPG Inc. evaporated last week when WaMu was seized by federal regulators.
  • ·       A fund managed by J.C. Flowers & Co. saw its 24.9 percent stake in Germany's Hypo Real Estate Holding AG drop from $1.77 billion to $253.8 million after the German government gave Hypo a $50 billion loan guarantee to keep it from collapsing.
·       A look at another timely Bloomberg article reveals: Fund Managers Rattled as Rescue Plan's Rejection Shakes Markets
  • ·       Citadel, TPG-Axon Stumble Toward Worst Year in Hedge-Fund Swoon ... The financial crisis that crippled mortgage lenders, shut down leveraged buyouts and ended the era of independent investment banks is bearing down on the $1.9 trillion hedge-fund industry. Managers are bracing for a surge in client withdrawals after average returns fell 8 percent through Sept. 19, the worst first nine months of a year since Chicago-based Hedge Fund Research Inc. started tracking the data in 1990 (more on this later). Investment gains are being squeezed by higher bank lending rates, and regulators are now clamping down on short selling, undermining hedge-fund managers' trading strategies... ``It's absolutely the most difficult period in hedge-fund history,'' said Brad Alford, head of Alpha Capital Management LLC in Atlanta, which invests in hedge funds. ``Even some of the best-known managers are looking at their worst years ever.'' Those include Ken Griffin's Citadel Investment Group LLC, a Chicago-based firm that oversees $20 billion; Steven Cohen's SAC Capital Advisors LLC of Stamford, Connecticut, which manages $16 billion; and Dinakar Singh's TPG-Axon Capital Management LP, a New York-based firm with $14 billion of assets. Hedge funds are on average outperforming the Standard & Poor's 500 Index, the benchmark for big U.S. stocks, and global gauges such as the MSCI World Index. The S&P 500 dropped 13 percent through Sept. 19 and the MSCI World fell 17 percent.
  • ·       Since 1990, the industry has posted one losing year, in 2002, when funds dropped an average 1.45 percent, according to Hedge Fund Research. The S&P 500 plunged 22 percent that year.
  • ·       About 350 funds shut down in the first half of the year, a number that may double by year-end, Hedge Fund Research reported. Among the biggest casualties is Dwight Anderson's New York-based Ospraie Management LLC, which is closing its $2.8 billion commodities fund after losses of almost 40 percent this year.
  • ·       Citadel's $13 billion Kensington fund, which seeks to profit by trading everything from stocks to bonds to energy, dropped 15 percent this year through Sept. 19, according to investors. The multistrategy fund's sole losing year was in 1994, when Griffin, now 39, was down about 4 percent. Two funds with combined assets of $3 billion gained 22 percent and 30 percent.
  • ·       SAC Capital's multistrategy fund declined 3.5 percent this year, the worst showing since Cohen, 52, started the firm in 1992.
  • ·       TPG-Axon dropped 18 percent this year through Sept. 15. It hasn't had a losing year since Singh, 39, a former head of in- house trading at New York-based Goldman Sachs Group Inc., started the firm in 2005 with TPG Inc., the Fort Worth, Texas- based private-equity manager.
  • ·       Even managers who've made money this year are having a difficult time. Philip Falcone, 46, was up 42 percent at the end of June in his seven-year-old Harbinger Capital Partners Fund. The gain shriveled to about 2 percent as of Sept. 19. The New York-based fund's smallest annual return was about 10 percent in 2004...
  • ·       September has been especially tough because of the severe market swings. In the first 17 trading days of the month, the S&P 500 moved more than 3 percent -- up or down -- six times, as Lehman Brothers Holdings Inc. went bankrupt, Merrill Lynch & Co. agreed to be bought by Bank of America Corp., the government took over insurer American International Group Inc., Morgan Stanley and Goldman announced they will convert to bank holding companies, and the U.S. Securities Exchange Commission placed a temporary ban on short selling 942 financial and related stocks. The index had no 3 percent moves in August.
  • ·       ...Victims of the short-selling curbs already include convertible-bond managers, who buy the convertible bonds of companies and short the stock as a hedge. Those funds are down about 6 percent this month, according to a client letter sent out by Gottex Fund Management SA in Lausanne, Switzerland, which farms out money to hedge funds.
  • ·       ... The $4.25 billion CQS Convertible and Quantitative Strategies Fund run by CQS U.K. LLP in London, lost 9.4 percent this month through Sept. 19, according to estimates given to investors. The fund is down 12 percent for the year. The fund, which has returned about 12 percent annually since its inception in March 2000, is one of six strategies run by CQS, which oversees about $10 billion.

 


Reggie Middleton's BoomBustBlog research outperforms, by a wide margin!

Please don't misconstrue my intentions. The brand names mentioned in the articles above are intelligent, successful and savvy people. But they are people, nonetheless, and they make mistakes just like the rest of us. Now, let's contrast the worst year in recorded hedge fund history to the past year and year to day of the a model portfolio built upon the BoomBustBlog.com research and opinion. BTW, the article is correct in that although funds charge a lot of money, their performance has beaten the broad averages of late, and the better ones outperform the broad market in general. But!!!! There's always a but, isn't it? There are better ways to skin a cat. Let's take a look-see.

blogvsfund2.png

 

 As you can see, if one were to buy or sell (short) the stocks opined accordingly in this blog's downloadable pdf reports the first trading day available the reports were released, and simply held the position until today (to be referenced as the "blog model"), you would have thoroughly trounced the S&P500 broad market and outperformed the Barclay's Hedge Fund Index by considerably over 50x, not to mention positive performance while the hedge fund indices and broad (US and global) market indices were negative! My proprietary trading account is primarily buy and hold in principle, but the extreme volatility in the markets has forced me to do some trading. I also make very heavy use of options, risk management, cash management, etc. and I am not afraid to use leverage, although I have not utilized any for over a year. This has allowed me to set realistic ROI goals approaching 400% (unfortunately, I cannot discuss my actual personal performance). After getting to know some of the blog users a little better, I have come to realize that many could benefit from trading (or at least buy and sell) guidance. I have been reticent to give such for a variety of reasons, but I am pondering several solutions that can help my consituency.

If one were to extend the horizon to one year or past, what would the outcome be?

blogvsfund1.png

 The blog's research model outpeformed the hedge fund index by over 33x, and the broad market index is not easily comparable, with nearly 100 percent spread in performance. I would consider this dramatic, indeed.

If we were to parse through Barclay's index to search for outlying overperformance, would it compare to this blog's staid "model"? Let's see...

Year to date:

copy_of_copy_of_blog_chart_with_shaun_updates_part_2_no_money_10809_image001.png

The closest runner up is the Short Equity Bias index, wiht a mere 27% of the blog's research model performance. If we look back for an entire year...

copy_of_copy_of_blog_chart_with_shaun_updates_part_2_no_money_10809_image003.png

The second runner up inches slightly closer, but still now cigar, 32% of the Blog's research performance. For those that are wondering, over 2,600 funds report to this index. So, I ask, should a blog charge 2 and 20? 

We have started receiving our first few institutional clients, a few of the very large global banks are coming on board. I would expect to see a lot more soon.

Update on the next phase of my investment thesis

The positions taken on the "next phase" companies opined on have returned handsomely. Smithfield Foods has been a standout. 66% percent of my position was popped out due to hitting my (way out of the money) profit targets. The remaining position has returned many multiples.

sfdchart.gif

This serves to bolster my conviction in the thesis, but dampens my spirits, for the veracity of the thesis is predicated upon rather dire economic events unfolding. I have decided to release the Smithfield report to non-paying subscribers and the general public due to the amount of price movement that has already occurred, and to exemplify the quality of research that my team has produced in this sector that is a universe away from the financial services, insurance and real estate that we have been covering for the past year.

I would like to add that the Navistar report should have enabled those who believe in the research to take advantage of the big pop emanating from the surprise earnings announcement. Any who did were handsomely rewarded. Feel free to download Smithfield Foods Professional report here:icon SFD_Pro Report_Final_240908 (286.98 kB 2008-09-25 01:32:23)

There is a lot of content on tap, and coming very soon. The bankruptcy candidates are also on their way...

Here is a listing of the companies opined, and a a link to at least one of the posts containing an opinion. The column on the far right refers to those companies who I performed an actual forensic analysis or deep study on. The coluimn to the left of it simply lists all the companies mentioned. Be aware that I may mention a company without feeling strongly enough about it to take a position. 

The timeline of BoomBustBlog analysis 

               
Blog post date Companies negatively Blogged Price as of Blog Date or following trading day 9/30/2008 % change Assumed Holding Period in Months Holding Period Return  
1-Sep-07 len $28.57 $13.81 (51.66%)  12.97 95.87% 95.87%
  hov $12.60 $7.62 (39.52%)           12.97 73.56% 73.56%
  phm $16.95 $13.89 (18.05%)           12.97 30.61% 30.61%
  ctx $29.12 $15.36 (47.25%)           12.97 89.01% 89.01%
  dhom $2.08 $0.55 (73.56%)           12.97 141.62% 141.62%
1-Sep-07 bzh $11.29 $5.62 (50.22%)           12.97 94.95% 94.95%
  rdn $18.11 $4.36 (75.92%)           12.97 146.36% 146.36%
  mtg $30.34 $6.72 (77.85%)           12.97 150.21% 150.21%
1-Sep-07 dhi $15.41 $12.10 (21.48%)           12.97 37.47% 37.47%
  tol $21.84 $24.38 11.63%           12.97 (28.75%) (28.75%)
  bsc $114.13 $8.72 (92.36%)           12.97 175.48% 175.48%
  cfc $19.81 $4.25 (78.55%)           12.97 151.60% 151.60%
3-Sep-07 mbi $61.92 $10.85 (82.48%)           12.90 159.46% 159.46%
  abk $64.63 $2.17 (96.64%)           12.90 187.79% 187.79%
8-Sep-07 wm $34.74 $0.16 (99.54%)           12.93 193.59% 193.59%
16-Oct-07 ryl $23.96 $25.38 5.93%           11.67 (17.34%) (17.34%)
19-Dec-07 ms $50.08 $20.99 (58.09%)           11.67 110.68% 110.68%
8-Jan-08 ggp $33.90 $14.21 (58.08%)           11.67 110.67% 110.67%
14-Jan-08 bac $39.22 $30.25 (22.87%)             8.53 43.17% 43.17%
25-Jan-08 kbh $23.65 $19.34 (18.22%)             8.17 33.87% 33.87%
19-Feb-08 leh $53.57 $0.00 (100.00%)             7.37 197.43% 197.43%
8-Feb-08 ago $21.57 $15.68 (27.31%)             7.73 52.04% 52.04%
21-Feb-08 key $23.03 $9.80 (57.45%)             7.30 112.32% 112.32%
25-Feb-08 ffhs $8.40 $6.50 (22.62%)             7.17 42.66%  
  ms $45.28 $20.99 (53.64%)             7.17 104.71% 104.71%
  c $24.74 $17.75 (28.25%)             7.17 53.93% 53.93%
  wfc $31.69 $33.25 4.92%             7.17 (12.42%) (12.42%)
  gs $177.36 $120.70 (31.95%)             7.17 61.32% 61.32%
  mer $54.42 $22.00 (59.57%)             7.17 116.57%  
  wb $34.72 $1.84 (94.70%)             7.17 186.83% 186.83%
17-Mar-08 bsc $4.81 $9.33 93.97%             6.43 180.18% 180.18%
27-Mar-08 kfn $12.71 $6.93 (45.48%)             6.10 88.38% 88.38%
2-Apr-08 jef $17.15 $20.00 16.62%             5.93 -35.81%  
15-May-08 pnc $69.39 $68.00 (2.00%)             4.50 1.43% 1.43%
22-May-08 bpop $11.52 $8.07 (29.95%)             4.27 57.32%  
  sti $54.85 $38.75 (29.35%)             4.27 56.13% 56.13%
  snv $12.32 $10.25 (16.80%)             4.27 31.03%  
  mi $23.59 $18.00 (23.70%)             4.27 44.82%  
  asbc $28.29 $19.40 (31.42%)             4.27 60.27%  
  fctr $30.20 $30.02 (0.60%)             4.27 (1.38%)  
  mtb $89.89 $80.00 (11.00%)             4.27 19.43% 19.43%
  hban $9.23 $7.45 (19.28%)             4.27 35.99% 35.99%
  bbt $33.44 $31.00 (7.30%)             4.27 12.02%  
  jpm $43.05 $41.00 (4.76%)             4.27 6.95%  
  usb $33.24 $32.75 (1.47%)             4.27 0.37%  
  cof $48.92 $44.00 (10.06%)             4.27 17.54% 17.54%
  wm $9.45 $0.16 (98.31%)             4.27 194.04% 194.04%
  cfc $4.69 $4.25 (9.38%)             4.27 16.19% 16.19%
  rf $19.14 $8.25 (56.90%)             4.27 111.22%  
  zion $43.47 $34.25 (21.21%)             4.27 39.85%  
  tcbk $15.92 $19.70 23.74%             4.27 -50.06%  
  fitb $19.88 $9.11 (54.18%)             4.27 105.78%  
  sov $8.78 $2.33 (73.46%)             4.27 144.35%  
16-Jun-08 ge $28.97 $23.10 (20.26%)             3.47 37.95% 37.95%
30-Jul-08 axp $37.54 $32.55 (13.29%)             2.00 25.68% 25.68%
30-Jul-08 hbc $82.32 $77.80 (5.49%)             2.00 10.07% 10.07%
21-Aug-08 nav $55.30 $51.26 (7.31%)             1.30 14.12% 14.12%
26-Aug-08 wire $18.70 $17.73 (5.19%)             1.13 9.88% 9.88%
11-Sep-08 sfd $21.00 $14.36 (31.62%)             0.63 62.75% 62.75%
               
          Average Average Average
  1/1/2208     Since 7/07             7.47 64.41% 71.31%
  17-Dec-03     Year to Date             5.42 50.19% 53.73%

A verbose listing of posts and articles concerning the stocks above can be found in "More on the accuracy of this blog's research " and a compendium of recent yet pleasant emails to the author can be found here: Some pleasant emails.