Tuesday, 19 May 2009

start of the summer?

The Raven's not made a trade since the last post, apart from being stopped out on the EUR position as it had a very tight stop.

He's been working on a couple of things although he's nowhere close to pulling the trigger;
1) Mastercard and Visa are interesting businesses, but the Raven really isn't sure what's a fair multiple, especially in this market
2) AYE looks very interesting from a fundamental view point - but he's really behind on the news flow in this situation
3) NRG-EXC, a very interesting situation, he's now on top of the deal news, management dynamics and that score, he's not so down with the valuations of the firms and the fundamentals of the business
4) TGT - he gets BAs (Bill Akman's) ideas i)management haven't done a great job ii)RE (real estate) doesn't look like its valued iii) TGT management ballsed up the credit card part of the business, however, he's not sure how well his proposals will actually be received. He's spot on in terms on incentives and his letter is very persuasive when he compares his 5 independant board nominees to the encumbents ie a) 30yrs of grocery experience vs marketing b) 30yrs of building a credit card business to banker who botched managing firms funding risk c) commercial real estate manager vs aussy telco exec??? d) 7% owner of the firm vs 0.1% LBO chap e)Prof of Law and Business at Stanford and Columbia. Saying that RiskMetrics came out in support of BA. The Raven still wants to do some more work himself, but it does look interesting.
5) IGT looks ok as well so far.

Oh and he wouldn't mind an general election being called in the UK. He's got a small punt on that there'll be one called before the end of the year at pretty decent odds, even though he thinks its only a small chance. He can see several ways that this comes about, Labour get smashed in the EU elections, the party chuck out Brown, new leader comes in and he's got to call an election as two PMs not elected in a row would just be unbelievable. He also thinks that the speaker resigning has taken a little bit of the sting out of the expenses scandal but not enough to make this go away - he still thinks this could just fester on to the point where it becomes essential for the government to call an election.

Other than that and the mountain of research he's trying to do the Raven has been very quiet, he can't see the macro picture changing too much with the bank holiday weekend coming up in the UK and the US, vol's getting crushed and thats probably fair as we've entered a bit of a range trading market, although he's noticed a pick up in his residuals momentums.

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