Monday, 26 October 2009

a few things

L: 172% S:176% G: 348% N: -4% ~ $D 88% $G -3% $V 0% $P -1.45%

The Raven has flown a little closer to the sidelines. The market has had a great run since it bottomed in March, risky assets have flown out the door, the dollar price of almost everything is much higher and its certainly been a case of the trend being your friend. That said things are beginning to feel weaker, with an inability to make higher highs over the last month. He’s also heard that systematic high frequency space has been a lot quieter with a lot less money to be made, this does make him think that some of the easy money flowing into the market has slowed down, as the market doesn’t tend to change its efficiency that quickly.

The other element that fits this hypothesis is the reaction to earnings announcements, companies that have surprised with much higher earnings than analyst estimates haven’t had the follow through that the Raven would normally expect, but perhaps that is sample bias.
The FT weekend headline last month (or perhaps the month before) that there were more ‘day traders’ in the market now that at the top of the tech peak is again a bit of negative news, as it goes hand in hand with a rather large earnings multiple expansion that we are seeing.
The Raven is having a look at JAVA again today, he’s been following the stock closely since it became an M&A name, its been pretty volatile given the fact that ORCL marketed the deal as being a good idea because it should have got through regulatory hurdles easily, that said who’d have thought the EU would be SUCH a pain.

The Raven has changed his mind on SNDK, he was actually long over the earnings because there has been so little anticipation of good numbers in the build up and their customers had been talking about good sales so it seemed pretty obvious that they’d beat, although he wasn’t expecting it to be by so much, or that they’d have so much pricing power. The stock looks pretty decent here and has reacted strongly, he’s been holding a small long.

MCO has been very pleasing for the Raven, he noticed when the stock really broke down how much retail chatter there was in the name and how much the short interest had popped, he’d made a lot of money and it appeared a lot of people had got on the bandwagon in a short space of time, so he took his profits ($1 too early mind!) and has enjoyed watching the inevitable short squeeze. He’s looked to get small short the last couple of days as it appears to be technically turning.

The Raven’s performance has been rather patchy this month he up 7.91% (especially in comparison to last month), but that really should be a lot higher given how right he’s been, he needs to really focus on monetising his good ideas and has been doing a little work on trying to squeeze more out of them with a more systematic position management approach.

He hopes that there is another Royal Mail strike this week as well, and he hopes that the union get shown up for what they are, greedy. His thoughts on the unions are just reinforced everytime he sees the way they behave, and he’d love for it to become a privately listed company, because he’d short it until the cows come home, especially with those ridiculous public sector style pensions, just look how much BT is enjoying having those.

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