Feb

28

The Rule of Two: Brian Hunter Update

By Teresa | Filed Under Trading Ideas | Leave a Comment

The March 3, 2008 issue of Canadian Business has the latest on the ex-Amaranth trader, but what intrigues me is how ex-Enron John Arnold’s Centaurus Energy was playing the other side.

“Always two there are; no more, no less: a master and an apprentice,” said Yoda of the Sith Lords while Darth Bane concluded, “Two there should be; no more, no less. One to embody power, the other to crave it.” It’s the Star Wars Rule of Two.

Market speculation: The trials of Brian Hunter
NG futures are later-date contractual obligations to deliver or receive 10,000 million British thermal units of natural gas at the Henry Hub, a pipeline junction in Louisiana. The game is played by a mishmash of speculators and commercial interests who buy and sell thousands of contracts (and options to buy or sell contracts) on a daily basis. Most never hit the Hub because obligations to deliver and receive often cancel each other out. Nevertheless, until settlement day on the New York Mercantile Exchange (NYMEX), all futures fluctuate in value due to numerous volatile factors, ranging from market fundamentals to the mood of Mother Nature.

Such price fluctuations can translate into a seriously bad trading day. In September 2006, for example, a string of Hunter’s bad days eventually cost Amaranth US$6.6 billion, which is more than the GDP of Chad. But believe it or not, Wall Street was still trying to toss big money Hunter’s way while CNBC was reporting on the fund’s fruitless efforts to survive.

That won’t surprise you after you know the whole story, which has never been reported before. For now, let’s just note that Amaranth — despite what you might have read in the business pages or on financial blogs — did not crash because a math geek placed ridiculous bets on something as unpredictable as hurricanes in the Gulf of Mexico.

Hunter’s strategy back in 2006 was based on monthly price spreads, not on an expected storm-induced jump in prices. (Such a jump could have actually hurt Amaranth’s positions at the time.) Not that Hunter is afraid of risk. He played the March–April “widow-maker” spread, where the unpredictable effect of warming weather on natural gas supply scares some traders off the market. But his overall position was hedged, highly calculated and not 100% weather-dependent. In fact, the bets Hunter made could be considered conservative when compared to what some debt traders were doing with sub-prime assets at the time.

Feb

27

Stocks to Watch for Thursday

By Teresa | Filed Under The Podcast | Leave a Comment

I was working today, and did not have time to write anything witty here.

And the Winners Are…

The stock scan conducted after the close on Wednesday found 93 winners and 24 losers.

The top 50 winners are listed in alphabetical order below. Click on the column headers to sort the list. Our scan criteria incorporates price movement, range and liquidity (500,000 shares on the day, 20-day average of 1.5 million).

Get your All Access Pass to our research and find out which ones to buy, sell or hold.

Ticker Close Change Sell Buy ToSignal
AAUK 33.12 1.74% 28.66   -13.47
ACF 14.92 2.75% 10.89   -26.99
ACH 52.12 5.53% 42.01   -19.39
AEM 69.11 2.49% 61.67   -10.77
AFL 64.7 0.61% 57.83   -10.62
AKS 53.92 -1.52% 46.91   -13.01
AUO 19.53 -0.61% 17   -12.97
AUY 18.21 3.87% 15.53   -14.74
BBD 32.25 1.77% 27.63   -14.34
BCS 41 -0.94% 36.65   -10.62
CAT 74.22 1.20% 65.91   -11.2
CCI 37.42 -0.99% 33.35   -10.87
CCJ 38.62 -0.83% 35.03   -9.3
CCU 33.42 -1.12% 28.55   -14.58
CHKP 22.87 0.55% 21.03   -8.06
CHT 24.9 -0.72% 22.11   -11.21
CIG 19.6 0.82% 16.56   -15.52
CLS 6.8 1.59% 5.96   -12.31
CNQ 73.39 0.18% 64.86   -11.62
COP 84.13 -0.53% 76.79   -8.73
CREE 33.75 0.00% 28.25   -16.31
CTSH 32.77 0.20% 27.98   -14.63
CVX 88.22 0.05% 79.79   -9.56
CX 28.39 -0.58% 24.14   -14.98
DD 47.61 0.66% 44.41   -6.72
DO 122.02 -1.63% 109.13   -10.56
DTV 26.49 -0.26% 22.54   -14.93
ECA 75.09 -0.11% 68.85   -8.31
EEM 146.98 0.75% 129.32   -12.01
EOG 105.68 -2.36% 95.32   -9.81
ESV 60.21 -0.20% 53.78   -10.68
EWT 15.86 1.15% 14.38   -9.32
EWZ 88.23 1.69% 76.4   -13.41
FAST 43.36 -0.30% 38.98   -10.1
FCX 103.62 3.62% 82.2   -20.67
FDO 20.91 -0.44% 17.43   -16.62
FISV 54.21 0.82% 49.65   -8.41
FMCN 51.76 0.16% 40.56   -21.63
FTI 58.47 1.04% 49.7   -14.99
GES 43.51 -2.44% 37.11   -14.71
GG 43.4 3.08% 38.58   -11.1
GGB 34.41 4.02% 28.19   -18.09
GT 29.31 3.43% 24.94   -14.92
HAL 37.55 0.10% 33.38   -11.1
HERO 26.85 -1.50% 23.38   -12.93
HL 11.04 1.75% 9.45   -14.37
HMY 12.93 4.02% 10.94   -15.41
HPQ 48.94 0.10% 44.64   -8.79
IBM 116.46 1.82% 106.73   -8.36
IJR 62.77 -0.11% 58.45   -6.88

Media Digest

  • Blackstone Plans to Line Up LBO Lenders, Bypass Banks
    Blackstone Group LP, manager of the world’s biggest private-equity fund, plans to bypass Wall Street firms and directly find lenders for leveraged buyouts, President Hamilton James said. The firm is contacting hedge funds and mutual funds to provide loans for takeovers, James said after a panel discussion today at the Super Return conference in Munich. Other firms may follow New York-based Blackstone’s lead, he added. “We’re bypassing the banks,” James said. “There’s still ultimately demand for this paper out there if you can go directly to the buyers.”
  • Kohn Says Slow Growth Is ‘Greater Threat’ Than Inflation
    Federal Reserve Board Vice Chairman Donald Kohn speaks in Wilmington, North Carolina, about reasons for the slowing of the economy and tightening of credit practices, the impact of the subprime mortgage crisis on the housing and mortgage markets, and the ability of government policy makers to help stem inflation and spur growth. Vice Chairman Kohn speaks at the University of North Carolina Wilmington’s Cameron School of Business.
  • Shilling Sees Consumers Spend Less as Home Prices Fall
    Gary Shilling, president of A. Gary Shilling & Co., talks with Bloomberg’s Tom Keene from Springfield, New Jersey, about a report today showing U.S. consumer confidence fell to the lowest level in five years, the outlook for spending and the economy.
  • Nasdaq Closes OMX Deal
    The Nasdaq Group is closing its $4.9 billion purchase of Nordic exchange operator OMX. Bob Greifeld, CEO of Nasdaq, discusses the complex deal.
  • Transparency for Sovereign Wealth Funds
    With Sovereign Wealth Funds coming to the rescue of major financial companies, do they need to be more transparent? Fergus O’Sullivan from Morgan Stanley has the answers.
  • Hong Kong Budget Surplus Soars
    Hong Kong’s budget surplus soared to a record in fiscal year 2007, allowing Financial Secretary John Tsang to offer tax concessions and handouts in his maiden budget speech. Enzio von Pfeil, CEO of Commercial Economics Asia, has the details.
  • ‘Marketplace’ Report: Home Equity
    Home equity lines of credit are getting harder to come by. Madeleine Brand talks to Sam Eaton about why banks are making it more difficult to borrow against your home.
  • Back from exile
    Thailand is braced for fresh political uncertainty on two fronts, with former prime minister Thaksin Shinawatra poised to return from exile just as charges of electoral fraud threaten the newly elected (and pro-Thaksin) government. Thaksin was deposed in the September 2006 coup, but he is expected to return to Thailand on February 28th to face corruption charges. In a separate development, on February 26th the country’s election commission “red-carded” the new speaker of parliament, Yongyuth Tiyapairat, on charges of fraud relating to the December 23rd general election. This means that the commission voted to disqualify Yongyuth from office, a ruling that is now expected to go before the Supreme Court.

Feb

27

Mad Money Watch for Thursday

By Teresa | Filed Under Trading Ideas | Leave a Comment

The Booyah list is comprised of featured and game plan stocks mentioned by Jim Cramer on Mad Money. The stocks are listed in alphabetical order below. Click on the headers to sort by column.

Want more ideas? Get your All Access Pass to our research.

Ticker Close Change Sell Buy ToSignal
AAPL 122.96 6.84%   138.41 12.57
ADCT 14.2 0.00% 13.08   -7.88
AGN 62.35 -1.09%   68.47 9.82
AGU 73.88 -0.09% 64.68   -12.46
AMX 64.17 0.02% 56.47   -11.99
BDK 71.28 -0.50%   74.77 4.89
BMRN 39.67 2.78% 35.78   -9.81
BMY 23.2 -0.73%   24.28 4.64
BSC 87.3 0.95% 78.38   -10.22
CHTT 79.4 -1.12% 69.81   -12.08
CRM 52.62 8.98% 47.97   -8.84
CSCO 24.95 4.49%   25.16 0.85
CVD 87.45 1.29% 78.76   -9.93
DD 47.61 0.66% 44.41   -6.72
DE 86.24 -1.33% 77.78   -9.81
DIS 33.1 1.09% 29.59   -10.62
DOW 39.17 0.15% 36.51   -6.79
DRI 32.15 -1.14% 28.15   -12.44
EMC 16.06 0.12%   16.7 3.97
ENOC 16.31 -35.84%   28.71 76.03
EPIQ 13.1 -1.20%   13.93 6.37
FMC 59.18 -0.76% 53.07   -10.33
FTI 58.47 1.04% 49.7   -14.99
GFA 39.32 6.40% 31.53   -19.82
GS 180.8 4.69%   192.76 6.61
GU 10.15 -1.46% 8.29   -18.37
HAL 37.55 0.10% 33.38   -11.1
IBM 116.46 1.82% 106.73   -8.36
IDXX 55.89 -0.37%   58.73 5.09
IGT 47.12 -3.05% 43   -8.74
ISRG 294.92 -0.08% 247.09   -16.22
JCP 49.61 -1.67% 42.23   -14.88
KKD 2.89 0.31% 2.36   -18.31
LM 70.75 0.74%   75.09 6.13
LVLT 2.38 4.87%   2.53 6.32
MICC(F) 114.13 -2.11% 98.82   -13.41
MO 74.47 -0.36%   76.5 2.72
MON 119.27 -1.87% 100.68   -15.59
MOS 113.17 -1.75% 92.65   -18.13
MSFT 28.26 -0.28%   29.68 5.02
NOK 38.25 0.45% 33.61   -12.14
NYX 68.39 -0.42%   73.18 7.01
PBR 125.01 3.08% 104.96   -16.04
PEP 71.2 0.00% 67.23   -5.58
POT 159.6 -0.95% 129.81   -18.67
QDEL 17.8 0.81% 16.33   -8.27
RAD 2.72 -2.52% 2.37   -12.74
RIO 36.65 1.08% 29.87   -18.49
RL 67.98 0.56% 59.82   -12
RVBD 20.59 -1.62% 18.92   -8.11
S 8.95 -4.63%   9.75 8.93
SBUX 19.04 0.00%   20.25 6.35
SIRI 2.94 -3.28% 2.85   -3.08
SLM 21.85 0.00% 17.95   -17.86
SXE 28.11 1.23% 21.49   -23.55
T 35.2 -0.90% 34.18   -2.89
TEX 70.27 -0.86% 58.03   -17.42
TJX 32.87 -1.32% 29.76   -9.45
TLK 45.5 1.23% 42.07   -7.54
UPL 78.3 -3.04% 72.35   -7.61
VZ 36.39 -0.98%   37.68 3.55
WG 37.09 1.57% 32.23   -13.1
WIND 7.5 0.01%   8.28 10.38
XMSR 12.44 -5.64% 11.39   -8.45
XOM 89.39 -0.38% 82.44   -7.77

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