Trade Alert: Flashback to the last time we were at these levels and run from cocky stock brokers
The last time the Nasdaq traded this high, here were the headlines. See how closely you can get to the exact date without clicking through:
Northern chill sends oil price up over $35 a barrel – World oil prices began to shoot past the $35 mark overnight as the first cold snap of winter hit the northern hemisphere. Supply concerns about heating oils in the US, the world’s biggest market, helped trigger the rises as the American Petroleum Institute revealed that US stocks had fallen by 55,000 barrels in the week ending 10 November. One industry expert warned a cold winter could cause parts of the US to run out of heating oil and trigger ‘a human tragedy’.
MP3.com pays $53.4 million to end copyright suit – MP3.com has agreed to pay $53.4 million to end its copyright infringement suit with Seagram’s Universal Music Group, a deal that sent its shares sharply higher in Wednesday trading.
The Second Coming of Steve Jobs – Jobs complained to Random House, the parent company of Broadway Books, months in advance of the publication of Alan Deutschman’s new biography. The book is a damningly complete picture. Deutschman interviewed close to 100 of Jobs’ friends, co-workers, and competitors, and he has crafted a detailed picture of a dictatorial perfectionist who humiliates employees and mistreats nearly everyone else. According to the author, Jobs refused to support his baby daughter for the first year of her life, argued against paying severance to longtime Pixar employees who were laid off, and forced the studio’s founders to give back all of their stock when the company faltered.
In Nod to AOL, Time Promotes Top Executive – New York Times – Signaling Time Warner’s effort to integrate its operations with those of America Online, the company’s magazine division, Time Inc., named Walter Isaacson, the managing editor of Time magazine, to the position of Time Inc. editorial director yesterday.
SANCTIONS AGAINST IRAQ ARE GRADUALLY ERODING – With help from Russia, France and the Arab world, Iraq has ended a de facto air travel embargo. Now it’s chipping away at 10-year-old U.N. economic sanctions and seeking more control over its oil riches. Baghdad’s high-profile campaign to end its long diplomatic isolation appears to be gaining momentum. Long-closed borders with Jordan and Saudi Arabia are opening up to U.N.-approved goods.
A year after curbs, Bin Laden still in Afghanistan – One year after the United Nation sanctions were imposed to force Afghanistan’s ruling Taliban movement to hand over Osama bin Laden, the accused “terrorist” remains in his sanctuary and Washington ponders how to step up the pressure.
Interesting that Steve Jobs was barely back in the saddle at Apple when that bio came out and on that the very same day, his official biographer from years later, Walter Isaacson, was promoted at AOL/Time Warner .
How about the oil, Iraq and Afghanistan headlines? Perspective anyone?
On another note, let me share with you a little back and forth I happened to be have gotten my hands on that went on between a major money manager with a tremendous long-term track record who has been disastrously bearish/short/under-long for the last couple years and one of his brokers:
I always love your insightful housing calls which have precluded you from owning the best performers across the board for the last year. I am spending all of my time and capital researching and buying related sectors like wood, mortgage servicing/originators and the like because I can’t buy the names we cover.
Money manager: “I have still not sold or shorted anything yet, though my long trading opps are fading fast with this rally. I am starting to circle the housing related stocks for short candidates. Toll at 4x’s revenues, what a freaking joke.”
Broker: “I always love your insightful housing calls which have precluded you from owning the best performers across the board for the last year. I am spending all of my time and capital researching and buying related sectors like wood, mortgage servicing/originators and the like because I can’t buy the names we cover. Good luck shorting the names in what is one of the only visible cyclically recovery sectors (with NAmer auto) that is in the 1st inning of that recovery. Had you ventured to be client of my firm you would understand well why your call has stunk and actually would have made a boatload of money long. As I’ve been saying, it’s all about housing for our economy and stock market and walla. One day you will be right on your short call for housing but that day is a long ways off.”
When the markets are at places they haven’t been since before the words “Smart” and “Phone” were even considered juxtaposable and when cocky brokers are mocking their potential clients for having been “wrong”, I get nervous.
Anyway, not just for that reason, but as you guys know, I’ve been very long and strong from the lowest levels, and I’m trying to reduce some of my overall net long aggressiveness by trimming and hedging with some gentle shorts here and there. I’m going to double down on my Morgan Stanley puts from the other day — they are now trading for about half of what I paid when I put the first tranche of hedges on last week, and I’m just using today’s big rally to reduce my net long exposure just a bit more.
