Daily Reading – Tuesday, August 2, 2011
The Big Picture: There’s Something Happening Here . . .
Life — and investing — is all about probabilities. We don’t know what is going to happen in the future — certainly not with any degree of confidence. What we can surely asses is a range of possibilities as to what might happen; we can also assign a range of probabilities to various outcomes.
This morning, we are taking a look at the shifting probabilities of various outcomes…
Institutional Investor: Soros Shows How Hard It Is For Hedge Fund Managers To Retire
Except on rare occasions, most successful hedge fund managers rarely seem to call it quits on a high note. Part of the reason is they seem to have trouble retiring in general.
FT Alphaville: What’s inside Pandora’s box?
Now, it’s worth at this juncture recalling the price Pandora floated at in October 2010 — DKr210 for a market cap of DKr27bn – those who managed the IPO —Goldman Sachs, JPMorgan, Morgan Stanley and Nordea Bank — and the sellers — private equity group Axcel, the founding Enevoldsen family and Pandora’s managers.
All the ingredients, then, for an IPO flop. A private equity seller, an insider seller and the involvement of Goldman Sachs.
FT Alphaville: Cyprus SOS
An amazingly impassioned statement on Monday from Bank of Cyprus on the island’s fiscal crisis, warning that a bailout is imminent.
FT Alphaville: Cleary Gottlieb’s new client
Last week, it was announced that Cleary Gottlieb, the New York headquartered international law firm, had been engaged by the Hellenic Republic. I believe this tells us a lot about the direction euro area finance will take… the Cleary team working on Greece will be headed by Lee Buchheit, the partner who has previously represented Iceland, Argentina, etc, etc. Trusted by distressed governments, cursed by former optimists with long positions, his is the mobile number of choice for sovereigns that believe they have unsustainable debt burdens.
Macro Man: Run away!
As a friend of TMM said today “This is like picking the best-loooking horse at the glue factory”.
The Slope Of Hope: Reid Between the Lines
OK, well, I was expecting this Debt Ceiling Rally to last a little longer than a few hours. Not that I was long. I didn’t have a single long position. But – – seriously – – my view was that our dear, sweet, honest bull friends would rally this crap up to 1330 before Armageddon kicked in. So – – whoopsie. And wow.
The Slope Of Hope: IPO Zillow Down 50% in Nine Days
The Economist: Word herd
In a recent paper Aaron Gerow of Trinity College, Dublin, and Mark Keane of University College Dublin, found that changes in the frequency distribution of English words can be helpful in identifying stockmarket bubbles.