Hedge Fund LIVE - An Interactive Trading Community


Cameron Newton Fortunate to Have Made Off with the Heisman Trophy

On Saturday evening, Cameron Newton settled in at a glitzy Heisman Trophy ceremony where he won the prestigious award given annually to the country’s most outstanding college football player.  There were smiles and handshakes all around.  Earlier that day, Mark Madoff’s body was being hauled off to the Medical Examiner’s office in lower Manhattan.  Mr. Madoff , the 46 year-old disgraced son of Bernard Madoff, had hung himself with his dog’s leash in his Tribeca apartment, while his two-year old son Nick slept nearby.  His death came almost exactly two years to the minute from the time that federal authorities, acting on a tip from Mark and his brother Andrew, arrested Bernie Madoff for masterminding a massive $18 billion Ponzi Scheme.  Facing possible criminal charges in New York and London, Mark Madoff ended his anguish, leaving his wife and children behind, and millions of Americans, including this one, shocked and saddened by this tragic turn of events.

As many college football fans are well aware, Cam’s Newton’s father Cecil has his own legal issues.  Mr. Newton  is currently being investigated in an alleged “pay for play” payment scheme in which he sought to extort up to $180,000 from coaches at Mississippi State in exchange for his son’s commitment to play football for the Mississippi State Bulldogs.  While this crime obviously does not compare to the heinous scheme concocted and pepetuated by Bernie Madoff, it is clearly something that Heisman voters were concerned about.  Moreover, Cam had his own issues with the law, having transferred from the University of Florida where he had been charged with burglary, larceny and obstruction of justice (those charges were later dropped), and reportedly was facing expulsion or suspension for three instances of academic cheating.

According to published reports, Cecil chose not to attend the Heisman Trophy award ceremony because he felt that his presence might “rob Cam and the event of a sacred moment”.  He should be thankful that he was was free to make such a choice,  A year earlier, Mark Ingram, Sr. was unable to attend the Heisman Trophy ceremony for his son Mark Ingram because he was serving time in prison on fraud and money laundering charges.  Who knew there was so much stealing going on outside of Wall Street?

I have no issue with Cam Newton winning the Heisman Trophy.  He is by all accounts a great kid who made some youthful mistakes, and his talent on the field speaks for itself.   I also happen to know many people who knew Mark Madoff, and consider him to have been a wonderful man who suffered needlessly for the sins of his father.  Many, I suppose, believe the Madoff boys must have known what was going on.  I say let Mark Madoff rest in peace.  In any event, I hope that Cam Newton realizes how fortunate he is to have had the opportunity to win this award, and to still have his future intact, notwithstanding his father’s transgressions.  He has his Heisman Trophy, and his father is free to cheer him on next year in the NFL.   Mark Madoff is sadly gone, and his father will thankfully spend the rest of his life rotting in prison.  Probably not even a day free to attend his own son’s funeral.

In Honor of John Lennon

Thirty years ago today John Lennon was killed in front of the Dakota in NYC by David Chapman. Today, YOKU (That is Chinese for Yoko) makes it trading debut up 200%.   IMAGINE a stock up 200% in one day?   Time to sell?   Nope, LET IT BE, LET IT BE!!!!!


“Hot DANG”-  An expression of  joy or excitement, like Bitchin.  “Hot Dang” I made 100% on my money buying stock in DANGDANG (SYMBOL DANG, duh) a Chinese online book store!!!!!”

HedgeFundLive.com does not endorse the speculative purchase of any or all Chinese internet stocks like YOKU or DANG unless done entirely on margin with rent money.


Hedge Fund Live does not endorse the use or consumption of this or any other illegal or dangerous drug or substance.   The reference to Purple Drank here is made solely to educate blog viewers as to the meaning of  “drinking sizzurp in my ride, like a 3-6″ - a line referenced in “Far East Movement’s” hit song “Like a G-6″, and used in the YouTube cartoon “Inside Trading-Sex for Money”.


Purple drank is a slang term for a recreational drug popular in the hip hop community in the southern United States, originating in Houston, Texas. Its main ingredient is prescription-strength cough syrup containing codeine and promethazine.[1] Cough syrup is typically mixed with ingredients such as Sprite soft drink or Mountain Dew and pieces of Jolly Rancher candy. The purplish hue of purple drank comes from dyes in the cough syrup

Unlikely, Maybe. Possible? Most Definitely!!!!

Odds against your house being struck by an airplane-  one  in 45,000,000

Odds against you winning the multi-state mega millions lottery - one in 176,000,000

Odd against you being hit by lightening TWICE in the same day-  one in 189,000,000

Odds of an meteor landing on your home- one in  182,138,880,000,000

Odds that these 5 hedge funds each independently bought and sold the shares of these 3 healthcare takovers at the times set forth by the WSJ without having any unlawful information whatsoever?

You do the math!

This Market Sucks!! Nothing to Buy

Oh, well.  How about dinner and a movie????:

Sometimes we make this game too damn hard!!!!

Update:   Since I absolutely top-ticked both CMG and NFLX (that is extremely hard to do) let’s try again .

What I meant was, how about a new outfit from Abercrombie (ANF)?some cool kicks (DECK),  and some delicious hot coffee (GMCR)?

Schadenfreude Rains on Hedge Fund Parade

Let’s face it, many law-abiding hedge fund managers (a new-age oxymoron) and traders are feeling a wee bit giddy lately with all the news about billionaire magnates getting their office doors busted down by FBI agents carrying search warrants instead of subpoenas.  I sit on a trading desk where most of the traders have expressed little or no compassion for the Diamondback Capital or Level Global investors or managers.  Indeed, I have heard quite a few comments such as “it’s about time” and “I hope they all rot in prison”.  Why are so many of us deriving such perverse pleasure from the misfortunes of our hedge fund brethren?  After all, many of these people are renowned philanthropists with wonderful families, and many are undoubtedly not guilty of any wrongdoing whatsoever.   Where is the love?   The Germans have a word for what we are witnessing (the Germans seem to have a word for everything) – Schadenfreude.

With every arrest, years of envy transform into righteous indignation, as honest and hard working traders increasingly revel in the plight of the accused.  Why all this morose delectation?  I have my theories.  In this post-Madoff world on Wall Street, there is very little compassion for fraudulent or dishonest hedge fund managers.  After all, these guys reaped huge financial rewards for toeing the line between what is and is not permissible, and now it is perhaps time for them to pay the piper.  Let the lawyers argue over whether that line was real or imaginary, fixed or moving.  For the average trader, the past few years have been extremely difficult, and it is nearly impossible for any of us to have any sympathy whatsoever for billionaires in handcuffs.  For many of us, these recurring stories of payoffs to experts and lawyers for providing material non-public information tarnish our profession, and make us the butt of jokes at cocktail parties and High School reunions alike.

Indeed, these headlines merely reinforce Main Street’s anger, and provide the average Joe with ample ammunition to argue that Wall Street is broken, and that the game is rigged against him.   What is clear is that as the FBI’s probe into the land of winks and nods unfolds, wired canaries are singing to save their asses, and the songs they sing will likely mean the end of the golden-age of hedge fund investing.   Most traders are keeping their feelings to themselves (secret Schadenfreudes), but privately are rejoicing in the misfortunes of those who appear to have pushed the envelope of greed a bit too far while collecting ungodly management fees from their investors.  Looking back, it is surprising how many of us in the hedge fund community were shocked last fall when the Galleon Group case first broke, and Raj Rajaratnam was seen being taken away by the FBI in handcuffs.  It wasn’t the allegations of insider trading which surprised many of us, as much as the fact that the federal authorities had finally got wind that all might not be on the up-and-up in hedgefundland .  Perhaps Captain Louis Renault said it best – “I’m shocked, shocked to find that gambling is going on in here!”.

http://www.youtube.com/watch?v=-Gf8NK1WAOc (Casablanca 1942)


The Chickens Come Home To Roost on Turkey Day

http://www.youtube.com/watch?v=QMBZDwf9dok (“I am as Mad as Hell, and I am Not Going to Take This Anymore”)

A great deal of what we do on HFL is supposed to be entertaining and outrageous.  Hell, read some of my prior posts and blogs if you want to see just how insane some of this stuff can be.  This is, of course, by design since we are a new concept in cyberspace-the most interactive and entertaining trading community on the web, and to attract “hits” we need to be fun, different and to some degree controversial.  Wall Street is an insane world unto itself, an incongruous and imperfect mix of greed and fear, morphing and changing daily, waiting to be captured by the creative genius of Jeremy Frommer and his team at HFL.

That said, this trading business is by no means all fun and games.  On the contrary, this is serious f***in business.  Just ask those hedge fund magnates pacing around their mansions in Greenwich this Thanksgiving morning, anxiously waiting for the other shoe to drop, wondering if their friends will sing, and whether their firm is the next target of an FBI raid.  Being a trader is among the most bizarre and surreal jobs in the world.  It is certainly not easy, and if you are not careful and good, it will slowly eat away at your pride, your psyche, your savings, and even your marriage.  On good days, traders can make more money in  5 minutes  than 99% of the American people earn in a year, and on bad days they can lose more more than most people earn over an entire career.  All done while sitting calmly at a desk staring at a computer monitor, watching red and green letters and numbers go up and down.  Try explaining that to your 8 year-old!

Make no mistake about what is going on right now on Wall Street as you awake to enjoy the Thanksgiving holiday with friends and family.  Main Street is screaming “we are as mad as hell, and we are not going to take this anymore”. Ten percent structural unemployment and the loss of the democratic control of the House of Representatives surely mean that many fabulously wealthy Wall Street trading titans are going to prison.  Some of them will sing like canaries, hoping to reduce their sentence from 20 to 10 years, others will spend millions of dollars to defend their good names in court.  Sadly, some of the accused will be innocent victims of the Wall Street versus Main Street fervor. Fortunes were made in the last decade as many traders appear to have danced on that fine line between what is permissible and legal (their “edge”), and what is illegal insider trading and might land them in the Big House.  And now we must all sit back and observe the legal process unfold, as the chickens come home to roost.


NOPE:  Cute hedge fund  analyst entering office this morning


“You Have Air Pockets, I Have Skid Marks!”

Thirteen years into this crazy obsession some refer to as a profession, I still find myself making “rookie” mistakes.  Who the hell am I to say how much downside there was in CSCO stock after its disappointing earnings release Wednesday evening?   A real f***in genius I am, betting tens of thousands of dollars that I know the bottom after John Chambers warned of  weak public spending and “a couple of air pockets”.  You have air pockets, Johnny?   I have skid marks.  Hmmm.  How far can CSCO possibly fall?  The tape is strong, and the shorts will have to cover.  Five percent is a lot.  Seven percent!!!  OMG, buy more, Bogey, you’ll  crush it when the buyers come in.  Nine percent????  Wow, gonna get rich quick and finally buy me that fancy watch- sure am glad I stayed late instead of going to the gym.  This is like taking candy from a baby.  Hmmm, 11 percent????   Thirteen  percent???  Holy shit!   Something is definitely rotten in the state of Denmark!!.  Yikes!  Just lost my day, my week and my month in 15 minutes.  This job sucks!!!   Sixteen percent!!!!  WTF!  I WANT MY MOMMY. Ok,  new game plan, this company is a pig, a friggin dinasaur.  It’s going the way of Compaq Computer and AOL.  SELL, MORTIMOR, SELL!!!   Time to drink.