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Category Archives: Business

Where are we headed?

There is no direction in this market. Tod the spooz traded in a tight range. Both our longs and shorts worked for us. As we take a look at the bigger picture and evaluate the broader market, we have no evidence of a big move. There are plenty of questions that still need answers such as; where are rates headed, what will happen in Egypt, will there be anymore quantitative easing. With these unanswered questions ahead of us, one would speculate we will eventually pullback. For the time being we still remain to grind higher. But when the pullback comes, it will come fast and hard. Take a look at our CEO Jeremy Frommer’s blog; 10 Reasons The Stock Market is Delusional, for further conviction of a pullback.

Hedge Fund Mafia webisode series coming soon

Hedge Fund LIVE has teamed up with producer Lamont Stephens, of Lamont Stephens Collection, to bring you the first promotional video for our upcoming webisode series Hedge Fund Mafia.  Hedge Fund Mafia is a reality series that documents the ins, outs, ups and downs of life at a hedge fund; both at the trading desk and away from it.  Episode 1 will air on February 24, 2011 at www.HedgeFundLIVE.com.  The Hedge Fund LIVE team is excited to continue its efforts to provide a first hand account of hedge fund and professional trading desk life as they continue to build the preeminent financial community on the web.  CEO Jeremy Frommer, “The Boss”, is joined by President Marc Schwartz, “The Enforcer”, “Mad Dog Mosk” Moskowitz, and “Pretty Boy Dean” Machado in what promises to be an entertaining and informative weekly web series.

Hedge fund live vs. Hedge Funds

I want to know where my money is invested

 Put us up against any other hedge fund and the one guarantee is our transparency. Four times a year, US securities regulators require fund managers to disclose their stock holdings. At hedge fund live, at any given time, your are able to view any of the traders portfolios, as well as watch the trading desk. I have mentioned this in a previous blog, that hedge fund live is truly innovative.

Mid day recap for Day Trade Well P&L is positive!

J.C. Penney Cheating the Google System

There was an article in the Times around how J.C. Penney (JCP) has been cheating Google’s (GOOG) search system.  Search terms like “dresses”, “bedding”, “area rugs” were all coming back with the same result at the very top of the list- J.C. Penney.  Other generic terms like “skinny jeans”, “home decor”, “comforter sets”, “furniture”, “tablecloths” were bringing up J.C. Penney’s website near the top of the search results.  Furthermore, specific terms like “Samsonite carry on luggage” were returning J.C. Penney, even ahead of Samsonite’s website itself.  The retailer’s holding the top spot lasted for months, and notably during the holiday season when online shopping becomes a more popular activity.

At first glance, one might applaud J.C. Penney for having great search optimization techniques.  In the SEO world, there exists what are called “white hat” vs. “black hat” approaches.  The former are acceptable tactics, the ones used by marketing/consulting firms to increase visibility.  The latter are techniques that are not necessarily illegal, but frowned upon, designed to cheat the system.

Now, Google does not discuss in detail how their search algo works.  But they do mention that one of the main criteria is links from one site to another.  J.C. Penney’s “black hat” approach exploited this very idea.  Supposedly, someone paid to have thousands of links show up on hundreds of various websites, and all of them linked directly to J.C. Penney’s home page.  J.C. Penney denied it was done internally and that they are currently working on taking down the links (I’m sure they’re taking their time with that).

So, clever or just wrong?  If searching the  internet is supposed to represent relevancy, then I say, yes, “black hat” strategies are lame, cop out approaches.

Summary of the first week

Ferrari F430 How Sweet!


I have always wondered what it is like to being a trader. As my first week comes to an end, I don’t own a Ferrari or a huge mansion. Is that not what Wall Street is? My first week has given me great exposure to the business and what a difficult one it is. There is a lot of pain that comes along with this job. You have to be able to stomach huge losses, but also not be greedy when things swing in your favor. I also learned that being prepared helps tremendously. The energy on the desk really gets you going and excited to be here.

I also realized that although I am a trader, there are other tasks that need to be done to help the business. The concept behind this site is truly remarkable.  Some may say I am drinking the “kool aid”, but in all honestly, think about it- a fully transparent hedge fund, really? One of the biggest complaints about hedge funds is, how do I know what they are doing?   Is this another Madoff scheme?  What are they investing in?  Well folks, here you have it! On top of that, the content that we can provide to viewers can help investors be successful traders from home.

There is still a lot for me to learn, but I am excited and can’t wait to share my success with you and hear about yours.

Have a  Great Weekend!

-Justin Valle

First Day, First Blog

I have always taken an interest to the markets, but never followed it that closely. As a trader that is about to change. Over the next several weeks there will be a lot to learn; from moving averages, too executing trades, and defining pivot levels makes me feel a little overwhelmed. With money as my motivation I am confident I will succeed.

Blogging, on the other hand will take some getting used to. I come from retail banking where creativity is tossed aside. All in all I am excited for the opportunity; and look forward to blogging about both my success and failures. Hopefully my failures stay to a minimum, but serve as a teaching tool to myself and the members.

-Justin Valle

Egypt’s craziness

Some people say the world is ending in 2012.. and I’m starting to get concerned that it’s coming true. With this craziness in Egypt, Australia, and other parts of the world hopefully it won’t slowly head towards the US. To start, banks were and are still closed. Horrible timing for workers, since this is the last two weeks of the month which is when most workers get paid. With no money, civilians can not afford food which is adding an edge of desperation to the protest. Even though some are losing a meal a day, any are saying they’d, “rather live hungry than die in fear.” American and international companies, like Coca-Cola, General Motors and German owned Volkswagen are closing plants and pulling workers out of Egypt.

Between curfews, checkpoints of armed civilians and fears of looting, transportation has emerged as a major problem. Many distributors of major companies are not letting their trucks nationwide on the road. As I watch CNBC, many importers in the Suez Canal are avoiding Egyptian ports at all costs. Tourists are flying away leading the capital to fly away as well. With that said, the stock market’s been down 17% since Jan 24.

As of last night, there has been a start to a more peaceful protest. The six day old uprising has entered a new stage when an Egyptian uniformed spokesperson declared on government television it will not use force on protesters. Meanwhile one of Mubarak’s trusted adviser offered to talk with opposition. Because of those statements and the weakened economy, Mubarak’s tightened grip over the country is slowly loosening.

Many Americans take freedom for granted.  Free elections, is the main demand Egyptians want with the departure of Mubarak. Facebook, a social networking site where opinions are stated, had a big part of this protest in Egypt. Young political organizations called on the network for a day of protest which was inspired by an outlash of other Arabs in Tunisia. The thought that what you say can be censored by the government is un-imaginable to any one in the US so it is positive to see civilians in Egypt are finally taking a stand to get Mubarak out of their country’s government, let’s just hope it stays as peaceful as possible.

EDU, the leading China education institution

EDU is always one of my favorite stocks. I have been watching this stock for almost one year. The company focuses on teaching Chinese students who plan to study abroad how to prepare all kinds of tests like GRE,Toefl,SAT,GMAT. It’s the leading China eduation institution.

According to google finance data, the current price is 98.86 with beta 1.00 and P/E 45.79.  In 2010, I took part in a virtual investment contest organized by one of my professors. I bought the stock at around 68(paper money) when I thought it was a great chance to buy in. Now the price is 98.86. I wish I bought it with real money( actually, I didn’t have so much money, otherwise I would definitely buy)

The reason I love EDU is as the following:

1. The company has no debt, all it receives are cashes. Almost all the students who want to study abroad will go to EDU to learn SAT,GRE,Toefl, GMAT… EDU is so hot that you have to register online and pay the tuition fee in advance.

2. The profitability is amazing. You can see it from this example: a normal teacher there teaching GRE during summer break in China can earn average 300,000 RMB. And we all know what teachers get is only a small portion of the company’s profit. The survey shows that in 2010 the students going abroad exceeded 250,000 and this number is increasing. Since EDU is the no.1 choice for studnets to take for preparing all kinds of tests, its probitability is sustaining.

3. EDU represents the best eduation. You can ask studnets from China, they may not knwo who’s the current CEO of Microsoft, but they definately know who is the chairman of EDU.

Future of Handheld Gaming Consoles

I’m a gamer. I’m being playing games since I was 5 years old. From the very simple Tetris and GameBoy to the Sony PSP  and Nintendo DS I’ve enjoyed every stage of their progress. But during the last couple of years I’ve wondered how they would survive in the electronic consumer market which seems to be converging day by day.

Within the next few years every consumer electronic would be able to make calls, browse the Internet, social networking, play music and video and play games. So what would happen to these big names in the gaming consoles in the future? We would have to take some time to analyse this situation.

Sony just came out with the announcement of its newest handheld code named “NGP” which looks quite the same as its predecessors. It specs are fantastic with quad-core ARM Cortex-A9 processor, 5-inch touchscreen OLED display with 960 x 544 resolution, dual analog sticks (not nubs as on the current generation), 3G, WiFi, GPS, a rear-mounted touch-pad, accelerometer / gyroscope motion sensing , an electronic compass, and cameras on both the front and back. Well is it impressive enough? If you look at some of the other types of consumer electronics you can see that you have quite the same specs as this except for the processor. How can they really make distinction between the other consumer electronics? I’m not sure if there is a clear cut line. If there was it is surely fading.

During iPhone 4G announcement it was told that the number of games purchased in the iPhone actually is much greater than the games purchased for any other gaming console. I’m sure the android platform is also able to give a similar comment. Apart from them the tablets are making their way killing off the market held by netbooks. These devices can afford to have much powerful processors and would surely rival the handheld gaming consoles. I was under the impression that the gaming console market would be safe with the younger generation until I heard a 10 year old asking for a iPad for Christmas.

This is what I believe. Sony and Nintendo would have to make a decision soon whether to kill off the devices or to join the game that is very much inline with the smartphones and tablets in the market. Smartphones and Tablets will be the future of gaming. They would cease to be called as Smartphone or Tablets but would be just larger and powerful or smaller and less powerful version of the same type of devices. I just cannot wait to see how things will turnout.

China’s 12th five year plan

2011 is the first year of the 12th “five year plan” in China. Five year plans, although invented in Soviet Union and designed for planned economy, have been and remain to be good indicator of Chinese government priorities. Most (26) of China’s provinces have held meetings in early 2011 to set their economic development plans in the next 5 years. And their plans, this time, are very ambitious.

10 provinces announced their planned growth would be 15% each year, a.k.a. double the amount of GDP they currently have at the end of 5 years. Those provincial governments are usually conservative in this number because this is going to be used to evaluate their performance. So this 15% is already conservative.  The pressure is on. We will see how the formal plan comes out in this coming May.

Where will the growth come from? Local governments will keep door wide open for capital, land and resources access, and fill the pipeline of big industrial and infrastructure investment projects. This implies that the current inflation in China will most likely continue and even rise higher. Despite effort of Chinese central bank, there is no real constraint in liquidity in China, as long as the government want to invest.

Another source of growth, which I personally like much better, is the potential in private companies in service industry. The room to grow is huge, especially in industries like education, health care, media and design(in its broad sense).  Local professional services, after accumulation of expertise and experience, will hopefully find its way too.

This outlook presents great investment opportunities ahead. Still, local governments worry me. They definitely see the whole picture. But it’s not clear how they will provide support to new generation of entrepreneurs, who are very key to the ride.