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Interview Experience by Danielle L.

My interview today was certainly unique and unprecedented, to say the least.  Knowing that I was applying to work at a “hedge fund,” I assumed that my interview would be similar to every standard interview that I had heard about or experienced.  I imagined the questions that I would be asked, the responses that would be expected of me and even the suits that the interviewers would be wearing.  Immediately upon entering the office, I was pleasantly surprised to learn that my assumptions were far from reality.  I entered a large room, where I was instructed to sit in front of one of about twenty computers, arranged around a large conference table, and to simply listen and watch my surroundings.  Several interns (“freshman”) were working and speaking, into headsets, with experienced TFG employees, and I spent several minutes speculating and trying to get a feel for how the company worked.  After a short while, I was approached by Jeremy Frommer, who briefly skimmed my resume and stated that he would be interviewing me, after warning me that “the company is a tough place to work and a harsh environment.”  Marc Schwartz led me up two flights of stairs to the roof, where Mr. Frommer and his cameraman met us shortly thereafter.  Mr. Frommer’s assistant proceeded to video-record the entire interview, as we sat in the heat and discussed many unconventional interview topics, including how to improve my resume, guns, travel, movies, finance, TFG interns and cigarettes.  Throughout our discussion, I felt comfortable and relaxed, was genuinely intrigued about the company and its operations, but st respect and appreciation for the two men who had dedicated their time to speak with a financial neophyte.  After about an hour spent at TFG headquarters, I left, smiling and optimistic, having fully enjoyed a process that most people dread and are forced to suffer through.


Profit Potential

Every day the Market presents opportunities for profit that may or may not unfold.  The key is to recognize that potential and trade accordingly.  Ideally, I try to take the trade when I see it, get out quickly if it does not materialize, or scale in and out to optimize profits as the price action dictates.  Amazon (AMZN) provided a good illustration of that principal twice yesterday.  Early in the trading day, as the HFL Head Trader pointed out at the time, a falling AMZN came into a key price level; the 200 Day Simple Moving Average on the daily charts.  Although AMZN’s momentum was downward in a falling Market, it represented a POSSIBLE level of support that might provide a significant Profit Potential.  The upside to the previous day’s high (an arbitrary level within reasonable context) was $2.50.  Even with a fifty cent stop out, the opportunity was a five to one ratio.

 This key level held, within 5 cents, and became the Low of the Day.  The reversal started an uptrend that continued through the rest of the day until AMZN approached another key level at R4.  At the time, another POSSIBLE opportunity for profit, this time, a Low Risk Short.  AMZN was on an R3 Pivot Sell Signal at the time, rising towards R4, which was only 4 cents above that target High of the Day from the day before.  In this case, the Profit Potential did not become a Profit Reality.  Instead, the price essentially held and was flat for the remaining 15 minutes of the day.  However, the Profit Potential was there.

These two opportunities demonstrate that although the potential for profit may not always materialize, putting yourself into position to capitalize when it does, while protecting the downside if it does not, can be rewarding.


The S&P will NOT rally today

The last 3 session the S&P has managed to rally off the lows each time, closing at respectable levels. Unfortunately that is not going to happen today. There is too much pressure on this market and having watched the 5 hours (instead of sleeping) the market has barely made a whimper of a move higher.

I will be agressively shorting rallies today and perhaps holding these short if the selling maintains all day. I try to be flexible about my trades so anything is possible but I believe that this could be the start of the next move that test the super important 940 level on the S&P. Before that 1060, 1044, 1032 and 1008 are critical levels and should be stopping points on the way down.

Even though I am a technician, I do not see the fundamental backdrop for a good market. Earnings were solid but each economic indicator that comes out seems to disappoint traders, England is lowering growth forecasts as well as China. The overriding poor economic news is going to drag this market lower and there is not a thing that Bob Doll and all the other permabulls can do about it.

Get short or get killed!


The Dog Days of Summer

And welcome back (bear) traders!  Following yesterday’s unBEARably quiet day in the market, today’s session was met by all the returning traders, bracing themselves for the FOMC statement ahead at 2:15p.  The Spooz closed down just 60bps, which eased whatever fear that may have been instilled in my after the initial weakness off the open.  We are still up for the month of August and the daily chart of the Spooz suggest that the bulls and bears are still duking it out right above the 200 day moving average.  The light volume we’ve been seeing gives favor to the bears; however, the fact that we are sitting above the 200 day moving average evens out the fight between the bulls and bears in my mind.  I don’t think we will see a real clear direction until the dog days of summer are over.  The summer is just buying time for investors who, like fund managers sitting on the sidelines, have no idea what to do.  So I will wait it out.  I cannot give much credence to light volume rallies so I have no choice but to wait for the end of the summer when everyone is back on their desks and hence forced to face the reality of having to make a decision.


“Quantitative Neutrality”

A lot of talk on the street is about the Fed’s FOMC conclusion made this afternoon. Commentary is mostly centered around the idea that the quantitative easing report did niltch. To help support the economic recovery in a context of price stability, “the Committee will keep constant the Federal Reserve’s holdings of securities at their current level by reinvesting principal payments from agency debt and agency mortgage-backed securities in longer-term Treasury securities.” So while the Fed’s decision to ease the Fed’s control over the US money supply, it seems as though the only effect the easing will do it “ease the stock market”. We saw a nice bounce off the lows in the market after the 2:15 meeting.

The financials book certainly didn’t respond well to the news as we sorely underperformed the market returning -1.32% compared to the SPX and XLF closing down 60 bps and 87 bps respectiely. AGM was our biggest loser at it lost 14.6% in value after poor earnings this morning; our two top five positions in the book didn’t perform well either with JPM and BAC both down about 2%. We covered our FXE short as we made the biggest gain in the position in over a month; we were up over $2,000 in PNL before the Fed meeting and after we only took away $926 in profit as the FXE jumped on the news. We also sold our position in FITB and a third of our position in Goldman Sachs.

Today’s news was neutral, but clearly the financials are misbehaving as they’re now the weakest sector over the week down 1.1%.


HFL Portfolio Recap: 8-10-2010

It was a tough day for Hedge Fund Live closing down 75 basis points underperforming the broad market where the S&P 500 closed down 60 basis points.  One bright spot was our performance in relation to the NASDAQ Composite which was down 1.24%, I feel it’s important to compare this book to the NASDAQ considering Tech now makes up over 40% of the long value.  We took our gross exposure down to 70.2% and our Net Exposure down to 15.4% as we feel more uncertain to the direction of the market.

The biggest winners on the day were the futures, WHR, FXE, BPOP, and AMZN.  The S&P 500 futures short (hedge) was up nicely when the market was puking off the open but profits were cut into a third with the rally following the Fed announcement.  WHR was down 3.86% due to the market rather than any direct news.  The FXE was down sizably throughout the majority of the day but ripped following the Fed announcement and we covered the remainder of our short.  The FXE closed the day down 33 basis points.  BPOP had a strong reaction to a Morgan Stanley upgrade closing the day up 6.13%.  AMZN rounds out the winners in the portfolio closing the day up 91 basis points.

The losers on the day were INTC, AGM, BBY, DELL, and XIDE.  INTC was down 4.02% with the rest of the tech/computer space after a report out of Taiwan said notebook shipments were down 20% in July and a bearish note from JP Morgan.  AGM was taken down today following earnings yesterday after the close.  AGM closed 50 cents off the lows at 13.86 down 14.66%.  BBY was down 2.84% on a downgrade and bearish comments out of Corning who said they have been seeing weak U.S. LCD TV Sales.  (This was reiterated from a previous statement)  DELL and XIDE had a rough day closing down 4.08% and 3.74%, respectively.


Scanning for Content

Today, after the close I spoke with Sam Bernstein who suggested a new idea to create content on the broadcast. He said that we should be running screens and filters for stocks that meet certain criteria and provide our members with a list of these stocks. For example, we could scan the market for names that are trading in a triangle pattern and list these stocks on the broadcast. Then, an hour later we can report how these stocks have performed over that time frame. Furthermore, we could report several different lists for different variables and report which strategies would have worked the best over the same period of time. This type of information is simple to collect and can provide our members with valuable trade ideas. Our conversation made me realize that our broadcast focuses on relatively small universe of names and not every trader is interested in hearing about letter X or RIMM all day. I would be very grateful to hear any member feedback on this idea so we can continue to add the most valuable content possible.


Robbing the poor to give to the poor

The House of Representatives just passed a $26 billion bill intended to help states save teachers’ jobs and to prevent Medicaid cuts.  In a rare case of anti-Robin-Hood-ness, this bill robs the poor AND gives to the poor.  A major portion of the $26 billion spend will be offset by $11.9 billion in cuts to the Supplemental Nutrition Assistance Program, a.k.a. food stamps.  If you’re “poor” you’ll be able to visit the doctor, just make sure to pocket as many lollipops as you can on the way out.  Liberal Democrats are less than thrilled with this outcome, although the food stamp cuts begin in 2014, so they’re hoping they will find an alternative offset by then.  Representative Rosa DeLauro, (D-Connecticut) went so far as to say “As you can imagine, for me personally, it’s like ‘Sophie’s Choice’”.  I wonder how her senior Senator, Joe Lieberman, would respond to that claim; considering Sophie’s actual choice was which child to hand over to the Nazis?


Cheating Time With A Picture

I hang up lots of pictures, photos of people, places, things; it’s a form pf clarification for me, like a receipt from god for the sale of life. I view it more as a philosophy than a hobby, but taking pictures, and “do I have enough pictures?” shows up more and more on my list of top questions, these days. I am obsessed with taking a picture of every personal event or occasion. I had that appreciation for the value of time, even as a kid. Photographs are a way of cheating time and reliving an experience. Hedgefundlive.com is filled with photos of the evolution of our business. In years to come, I will look back on them with joy or sadness. Either we will have failed or succeeded. That is the irony of cheating time by reliving memories with pictures. Pictures don’t change, but perceptions do.


Buy The Dips Of Slow Summer Days In The Stock Market

Once again my doom and gloom partners whisper “the end of the world is upon us.” I don’t agree. light volume , fear and a deep desire to protect ones money while enjoying the summer will dominate the first 2 weeks of the month while a comfort rally will take us through the end of the month. The fundamental reason the bears give is a double dip is upon us. I just don’t see it.