Need A Winner?
By Jeffrey Hildebrand, on April 17, 2014

Herbalife & Trading Psychology - Media Darlings

The Brandnet Cycle for Trading Hedge Fund Pissing Matches

Most of you are familiar with this chart describing the psychology of trading, it speaks for itself, and speaks a universal truth for every new trader.

Trading Psychology

Media darlings follow different cycles: The Herbalife trading psychology, for example…

Herbalife Trading PsychologyI guarantee that both of these famous hedgies are going to make a killing!

By Jeffrey Hildebrand, on April 8, 2014

Bags in Bags and Bags in Bags

ikea bagWith spring comes spring cleaning. I approached my garage yesterday thinking it’s time to make space for the bicycles and garden tools that have been hidden away all winter. The garage is the place where time hides out, too–ours is filled boxes of clothes that the kids have outgrown, half empty paint cans, projects forever on hold, plus all the other stuff that accumulates over a winter spent indoors. Part of the problem is that now, at least here in France, when you go into a grocery store you bring your own bag or buy one of theirs – to bring back the next time. That’s not really a problem of course, it’s good for the environment apparently, but if half the time you forget to return with a bag, you accumulate dozens and in my case, millions of bags. What most people do, including me, is stuff one bag in the other (again and again) and toss it in the garage – so you have one when you need one. I have millions, and not just grocery store bags, I have bags-of-bags from Ikea, and plasticized bags from every shop in Paris. You never know when I might need one… My garage was starting to look like the Pacific Ocean garbage patch.

bags of bags

It was a personal challenge to throw out a very solid colorful Disney store bag with light blue fabric cords, I’ve been holding it unconsciously since my daughter was 5, she’s 16 now. We bought an ‘Ariel’ figurine. I remember her euphoria and how crowded the Disney Store was on the Champs Elysees. We had developed the habit of taking a walk along the Champs on Saturday mornings when the weather was nice. Ariel was irresistible.

Bags have a history and despite the fact that they’re just bags, try desperately to maintain value. They don’t want to be discarded. If I mention to my daughter that I threw out an Abercrombie and Fitch bag, now containing the Disney Store bag (which contains others), I risk the wrath of an adolescent girl. So I hid them – at the bottom of the garbage can. Au revoir, bags. You held a lot even empty, it turns out.

This is a finance blog, right? Sorry… There are a few possibilities; I’ve never seen an analysis of bag quality vs. market price, there’s likely a correlation. The other is that cleaning out a garage clears out the head, and I recommend that to anyone trying to trade on a daily basis.

Good Trading.

By Jeffrey Hildebrand, on March 13, 2014

Herbalife and how the 1% unproductively spend their money

It’s time again to renew our interest in this non-story. Herbalife (HLF) against the world.

Now that the short-squeeze is over and Bill Ackman’s equity investment has been transformed into a derivatives investment, he can manage his losses as, “the cost of doing business” against Carl Icahn. They both probably have nothing better to do. Wouldn’t there be more productive uses of capital. I know a few… Seriously!

As you’ve probably heard the FTC is launching a civil probe into Herbalife’s practices. Though the results of that probe might take a year or two, the expectations are already being communicated  (Bloomberg).

The investigation will most likely end with Herbalife intact while paying a “palatable fine” and agreeing to stricter controls on its multilevel marketing structure, said Robert Chapman, founder of hedge fund Chapman Capital LLC in Manhattan BeachCalifornia. Chapman, who has been critical of Ackman, owns Herbalife stock and bullish derivative options.

And on the other side of the isle, the obligatory lobbying…

The FTC, along with the U.S. Securities and Exchange Commission, had been asked by SenatorEdward Markey, a Massachusetts Democrat, to look into Herbalife’s business practices. An advocacy group called the League of United Latin American Citizens also has met with FTC Chairwoman Edith Ramirez to describe alleged abuses by the company. Ramirez told Markey in a letter last month that his concerns were being “carefully considered.”

The New York Times reported this week that Ackman had donated $10,000 to the advocacy group and hired a former aide to Markey as part of his anti-Herbalife campaign.

I’d bet $10,000 only scratches the surface.

This got me thinking of the irony of the argument. The League of United Latin American Citizens is challenging Herbalife because the Hispanic community is unfairly being targeted by Herbalife; a pyramid scheme praying on the local hard-working community. Shame, though you would find the same behaviour at Anheuser-Busch InBev. Hypocracy aside.

In their own words (here),

The League of United Latin American Citizens, this nation’s largest and oldest Hispanic civil rights organization, welcomed the news that the Federal Trade Commission (FTC) has opened a formal investigation of Herbalife’s business model.

LULAC has maintained that the company has been defrauding hundreds of thousands of their own distributors by promising a lucrative business opportunity when the vast majority suffer financial loss.

Now my confusion  Here’s a financial whale in a billion dollar pissing match, paying a lobbyist to convince the FTC that HLF is praying on the small guy – which is illegal – while the very act of paying this lobbyist to move the FTC, prays on ME – which is in NO WAY illegal.

HLF-FTC

 

I’m not Hispanic and I don’t buy or distribute Herbalife, but I do buy stocks, futures and derivatives. I want to believe that financial products, serve a valuable purpose, and speculating pits my capacity to measure opportunity against the traders at funds like Pershing Square or Chapman Capital.

I’m clearly holding on to a naive notion. Good Trading

By Jeffrey Hildebrand, on March 10, 2014

Soy Meal vs. Soy Oil Futures - Spread Setups

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By Jeffrey Hildebrand, on February 13, 2014

Marijuana OTC

I sometimes wonder out loud (here, for example) why I keep getting hit up with penny stock requests. My little Fiverr experiment (here) brought in a handful of spin doctors fishing for technical analysis and at the time those requests looked arbitrary. One of my favorites was for an underwater tree harvesting company.  Really. But several were affiliated with a recently legalized and very popular plant. (No disclosures forthcoming.)

I hadn’t considered the trend until I stumbled on a Zerohedge post (here). The good bits come from Nanex.


→ Continue reading Dealing Marijuana – OTC

By Jeffrey Hildebrand, on January 31, 2014

France FDI - Emerging Market?

Investment in France fell 77% last year according to the UN’s report on Global Investment Trends (here), to $5.7 Billion.

That’s the report that kicked things off,  since it’s been downhill. The Figaro picked it up with: Les investisseurs étrangers délaissent la France and try to make a disaster bad thing look normal, by saying  the data is volatile and the charts look more like peaks and valleys. Ok but… As support they refer to an outdated document from the Banque de France. Strange.

The FDI inflows for the top 20 economies are here, find France…
→ Continue reading France FDI – Emerging Market?

By Jeffrey Hildebrand, on January 27, 2014

Hedgehogs

Roberta FlackI appreciate and respect honesty, despise blatant lies, find frauds disturbing, though a bit like reality TV- mostly because Ive never been personally impacted (unless you include commodity price fixing, Libor, etc.) But these are frauds that the collective popular imagination justify, and a story for another time.

Bronte Capital’s blog post When the hedge doesn’t work caught my attention this morning. I like to see hedge fund managers fall on their swords once in a while, not because I’m becoming more French, but because it’s a frank, honest truth about speculation. Whatever your model has defined to hedge exposure (short or long), volatility, leverage or capital, the hard truth is your model will never always respect your predictions. Adjustments are a part of the game,  maybe the most difficult part. Good Luck, time will tell, but the market might be telling us it’s time for a post-QE adjustment.

It’s a good post and my readers should have a look.

Roberta Flack:  One of the primary qualities of a good performance is honesty.

By Jeffrey Hildebrand, on January 23, 2014

Start-ups Take Two

Welcome to the future, again.

b2fMaybe it’s serendipity, things seem to be coming together for technical innovation these days. Maybe we’re experiencing the promise. Everywhere you look, literally, efficiency is being injected into our daily lives. Our PC and the internet in our pockets, in our cars, and at The Gap.

For those of us that lived through pets.com, boo.com, flooz.com, Napster, and the play by-play demise of these astronomically high valued companies on fuckedcompany.com, the ongoing optimism around  Twitter, Facebook, Bitcoin, Snapchat, and a myriad of others has taken me a bit by surprise. At the time (and for me personally) it was the tsunami of freshly minted marketing graduates descending on NYC that signaled the beginning of the end. The party was filling up with the uninvited. Time to cash out. Bye. France? Ok, why not. For those handing out the cash it was the start-up earnings that never came to the party. Time to apologize to our investors and move on.


→ Continue reading Start-ups Take Two

By Jeffrey Hildebrand, on January 10, 2014

How Sustainable is the Status Quo?

For the moment, I’m just liking the question!

In the context of trillion-dollar debt and market confidence, things seem to be rolling along smoothly.

In the context of politicaly motivated traffic jams (read what you will) or gay marriage in Utah, the half-life looks a bit shorter.

By Jeffrey Hildebrand, on December 26, 2013

Another Year (Tchin)

priorite-a-droiteAre you already tired of top 10 lists and reviews; the best, worst, top, bottom, favorite, saddest, ugliest, or even funniest? The people we lost, the music, the films, and viral videos all get pulled off a virtual shelf then pulled from a a virtual box. In truth these lists are stored in a relational database and prepped for release in November. You never know – the top 10 most viewed YouTube videos might need to be recycled for 15.

Of course predictions will be arriving any day. Here’s mine: in 2014 Google will  start adjusting the “Lists of Top” I prefer, automatically. The top 150 wing-suit videos, 45 cat jokes and the 5 most effective Federal Reserve programs. They’ll appear on my android phone without my asking. Relational databases are smart but Google is much smarter.


→ Continue reading Another Year (Tchin)

By Jeffrey Hildebrand, on December 19, 2013

Gold - GC Analysis

Gold is one of my favorite and most frustrating products to trade, so it was a pleasure to ramble on and point out some technical levels. Enjoy the video.

By Jeffrey Hildebrand, on December 13, 2013

Another Huge VIX Bet

Bloomberg reported today (here) a $5 Million VIX bet - 40,000 April calls with the VIX at 15.5 - this follows the $6 Million spread I saw in November  (here).

Things are getting interesting.

The trader purchased 40,000 April calls on the VIX with a strike price of 22 for $1.28 each, according to Trade Alert LLC. The bullish volatility bet was the biggest single block of options to change hands on U.S. exchanges, the research firm said. The VIX rose 0.8 percent to 15.54 today.

Investors are positioning for a possible jump in volatility with stocks poised for the biggest annual advance since 2003 after the Federal Reserve refrained from reducing monthly bond purchases. The central bank may begin reducing its $85 billion of monthly bond purchases at its Dec. 17-18 meeting, according to 34 percent of economists surveyed Dec. 6 by Bloomberg, up from 17 percent in a Nov. 8 poll.

“Customers continue to hedge their stock-market risk by buying upside calls in the VIX,” Mark Caffray, who brokers contracts on the index for clients at Chicago-based PTR Inc., said in an interview. “There have been very aggressive customer buyers of VIX calls in March 23, April 24, and today April 22 call strikes,” he said. “We do not expect this activity to subside until a Fed decision on tapering.”

An explanation from ZH which also suits this trade; “everyone remembers the summer very vividly, the last thing anyone wants is to be the last Kool-aid drinker at the centrally-planned party.”

By Jeffrey Hildebrand, on December 11, 2013

That was fun

There we have it.

The S&P in moderate panic mode on news (presumably) that a budget deal is in the works. So good is bad for another Fed fix. It’s been a long time since we saw such a smooth ride down. I like this chart, look where we stopped, surprise.

ES Chart

For those of you looking at Fib extensions we have a bit more downside. (Or not…) What was so fun (and profitable) about today’s trading was the failure to find 1800 again and then the breakout under 1792.

These opportunities are rare these days, it was a beauty.

ES Chart Levels

The VIX screamed higher 10% to 15.42. This in itself isn’t so extreme, but if the end of the week shows some follow through we’re in for some volatility. Finally!

The other possibility is we’re going to find a range here 1775 -1805. That also offers some interesting possibilities.

Good Trading.

Selling Vol on the radar.

 

 

By Jeffrey Hildebrand, on December 4, 2013

Urgent Request To Pump Up A Penny Stock

There’s a first for everything.

Yesterday I had an odd and urgent request: “I need a stock chart on TDEY – I need it done within 3 hours, and I need you to hype it saying looks like it could see an NTEK type move long run.” 

Curious, I thought to myself what could this be about, and what in the world is TDEY? Or for that matter, NTEK? I actually read ‘DDAY’ in my head… Being in Normandy. The guy sent me to a link for AZFL and a charting video (with over 115,000 views) . I thought, this IS curious.


→ Continue reading Urgent Request To Pump Up A Penny Stock

By Jeffrey Hildebrand, on December 3, 2013

Johnny Cash

Johnny CashI have no explanation for it. Johnny Cash sings in my head. I don’t think his last name has anything to do with it, but I can’t entirely exclude the possibility.

Driving back to Paris on Sunday, I hear The Caretaker on FIP. Last night a friend in New Jersey tells me he’s coincidentally been on a Johnny Cash hokey-sentimental-reunion-tour, pulling out vinyl.

Maybe it’s the classic lines: The beer I had for breakfast wasn’t bad so I had another for dessert, or the holiday arriving, and A Johnny Cash Christmas subliminally starts to leak back into my consciousness.

I’m off track, and that, thanks to Grant Williams, who is growing increasingly frustrated with the state of the Gold Market. Aren’t we all?


→ Continue reading Johnny Cash

By Jeffrey Hildebrand, on November 25, 2013

MetroPCS - TMobile (TMUS)

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By Jeffrey Hildebrand, on November 18, 2013

Bitcoin Parabolic

It’s hard for me to resist the Bitcoin story. A few months ago I calculated that mining Bitcoins would cost more than the electricity needed to run the mining computer (here).


→ Continue reading Bitcoin Parabolic

By Jeffrey Hildebrand, on November 14, 2013

Trading Timeframes

Due to a recent request to publish a video, I’ve dropped in a ‘quick n dirty’ here. I talk about trading timeframes, classic setups, and market differences. A rough cut, I admit.

Most of the books I’ve read don’t spend enough time on timeframe. The fastest way to lose money is adjusting your trading timeframe when a trade goes against you. I try to drive that point home, it’s important. The second point I try to make is that different markets behave differently. The same setups don’t work the same across markets, as you’re lead to believe.

I talk for a bit about GC and how even with the best setup, Gold is a market which will devour a stop order.


→ Continue reading Trading Timeframes

By Jeffrey Hildebrand, on November 7, 2013

Following a $6.7 Million VIX Call Spread

On October 18th Bloomberg published an article (here) about a trader or institution that bought 160,000 February 24 calls and sold February 29 calls (in equal measure).  The open interest today is at 170,000 and the cost for the trader on October 18th was 42 cents per contract or $6.7 Million. I’m following this trade for fun.

It was very likely a hedge against the SPY (or maybe some SPX futures?). Almost 30 days later the pair would trade at about the same price but what’s interesting is to imagine what this trader/institution had on the other side.


→ Continue reading Following a $6.7 Million VIX Call Spread

By Jeffrey Hildebrand, on October 30, 2013

Success with Fiverr

FivrrThe web is rich with ideas. I enjoy testing those ideas, playing with the concept and drawing my own opinion in the absence of spin. My latest little experiment is with Fiverr.com (don’t ask me why there are two r’s in Fiverr).

My profile on Fiverr.

So let’s go.


→ Continue reading Success with Fiverr