Quants: The Alchemists of Wall Street

If you haven't seen it yet, embedded below is the video entitled Quants: The Alchemists of Wall Street. It's really an interesting almost hour long segment regarding the most mysterious players in financial markets. Email readers will need to come to the site to watch the video:



And if you fascination with quantitative managers doesn't end there, we highly recommend checking out Scott Patterson's The Quants which focuses on the likes of Jim Simons (RenTec), Ken Griffin (Citadel), Cliff Asness (AQR) and more.

CNBC Parody By 30 Rock

Here's a video of a short parody of CNBC by the television show 30 Rock that's been making the rounds:

E*Trade Superbowl Commercial: Milkaholic

E*Trade has had a few good commercials featuring their babies over the years and here's the latest video from the SuperBowl if you missed it:



And on a market related note, we see that E*Trade has recently jumped into the broker battleground by lowering their trade commissions to compete with the likes of Fidelity, Charles Schwab, and TD Ameritrade. This competition is good all around for retail traders and investors.

Tiger Management's Julian Robertson Interview With Charlie Rose From 1998

This is an excellent video from over a decade ago (feels funny to say that... time flies). Today we present you with Charlie Rose's interview of hedge fund legend Julian Robertson of Tiger Management from back in 1998.

Embedded below is the video, so RSS & Email readers come to the blog to view it:




It's kind of funny to look back on his thoughts. We've essentially taken a time machine to a different market environment following Robertson's ascension as one of the most widely regarded hedge fund managers with his Tiger Management (profile & background here). It's even more intriguing when you compare his thoughts from the video above to a Bloomberg interview Robertson did this past October, over a decade later. Robertson's legacy has obviously lived on with the spawning of Tiger Cub hedge funds that emulate Robertson's success and build their own legend.

Nowadays, Julian seeds various hedge funds and has been investing for himself. We've highlighted Robertson's portfolio and in particular his bet on rising interest rates that he has recently tweaked to doing so via constant maturity swaps (CMS). Whether it be the past or present, two things remain the same: Julian Robertson's sharp investing prowess and that good ole southern twang.

Carl Icahn Guest Lecture At Yale University

In a recent video courtesy of AcademicEarth, Yale University's renowned Professor of Economics Robert Shiller welcomed Carl Icahn to his classroom for a guest lecture.

Embedded below is the video of Carl Icahn's lecture on his career in finance, shareholder activism, and the economies and markets of today. RSS & Email readers come to the blog to view the video:

Carl Icahn runs hedge fund Icahn Partners and focuses on activist investing where he seeks to implement change at various companies. We've covered his movements in-depth here on the blog and in October he laid out the idea to short real estate. In addition, we've also detailed some of his portfolio activity. There have been some recent developments out of the Icahn camp and we'll present those in a separate post shortly.

Key Levels In the S&P 500

MarketClub just posted up a new video examining the S&P 500 and in it they've outlined two key levels in the market. They highlight that while the trend is up, you still have to be cautious and know when to switch from long to short. So, they've identified a level at which to exit longs (S&P 1072) and then they've identified a separate level which would signify a trend break where you would want to then get short (S&P 991). These are obviously important areas to watch because the trend is your friend... until it's not. Hear what they have to say in their S&P 500 video.

Use those levels to help you place your stops or know when to exit your longs as the market continues to melt up higher. It's never a bad thing to have an exit strategy in place.

Why Hasn't Gold Skyrocketed After Clearing Resistance?

This is indeed a prudent question that needs addressing. We've been covering the move in gold on the blog with our technical analysis updates and paid special attention to when gold crossed the important psychological and technical resistance level of $1000. But since this big achievement, it hasn't done a whole lot. Why hasn't it skyrocketed yet?

The guys at MarketClub have identified an interesting pattern in the gold market that could possibly highlight why gold hasn't taken off yet given the fact that it broke out above longstanding resistance levels. Check out their technical analysis video here to see a possible explanation. They've noticed a pattern that gold trades in cycles where it will make a higher low every 84-90 days or so. Looking back to October of 2008, this cycle plays out for another potential higher low soon. This could potentially be a reason as to why gold isn't skyrocketing higher as near-term pressure could be weighing on the precious metal. It hit a tradable low in November 2008, January 2009, April 2009, and July 2009. That cyclical pattern points to this coming October next.

The long-term uptrend seems to still be intact, but there could be a trading range or pullback on a shorter timeframe. They also go on to highlight a similar cyclical pattern where gold could potentially be topping out every few months too, so make sure to check out the video for the full graphical representation and explanation.

Recent Interview With Hedge Fund Manager Jim Chanos

CNBC recently had noted short seller and hedge fund manager Jim Chanos of Kynikos Associates on as a guest host. In his interview (video embedded below), he speaks on the subjects of executive pay, mark to market accounting, transparency, and other interesting topics in today's economy. Also, Chanos mentions the debut of a new website he has helped release, HedgeFundFacts.org. It is a hedge fund advocacy site with a focus on dispelling myths related to hedge funds and short selling. This site is certainly a step in the right direction in terms of removing the 'villainous' title hedge funds are often labeled with.

It's been a while since we covered Chanos on the blog so it's good to have something to post up. Interestingly enough, in the interview he also mentions that he (along with others) met with director Oliver Stone regarding the upcoming film, Wall Street 2. Chanos and others urged Stone to take the focus away from hedge funds and to put it more on the banking system in general. For more on Chanos, you can check out some of his past investment ideas as presented at the Ira Sohn Investment Conference.

RSS & Email readers come to the blog to view the embedded video:

Visit msnbc.com for Breaking News, World News, and News about the Economy

What a Short Squeeze Feels Like (Video)

Going into the holiday weekend, we thought we'd post up two fun Friday videos that we are going to call, "what a short squeeze feels like." Don't worry, both videos are work safe. (Email readers make sure you come to the blog to view the videos).

Firstly, here's what it feels like to be squeezed as a short:





Secondly, here's what it's like when you're not the one being squeezed. Instead, in this video you're riding the waves of those shorts who are getting their faces ripped off below you:







Oh, and for those of your curious/puzzled/in denial: yes, the second video is fake. It was edited together and used in a Microsoft Germany advertisement and you can read more about their viral marketing video at Tech Ticker here. Remember that US markets are closed on Monday (Sept. 7th) so have a non-laborious Labor day!

Fibonacci Retracements S&P 500: Technical Analysis Video

Since we like to look at both sides of the argument, we thought it would be prudent to highlight a potential bullish scenario as identified by technical analysis. This comes after we just earlier today looked at two reasons to be bearish.

The bullish scenario stems from a potential inverse head and shoulders and levels identified by Fibonacci retracements. Here's the video that outlines the potential scenario. (Unfamiliar with Fibonacci? Watch this educational video).

A screenshot we've taken from the video highlights that the retracement tool was drawn from the highs of October last year to the lows of March of this year. By placing it as such, it identifies four potential fibonacci retracements at S&P 500 levels of: 878, 1011, 1119, and 1227. We are currently floating around the 38.2% retracement of 1011 and looks like we may head higher. When the market initially flew past the 23.6% retracement at S&P 878, we noticed that it came back down and tested that level. That level held and the market was propelled higher. The next stop in terms of retracements where we might see resistance is 1119 and after that, 1227. If the potential inverse head and shoulders plays out to fruition, then 1227 on the S&P would be a likely upside target.

(click to enlarge)

The guys over at MarketClub have done a nice job of walking you through everything so you really only need to watch the first half of the Fibonacci retracement video. While we are not bullish at this moment, we want to be clear that it's always prudent to examine both sides of the argument. (After all, Doug Kass called a top in the market for this year). One of our favorite sayings is that the market can remain irrational longer than you can remain solvent. Hedge fund manager Paul Tudor Jones likes to let the market guide him and that's exactly what we'll do here.

The Basics Of High Frequency Trading (HFT)

Great video flagged by Zero Hedge last week regarding the basics of high frequency trading (HFT). There has been a whooole lot of talk about this lately on other sites and in the world of finance. So, this video embedded below serves as a great primer for those of you interested in the subject. (RSS & Email readers will need to come to the blog to view the video).



For those of you who would like the latest opinion swirling around the investment blogosphere, Abnormal Returns has a nice post and round-up.

Dan Loeb Video: Hedge Fund Manager Of Third Point LLC

Hat tip to Simoleon Sense for this find. Interesting video embedded below featuring a lengthier speech/chat by Dan Loeb of hedge fund Third Point LLC. In the video, Loeb details his background, talks about the investment industry, and gives a lot of great advice. And, since this was pretty recent (June 2009), he details the turmoil his firm suffered in 2008 and walks us through his progress thus far in 2009. A funny quote from the video comes when Loeb talks about his bearish outlook when the new year began, as Third Point was positioned defensively and owned a lot of gold. Loeb said, "if we could have stockpiled guns at Third Point, I probably would have." Good times. But, as we here on Market Folly have already covered, Third Point's gold position was mainly a hedge against uncertainty and they have since moved out of it, as detailed in one of their investor letters.

Third Point is a $2 billion activist and value based hedge fund. Specifically, they deem themselves to be "event driven, value oriented investors." While Loeb actually got his start in private equity, his passion has always been the markets. Loeb founded the firm back in 1995 with $3.3 million in seed capital and is still running the show these days. While Third Point is technically an activist fund, Loeb often has numerous passive investments as well. Loeb himself is quite well known for his searing and critical letters to management of various companies. Third Point has seen annual returns averaging over 15% since inception (including the crazy year that was 2008), a Sharpe Ratio of 0.9, and a correlation to the S&P500 of 0.4. For some of Third Point's hedge fund movements, we covered Loeb's recent activity here.

Here is the video (RSS & Email readers will need to come to the blog to view it:

Paul Tudor Jones 1987 PBS Film 'Trader: The Documentary'

*Update: The link to the third party site hosting the video has been removed at the request of the copyright holder.

The 1987 PBS Film on Paul Tudor Jones entitled 'Trader: The Documentary'. This video has been extremely hard to find and those possessing a precious copy guard it with their life and/or sell it on eBay for hundreds if not thousands of dollars.

This is hedge fund manager & legend Paul Tudor Jones in his element. He is notorious for predicting and profiting from the stock market crash in 1987. The video takes you inside Tudor Investment Corp back when they were only 22 employees large and managing around $130 million. Today, obviously, they are much, much bigger. We cover Tudor Investment Corp here on the blog because of Tudor's excellent track record and legendary status. We've covered Tudor's recent equity portfolio, as well as good quotes from Paul Tudor Jones in the past. Lastly, we also posted up his hedge fund manager interview. This documentary is insider footage of what things were like at Tudor's firm during the build-up to some of the most interesting times in the stock market's history. Enjoy the videos!

Technical Analysis Videos: How to Find Trades & AAPL Versus RIMM

Educational/Resource Videos

We occasionally like to focus on technical analysis to give some added flavor to the blog and to feed the trader inside many of our readers. At the same time, we realize that not everyone is familiar with technical analysis and charts or trade setups. As such, we wanted to direct those of you interested to a video on how to find trade setups. We like to highlight educational content like this as it helps build a base for us to discuss certain topics going forwards. So check out the video for finding trades if its something you've been struggling with or are curious about. Also, we've previously posted an educational video about Fibonacci retracements for those of you interested in that topic.

Technical Analysis / Trade Videos

And, of course, what kind of post would this be without some technical analysis of actual stocks for those of you already in the know. Recently, the guys at MarketClub took a look at Research in Motion and Apple. As such, the video for RIMM vs AAPL was born. Check it out for some nice technical analysis.

For more great resources on the subject, check out our technical analysis recommended reading list.

Best Way to Predict Inflation (Video)

Came across another great video from the guys at MarketClub where they're looking at the best way to predict inflation. And, no, it's not Gold. In the past, we've posted up some of their technical analysis videos on Gold which have been really helpful. This time around, they look at the commodities index chart and they think it is pointing to inflation. Check out their technical analysis by watching the video here.

Gold Technical Analysis Video

In light of the fact that hedge fund manager John Paulson recently bought tons of gold and gold miners, we thought it would yet again be prudent to examine what the technicals are saying about the metal this time around. Is it time to pick some up? Check out the video here.

Although Paulson & Co have said they bought the gold as a hedge, we've noticed a confluence of smart minds flocking to large gold positions over the past few quarters. At one point or another, David Einhorn of Greenlight Capital, Eric Mindich of Eton Park Capital, and Dan Loeb of Third Point have all been in gold (among many other funds we're sure). On one hand, Loeb was using it as a 'hideout' and safety net from market irrationality and volatility, and has since sold out, as noted in his investor letter. Einhorn, on the other hand, holds gold due to future inflationary fears.

The guys over at MarketClub have pulled up the charts in their latest free video and are seeing some possible consolidation signs in the metal. Check out some technical analysis on Gold here.

Bill Ackman of Pershing Square Talks General Growth Properties (GGWPQ) & Target (TGT)

Hedge fund manager Bill Ackman recently sat down with CNBC and gave his thoughts on two of his well publicized positions. In the first video, he talks about his stake in General Growth Properties where he has a position of $177 million in unsecured debt, 24% of the company's equity, and has been in talks regarding debtor in possession (DIP) financing. General Growth of course has filed for Chapter 11 bankruptcy. Ackman sees General Growth as having one of the premier commercial real estate portfolios in the country, as they have flagship malls in numerous key markets. He cites the fact that GGP (now trading as GGWPQ) has around 91-93% occupancy and has very strong cashflow. The credit crunch simply caused them problems and Ackman wants to see a better capital structure and reorganization. He feels that the company will not have to be liquidated and that bankrupcty courts will merely draw out the maturations on their debt and he hopes that current shareholders should come out ok. He sees some potential deleveraging afterward as well.

In the second video, Ackman touches on his big plan to get his slate of directors elected to the Target's (TGT) board. Ackman points out that while Target serves in the retail, grocery, and credit card business, none of their board members really have experience in these areas. Ackman seeks to rectify this by bringing in an impartial board, with each member having expertise in a certain area to fill the void. He also cites a big problem in that there is no 'ownership culture' on Target's board. He says that board members own less than 0.02% of Target stock and seeks to change this.

Ackman's struggle with his Target position has been well documented, as one of his hedge funds, Pershing Square IV, invests solely in shares of Target, and with leverage (through call options that expire at the $35 strike in 2011). Target is by far Pershing's overall largest position, as we detailed when we covered Pershing's portfolio. Their new portfolio will be released in a few days and we'll be updating their changes in our hedge fund tracking series. Since the losses, Ackman has ponied up $25 million of his own money into the position as well. It's very clear that he is doing whatever it takes to institute change at Target. He recently sent out a letter to Target shareholders as well.

His position in this name leaves him with ample lessons, as he recently stated, "The investment business is about being confident enough to know that you’re right and everyone else is wrong. Yet you have to be humble enough that you recognize when you’ve made a mistake. Earlier in my career, I think I had the confidence part pretty solid. But the humbleness part I had to learn."

For more thoughts from Ackman, also check out his interview with Charlie Rose.


Video 1 (GGP)



Video 2 (Target)

Long Term Capital Management's Collapse: Eric Rosenfeld

Eric Rosenfeld recently made this presentation at MIT regarding the collapse of Long Term Capital Management. As a former principal at the firm, he touches on the myths and lessons learned from those crazy times. Definitely a must-watch video if you're interested in markets or hedge funds. Here's the video:

Seth Klarman Video Presentation (Baupost Group)

*Update: Unfortunately, the video has been removed due to copyright enforcement. We apologize for this inconvenience.

Baupost Group's Seth Klarman gave a video presentation in late March and we thought our readers would love to listen about his methodology and his take on the markets.

"At Baupost, we are big fans of fear, and in investing, it is clearly better to be scared than sorry," Klarman once wrote. Klarman's investment process is detailed in his book Margin of Safety. In it, he lays out a "how-to" on risk-averse value investing. He received his MBA from Harvard Business School and started working at Baupost at age 25. In an earlier Baupost letter to investors, Klarman wrote ""Rather than ratchet up risk, our approach has been to hold cash in the absence of opportunity." He has always considered himself a value investor and has been patient through the market turmoil. The past few years they have had nearly half their $14 billion in assets in cash. But, with turmoil comes opportunity. And, as such, Baupost's cash has been gradually deployed by Klarman and Baupost's 100 employees, leaving them with around a fourth of assets left in cash. And, we've been tracking their every move to see what kind of opportunities they have discovered.

Baupost Group's tremendous performance over the years is one of the main reasons that we selected them as one of the hedge funds in our custom Market Folly hedge fund portfolio. Our custom portfolio has seen a total return of 194% since mid-2002 and is returning 17% annualized. It's very evident that Baupost's sterling reputation and performance is a big contributor to our custom portfolio's solid numbers.


(Video Removed)


We've covered Baupost Group's portfolio before, and have detailed their recent activity just yesterday. Over the past 25 years, Baupost has seen an annual compound return of 20%, is ranked 13th in the 2009 hedge fund rankings, jumping way up from being ranked 49th in Alpha's 2008 hedge fund rankings. For more insight from Klarman, check out his take on recent market action in his interview with Harvard Business School and his thoughts from Value Investor Insight.

Eric Hovde Says We're in a Depression

Eric Hovde of $1 billion long/short Hovde Capital says we're in a depression. He sees commercial real estate defaults hitting as high as 25%. His commentary on the CNBC video below: