October 2009 Archives

Fistful of Gold

By Philip K. on October 20, 2009 11:32 AM | 0 Comments
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I've developed a weird addiction of sorts.  I've been busy playing World of Warcraft.  I've been neglecting my real life and this website.  Have I mentioned that I love to play games?  Maybe to the level of dependency issues.  :)

There's a fistful of gaming gold in World of Warcraft.  Each online gold is worth about $.01.  I've spent maybe a 100 hours and I've made a total of $.15.  Fistful of gold, indeed.

I've also been really making a fistful of gold in the market run up.  For those who keep tab, I've been very bullish on the overall market for the past few weeks and it has paid out well.  Well enough to take a nice long vacation.

I won't be writing up any meaningful evaluation of my wagers/predictions until the end of the year, but 2009 has been an unusually good year.  I was wrong about there not being a V-shaped recovery.  It was V-shaped.  I would have predicted a more gradual ascension.  

Everything is getting back to business as usual.  For those concerned about the everyman unemployment, economic growth will take care of it.  No need to lose that much sleep over it.

If I were to sum up any business sentiment, everything just feels like business as usual.  Business as usual doesn't really make for good writing posts.

Couple of Updates

By Philip K. on October 6, 2009 2:08 AM | 0 Comments
*MGM slashes CityCenter condo prices by 30%.  Good move.  (Bloomberg)


*Just like that --poof-- I will have to officially end my two day recommendation of longing the S&P by today's closing price.  I'll consider Monday's 1%+ gain good enough.  According to my system (you should be suspect whenever anyone mentions system), the market inefficiency has been quickly corrected.  This doesn't mean I'm short.  I'm definitely still long, but that's for various reasons that I just don't want to get into right now.


*The possibility of war with Iran is very real.  Intrade has a proxy-ish estimate of about 7%.  By my definition, an air strike against Iran is war.  That old saying about war being good for the economy was a fluke of an instance to describe World War II.  Any war with Iran will be bad for this fragile market and economy.


*Fuck you Robert Benmosche.  AIG's CEO is thumbing his nose at the US Government.  (Money).  The problems of moral hazard has just got worse.  Freerolling on limited liability and government guaranteed programs has lead to an unchangeable culture of moral hazard.  2008 Credit Crisis, LTCM, Bear Stearns.  We'll be seeing these events again, if Bob's attitude is representative of other executives.  

Fear Coming Back to the Market

By Philip K. on October 4, 2009 4:41 PM | 0 Comments
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Investors have more to fear besides the upcoming Halloween.  The S&P is about 5% off from its short term highs.  The VIX, fear index as some pundits like to call it, has gone up more than 10% in the past few weeks.  

The Employment Situation and ISM numbers released on Thursday and Friday largely explain the broad based sell-off.  Investors were expecting more.

I'm going to take a step away from the crowd and argue the numbers weren't bad.  The ISM numbers showed growth in the service economy.  It's not a large growth, but it's growth.  Any growth, besides cancerous growth, is good growth.  While it did not meet consensus expectations, from an economic perspective it's not too bad because it's still growth.

The unemployment figures leave me feeling a bit mixed.  Until the GDP recovers about 2%-3% (Okun's Law) we can't really expect the unemployment figures to get much better.  OTOH, unemployment numbers usually lag any recovery in the economy.  Tricky.

The two not so stellar figures have been the catalyst for the fears of "too much too soon" to take hold and explains recent sell-off.  

I'm going to officially step back from the crowd/market and put myself on the line.  I believe, about 2 standard deviations believe :), the recent sell-off is a great time to get back in the markets.  For obvious reasons I would rather not discuss any statistically significant patterns I discover in the market, but my contrarian system is flashing green.  I love buying into fear, so I'm wagering now is a good time to long.  



Disclosure: I'm long FXI and BRF.  No guarantees.  No refunds.  You'll probably lose money from following random strangers on the internet.

MIT's Card Counting Team Business Plan

By Philip K. on October 2, 2009 1:26 PM | 1 Comment
The Boston Team aka MIT Team aka Strategic Investment card counting team's business plan has found its way on the internet.  

Card counting teams are so 19 - 90's.  



If you scroll to the very bottom you can see the bankroll they were working with. $1.2 Million.  Serious money.

College Problems With Gambling

By Philip K. on October 2, 2009 10:23 AM | 0 Comments

Colleges Often Turn a Blind Eye to Student Gambling Problems

Illustration of student thinking about gambling.The New York Times

Sometime last year, the University of Alabama got serious about raising awareness on campus of gambling addiction. For about a week, there were articles about the subject in the student paper and some talks on campus, Shannon Shorr, a business major, recalled.

After that, the campaign seemed to fade, Mr. Shorr said.

................... (NYT)


Kids in college have a lot more to worry about than studying for the calculus exam or which major to choose.  Too many college students are taking a binge approach to everything including gambling.

They binge drink (well, they've always had).  They binge eat.  They binge spend and now some are binge gambling.

The funny thing about college is that was when I first learned how to gamble.  Before I took a statistics course on blackjack card counting, I hated gambling.  Even after I acquired an edge from this peculiar college course, I still adopted a negative view of the gaming industry.

I see the problems from gambling all the time.  They prey on those with addictive propensities and rob them of their financial worth.  Casinos wrap this distasteful behavior under the pretense of "entertainment".  I can tell you right now, it's not fun to see the fish lose their rent money or money they were going to spend on clothes for their children.

I imagine it's worse for the majority of college students who pick up gambling.  A little football betting or poker betting might seem harmless.  Many students, I'm guessing over 95%, don't have the mental acuity and risk personality to succeed in gaming.  Many will think they're smart enough to win in gambling, but that's just a disconnect with reality.  The kids will lose a large portion of their young adult lives and for that, Universities should do something more.

China Takes Over the World p.15

By Philip K. on October 1, 2009 10:43 AM | 0 Comments
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Happy 60th Birthday China.  

When I watched the news clip with the massive number of people and choreography, I was a bit worried.  

China's taking over of the world is a foregone conclusion.  I can't say I'm not apprehensive about this, but they've decidedly earned it.  
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