Investment Ideas by Yaser Anwar

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Hedge Fund Salaries
2007-04-24 10:08:00
FT had a great annotation of an Alpha Magazine article pertaining to Hedge Fund salaries.FT: The Hedge Fund Sala ry Calculator"A junior portfolio manager has a mean salary of $152,744 plus a $492,819 bonus. A senior trader?s salary comes in at $182,019 with a $431,275 to boot.A lowly junior analyst has a mean salary of $103,852 - but before we start feeling sorry for the poor mite, his bonus boosts that by an average $168,740, to reach a grand total for last year of $266,171. Delving deeper, we can cut this by region, firm size and by years of experience. Base salaries in the US and UK for analysts are pretty similar at this level, coming in at an average $111,365 and $108,750. But the London-residents do better at bonus time - getting their hands on around $225,000 compared to their average counterpart stateside who has to make do with $175,734. Only fair - London?s an expensive town, and it costs a lot to maintain a Mayfair lifestyle. For senior analysts, the differential?s eve...
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The Monday Edition- Taiwan Economic & Market Analysis
2007-04-23 06:40:00
This week I take a look at Taiwan 's: a) Exports (very resilient), Trade & FX Reserves (4th largest globally), b) Economic s- GDP (4%+), Inflation (CPI 1.5%) & M2 and c) Risks (US-S.Korea deal & China's rate hikes). Taiwan SynopsisExports have been the main impetus for Taiwan's growth, 5th largest in Asia, which have been fueled by a) decreasing guidance of investment and trade by government authorities alongside, and b) privatization of government-owned banks and industrial businesses. This trend has led to strong trade performance in 06, with Taiwan's GDP growth rate above 4%, and unemployment below 4%.Exports, Trade & FX ReservesSo far in 07, Taiwan's export orders have grown quite well. In Jan. exports rose 13.1% YoY, the fastest pace since August though the Lunar New Year holiday distorted the trend, leading to exports falling 4% in Feb. to 8% In March exports were up 10.4%.Taiwan, like its Asian brethren, relies on Chinese demand to drive export growth amid an economic ...
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Interview With Jonathan Knee, SMD Evercore Partners
2007-04-20 06:01:00
Jonathan Knee is a Senior Managing Director at Evercore Part ners. Mr. Knee teaches Media Mergers and Acquisitions and co-teaches Strategic Management of Media with Professor Bruce Greenwald at Columbia Business School. Prior to becoming an investment banker, he was Director of International Affairs at United Airlines and served as Adjunct Professor of Law at Northwestern University. Before joining Evercore in 2003, Mr. Knee was a Managing Director and Co-head of Morgan Stanley's Media Group. He was previously Publishing Sector Head in the Communications, Media and Entertainment Group at Goldman Sachs. In 2006, Mr. Knee took us inside the world of investment banking, like never before, through his book, The Accidental Banker.Y: Mr. Knee thanks for taking time out for the interview.Y: With a record 2006 for M&A activity, and deal volume in Jan & Feb exceeding last year, a lot of me-too firms are venturing into the Private Equity business. How does one firm distinguish itself from...
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Trading Tactics of George Soros
2007-04-19 06:01:00
This post is lengthy but i promise that it will tremendously benefit your investing/trading as it has mine. I would recommend you save this post in word or notepad &/or save this link, so you can refer back to it.One of Soros ?s most useful qualities has been his ability to detach his emotions from his dealings in the financial markets. In that sense, he is something of a stoic. Invest First and Investigate Later While others permitted their egos to get in the way of making intelligent market decisions, Soros understood that the wise investor was the dispassionate investor.It made no sense to claim infallibility. Although it may have been difficult when a favorite stock suddenly took a plunge, it was far better, as Soros constantly did, to admit when he made mistakes.One day in 1974, Soros was playing tennis with an acquaintance. The phone rang.It was a broker in Tokyo, letting Soros in on a secret: That year President Richard Nixon was immersed in the Watergate scandal that would ev...
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Palomar Medical Tech (PMTI)- Fundamental & Technical Analysis
2007-04-17 06:01:00
PMTI (a small-cap stock, 724 mill) engages in the research, development, manufacture, and distribution of laser and light based systems for medical and cosmetic treatments. Why this sector? According to CIBC World Markets, the cosmetic laser market is valued at about $1 billion worldwide, and sales grew 15% in 2006 over the previous year. While hair removal remains the top use of cosmetic lasers, with growing numbers of non-core markets acquiring them -- hospitals, family practitioners, OB/GYNs, and even spas and beauty salons -- additional uses will continue to climb in importance. 7 Catalysts That Make PMTI A Buy: 1) P&G Partnership (cosmetic lasers): Palomar will complete certain development activities in consultation with Gillette during an 11th month program, scheduled to end by January 13, 08. Gillette will provide PMTI with development payments of approximately 1.5 mill upon the completion of certain deliverables. 2) Royalties & Lawsuits: Alma, charged for infring...
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V-Tech Massacre Idea
2007-04-17 01:59:00
It is so unfortunate what conspired at Virginia Tech . Thank God one of my best friends who goes to that university is fine. I hope anyone you may know who goes there is fine too.I've been thinking that someone can start a gun violence foundation and making "V-Tech Mass acre " on the front and "We Remember" on the back t-shirts to sell to finance the non-profit organization. If I was in the US I would definitely do it. Such an event of course will not be forgotten, but something more needs to be done to avoid such events in the future.This is just ridiculous, how such a catastrophic event can occur is beyond me, its akin to a fat-tail event.
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The Monday Edition- China's Stock Market
2007-04-16 06:01:00
This week I'd like to take a look at China's stock market- From a) What's Fueling The Market , b) Mutual Fund Flows & c) China vs. Nasdaq 2000 image. Thanks in advance for your time. Two centuries ago Napoleon warned China was a "sleeping giant" that "once awake would astonish the world". Rapid long-term economic growth, an expanding share of global trade, and record foreign direct investment inflows all justify China as a rising economic power. Astonish it has.The Chinese economy, the 4th largest, has doubled its output to $2 trillion in the 5 years since it joined the WTO. Pressured by the US, China's studying a cut in export tax rebates on textiles to 9% from 11 to reduce the trade surplus, but would that really matter?The budget deficit & low saving rate are the two attributes of the US deficit. The US & Chinese economies benefit each other. The US imports labor-intensive products such as clothes & living goods. They import because Chinese products are cheap. If the yua...
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Quick TNH Synopsis
2007-04-12 01:28:00
TNH is both fundamentally & technically wicked.The stock pays you a dividend to bear its volatility, so the risk/reward becomes more acceptable. Eric Bolling posited that Natural Gas will be at 10, if its there, will expect TNH to get hurt as its levered to it (65% of its costs were due to it).Fundamentally its got excellent characteristics, I especially like the $4 in FcF, 2x as much as competitors, not only that its got 0 debt! Furthermore, its assets are worth more on a book to enterprise value measure than competitors. Wicked. Check out the full comparison on Smart Money with competitors of key stats.I'm a strong believer in buy high, sell higher. It can. Overall its sector has been strong, fertilizer, just look at POT! even though its not its direct competition, trend so far remains up.Its technically so correct. Pull up a weekly 8 month chart and you'll notice it doesn't stay down for more than two weeks, if it drops, this is excellent strength. The OBV hasn't dropped a lo...
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Technicals of ICE
2007-04-12 01:01:00
Not so long ago I analyzed the ICE/BOT merger, so today wanted to take a look at it technically.1 year chartFrom this chart ICE looks quite dangerous and technically a no-no for those who dwell on the no buying before the 50-day breach level. The only thing positive is the MACD indicating oversold.3 month chartFrom this chart we can say ICE has sustained some heavy heavy selling. The only positive I see is the OBV looking like its bottomed out.6 month chartI would keep an eye on the 120 level and be more comfortable establishing a position there, assuming it found some support at that level. The 120 level is where it broke out of, almost 120, at the start of 07, and as the chart will show it has found support there before.Overall I'd be much more comfortable taking a position once the BOT air has cleared, but if it approaches the 120 level and manages to stay there, I'd like to establish a long-term hold because the fundamental trend/story of exchange consolidation has not slowed....
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Technicals of SWC- Head & Shoulders Forming
2007-04-11 17:34:00
Stillwater (SWC) is the largest primary producer of platinum group metals outside of South Africa. For Palladium plays, it's got a clean balance sheet vs. competitors, growing at 30%, above the 50-day MA but watch out as a head and shoulders formation is developing, the right shoulder to be specific. I'd look to short SWC if it can't break the $15 level.62%, 50% & 38% Fib levels are at: 12.87, 12.2 and 11.54 respectively. If SWC doesn't break the end of Feb level, the stock could retrace to any of those levels, and as you can see it has found support at 38% levels, or close to 'em, since December 2006.
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Catalysts That Make Apple (AAPL) A Buy
2007-04-11 01:11:00
Sansa Vs. iPod: KO in T-10 seconds, AAPL?s favor Recently YHOO and SNDK announced the launch of a wifi enabled MP3 player. Sansa Connect, $250, connects wirelessly to YHOO?s music services, which one can avail for $12 a month.In my opinion, Sansa is one of the worst creations. Not only is it ugly, I?m not going to be paying 2 extra bucks when I can get this and more at Napster (assuming most buyers will be in US of the Sansa, as Napster?s service is US-only). In the era of pirated music, each extra cent counts, therefore Sansa (what a ridiculously uncool name) is definitely not on my buy list.Let?s recap: 1) Its ugly, uncool and 2) cheaper music available elsewhere. Feel free to add your own flaws! Some of the main reasons millions of people own AAPL is: 1) super cool, 2) patented wheel technology which makes it very easy and comfortable to use. Sansa or SaanSa, maybe Saaaaaansa? (reminiscent of Seinfeld episode ?Salsa. Can I have some salsa; give me some saaaalsa, sall...
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Internet Problems
2007-04-09 07:41:00
I'm having lots of computer and internet problems that's why no post, trying to get it fixed ASAP. Thanks for stopping by.Update 12:22 PM- Problem s are still persisting with my computer and I'll be traveling, so don't think I'll be posting this week. Sorry for the hassle.
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In The WSJ & Financial Times
2007-04-06 11:18:00
Special thanks to God, David Gaffen (WSJ) & Paul Murphy (FT) for quoting my work in their prestigious publications. This was my 8th quote in the WSJ & 3rd in FT, and is what I strive for day in day out with the blog. Special thanks to all the readers as well, this blog won't be here without your continuous visits.Featured & Quoted on April 5th, 2007 at 2:17 pmFeatured on April 3rd, 2007 at 10:01 GMTAlso, special thanks to James Altucher for linking to me from TheStreet.com!
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How Wall Street Works & Profiting Of Blackstone's IPO
2007-04-05 06:05:00
For the past couple of weeks, Blackstone's IPO has been all the rage. A day doesn't go by if I don't read something pertaining to the offering on either of my favorite MSM blogs, Deal Book and FT Alphaville.My pal Roger Ehrenberg has talked about how buying into the Blackstone IPO is a suckers bet, and I concur with him.So is there really no way to profit from it? Actually there is, though it requires you to understand how Wall Street works.Most of you would be cognizant of the quote, "keep your friends close, enemies closer" by Sun Tzu. This quote fits Wall Street precisely. What do I mean?In an era where bulge bracket firms like Goldman Sachs, Morgan Stanley et al, have raised massive funds to capitalize on record cash on corporate balance sheets and discontent of senior executives due to more stringent regulatory environment [read: Sarbux] aided in part by historically low interest and default rates on a global level, we're witnessing an increasing convergence of Private Equi...
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How Sales & Trading Operates & Gaining An Edge Like Them
2007-04-04 06:02:00
I've been fortunate enough to work in and with Sales & Trading departments of some of the finest investment banks, thanks to God, and today I'd like to share some of that experience.For those who haven't had exposure to this side of Wall Street, I'd like to give a short primer. Sales & Trading consists of various salesmen and traders who cover most sectors, like analysts, and provide vital services to institutional and individual clients.There are typically three types of traders at bulge bracket firms: 1) Position, 2) Liquidity and 3) Proprietary traders. Liquidity traders have a very very short-term holding span, usually seconds to minutes and they provide liquidity in various stocks the firm makes market in and client positions.Position traders are those who work with salesmen to take positions on behalf of the client. For example, if a Hedgie wants a position in AAPL stock, the salesman relays that to the position trader who utilizes his/her skills to take positions in a...
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Margin Debt- What You Need To Know
2007-04-03 06:03:00
I'm a big fan of the Economist, in my opinion its the best magazine one can read and is the only one I enjoy reading cover to cover. They've got a great blog too, Free Exchange.Free Exchange had an excellent post on margin debt, which I'd like to re-print.Financial writer Daniel Gross sounds an alarm over margin trades. He quotes the Wall Street Journal:After rising 24.2% last year, margin debt, which is accumulated by investors who bet on stocks with borrowed funds, got off to a strong start in 2007. In January, it reached $285.61 billion as the Dow Jones Industrial Average gained 1.3%, passing the previous highest level of $278.53 billion, according to figures from the New York Stock Exchange. That record was set in March 2000, the same month that saw the Nasdaq Composite Index reach its highest closing on record And adds:Anybody remember what happened in March 2000? Anybody care to guess when else in history margin debt, after several years of positive market returns, soared ...
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The Monday Edition- Copper & Chile
2007-04-02 06:01:00
This week I'd like to talk about: Copper (The Chinese Factor & Demand) & Chile (Economic environment) alongside Risks & Short-Covering (slow US growth & more).SynopsisEconomic expansion in Emerging markets- BRIC, especially India and China, alongside the US housing market have fueled strong copper demand. Copper is used in nearly every major industry- from transportation to machinery and equipment, and housing to autos.Over the course of last few years, price has skyrocketed from 50 cents to $6 and change (this run up has benefited Chile the most, which accounts copper as 50%+ of its exports and about 20-23% of GDP), but will this run continue & what does it mean for Chile?The China Factor & DemandChina is expected to import more copper from Chile in 07 due to continued strong economic growth, a senior Chilean copper official said on Wednesday. China is the world's biggest copper consumer and a top export market for Chile.Chile produces about 35% of the world's copper and ear...
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Interview With Michael Mauboussin
2007-03-30 06:02:00
Michael J. Mauboussin joined Legg Mason Capital Management as Chief Investment Strategist in 2004. Prior to joining LMCM, Michael served as Managing Director and Chief U.S. Investment Strategist at Credit Suisse First Boston. He was also a member of the firm?s Research Review Committee. Michael joined CSFB in 1992 as a packaged food industry analyst. He is the former president of the Consumer Analyst Group of New York and was repeatedly named to Institutional Investor?s All-American Research Team and the Wall Street Journal All-Star survey in the food industry category.He is the author of More Than You Know: Finding Financial Wisdom in Unconventional Places (Columbia University Press, 2006) and co-author, with Alfred Rappaport, of Expectations Investing: Reading Stock Prices for Better Returns (Harvard Business School Press, 2001). Mauboussin has also authored or co-authored articles for the Harvard Business Review, Journal of Applied Corporate Finance, Financial Management, and For...
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Analyzing Lennar (LEN)
2007-03-28 06:06:00
LEN reported that net income fell 73% to $68.6 million, 43 cents a share vs. $258.1 million $1.58 a share in 06, on revenue of $2.79 billion vs. $3.24 billion last year. Its becoming increasingly tough to sell homes, resulting in big inventory overhang.For LEN, California's the key to early recovery success. Excluding land related charges, Q1 earnings missed estimate by $0.10-12 as a lower gross margin, higher SG&A expenses, and lower financial services income more than offset a higher than expected LandSource JV gain (which added $0.7 after tax to Q1 EPS).With continued weakening market conditions driven by huge re-sale inventory across the country and increasing mortgage financing problems in the market, orders were down 27% YoY in units.The Street expects prices on orders fell roughly 13%, driving the dollar value of orders down by 40%. LEN?s unsold inventory remains high at 7K homes, about half of the 13.9K under construction. The Street expects additional margin headwind from ...
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Useful Pre-Open Tool To See What's Moving
2007-03-28 05:37:00
My friend Pete Stolcers of One Option suggested an excellent tool to me earlier this morning pre-market hours that would help traders see what's moving.Considering the plethora of requests Pete had for searches based on the CNBC Challenge, he put some free searches together that traders might have interest as well. Peter posted a post regarding the challenge and the approach he thought would win. Click here to check it out.Now, the tool I eluded to earlier, it's a Pre-Open or Movers searches, which is free. I included them in the post. Pete dynamically updates them and they are a great resource.
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The Monday Edition- Going Gold
2007-03-19 05:02:00
This week I'd like to cover topics surrounding gold. From a) Market Sentiment to b) Demand and c) Supply to d) Implications of de-hedging. Thanks in advance for your time.Market Sentiment Too bullish?Consider this- 1) Bloomberg's most recent Gold survey indicated 23 of the 32 analysts & traders advised buying gold and only three said to sell, with five being neutral.2) The top 100 amateur investors tracked by Marketocracy.com recommend Goldcorp. Also, all major brokerages expect gold to hit $700 by second half of 2007.3) The Commitment of Traders report- (keep in mind commercial traders are a much better indicator of price movements than speculative ones) from Jan 9th to Feb 27th, the speculative traders added 12.11 million oz of net longs to take their position to 21.6 million oz (Gold fell quite a bit since then, especially Feb 27th, about $30+).In the week to 6 March we saw 5.5 million oz of net long liquidation and estimate that there has been about 4.5 million oz of long liq...
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Interview With Structured Products Expert Moorad Choudhry
2007-03-16 05:02:00
Professor Moorad Choudhry is one of the industry experts when it comes to structured products, and has worked over 18 years in investment banking including experience at ABN Amro Bank NV and JPMorgan Chase Bank.He has written the following books: (1) The Bond and Money Markets: Strategy, Trading, Analysis, Butterworth-Heinemann 2001 (2) Handbook of European Fixed Income Securities (editor, with Frank Fabozzi), John Wiley 2004 (3) Analyzing and Inter preting the Yield Curve , John Wiley 2003 (4) Structured Credit Product s , John Wiley 2004 (5) The Repo Handbook , Butterworth Heinemann 2002 (6) Capital Market Instruments: Analysis and Valuation , 2nd Edition, Palgrave MacMillan 2005 and (7) The Credit Default Swap Basis, Bloomberg Press 2006. For more of his excellent writings, please visit this linkMoorad talked to me in his capacity as Visiting Professor at the Department of Economics, London Metropolitan University. He is also a Visiting Research Fellow at the ICMA Centre, University...
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Structured Products Industry Veteran Interview Tomorrow
2007-03-15 05:04:00
Please check back tomorrow as I've got a great interview lined up with a Structured Product s industry veteran. Thank you.
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4 Short Synopsis: Boeing (BA), Qualcomm (QCOM), Sprint Nextel (S) & Alc
2007-03-15 05:02:00
Boeing (BA)Solid growth in revenue and net income. Boeing’s revenues climbed 26.2% to $17.54 billion in Q4 06 from last year. Net income expanded 110+% YoY to $989 million. Strong business trends helped the company to post better results during the quarter. Increased production boosted revenues and weakness of EADS helped too.BA now forecasts 27K+ new planes in the global airline market by 2025, as compared to its previous forecast of 25,700 new planes. The Street projects a 6% sales increase in 07. S&P is looking for modestly slower growth (about 9%) in commercial airplane sales, on tougher comparisons, and sustained moderate growth (near 4%) in integrated defense system sales.In January, BA reiterated its May 2008 first-delivery schedule for the 787 Dreamliner, and we see BA continuing to win share from Airbus.The Commercial Airplanes (CA) segment rose 37.4% to $7.61 billion boosting revenue, as airplane deliveries increased as the production rate increased. This resulted in the...
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How To Lose Your Life, Your Dad's Savings= 700K In 3 months
2007-03-15 04:38:00
I came across this article about a guy who lost more than 700K gambling in the stock market. Here's the link (hat tip Trader Mike)This story has pissed me off so bad, I can't tell you..I feel like cussing the guy out but it will be a total waste of time. People like him deserve to loose every penny and more, I wish he suicides and/or I'd be happy to put a bullet in his head.Goes against everything we work for in this business. Then again, if idiots like him don't exist in the market, we won't be profiting from the inefficiencies.
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Analyzing Texas Instruments (TXN)
2007-03-13 05:01:00
Management at TXN provided a some what encouraging Q1 mid-quarter update, narrowing revenue and EPS around the mid-point of the prior ranges (Q earnings guidance from $0.28-$0.34 to $0.29-$0.33).Given that revenue for March is expected to decline 9% QoQ (Q1 revenue guidance from $3.01-$3.28B to $3.07-$3.22B), business trends so far aren't showing any signs of weakness and growth is expected to resume in Q2.According to management the inventory correction is reversing and even with the order trends seen so far in 1st Q (TXN internal inventory peaked in the month of November and has continued to come down during Q1) the risks with investing in TXN's sector are not favorable, thanks to weakening demand for telecommunications equipment, wireless handsets, a slowdown in telecom spending, alongside a slowdown in consumer spending, all of which would negatively impact TXN's business.Management said that lead times have been stable, while pricing in general has been stable as well althou...
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The Monday Edition: Global Macro Talk (US, China & ECB)
2007-03-12 05:02:00
This week I'd like to discuss 1) Conflicting US Economic Data (weak ISM but strong wage growth) and 2) China 's Fuel (18% savings rate), ECB hike (likely in June) & report International Money Market positions (in FX markets).Conflicting US Economic DataRecently, the US Q4 growth came in at 2.2% vs. 3.5% expected. The ISM non-manufacturing index fell to 54.3 in February vs. 59 in Jan. The softening in non-manufacturing index, (representing a significantly larger portion of the economy than manufacturing) showed the lowest reading in four years.However, unit labor Costs surged at a 6.6% annualized rate in the Q4 thanks to an 8.2% annualized rise in compensation. So you see, at one hand we have sluggish growth but on the other we've got employment and wages which are not so sluggish.Furthermore, the USD is highly dependent on capital flows, a risky position as problems in housing and mortgage markets threaten to spill over into growth. Tightening by overseas central banks is right on...
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Exxon Mobil (XOM)- Analyst Meeting Notes & 2007 Outlook
2007-03-09 06:01:00
Exxon lowered production growth for the next 3 years with production of approximately 4.7 million b/d vs. 5.0m b/d announced last year. The primary 'cause for delays was partner operated projects, especially in Kashagan and Tengiz (management also canceled the Qatar GTL project and withdrew from Angola LNG).Even with lower production forecasts, Exxon is on track with 2005-10 organic production CAGR of 2.2% vs. industry avg. of 1.9% over the five-year period. Medium term upstream capex expectations, on a comparable basis, have risen by approximately $2bn per annum in both 06 and 07. Upstream capex per barrel produced is up 30% in the last three years. Here's an excerpt from one of my paid columns, where I also discussed Exxon's analyst meeting-"Starting from the base of 4.2 million b/d in 06, Exxon expects that 20 project start-ups over the next 3 years will add 1 million b/d net production at peak to Exxon. The forecast does not include any divestments going forward. The Street w...
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Analyzing Sears Holdings (SHLD)
2007-03-06 06:02:00
SHLD Reported Q4 EPS of $5.36 vs. $3.98 previous year, which beat Street estimates of $5.18. Results were driven by improved gross margins and EBITDA (which grew at robust 15.8% annually and EBITDA margins expanded +133bp, the 8th consecutive Q of expansion), which were better than expected at Sears Domestic & Kmart but not so great at Sears Canada. SG&A rose $100 million and the resulting deleverage limited margin expansion to 8.7%. SHLD has always focused on increasing ROE for shareholders, be it through dividends or acquisitions, especially through Eddie Lampert's trading acumen (i.e. Total Return Swaps) of wisely investing SHLD's cash horde. During all this time, Eddie Lampert has kept his eye on improving the profitability of the core business.Sears Domestic Business was better than expected in Q4 even with SSS decline of 4.9%, which was better than Street estimates of 5.6% decline. While SSS declined across the board, i.e. home appliances, these declines were partially o...
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FX- YEN/EURO: Will The Markets Dwindle?
2007-03-05 09:03:00
To be successful at trading one has to understanding the inter-market relationships that occur across all trading instruments, from FX to Derivatives to Stocks, as they are all intertwined.Take a look at the YEN/EURO 10 year chart. Yen is approaching the support of its '98 lows after falling for over 7 years, the time when institutions leveraged heavily to load up on stocks leading to the Tech bubble burst, also evident on the $XLJ chart alongside the Slow STO signaling oversold.Could lead to a reversal and end of the carry trade, as the markets have been perceiving. If this occurs, it will be negative for the market, and I'd suggest trading with the trend towards the short-side, till we're told otherwise, by the charts and price action.Good hunting.UPDATE 06:43- As suspected, the rise in the Japanese yen continued during Tokyo trading this Morning as large funds continue to exit the carry trade. I'm going to be trading with a short-bias, unless the market tells me otherwise.As ...
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