Investment Ideas by Yaser Anwar

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Permanent Shutdown
2007-06-19 23:22:00
I'd like to announce my permanent hiatus from the blogging scene. I've utilized the blog to leverage my knowledge and show my passion for the business, which has served me well, as I've learned from this experience a great deal and made a few contacts along the way. It is time now for me to concentrate on school and other important tasks that require my attention.Also, during my blogging tenure I made a few posts and comments I'm not proud of, so I'm terribly sorry if I offended anyone, it was never my intent.I would like to thank everybody who has ever visited the blog, made a comment and/or subscribed. Your time and visits are greatly appreciated. Wish you all the best.Sincerely,Yaser
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The Monday Edition- Fixed Income Strategy For This Week & Speculative Trade
2007-06-11 07:19:00
I've finally got some spare time, so thought I'd share my thoughts on one wild week we're going to have.The price action in the US 10-year Treasury yields last week was extremely bearish as the bull channel in place since the 1990s was broken, when 10-year yields passed 5.03%, compromising the lower highs (as evident in the chart below). The relevance of this bull channel should not be underestimated as it reflects a period when the Fed was able to lower inflationary expectations in the US economy.The failure of the 10s to find sufficient buying interest to maintain the longer term trending pattern is indicative that longer term inflation expectations may no longer be contained in subsequent cycles if the data continue to firm up, the core inflation data don't come down fast enough or the unemployment rate fails to rise.How do we trade it? (please refer to the chart) First, if I ignore the break in the longer term trend, I would look for resistance at the brown line 5.20-.25% ne...
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Buy MNT (Short-Term Trade)
2007-06-03 22:29:00
Rationale: 1) With 16% of its float sold short, or 6,537,400 million shares, with 4.3 days to cover and average daily trading volume (3m) of 888K, it will take 7.36 days to cover the entire position.2) On a fundamental level MNT is turning around, evident by the fact that inventory levels were 150-170 days for the quarter ending May, vs. 200 and 548 days in 06 and 05. Furthermore, efficient mgmt has led to a shrinking cash conversion cycle, 110 days from 150 and 400 in 06 and 05.3) On April 20th, MNT plunged 5 points on lowering guidance 07 guidance, which I believe was overly excessive. Why? Having an earnings surprise average of near 20%, analysts I believe got overly bullish.On May 16th, MNT announced expectation of higher sales in 08. It is possible that management is playing the UPOD- Under Promise Over Deliver, game, seen as they have 96% profit margins and close to 12 bucks in cash per share with little debt, and quarterly earnings growth of 50%+4) While I'm a fundamentalist...
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Stamp duty China impacts 1991-2005
2007-06-01 10:57:00
Yes, I know I'm on a hiatus, but that doesn't mean I can't take a minute out to re-print something useful I received in the e-mail from someone who would rather not be named.Oct. 1991 - The Stam p Duty was cut from 0.6% to 0.3% - SHCOM (market index) gained 20.7% in the following month;May. 1997 - The Stamp Duty was raised from 0.3% to 0.5% - SHCOMP lost over 30% in the following month;Jun. 1998 - The Stamp Duty was cut from 0.5% to 0.4% - SHCOMP gained 2.65% on the day of the announcement;Jun. 1999 - The Stamp Duty on B-share was cut from 0.4% to 0.3% - SHSE B Index gained over 50% in the following month;Nov. 2001 - The Stamp Duty was cut to 0.2% for the whole mkt - SHCOMP gained over 1% in the following mth.Jan 05 - The Stamp Duty was cut from 0.2%-0.1% - SHCOMP gained 4.3% in the following mth.Hope all is well.Y
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Featured In Globe & Mail
2007-05-29 21:56:00
It is my first time in the Globe & Mail , which is Canada's NYT, and first time in print (no online version). I'm thankful to God, GM and everybody else who takes time to come here. I'll sure miss you in the next few months due to my hiatus. Feel free to e-mail me to chat about the market, in the mean time will try to get permission for "Monday Edition" posts. Thanks!
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Blogging Hiatus: Internship Time
2007-05-29 06:05:00
For this summer, I had some good offers, thanks to God, from Barclays (Dubai), UBS (LA) but I chose a firm in the HF industry.I posted their name and a few clients, but have been advised by a friend to take it down, for now.Anyhow, if you know me, feel free to e-mail and I'd be happy to tell you. Besides, if you're a regular here, I'm going to be posting it sooner or later in my resume and talking about them in the future.I'm going to seek permission to do my "Monday Edition" post, as that is sent to my institutional contacts, however, if I don't I apologize.
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Hedging w/ Futures & Options: Bullish, Bearish & Neutral Strategies
2007-05-29 06:01:00
As you know, we're in the third year of the presidential cycle, which on a historical basis has been quite bullish for the markets.The DJIA has risen 24 times and fallen 5 times in the 29 third calendar year of the Presidential Cycle since 1891.The overall, average gain for the 29 third calendar years is 12.31%, with the 16 Republican presidencies averaging gains of 5.12% and the 13 Democratic presidencies averaging gains of 21.14%. (Source: Stock Traders Almanac)So far confirmed, there will be 196 companies reporting in July and about 30 in August. For the options and futures spreads mentioned below I've chosen an August expiry so we can benefit from the full swing of July earnings report and not suffer from time decay.Lastly, to keep things simple, each spread below is calculated with the assumption of just 1 contract, options and futures. (Source of prices: CBOE & symbols: Y! Finance)Hedging w/ Futures & Options : Bullish , Bearish & Neutral Strategies 1) Buy CBOE Volatility I...

Win A Copy Of Bank Asset & Liability Management
2007-05-29 06:00:00
I'm delighted to announce that institutional readers (please e-mail me from your corporate e-mail) can win a copy of 'Bank Asset & Liability Mana gement ' by Moorad Choudhry (Head of Treasury at KBC Financial Products, derivatives arm of KBC Bank).BALM is a reference book for those involved, or becoming involved in, or becoming involved in, commercial banking and/or money markets. It describes products and the art of ALM, which includes money markets trading, risk management (including interest-rate risk and credit risk), regulatory capital management, and securitization.You can win the book, 5 copies available, by answering two simple questions. Please e-mail me at yaser AT yaseranwar.com, no comments accepted.1) Which university is Mr. Choudhry a visiting professor of? 2) Name one other book by Mr. Choudhry.** Please be cognizant the participants will have their e-mails sent to Wiley (promotions@wiley.com.sg). However, there is nothing to worry about as the Wiley rep. has assure...
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Closed-End Funds To Consider- UTF, SRO, ESD
2007-05-24 06:02:00
I've compiled a list of closed-end funds selling at a discount that you should consider. Besides looking for funds selling below NAV, I looked for companies which have are rated at least 4/5 from Morningstar, have a good 3 year track record, and have share prices that have done well in 07.Please be cognizant that the average CEF trades less than 50K shares on a daily basis, but 2/3 presented in here trade above 100K and 1, which I felt was good enough to mention, trades 97K.1) Cohen & Steers Select Utility Fund (UTF)4-star rating with Morningstar's above average return and risk profile. Dividend Yield: 4.5% Discount to NAV approximately 13%. Expense Ratio: 1.28%Sharpe Ratio: Vanguard Total Mkt Idx (VTSAX) 1.17 | Cohen & Steers Select Utility (UTF) 2.21 (the higher the sharpe ratio the better)Beta: S&P 1 | UTF 0.21Volume: 149K daily (average 3 month)Total Shares Outstanding x Closing NAV: 43.32 x 32.64= $1,414 millionTSO x Closing Price: 43....
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Charity Is Important: Three You Can Donate To Right Now!
2007-05-19 03:13:00
"It is important that you give back." While we've all been told that, truthfully how many of us actually act on that? There are hundreds of charities, no thousands, of them out there trying to make a difference one way or the other.It is important for us to donate, be it $5 only, on a consistent. And we can all afford $5 per month. If we can tuck away money in our IRAs, RRSPs etc., are we so inhuman we can't afford $5 per month to a charity? I don't think so.I've selected three of my favorite charities, by religious affiliations, that you can donate right away and help some one!For Muslims- Hidaya Foundation is the best one. They've recently launched "No Orphan Without Education" program and for $30-50, you can make someone's life better. Click here.For Christians- Christian Children Fund is a pretty good one.For Jews- Jewish Life Network is one of the oldest and best one's I hear, and hey! it's run by a former hedgie, legendary one that too- Michael Steinhardt.I've no affi...
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Thank You FT Alphaville
2007-05-19 01:31:00
Just recently FT Alphaville started a blog roll and had me alongside 21/22 excellent blogs. So this post is a "Thank You !" to their editors for deeming my blog worthy of their time.Much appreciated!Yaser
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Managed Accounts- What You Need To Know
2007-05-18 18:27:00
Recently I got an e-mail from a lawyer dealing with documenting fund of fund financing who wanted to know more about- Mana ged Accounts. I liked what I said, so here's a re-print w/ few exclusive additions.Under the managed accounts platform, funds are invested in segregated accounts, each of which is managed according to a particular strategy by a ABC hedge fund manager within pre-defined limits.The manager?s authority typically is a limited power of attorney that grants the manager the ability to place and liquidate trades, but not the ability to move cash into or out of the account or to link the account to any other account. A trust controlled by a custodian is one particularly effective means of protecting the account assets from any improper transfers or account linkages by the manager or any other party.An external fund administrator is responsible for all hedge funds administration activities. The funds administrator (i.e.- Anson Group) interfaces with the prime brokers and ...
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Central Banks- A Macro View
2007-05-18 06:02:00
Capital flows into emerging markets, driven by a combination of expected stock market gains, currency appreciation, and in some countries high interest rates, have been of increasing concern for central banks. Across the emerging market countries, FX reserves surged by $209 billion to $3.2 trillion in first quarter of 07 after a $216 billion increase in the last quarter.Authorities struggling to grapple with large capital inflows would welcome some dampening of risk appetite. Meanwhile, lower export growth, modest inflation, and accumulated real currencyappreciation make central banks less willing to accept further nominal appreciation.This already prompted heavy capital controls in Thailand, controls that were faintly echoed in prudential or monetary measures in China, Korea, and the Philippines. Vietnam also is reportedly looking at imposing capital controls.The relative weakness of the yen only exacerbates the pressure on Asian central banks, especially in Korea, Malaysia, and Ta...
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What's Up With Calpine (CPNLQ)?
2007-05-17 06:03:00
Fundamental Picture:WSJ's Head On The Street column had a good article on Calpine, so I'm going to reprint the necessary excerpts.Plugging Into Calpine"Calpine recently told the U.S. Bankruptcy Court for the Southern District of New York that it is considering raising money, possibly from private-equity firms or others, as part of its strategy to emerge from bankruptcy court this year.There even is speculation of buyout interest in the company, the nation's largest owner of natural-gas-fired power plants, in terms of megawatts of capacity -- and that could make its shares even more attractive.The company's price/earnings ratio is far below that of the independent power sector as a whole, with Calpine trading at 17.6 times its estimated per-share earnings for 2007, compared with 35 times for the sector.Since filing for Chapter 11 in December 2005, Calpine Chief Executive Robert P. May has been selling assets and patching up the balance sheet. The company has sold eight power plan...
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Time To Buy NYSE Euronext (NYX)
2007-05-15 06:04:00
Fundamental PictureHigh margins and return business with secular drivers. NYX's valuation does not fully reflect strength or persistence of growth. NYSE's recent merger with Euronext will enable it to benefit from Cost synergies arising from consolidating platforms and pools of liquidity, giving members of the exchange access to worldwide markets and equities.A combined NYX will add new products and distribution capabilities, alongside reducing dependence on human capital. NYX recently will be firing about 1/3rd of it's workforce and here's where the Archipelago merger helps NYX be more electronically efficient similar to Nasdaq.Furthermore, my conviction level has increased after noticing Third Point, run by the activist Dan Loeb, has taken a position in NYX. I would also like to go one step further and speculate that Atticus Capital, run by the superstar Tim Barakett, will or has taken position in NYX.Why? Atticus has a position in Deutsche Borse (Mr. Barakett has been pushing...
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The Monday Edition- Singapore a) Govt.'s Public Policies & Investments, b)
2007-05-14 06:06:00
This week I talk about Sing apore 's: a) Govt.'s Policies & Investments (pro-business growth), b) Economy (6-year unemployment low, bankruptcies falling and growth drivers) and c) Main Risks (severe slowdown in US IT imports).Singapore, Asia's second richest country after Japan with a GDP per capita of about $27K, has witnessed stellar performance in it's equity capital markets thanks to robust economic growth (7.9% in 06 and 5-6.5% expected in 07). The reason(s): Singapore's pro-business growth stance through tax cuts and infrastructure investments. We're seeing a significant shift in government policies which will result in further economic development.A corporate tax rate of 18% closes the gap with Hong Kong and will lift foreign investment (Corporate tax rate: 24.5% in 02 to 18% 07-08). While Consumers may be hit by the 2% GST hike, the government has hinted that personal tax rates could be cut further in the future to maintain competitiveness and attract foreign talent (Pe...
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BBH Update
2007-05-14 06:01:00
Recall on May 4th I posted patterns that were developing in BBH. My intention with this post is just to show that following chart signals for channel trading work. It's always great to have such patterns as the signals are somewhat predictable, though one has to be a little flexible and patient.Before: May 3th ChartAfter: May 11th Chart, dropped 7ish pointsSynopsis:1) Negative divergence in RSI and 2) making higher highs in price but lower highs in volume. Keep an eye out for a buy signal around 170-3.
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Double Buy DIS and TNH - CAL Technicals
2007-05-10 06:01:00
TNHNot sure if you've been following my TNH buy recommendations, April 11th and 26th, but the stock is up 27 odd points since the first time. I still think the old analysis is valid and the strong accumulation goes to show the validation of the idea. One of the reasons I've been quite bullish on, besides the ones mentioned in the links is the strength in TNH around Feb 27th the down day.If you peruse the historical prices, you see it falls 4 points on 27th, then it is snatched up quickly by institutions and has 2+ up days to follow. You see the rapid pace of money flow? This shows it was valuable one to watch.DISDisney reported on May 8th so I'd like to mention a quick word.Media Networks benefited from stronger than expected results at Cable Networks, grew 11%, excluding the $85 mn in incremental deferral revenue. which offset weaker results at the Broadcasting segment, which included an estimated $20-$25mn in losses related to the Disney-branded MVNO.DIS has a significant oppo...
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The Monday Edition- Beneficiaries of China's Consumer Spending
2007-05-07 06:01:00
In this week's report I breakdown: The Catalysts For China's Consumption Growth (increase in PPP, consumption boosting policies etc) and Bene ficiaries of Consumer Spending (PG, BIDU, MCD, LVMH etc.). Thank you in advance for your time!Catalysts For Growth: Consumption Boosting Policies (Tax cuts and increase in PPP)There are three key drivers of the increase in Chinese consumers appetite: economic growth, rising income per capita and currency appreciation. The per capita income in China has grown from $280 per year two decades ago to over $5.6+K (PPP method, Atlas method= $1.5K).China's population of 1.3 billion+ translates into consumer dollars going in cars, houses and electronics. Measured on a purchasing power parity basis, China in 06 stood as the second largest economy in the world after the US, although in per capita terms the country is still lower middle income with 130 million Chinese below international poverty lines.Private investment and enterprises alongside consume...
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Analyzing General Motors (GM)
2007-05-04 06:05:00
** Please be cognizant this is NOT a complete GM analysis. I've analyzed the parts which I thought were most important and couldn't do a full analysis due to time constraints. Sorry in advance.GM reported Q1 07 EPS of $0.17 vs. $0.87 consensus estimates, a surprise to the downside. EPS came below expectations, but auto net income enjoyed a large QoQ positive swing due to better mix and the positive effect of the restructuring plan and reduction in structural costs. Furthermore, GM reported higher revenues of 43.9 bn vs 40.8 bn consensus estimates.As of March 31st 07, GM had 24.7 bn in cash, which provides substantial liquidity with no material near-term maturities. A very positive sign, GM?s Auto operating cash flow was positive $300 mill in the quarter, which represents a $1.5 bn YoY improvement. GM ended the quarter with 13.3 bn in net debt.During the conference call management mentioned that cash flow for the year should be improved over 07 but still negative. 07's outlook cal...
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Technical Analysis- Biotech (BBH)
2007-05-04 06:03:00
Let's take a look at Biotech.It's clearly evident that the rising tide lifts all boats. In this case strength in market indexes has led to strength in BBH, but look at the volume! In technical analysis slang, we're witnessing higher highs for the stock while volume is making somewhat higher lows.In the below chart look at the first box with the blue arrow. Do you see the increase in volume when BBH sells of? Similarly, do you see the rise in volume vs. average when the stock rises back for the next two weeks? Now compare that with the volume since the April rise, almost non-existent.Also, the circle on top shows that a bearish engulfing pattern is forming. If it breaks back below 188, where it dropped of from Feb 27th, could retrace to the 62% level in the third chart.Ever since the March mid-week high volume pop, we haven't seen a similar volume rise for a gain which is 2x that of the 3rd and 4th March weeks.This is my favorite chart of 'em all. Do you see the trading signals ...
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Crazy Call Activity In Nokia (NOK)
2007-05-04 02:52:00
NOK options going crazy today- 15 days before expiryCall s123,025 Volume vs. 7,567 Open Interest for May 22.5s40,747 Volume vs. 9,886 Open Interest for May 25sPuts3,225 Volume vs. 15,207 Open Interest for May 25s2,027 Volume vs. 419 Open Interest for May 35sWho would buy so much just 15 days left to expiry? Can't be a buyout because the calls are in the money and out-of-the-money's barely have any volume, which isn't usual if there is a looming buyout.
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Time To Get Out Of Energy Stocks?
2007-05-03 06:04:00
The BPENER works great to produce general buy/sell signals for energy stocks as it marks overbought and oversold conditions. The lowest risk time to buy energy stocks was when the BPENER fell to the 25-30 level and 80-85 level for selling (sorry Stock Charts doesn't allow overlaying of two indexes for the free one).
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Best Articles You'll Read In All 2007, Guaranteed
2007-05-03 06:01:00
Yes I know you've heard "never to trust someone who guarantees anything". However, I'm very confident that the articles below will be some of the best you will read in all of 07, if not ever.My Golden Rule: 30 business visionaries, collectively worth over $70 billion, what single philosophy they swear by more than any other--in business, life, or both. Here are the secrets of their success.50 People Who Matter Now: Meet the executives, entrepreneurs, and cutting-edge innovators who are setting today's business agenda.My personal favorites:1) Chad Hurley: Primary Research, First2) Mike Eskew: Practice "Constructive Dissatisfaction"3) Ram Shriram: Give Your Startup a Fighting Chance4) Tim O'Reilly: Put Yourself at the Center of the Action5) Karen Francis: Leverage Your Personal Network6) Michael Dell: Think BIGTrust me you will find these articles very helpful, good luck to you.
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Technical Analysis- USEG
2007-05-02 06:02:00
First of, special thanks to my pal Wes Golladay (who Jim Cramer has highlighted 5 times on Mad Money ever since his IU tour) for this stock. He sent me the following synopsis pertaining to USEG yesterday:"Check the news today, they sold a uranium plant for 6.6m shares of SXR.TO + 6m cash. SXR $15 USD = $99m + $6m cash = $105m for the deal; plus other royalties. The stock has $125m market cap; back out the $105m in SXR deal and the co is worth only $20m?? Do you see anything that I am missing?"Taking that into consideration I look at multiple time frames and what I see is bullish. Let's go over it.1 year chart: The stock is at the top of its Fibonacci retracement level and could pull back around the six dollar level. Overall, the stock is trending really well since it bottomed in October 06.6 month chart: The chart shows us that accumulation, up days, is higher than distribution, down days. USEG is also forming a bullish wedge formation by making higher lows. The chart is a weekl...
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The Monday Edition: Swiss Franc vs. SPY
2007-04-30 06:05:00
This week's newsletter looks at: 1) Swiss Frank vs. S&P and 2) Consumer Wealth (Total Household Wealth/Disposable Income).Swiss Franc , CHF/USD & S&P Inverse RelationshipA lot of investors concentrate on the JPY/S&P negative correlation, but I've found the Swiss Franc, which has very stable interest rates, to have a similar inverse correlation. Check the image below.Consumer Wealth & Housing It is true that some homeowners have astronomical Loan-to-Value ratios, in some cases even exceeding 100% thanks to negative amortization. However, investors should be cognizant that's only the case for a small share of the population and the average LTV for the economy is 43%.The other 57% represents upper class housing which continued to growth into 07 despite flat home prices. As a percent of income, housing wealth remains near 50-year highs. That this represents the wealth accumulation that has not been cashed out yet. Cash out refinancing remains an option for many homeowners.In light...
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PMTI, TNH, AAPL Still A Buy
2007-04-26 19:30:00
Recall, April 17th I mentioned why PMTI was a buy and it's up 3-4% so far, especially on today's conference call. After today, I think it is still a buy. I'm away till Sunday, will try to do a recap, please read conference call and you will see what I see.Also make sure you check out the TNH, AAPL, AMZN analysis. TNH is up 10 points since April 11th mention, but I never said it was a "buy" but mentioned it was "technically and fundamentally wicked", so I can't claim the "victory" officially, but I'll tell you now, buy it just like AAPL- but be patient, market is hot right now but these stocks have very solid underlying fundamentals and good technicals. Do your diligence and if you see what I see, then go ahead.If you missed out on any day, check out Hedge Fund salaries, I liked the post.Thanks, enjoy the weekend.PS. If you've got any earnings plays, do let me know.
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Missed Apple? Don't Worry Here's What To Do
2007-04-26 06:04:00
Yesterday AAPL popped about 10 points from start of the day to after hours. If you've been reading my blog regularly, I recommend it about every 2-3 months. Last time I did so was on April 10th.My intention is not to pat myself on the back, but to assure those who missed out on the pop can benefit as long as they are a little patient. Apple averages an earnings surprise of about 19% and in the past 6 quarters that I've traded it, each time it has popped about 5+ points on average.Read my April 10th summary for the fundamental picture, which I think is very well in tact. We saw some short-covering, about 800K traded at about 4:15ish buying AAPL. My suspicion is this was some dude covering on their short positions as they offers were being lifted. However, it could be any one lifting offers as they expected more positive trading to come, which did, as AAPL popped 3 points to 101ish.This is what's going to happen- tomorrow at the open, much like AMZN, we're going to see more streng...
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Living The Good Life
2007-04-26 06:02:00
There was an excellent article in Bloomberg a while back pertaining to luxury living that I thought I should post here. It is wicked good motivation for working hard and trying to be the best at what you do.Rotating Rooms, Yacht Berths Spur Dubai, Moscow Apartment Boom Starts of with..."Parking your $115,000 Maserati in Manhattan will soon be a snap. A luxury tower planned for 11th Avenue features an elevator that lifts cars to the apartment owner's floor, where they can be parked near the entry door. The cost for 4,000 square feet: as much as $16 million."In the middle..."In Dubai, the most populous of the seven states in the United Arab Emirates, changing the view from your apartment will require only a push of a button. Developer Omniyat Properties' 24-story high- rise, planned for 2009, boasts apartments that project scenic images, such as the Manhattan skyline, onto its windows. Living and dining rooms in units costing up to 9 million dirhams ($2.5 million) will also rotate 3...
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Analyzing Amazon (AMZN)
2007-04-25 06:04:00
Amazon reported better than expected results for the first quarter. Revenue of $3.02 billion, up 32% YoY, was ahead of guidance and Street estimates of $2.94-.99 billion.The Q's growth was affected by: a) FX benefits approximately 300 bps, b) media sales strength, c) higher gross margins (23.8%) and d) lower taxes (27% tax rate vs. 35+ last year). The growth rate for international media was up 800 bps leading to positive margins and Shipping costs as a % of revenue was steady at 2.9%.Over the past two years, or about 1.5, the Street had been bearish on AMZN due to their aggressive spending and discounting, which resulted in lower gross margins. However, these results display they were necessary to drive growth, and both revenue and margin upside in the quarter.Longer term, investors should expect AMZN's initiatives to result in margin expansion, as it leverages its leading brand name and position as a leading Internet retailer on a global basis.EBITDA came in at $241 million, 51% ...
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