Wednesday, January 4, 2012

Thoughts for 2012 and Selective Review of 2011


Thoughts for 2012 (some more serious than others):
- Flash mob acceleration makes standard retail an even less desirable place to be; retailers blame evil short-sellers for organizing the mobs
- The "better burger" and the soft-serve ice cream waves top out, there might be an IPO or two (Smashburger, Red Mango)
- Carl Icahn buys a ton of treasurys, demands seats in Congress, asset sales
- Apple somehow takes over your TV, car and fridge
- Hillary for VP; gets elected and takes "the suitcase" away from the O-Fail
- Brazil starts to look uglier than most think possible
- 100 m sprint record broken in London 2012
- Social media and tech start-up rapid valuation deflation
- Germany wins Euro 2012
- Chris Christie weight loss surgery during his summer vacation fuels 2016 speculations (promptly denied)
- Since every hedge fund strategy is negative for 2011, many expect mean reversion in 2012: the reversion does not happen
- US ISPs tighten data limits + USPS down to three delivery days = NFLX in the teens
- The Fed is sued by a pension funds group led by CalPERS for causing severe underfunding by rate manipulation
- Some widely despised sector does really well (financials, sovereigns, old telcos, big pharma?)
- Department of Education requires that colleges take "first loss" position in any student loan; this leads to differential pricing by major and a big decline loan availability for worthless/hobby/lifestyle degrees
- Surge in specialty spirits: ouzo, calvados, grappa, cachaca, etc.
- TSA-free/fly-at-your-risk airline fails to take off due to red tape
- Obama caught smoking with Carla Bruni, Michelle disapproves and flies coach back home
- Twitter still can't figure out how to make money, introduces a paid 240 character account; paid individual "pimped tweets" displayed in color and flash
- Unsynchronized transmissions and carburated engines make a comeback with enthusiasts
- ACLU sues school districts on behalf of American Muslims juveniles who feel excluded from football because of the "pigskin"
- Major newspaper takes a position against veteran privileges based on non-draft, paid military
- Perry, Palin and Santorum co-author a book on evolution, promote it with a trip to the Galapagos Islands
- Payroll deductions renamed from abbreviations to "old people pay", "old people healthcare", "Middle East occupation", etc.
- Cocktail food trucks (these really are coming)

Looking at my meager blog postings over 2011, here are a few things that make me look good. Not that I can eat that: inflation-positioning, even with good sized TIPS and cash/opportunistic holdings, was a disaster in the 2nd half of the year.

January 2011: Stay away from the Crumbs Bakery reverse-merger IPO. The stock gyrated in the low teens after the transaction closed later in the spring, prior to tanking to $3-$4 range. Who knew?
April 2011: Are we at the peak? This was a well-timed listing of current events pointing to a peak in economic activity. The US has not gone into a double-dip but we are not seeing mega deals, big resource mergers, and so on. Follow-up post in June, M&A Activity Indicative Of Peak Cycle
May 2011: The Ira Sohn Conference Lemming Trade: from the charts there, HOGS $15 to $8 now, CIT $44 to $34, MBI $9 to $12 (this one is up on the legal developments), BPI $26 to $24 (not bad, and a great story about the guy presenting it), MMC $30 to $32, AON $52 to $46. As discussed, one should not be following blindly (unless it was for a quick trade)
June 2011: Howard Marks is Selling, Should You Be Buying? Oaktree's filing was not a good harbinger. I discuss why.
July 2011: Coffee Stocks: Do Not Burn Your Fingers. This post discussed some of the hot coffee stocks. JVA, JCOF, JAMN, CRVP have all tumbled since then (some were on their way down already); the real businesses (SBUX, THI, PEET) soldier on, while the grandfather of all hot coffee stocks, GMCR is... well...GMCR.

With that, good luck in the new year.

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