Tuesday, January 28, 2014

Ready to Open Some Positions

Markets finally have a series of off days, going to be ready to get some cash into the market, not sure whether this is a buy the dip scenario, but the earnings of companies in the last few weeks with softer guidance is a hit for market expectations and we should expect prices to remain capped.
AAPL reported with lower guidance, which puts them in a no growth situation and Icahn now looks like he is probably chewing a lot more than he can handle with some tech cases.  He also positioned himself in ebay to call for a divestment of Paypal; looks like his 'genius' call in Netflix has made him a lot more confident in investing in the tech sector.  But the last two positions in AAPL and EBAY may be a lot more challenging that his previous activist investments, namely because his holdings are less than 1% of the float, and tech has always had cases where valuations take a lot longer to play out, if at all, reminds me of Klarman in his HP position, because I was riding that trade down also.  I was long into AAPL in the 3qtr of 2013 but I was out end of 4qtr.

Early last year with the AUD above parity and the Australian government with some margin for lowering rates, it was an obvious call to see AUD below parity, but how much lower?  I think we've come close to the mean range of what we could expect for the AUD, although settling around 80c is within range.  However everytime we see some US related news on the housing/employment situations, we will see the uptick in the AUD.

After seeing Gold and the miners reversely correlated with the market sell-off now seeing markets all being correlated.  This is a sign that market risks are getting heightened, as asset classes becoming correlated in down markets are the scariest thing for risk managers (other than redemptions) who still need to find some returns somewhere.

Not sure where my next macro idea will come from, as I haven't seen a good macro idea in the last 12 months.