The Tasgall Group

I got interested in Oaktree Capital Management after reading a little blurb about them raising close to a billion on private markets. I like Oaktree’s focus on inefficient and alternative markets, and I looked into what it would take to get some exposure to their expertise. I went to their website to cruise around and check them out. (more…)

There are interesting allegations that contestants in the CNBC Million Dollar portfolio contest may have been cheating…? taking advantage of a security hole in the contest website to place after hours trades.? The amusing thing is that the cheaters have basically done the same thing Wall Street did back during the mutual fund late trading scandal…

More amusing to me is the description of the guy who found that the leaders were cheating…

…the 42-year-old was spending 12 hours a day on the contest, using three computers in his Greenwich Village apartment to trade 1,600 different portfolios, all in an effort to win the $1 million grand prize. He even dropped his studies for the chartered financial analyst (CFA) exam, given once a year, so he could have more time for the financial news channel’s game.

He was taking advantage of a “feature” of the contest that you could have as many trading portfolios (and entries in the contest) as you wanted to…

Of course those of us with programming experience thought about gaming the system with an automated program, but sometimes life is too short to chase a contest like this…

You may have heard the old saying: a recession is when your neighbor loses his job, a depression is when you lose your job.

Bad news, the mortgage loan debacle is no longer happening to other people… my bank has been hit by it and may be about to go out of business.

NetBank Agrees to Sell Assets at a Loss to EverBank

Not to worry, their retail accounts are being sold to Everbank. The changes are primarily bad for investors, not for account holders. The accounts are FDIC insured, though I’m sure it would have sucked to have to collect on the insurance if someone like Everbank hadn’t stepped up to buy the accounts.

While many finance professionals that I respect (like John Bogle) claim Value funds outperform Growth funds, there are investment opportunities when one class of funds dramatically outperforms another. Currently, Value funds have been kicking the pants off Growth funds, but that might be helping set the stage for a contrarian trend that favors Growth in the next 1-3 years. (more…)

In April, the S&P 500 went up 4.3%. If it were to continue at the same pace every month, in a year it would be up over 50%.

Anyone want to bet whether this type of rise is sustainable?

Here’s a fascinating note on accounting rules from a recent Hussman commentary:

…Following the Enron blow-up, the Financial Accounting Standards Board banned an accounting practice that Enron had used to book expected future profits as earnings, immediately, at very the moment it made an investment. In February of this year, the FASB effectively reversed itself in a rule that re-admitted the practice.

Perhaps not surprisingly, the buyout firm Blackstone Group has now filed for an initial public offering of shares. Blackstone is expected to apply the new accounting rule to immediately book the management and performance fees it expects to receive on long-term deals involving private companies, to which it may also apply its own fair value estimates. As the Wall Street Journal quoted Jack Ciesielski of the Accounting Analyst’s Observer, ?This is a black box if there ever was one.?

I wonder if I could do that when applying for a loan…? you know, claim all my income for the next three years of my job today so I can qualify for a bigger home mortgage…? brings a new meaning to the term liar loans, no?

Here are the current streaks in the markets…

• S&P 500 up 12 of the 14 trading days in April
• Euro up 6 weeks in a row, up 11 of the last 12 weeks
• Gold up 7 weeks in a row, up 14 of the last 15 weeks

All of these are not typical trend moves, they are more typical of an exhaustion move before a turning point, or at the very least the signs of a maturing rally. And when we’re getting close to the May part of the catchphrase “sell in May and go away”, I’m starting to get a little risk averse. (more…)

The Wall Street Journal has won a Pulitzer Prize for their series on options backdating.? The paper has made all the articles on the topic available to those of us without subscriptions…

The Perfect Payday: CEOs Reap Millions by Landing Stock Options When They Are Most Valuable March 18
How the Journal Analyzed Stock-Options Grants March 18
Five More Companies Show Questionable Options Pattern May 22
At HealthSouth, an Options Issue May 31
Monster Worldwide Gave Officials Options Ahead of Share Run-Ups June 12
During 1990s, Microsoft Practiced Variation of Options Backdating June 16
Executive Pay: The 9/11 Factor July 15
Setting the Date: How One Tech Company Played With Timing of Stock Options July 20
Stock-Options Criminal Charge: Slush Fund and Fake Employees Aug. 10
In Internal Probes of Stock Options, Conflicts Abound Aug. 11
As Companies Probe Backdating, More Top Officials Take a Fall Oct. 12
McGuire Faces Pressure to Leave at UnitedHealth Oct. 14
Embattled CEO To Step Down At UnitedHealth Oct. 16
Stock-Options Scandal Fugitive Puts Roots Down in Namibia Nov. 17
How a Giant Insurer Decided to Oust Hugely Successful CEO Dec. 7
How Backdating Helped Executives Cut Their Taxes Dec. 12
Bosses’ Pay: How Stock Options Became Part of the Problem Dec. 27
Living Large and Bouncing Back Dec. 30

The NY Times has a good calculator online that compares the cost of buying versus renting, and is worth playing with a bit…

From Bloomberg:

Federal Reserve officials agreed last month that higher interest rates could still “prove necessary” even as they removed a reference in their policy statement to tighter credit.

And here’s the definition of jawboning:

…to attempt to influence or pressure by persuasion rather than by the exertion of force or one’s authority, as in urging voluntary compliance with economic guidelines…

If anyone still thinks that the Fed is trying to control inflation — they’re not.? They’re primarily interested in controlling inflation expectations.? Hence all the jawboning.