HPQ: Revisiting the Short...

On 5/28 I wrote a follow up note titled "They Can't Hope This One Any Higher", and it looks like they couldn't.

Today HPQ underperformed the market again, trading down another -1% to $45.04. The stock is technically broken, and the entire Street remains long the same bullish narrative that this deal for EDS is gravy.

*Full Disclosure: I have covered my short position, and plan on re-shorting it again on an up day.

(Chart courtesy of

Pinnacle (PNK): Buying More...

On 6/11 I introduced the timing of my 1st tranche of buying PNK in my fund. Fortunately, my process forces me to buy things in thirds. Process is born out of hard lessons learned. Bottoms in stocks are processes, not points.

PNK was down -8% today, to $10.75. Down eight percent is not bad when I look at a stock price that's down almost -70% from its 2007 high!

There is no doubt in my mind that PM's who got this one wrong are blowing it out into Q2 end performance reporting. Short interest is approaching 1/3 of the float, so the shorts are leaning on it here too.

I'll be buying more.

*Full Disclosure: I now own PNK in my fund.

(Chart courtesy of

Shuffle Master (SHFL): Buying some...

The stock is down -83% from where some of the "smart" hedge fund guys would pitch it to me as a long at "idea dinners" in 2006, and at 20% of the float, short interest continues to build to a level where the same hedge fund community now thinks "its a short to zero".

Additionally, 78% of the sell side's ratings on SHFL are now Hold/Underweight/Sell. In September of 06', according to Factset, 75% of the ratings were Buy + OverWeight!

My Partner, Todd Jordan, has edge here, and we don't think it's a zero. Buying it in the $5.91-$6.26 range is where I'd get more aggressive, but I bought 1/3 of a position in my fund today.

(Chart courtesy of

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Indian "Schemes"

Sandeep Singh, from the Hindustan Times wrote a great article today outlining the mathematical reality that 2 of 3 funds in India have delivered below 1% returns over the last 12 months.

While these returns are not funny, the language he uses is. Indians like calling investment funds "schemes". Maybe that's because thats what they, like tulips, turned out to be!

Singh highlights that "of the 170 equity schemes that have been in existence for more than a year, only 18 schemes (around 10 per cent) delivered returns of more than 10 per cent. Only a third of the schemes have outperformed Sensex which itself has grown by a mere 1.1 per cent over the past one year."

*Full Disclosure: I recently covered my short position in IFN.

Copper Update: Confusion Continues...

Today the Chinese Government flipped us over on our back again by providing more politically massaged "data", this time signaling decreasing copper demand.

The custom office reported May refined copper imports of 94,196 tons. Imported supplies are down -26% from the prior month. Copper futures sold off -0.5% today.

Below is a chart of copper prices/Chinese import data.

Andrew Barber
Research Edge

Quote of the Day from the Head of Goldman's Quant Investments

Actually, according to Bloomberg's Tom Cahill, Goldman's Robert Litterman, (head of GS quant investments) said this at the GAIM Conference in Monaco on June 19th. Thankfully, I was not chasing "hedgies" around at this conference, so I am happy to take this quote on time delay...

"We couldn't get out and if we had it would have made it worse. We had to ride it out.'' -Bloomberg Article, June 24 ("Goldman's Global Alpha Fund Gains After 2007 Plunge")

Anyone remember 1987? Buler?

Liquidity remains one of the many reasons why the US stock market can bounce for a "Trade", but remains in a downward bear market "Trend".

Early Look

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