In Search of the Perfect Investment

Buy on rumor. Sell on news. An old Wall Street adage.

The “smart money” is selling Yahoo short. Why? Everyone who couldn’t get any Alibaba bought Yahoo, knowing that it owned a ton of Alibaba. Now they think Yahoo has “run up too much.”

Friends on Wall Street say the underwriters lead by Goldman Sachs are being obsessive about making this IPO a success. They’re desperate to avoid the mess that was Facebook.

Wall Street is weird. The BIG players in IPOs are called the Syndicate Guys. They buy every IPO or secondary and sell it the moment it comes public — whether they made money or not. The idea is that you do enough of them, the few good ones will pay for the bundles of bad ones.

These guys are important to the underwriters because they buy (i.e. support) the bad deals also. Hence the underwriters have to support them with oodles of shares in the good IPOs, like Alibaba.This year, 2014, the Syndicate Guys “have been sucking hind tit.” That means they haven’t been doing well.

If a lot of these Syndicate Guys sell the moment Alibaba goes public and Alibaba stock downkicks, that might give us all an opportunity to buy the shares we wanted, but couldn’t get, because all Alibaba shares were allocated to “institutions.”

Apparently, a “Grey Market” in already trading Alibaba shares. They’re indicated 28% above the top end of the suggested IPO price. They’re selling  around $87. My friend tells me “this is the earliest I’ve ever seen a grey market.” Certainly one of the strongest ever.

As I’ve written, owning Alibaba for the long-term is good. Trading in it is dangerous.

According to another friend, “Too much is riding on Alibaba.”

We’ll see tomorrow.

Calpers fires its hedge funds. All of them. Miserable returns Too expensive.
Calpers paid $135 million in fees for its last fiscal year, according to Bloomberg, and its hedge fund investments earned returns of 7.1 percent.

Upgrade to iOS 8 on your iPhone or iPad?
Not now, thank you. My philosophy is simple: If it’s working fine, don’t mess with it. Meantime, the techie press is full of bug stories. One say iOS 8 could mess up your regular (and perhaps automatic) backups to Dropbox in the cloud; the Healthkit is not ready yet; and it might slow other things, down, especially if you have an older iPhone 4S.

There are huge benefits to upgrading to Apple’s latest iOS 8. For some of them, click here.  Let others struggle through the bugs. Apple will fix them, soon. Wait a little. There’s no urgency.

How much money does PayPal make? I sent Matthew $150. He paid a 4.1% fee. That’s extortionate. Far more than credit cards. That business is ripe for heavy competition. PayPal is a subsidiary of eBay. I’m staggered at the fees PayPal and eBay charge.

Amazon is not the cheapest kid on the block. I bought some Starbucks Frappuccino Mocha 9.5 ounce bottles from Amazon and from Fresh Direct. Amazon was 18% more expensive. My comparison was apples to apples. It included tax and shipping.

Is Islam a religion of peace? Many world leaders seem to think so. They’re probably wrong. For the best piece I’ve read on the subject, click here.

Totally tasteless jokes about Oscar Pistorius
Oscar wanted to get a new bathroom door but his girlfriend was dead against it.

Oscar clearly misunderstood when his girlfriend told him that on Valentine’s Day he had to take her out.

If he gets off this charge it will be the closest shave anyone has had with only 2 blades.

Oscar Pistorius is pleading not guilty due to temporary diminished responsibility. He claims he was legless at the time of the incident.

Whatever happens in court, he still has a career. The IOC say he’s a front runner at the next Olympics for pistol shooting.

Police reconstruction indicates that Pistorius lost it when, for his Valentine’s Day gift, his girlfriend gave him a pair of socks.

New Valentine’s Day card: “Roses are red, violets are glorious. Never creep up on Oscar Pistorius.”

Looks like he has an expensive lawyer. I hope he can foot the bill.

New evidence has been found outside the Pistorius home that completely acquits him of his girlfriend’s murder . footprints !

She didn’t notice Oscar stalking her.. It was the silence of the limbs.

And finally,

Anyone making jokes about Oscar Pistorius is just prosthetic!

Harry Newton who finally finished the 28th edition of Newton’s Telecom Dictionary at 2:00 this morning. Hard word, but happy. My legacy?

My legacy palls. Henry Kissinger is 91. He’s just published his 21st book:

That’s an amazing accomplishment. But really, Kissinger’s major accomplishment is that 1971 he  traveled to China and opened U.S. relations with it. I’d vote that that trip is the single biggest accomplishment in U.S. foreign policy since the winning of the Second World War. Kissinger brought hundreds of millions of Chinese out of poverty, and helped start the 40-year ongoing boom in China — the culmination of which is tomorrow’s Alibaba IPO, the world’s largest. Jack Ma was seven in 1971.