Daniel Moser

Hedge Fund Portfolio Tracking: Renaissance Technologies (Jim Simons), Q3 2008

There needs to be a major disclaimer in this article. Some hedge funds that are being tracked are prefectly fine and arguably helpful. Anything related to Renaissance should be looked at for fun with no intentions of gaining any insights from it. I would argue that no insight can be gained looking at Renaissance because they are more than anything a quant shop. As an individual from the outside looking in...you have no idea why they own those securities, how long they have owned them in relation to the filing period, how long they will continue to hold them, etc. For all you know, they are holding certain securities in one fund because it tends to behave a desired way with another fund you have no information on. It is really dangerous to attempt to garner information from a fund that is famous for changing strategies midgame.

The managers at Renaissance are like Gods. They are all extrodinarily intelligent. Renaissance is more like a Think Tank than a hedge fund. They are not ordinary folks. They are Phd in mathematics, physics, and statistics. In conclusion, just take a huge grain of salt from any holdings reports on Renaissance related funds.

Hedge Fund Tracking: Moore Capital Management (Louis Bacon), Q3 2008

Banning short selling is a very silly idea. Maybe during the next cycle you will read up on diversification and what expanding your selection by including short positions or short funds can do for your overall portfolio. And if the argument against me is that you can't short in IRA's, read up on the short ETF's out there. 401K and IRA investors need portfolios designed for all weather not bull markets exclusively. Heaven forbid, people actually have to pay a little bit of attention to their finances! Say it ain't so.

SEC's New Plan Could Revamp Oil and Gas Reporting Rules

From my understanding there is another issue surrounding the accuracy of proven reserves. Apparently there are two different numbers reported to the agencies...reserves and resources. As it turns out proven reserves reflect the economically feasible reserves. This is a huge kink in the peak oil theory as well as any other medium term shortage argument.

As the price of oil/nat gas rises suddenly reserve numbers grow simply because projects that were not feasible a year or two before become feasible. That is a wretched way to measure the quantity of oil and natural gas on the Earth.

It seems to me Wall Street, the media, and policy makers should be more concerned with resources than reserves in the first place. I can understand from a raw cash flow valuation perspective why proven reserves may be important for short term valuations of securities (i.e. less than 5 years). However from a long term perspective natural resource companies are much more of a call option (real or financial) and proven reserves just wouldn't allow the correct valuation in my opinion.

Case in point, Canadian tar sand energy companies are quite literally a call option on future oil shortages. Yet because of limited technology currently, the amount of reserves available for them to harvest is grossly underestimated because it assumes no improvement in technology, which in itself is a very poor assumption.

P.S. On a website in which knowledge can be gained, nothing productive comes from being rude.