Stone Fox Capital

Galleon Group's 50 Largest Holdings

the list would be better if it was based on the % of ownership. Apple is clearly not a short based on this. Also, not so sure you can't count on a massive wind down as a large % of the money is Raj's and i don't see him being forced to cash out much.

Why I'm Short So Many Financials

While I understand that you've made great calls in the past I don't understand how any of these banks are in trouble. They all are now making money partly b/c the govt has made it practically impossible to lose money. I doubt this situation will go away as long as they have writeoffs. Each month that passes they get clear out bad loans using their income. So not only aren't they losing money, but they are slowly riding themselves of toxic loans.

For sure these banks will see peak earnings in say 2011 that they will have a hard time matching b/c as loan provisions drop so will their net interest income. This will cap the upside to these stocks, but I don't see your worst case scenario playing out. Heck just today ETFC and RF both talked about moderating losses. These were 2 banks on the brink and now them have made it past the worst.

Would could always get a double dip recession b/c Obama goes regulation or tax crazy, but that would be a change in scenario. An investor wouldn't want to jump ship until it turns.

Sobering Stat: ARMS Index Indicates Market Is at Peak, Not Bottom

When a comment suggests that the market will retest March lows and gets a +30 score it sure makes me wonder about the market actually being at a top. Everybody is so bearish?


On Aug 29 02:11 AM Michael Clark wrote:

> This is not a surprise -- but I appreciated reading it. We are near
> a top and we will test March lows. Denial is not a fundamental strength.
> And companies with declining earnings are not necessarily a good
> value. I'd rather own a company with a high PE and rising earnings
> than a company with a low PE and declining earnings. In the case
> of this market, we have mostly companies with a high PE and declining
> earnings. That's a very dangerous market condition.

Four Reasons We're Headed Even Higher

The negativity of the comments tells you everything you need to know about investor sentiment and the fact that this market will continue to rally. SP500 at 1,200 to 1,300 is where the market is headed with little to know resistance.

Look at any poll on websites and the majority still expects the market to be lower. Load up!

The Problematic Banks

If the assets are not market correctly, then the auditors still aren't doing their jobs. No way banks should be marking assets to absurd values that don't correctly value them. What good is that scenario?

On Picking the Right Pundits

Garzarelli reminds me of Whitney. Just b/c a analyst makes one great call doesn't mean they are somebody you should follow. The thing about Paulson is that he was bearish on the financials and now is bullish. You rarely see somebody play both sides so well. Makes his move that much more worthy of following.

Is John Paulson Really Bullish on Banks?

Paulson is not a trader so its unlikely that he has unloaded the shares. If he bought RF in the $3s, he likely did so thinking the stock was going to $10+. Don't be so fooled by marked to market. We already know that now market exists for those loans so its pretty clear that Paulson is confident those loans are worth a whole lot more and you know hes got the resources and intelligence to do the leg work on that.

This Advance Will Be Measured in Days, Not Months

Great to see everybody still shorting. Market on the verge of a major breakout. Leading indicators are very bullish now. Why would you short?

Meredith Whitney Ratings

as usual she seems overly bearish on just about all banks. Most people that have been correct since March expect much better numbers out of the likes like WFC.

As far as the Goldman call, would like to see her numbers compared to the most recent updates. Too many times avg estimates include a bunch of analysts that haven't updated numbers. Shes likely within the consensus in that regards.

Fed Finds a Way to Use Stress Tests to Screw Bank Shareholders One More Time

Good stuff. Keep posting though its impossible to invest in this sector based on the moving rules.

Why BAC Will Beat: Understanding a New Bull Market Is Not Underway

A month later and the bull market is still alive. It might be ready to roll over now and maybe not, but you seem way to sure of yourself. If the market is so rigged as you think, then why don't you think it'd now be rigged to go up? Wall St needs a good market to recover.

Housing's Big Picture Isn't Pretty

If incomes don't go up as you suggest, then interest rates will stay insanely low. Either way, home prices are unlikely to drop that much more.Unemployment isn't an issue to that great of an extent. Your only talking about 5% of the population that has been impacted. The real issue is with the 90%+ that is employed. Getting them to have the confidence to buy a house is so much more important.

This website continues to be too negative. My fund is up 50%+ over the last 6 months and all I hear is the negatives. Wake up people, the world hasn't ended!

On May 24 03:26 PM Dave T wrote:

> I understand that interest rates have to go up but incomes? What
> do you base that on? I see incomes being miserable for years to
> come! With thousands of kids coming out of college with no where
> to go, boomers losing great jobs only to find one at $15 or $20 an
> hour, corporate America laying off thousands, soldiers coming back
> from Iraq when this ridiculous war is over, car manufacturing laying
> off thousands and you think incomes are going to go up? Puleeeez!!
>

Housing's Big Picture Isn't Pretty

What Schiff and others fail to understand is that the price of a home is so dependent on rate of mortgages. Back in the 80s mortgages were in the teens and not they are only 5%. That greatly increases the value of a house and is why housing affordability is at record highs. So how are prices going to decline 20-40%, when houses are so cheap? After all isn't that what determines price? The ability to buy a house. The more likely scenario is that instead of prices going down we'll likely be in for a time period of flat prices as income and rates go up. Increasing ability to pay more will be sucked up by rising rates and hence prices won't drop. If mortagage rates were still 7-8%, i'd be all behind Schiff's theory, bu the facts don't back it up.

Stress Test Not Stressful Enough?

What I don't understand about Whitney is that she still doesn't get it that maybe the industry as a whole will be smaller with the lower leverage, but that so many players were put out of business ala Lehman that the remaining players actually make more money. WFC is originating a ton of mortgages b/c alot of mortgage originators are out of business. She like Mayo and others seem to want to completely ignore that the banking industry was extremely positive in Q1.

Long term though I do wonder what happens to the holders of these 5% mortgages when short term rates soar. Most consumers will have a financial incentive to stay in that home b/c switching to a 8% mortgage will be expensive. The banks will be squeezed with lower fees and lower net interest.

To me that means that solvency isn't an issue, but earnings growth in 2010 and beyond is an issue.

A Bull Market That Few Are Buying

so many doubters still makes me more bullish. Keep waiting for this rally to end, but very few are bullish.