effiiciency

Buffett's Betrayal

Livermore???????? Another groupie???????? Here, chew on this:

For clarification, here's a sketchy chronology:
By 1900, aged 23, he had amassed roughly $50,000, from the bucket shops.

Fall of 1905 Thomas Lawson of Boston provided ALL partnership capital for Livermore to raid Union Pacifc stock, actively traded by the Harriman. pool.
Losing his ass up until April 18, 1906 San Franciso earthquake. UNP stock took two days to respond lower. Lawson got the proceeds and Livermore pocketed a $300,000 fee. Took off for Saratoga.

On an unknown date soon after Livermore made the mistake of going short the SAME stock. Harriman pool this time was prepared. Livermore watched a quarter of a million vanish on upticks.

Slightly later, another 50/50 deal with Lawson to short Great Northern. Made a second killing. .

Jesse made his FIRST million in shorting Anaconda in the summer of 1907. Market panic as much as his skill. Banks called existing loans. October 24, 1907 J.P. Morgan forced his fellow capitalists to start supporting stocks. Livermore knew better than to buck the Morgan crowd. Bought his first yacht, the Anita Venetian.

Had an epiphany that commodities posed less "problems" because prices depended upon supply and demand (rather than synthetic measures). Long 120,000 bales of cotton. First used the power of the press release. in the New York Hearld "July Cotton Cornered by Jesse Livermore". Shorts covered, suckers (his term) rushed in, Livermore unloaded. New nickname, Cotton King.

Spring of 1908, Desperately trying to stem a dropping price by buying in both New Orleans and Liverpool, found himself long 500,000 bales. Simply put, the Anita Venetian went under the hammer.

For Livermore 1911-1913 appear to be lean years.

In 1914 he was living Bretton Hall Hotel at 86th & Broadway.

Filed bankruptcy in 1915 with $102,474 in professed liabilities.

The Bethlehem Steel trade in cited LeFevere's book was in here somewhere.

December 20, 1916, somehow became alerted to a telegram to Finlay Barrel & Co. in Palm Beach from a Washington reporter named W.W. Price leaking of Wilson warning the warring parties. Figuring there'd be a market collapse, Livermore approached Lawson again. With capital, shorted the "four horsemen" US Steel, American Can, Baldwin, and Anaconda. E.F Hutton made a flash wire to its offices hours before Wilson's note was publicized. Bids melted away. Livermore bought a half million annuity to throw off $30,000 per annum Also rushed out and bought a speed boat called the 'sub-catcher" and a $120,000 platinum and emerald ring.

Unloaded his first wife via Reno in October 1917 and the 40 year old, on December 2, 1918, married the 18 year old daughter of a wealthy Brooklyn merchant named Wendt. Rented a furnished townhouse at 8 West 76th Street. January 1920, bought a seat on the Curb (today the AMEX). 1919, first son.

1921 had a pool agreement with the Lewisohn Brothers to ramp Seneca Copper. After running from $12 to $25, the brothers canceled the (then legal) agreement.

Summer of 1922, Livermore was reported to have lost $8.5 million on the short side of Mexican Pete. June 1922, Clarence Saunders, owner of the Piggly Wiggly chain hired Livermore to "kill the bears". By November, Livermore had amassed 105,000 of 200,000 shares outstanding at an average of $35. March 1923, stock was over $70. Livermore had 198,872 of the float. March 19th, Saunders asked Livermore to spring the trap demanding delivery from short sellers. Livermore RENEGED. Saunder's somehow succeeded anyway. From an open of 75 ½ sky rocked to $124, and closed the day at $82. Same year, ran the Mammoth Oil pool involving Harry Sinclair.

In 1924, Arthur Cutten forced wheat to over $2 per bushel for the first time. Livermore was short and lost a considerable amount.

In 1927, Livermore ran a pool to ramp Freeport Texas stock from $19 to $74 ½. Also a dirrector of Minter & Assoc, selling $9 million worth of Florida lots and filing BK two years after inception. Robbed at gunpoint in his home in May 1927.

April 1929, sued for $1,450,000 over the 1926 Boca Raton RE crash.

July 1929 refused to make a court appearance in a $525,000 suit against Livermore by the Carbonite Corp for an alleged breach of agreement.

October 1929, details sketchy but even though Livermore "won" millions on the short side, he lost $6 million in his long positions in the crash.. Arthur Cutten purportedly lost $50 million.

August 16, 1932. Divorced his second wife. March 28, 1933, married his third wife at age 56. May 30, 1933. Security Legislation enacted. Pool operations outlawed.

March 4, 1934, Livermore filed BK again. . $2,259,212 liabilities/$184,000 assets.

Thanksgiving Eve 1935 his divorced second wife shot his first son. Non-fatal.

Summer 1937 chartered a yacht (Nina) rather than owning it outright.

Apparently from 1934 to 1940 he was an investment advisor/broker. Apparently to acquire capital for a comeback, decided to write a book (in two versions) The office that's frequently mentioned in awe appears to have been merely a facade to promote the book. The "legendary" market key, is patterned after Dow Theory confirmation, but using two companies in each of 5 leading industries. Hardly original, and basically the opposite of pairs trading.

November 28, 1940, shot himself in the head in the hat check room of the Sherry-Netherland hotel after writing an 8 page note to his wife with the recurrent theme "My life has been a failure"


On Aug 05 10:01 PM Igor Shumovich wrote:

> Forget about Buffett.
> This is technical market, there is nothing fundamental about it and
> Buffett is all about "fundamentals". If you want to make money in
> this type of market - follow Jesse Livermore. The only person Buffett's
> advise is good for is Buffett himself - it served him well so far,
> didn't it?

Buffett's Betrayal

Let's see, I could discuss Warren going to the helm of Solomon Brothers (not to be confused with Lehman or Goldman) in 1991. Or, I could discuss sweetheart deals such as Level Three (LVLT) convertibles not available to the pubic or Mueller Industries (MLI) hefty "special dividend", or I could discuss fuckups in Munsingwear or US Air (gee that rhymed) or losses in foreign currency instruments (weapons of mass destruction) to the tune of aprox 900 million, eh,,,,,,,,,instead I'll just mention my owning of Oakwood Homes, who, though not having stellar results, was a going concern. FIled BK, and today oeprates under Berkshire's umbrella, my investment went POOF.

Lastly, for some of you groupies, you might wanna spell your idol's name so we laymen don't confuse it with an all-you-can-eat diner in a northern suburb of Detroit.

Buffett's Betrayal

Tongue-in-cheek, was Babe Ruth a great athlete?

Analysis: Cardinal Health Is Undervalued

Operating margin is 2.2%. Consistent with wholesale distribution, and a fairly competitve arena. Which, also explains the low PSR.

ROE is 15%, however that's acheived with $3.7 billion of debt...........oops, I mean leverage. Hence an ROA is a mere 5%.

Insiders don't own much of the float but institutions own 86%, Not exactly "room" net net but I will concede exchange within that proportion. Churn.

Will Obama's proposed healthcare reform be a catalyst? Did I mention something about a competive arena?

Related to that, there have been NO insider purchases in ages (other than option flips). Apparently, they don't see what you see.

Not enough short for a squeeze. Looking at a chart since inception, support is at 30ish, which........is where it was in 2000. Thank goodness for the dividend, eh?

Words of Wisdom from the Oracle of Omaha

The bulk of his 50 years of his out performance occured between 1956 and 1969 via the Buffett partnership and...........a secular bull market. His
first billion didn't occur until 1983. Since 1999, net net, performance pales to cash.

Yes, I fully realize the time origin can slant results, but.............he's an adovcate of "buy and hold". As such, the last DECADE has been nil.

I detest groupies but I will concede you can spell Buffett (so he's not confused with an all-you-can-eat diner in a northern suburb of Detroit).

Buy and Hold Is Alive and Well

I can't pass this one up. In 1949, after 15 years of lobbying, the NYSE specialist en masse became expempt from Federal Reserve Regulations 'T" and "U".

This brought about several advantages, one being a tax-segregated omnibus account. That intrument ushered in the 1949-1966 bull market.

Point being.................... and hold works as "long" as you're aligned with the specialist (and willing to contend with his day to day inventory adjustments as well as his other role of maintaining a "fair and orderly" market. In essence, he can be long and short simultaneously.

That said, when he pulls the plug (matures the omnibus account and pays his capital gains) probably due to either a lack of alibis to move paper further OR he's sold out and postured to go net short on an alibi (such as Bear Stearns or Lehman Bros), then the word "humbled" is re-defined.

The specialist is THEE entity most married to a given stock. CEO's come and go but "he's" perpetual.

KO matured long ago. 1997. All you need to do is simply look at a long term (20 year) chart.

As a special sidenote, there is indeed a PPT, but it operates in the futures market, hardly all issues, and runs counter TO the specialst who deals in the acutal paper. DAILY. Perpetually.

Always More to Learn From Buffett

The compounded return of the Buffett partnership from 1956 to 1969 would be more impressive than what you've cited.

As for BRK.A, the 1997 peak was at $84,000 and as I write, it's priced at $94,050, This translates to .94% for that 12 years. No dividend involved. Hence, woefully pales to................ cash.

Adjust it for inflation, and what do you have?

Yes, I am well aware of massaging data with origins, but I chose 1997 as the pinnacle of the buy and hold posture Buffett advocates (but doesn't necessarily follow). Since then, net net, less than a per cent per annum nominal

I'll spare you on Munsingwear, US Air (gee that rhymed) as well as sweetheart deals or delving into foreign currency.

But, I will commend on your ability to spell thus avoiding confusion with all-you-can-eat diners in a northern suburb of Detroit. An aspect many groupies fail at.

While Gartman is Goldless, I Still Itch for Commodities

In the US a dollar is a dollar. Irrespective of source, they all spend the SAME at the hot dog stand. Strength or weakness only pertains to foreign currency translation.

Dennis Gartman doesn't walk on water. Nor part the Red Sea.

A precious metal ETF is PAPER. So are dollars. There's a hidden message in there.

Lastly, as for the one trick pony Potash, looking at a full chart, since inception, should blatantly portray the risk/reward potential.

An Open Letter to the Plunge Protection Team

Boy..........would I love the debate whether the PPT exists versus the GLD ETF acutally being BACKED by physical gold dollar per dollar. But (grammatical error) it would take too much typing with nothing to gain.

But (another grammatical error) you'd be right if you indicated there's no Good Tooth Fairy, Santa Claus, or Easter Bunny.