ebook essays pieces of the puzzle
Monday, January 3rd, 2011
red turned to green

Doctor Copper has been feeling his oats.  Really:  The rolling 120-day correlation between copper and oats is .92 — but you can throw just about any “risk asset” against it and get a high number.  The FTSE All-World Index?  That matches up with a .95 correlation of late, although you can see above that copper has left stocks in a cloud of red dust the last ten years, with a return more than fourteen times as great.  There are rumors of someone cornering the market for it and optimistic calculations of how many pounds per capita of it the Chinese will consume, leading to a new all-time high in copper on Friday.  It’s enough to make displaced and angry ex-homeowners look longingly at the pipes on the way out the door.  In any case, figure out copper in 2011 and all else will probably fall into place.  (Chart:  Bloomberg terminal.)

write it out

Michael Bigger hit the nail on the head with his posting, “99 Percent of Traders Are Missing Out.”   Writing about your craft is so important.  With the “blogs are dead” chorus continuing to get a lot of air time, his is a welcome retort.  Any attempt at writing is good for you, and forcing yourself to describe what you are doing beyond cryptic tweets and Facebook status updates and journal notes is important practice.  And, if you follow Seth Godin (featured in the short video in the posting), you won’t lack for fun and fulfilling ideas on how to do what you do.

a changing industry

I am going to have much more to say about this in time, but I agree with the thesis presented on Notable Calls:  The business of research is going to change markedly in the wake of the expert network/insider trading revelations.  (Also notable are the disclaimers, so read to the end.)

in the news

I spent four years as an advisor to two student-run investment funds, so I have an interest in what university programs, clubs, and funds are doing.  Going forward, I will post interesting items from some of the schools I’m familiar with, and maybe even link to research produced by students.

A piece in the New York Times last week brought the growth in student funds to the attention of a broader audience.  Specifically, it focused on the “bling” — the fancy trading rooms and expensive data tools.  Many of the online commenters considered it all symptomatic of what’s wrong with our economy and markets.  Broadly speaking, they have a point, because the article and accompanying video come across as superficial.  Is that all there is?  It depends on the school and the teachers.

Some will provide the insight and perspective and ethics that a true professional will need.  Others won’t.  Just as happens in any discipline.

(Readers that are part of student programs should feel free to send me information on what you are doing.  And, if you are looking for a job, things continue to improve, but be ready for some wacky questions when you interview.  You’re probably not lacking for advice, but my letters to a young analyst will give you an idea what I value should we ever find ourselves across the table from each other.)

for investments too

“Creativity has much to do with experience, observation, and imagination, and if any one of those key elements is missing, it doesn’t work.” — Bob Dylan, Chronicles:  Volume One.