http://www.cmegroup.com/education/trading_challenge/2010_Commodity_Trading_Challenge.pdf
Details:
The electronic component is team based and runs for four weeks:
• Products Traded: Crude Oil and Gold Futures
• Practice Round: February 16-17, 2010
• Preliminary Round: February 18 – March 4, 2010
• National Finals: March 8-19, 2010
Scholarships will be awarded for the winning teams in the electronic portion.
There is also an optional open out-cry component where individual students can test their skills while on location in Houston on March 27, 2010 or in New York on April 16, 2010.
Please Contact Nswijnbe@colby.edu if you would like to be part of Colby’s team.
Consensus in this Weeks Barrons, Check out the GDP estimates of the experts.
Interesting visualization of Unemployment in the United States
Important purchasing meeting on Monday December 7th in Diamond.
What is a Bond?.
Focus on the concept of duration, dollar duration. Our convexity is already hedged by owning TBT
Calculating present value of a future payments, (zero coupon, bullet etc.)
Please come prepared to discuss our current portfolio.
Trading has expressed an interest in the Lodging/Hospitality sector in the form of a fixed income annuity.
We will be looking at prospectuses for these three hotel/lodging companies: Starwood (HOT), Wyndham (WYN) and Martiott (MAR). ]
HOT:
1) Maturity: 05/01/12 – Coupon: 7.875
[http://www.sec.gov/Archives/edgar/data/316206/000095013703001228/c75018a1sv4za.htm]
2) Maturity: 02/15/13 – Coupon: 6.250
[ ]
MAR:
1) Maturity: 05/01/12 – Coupon: 10.000 (Carefully analyze this bond given its higher than market YTM)
2) Maturity: 02/15/13 – Coupon: 5.625
WYN:
1) Maturity: 05/01/14 – Coupon: 9.875
http://finance.yahoo.com/news/ITT-Educational-3Q-profit-up-apf-1957144068.html?x=0&.v=1
The last paragraph discuses bad loans.
http://finance.yahoo.com/news/Sector-Snap-Forprofit-apf-3270817164.html?x=0&.v=1
This article discuses the SEC and Apollo situation.
Attached to this post are the slide slows about fixed income securities. The trading PowerPoint has some good links if you’re looking to do some basic research into bonds.
Fixed Income Primer
Bonds-Trading
What is a REIT? Investopedia
REITS offer an excellent investment for a tax free institution because they pay out 90% of their taxable profit to the shareholders.
Lets talk about how depreciation impacts our investment.
Please Watch this Video that shows the Senate debate on the Re-appointment of Chairman Ben Bernanke
Check out this club profile featured in the November 23rd edition of Bulls And Bears Press
Market update: Nick Van Niel
Portfolio Management:
CSIA has revised its fair value estimate for JPM from $36.85 to $49.90. CSIA believes that a profit trigger should be set at 20% above the CSIA fair value estimate and a stop loss be set at 30% below the CSIA fair value estimate. Therefore, CSIA asks that the current profit trigger for JPM at $47.91 be cancelled. CSIA asks that a price limit order be set at $60 for JPM and a stop loss at $35 be set for JPM.
Based on ESI’s trading range for the past three weeks, CSIA asks that a stop loss be set at $86 for ESI.
Approved by a majority of CSIA members.
Strategy: Presentation on the dollar
Investment Banking Presentation: Nick Wijnberg
Curious about the oversight on Government Spending. Check out the Report here.
Also, a visualization of the US. Debt Clock.
Also the Fed Put out a summary on its outlook for Monetary Trends. Download the report output gap.
Very interesting article regarding a competitor to our ESI (ITT Technical Institute) in Barrons. Important Segments Below. If you have a subscription please check it out.
THE FOR-PROFIT COLLEGE BUSINESS grew sensationally right through the recession. September-quarter enrollments rose 20% to 50% across the industry, from little Grand Canyon Education (ticker: LOPE) to giant Apollo Group (APOL), parent of the well-advertised University of Phoenix. So why are the industry’s stocks trading at historically low multiples of their fast-rising profits? And why did an Education Department panel spend last week discussing regulation of these businesses — which enrolled more than 10% of all U.S. college students last year while accounting for almost 25% of $60 billion in government-backed student loans?
President Obama has called for $12 billion in funding to support public community colleges over the next decade, but Congress has barred the Education Department from collecting the student-level earnings data needed to assess graduate outcomes. So there’s no solid data to let prospective students-or investors-compare the salary boosts from public and for-profit degrees. But one crude measure of the relative return on those educations is the default rate on student loans. Defaults were about twice as high among for-profit alumni as among the alumni of public colleges, and three times the level of non-profit alumni — according to the government numbers on those who started repayment in 2007. More worrisome, the Education Department says defaults of the for-profits’ students get much worse over time, rising above 23% of individual loans after four years, compared with 10% for public college alumni and 7% for nonprofit alums.
“This reminds me of the ‘liar loans’ that helped create the housing bubble,” said California Democrat George Miller, chairman of the House Education and Labor Committee, at a hearing last month where government investigators told how a for-profit company’s testers helped applicants pass an entrance exam. “They end up defaulting,” fumed Miller, “with ruined credit reports, and all their problems got worse.” Barrons Article
The G20 met this weekend. Please review their summary on the state of the global economy.
Bloomberg On the Economy
Also, check out the CME and the Chicago Options Exchange website For those who are curious about the VIX makeup
November 2nd, 2009 Townhall Meeting Highlights:
Please see below posts and look over the following attachments that were reviewed at tonight’s meeting. Feel free to email your group leaders any ideas or thoughts about after reviewing the documents.
KO Analyst Report
Understanding Value Metrics
Valuation Metrics
TBT Article
CSIA Open Orders compared with morningstar valuations
Next week, there will be group meetings on November 9, 2009. Please check your divisional pages later in the week for updates about these meetings.
Please read this excellent article by RGE’s Nouriel Roubini
Nick Van Niel will be leading our meeting. I look forward to seeing all of you there.
Please Review the Market Update presentation CSIA_Nov1Update
Also, there was an article published today on MarketWatch about TBT:
http://www.marketwatch.com/story/the-treasury-bubble-is-about-to-burst-2009-11-02
The Treasury bubble is about to burst
LA JOLLA, Calif. (MarketWatch) — The long bond repurchases are complete, and there is not much cash left for agencies and mortgage-backed purchase programs.
We know when things don’t look right. In early 2000, it was the Internet bubble. Anyone thinking rationally could see, earnings versus prices of Internet stocks did not add up. More recently, we could all see the free credit environment leading up to 2007. When the baristas at Starbucks are getting hundreds of thousands of dollars in loans with no money down, something has to be wrong. Anyone paying attention saw the opportunity to reap significant rewards from these two simple observations. Now, there is a third opportunity.
This bubble may be the biggest one of them all. The Treasury bubble is about to burst.
By now, most investors are wondering why the demand for U.S. Treasury bonds seems so high. The U.S. dollar is declining, interest rates on U.S. Treasurys are extremely low, and other investments have been doing far better. Government officials and the Federal Reserve chief have proclaimed an end to the recession, and that adds to the confusion.
If the recession is over, why are so many investors scrambling to buy U.S. Treasury bonds that pay nothing? The U.S. government would like you to believe that demand comes from foreign nations. However, that is not entirely true. In fact, there has actually been an exodus of foreign funds from the U.S. in 2009. Still, demand appears robust, but it could not just come out a thin air, or could it?
It just might. The U.S. Treasury began buying agency debt in January of 2009. It began buying long-term government bonds in March. And it has been buying mortgage-backed securities since 2008. This was all done in an effort to stabilize the credit markets and keep interest rates low. At least, that was one of the reasons.
Another might be the government’s interest in satisfying its own debt obligations and propping up the dollar so it remains a world currency. With careful observation, this second reason begins to make more sense. In fact, a review of the current accounts that foreign central banks hold in the U.S. makes the Treasury bubble much more clear.
Foreign central banks owned a tremendous amount of agency bonds. In March, the U.S. government committed to buying hundreds of billions of dollars in U.S. agency bonds. In total, the U.S. government committed $1.2 trillion to this combined effort. The goal sounds great on paper, but the method of operation produces a shell game, and falsifies demand for U.S. Treasurys. This is where the opportunity comes from.
Foreign central banks do have a vested interest in keeping the dollar from collapsing. Therefore, they are willing participants in this bubble-process. Because they have a stake, they will do what it takes to support the dollar, but they are not willing to commit much more money to the effort. So, the U.S. Treasury came up with a plan.
This is how it works. The U.S. government has been printing money to buy agency bonds from the current accounts of foreign central banks. It deposits the cash into those accounts. Then, the central banks buy U.S. Treasury bonds with those proceeds. In essence, the U.S. Treasury has been printing money to buy its own bonds. This has created the bubble in the U.S. Treasury market that exists today.
Some investors might argue that this could last forever, because we could print money forever. However, the Treasury has already set a spending limit. The question is, how close are they? In the chart below you will see that the Treasury has already spent $1.2 trillion on this combined effort. The chart below includes mortgage-backed securities, agency purchases, and long term government bond repurchases.
The U.S. government has almost spent all of the monies allocated to this program. Soon, it will not be able to play this shell game anymore. Once that happens, the demand for treasury bonds will change considerably, and the bid-cover ratios will change (decline). Once the U.S. Treasury stops giving foreign current accounts the money to buy U.S. Treasury bonds in the open market, the demand for U.S. Treasury bonds will decline significantly.
From there, Treasury bond prices will decline.
In the early part of this decade, shorting Internet stocks was one of the most rational investments an objective investor could ever have made. At the end of the credit bubble, shorting financial stocks was an easy way to make money. Now, as the Treasury bubble begins to wind down, the easy money will be made from shorting Treasury bonds.
I am recommending ProShares UltraShort 20+ Year Treasury ETF and ProShares UltraShort 7-10 Year Treasury for this. These are ETFs that will increase if Treasury bonds decline. In addition, I expect higher levels of inflation to accompany the increases in interest rates, and I believe gold is an excellent hedge. In fact, but this is left for another discussion, I believe the U.S. government wants inflation to come. SPDR Gold Trust can be used for this.
Disclosure: TBT and GLD have already been recommended to clients of Stock Traders Daily.
Thomas H. Kee Jr. is president and chief executive of Stock Traders Daily, based in La Jolla, Calif.
CSIA voted to buy BDSI (pitched by Mike White) at the 10/26/09 meeting with a majority vote (85%).
10/29/2009 Buy BDSI Biodelivery Sciences 1,000.000 4.160 -$4,159.60
Also, the following open orders now exist related to BDSI
Sell 1,000.000 BDSI Biodelivery Sciences Good Till Cancelled @ 7.000 Limit 10/29
Sell 1,000.000 BDSI Biodelivery Sciences Good Till Cancelled @ 3.750 Stop 10/29
Please review our 2009 annual report.
CSIA 2009 Annual Report-1
Helpful Websites:
Welcome to the new Website:
Club members will be able to upload their own content, share and comment with ideas.
BioDelivery Sciences International Inc
