Blog

The Return

It's been a while since I've updated the blog and with good reason. Like any worthwhile business the foundation on which it's built must be thoroughly researched, well planned, and ruthlessly executed. With that in mind, I've been away building other pieces of the foundation which I will be unveiling over the next week or so. Be on the lookout for the upcoming BlackArbs flagship product titled the "iVC Report" (Identify Value Creators). This report is designed to assist retail and professional i

READ MORE →

3d Systems_Follow the Leader

I'll keep this short and sweet. 3d systems is still the undisputed king of the mountain in the 3d printing industry. They generate more revenue, more gross profit, more operating profit and more net income than all their competitors. See my updated report which includes their most recent 3rd quarter results and additional analysis. 3d Systems (DDD)_updated for Q32013 from Brian Christopher

READ MORE →

Stay Long Stocks Until...

...the Fed stops buying Bonds. It's as simple as that. The Fed has committed to purchasing $45 billion in treasuries and $40 billion in MBS per month for the foreseeable future. That's a run rate of ~1 trillion a year! The "Fed put" is real and I can prove it. Look at the following chart. US Federal Reserve Total Assets data by YCharts The plot starts on 11/25/2008 or the beginning of the first Quantitative Easing program (QE1). We can see there is a clear relationship between the Federal Rese

READ MORE →

Bernanke's Bluff, Congress Gridlock, What Happens Next?

Did you fall for it? Market pundits and the general investment community gave the impression that Bernanke would announce the taper plan during September's FOMC meeting. While not an impossible event, the political and economic situation made it a low probability event. Here are my thoughts on why: 1. Bernanke's term ends January 31, 2014. A replacement has not been named and at the time one of the key front runners, Larry Summers, withdrew from the race. A policy change to the QE program whic

READ MORE →

3d Printer Wars - An Industry Primer

Here is a presentation I created focusing on the Additive Manufacturing Industry aka the 3d Printing Industry. I will examine individual firms within the 3d printing industry in an ongoing effort to look for potential profit opportunities in this revolutionary space. 3d Printer Wars - An Industry Primer from Brian Christopher

READ MORE →

Is Trading the FED's POMO Schedule Profitable?

I often consider the market's distortions that are or can be created by its participants. Arguably, the most important market player is the Federal Reserve. For years the FED as been injecting liquidity into the financial system through its Permanent Open Market Operations (POMO). I'm not going to delve into the purpose of these multibillion dollar transactions as others have covered this extensively. Instead I ask a simple question. The FED makes their tentative POMO schedule public beforehand.

READ MORE →

Using R to Chart Shadow Banking Components

Previously I wrote a primer on the shadow banking markets. In this post I follow up by attempting to chart and analyze the components. Surprisingly (or not) it proved more difficult than I anticipated to construct the components charts. First finding good data series that could serve as a proxy was time consuming. Additionally some of the data series that helped in deconstructing the market in the past were discontinued. I also had to merge data from several sources. Keep in mind this is definit

READ MORE →

Shadow Banking _ A primer

How large is this shadow banking market?? Estimates vary due to the inherent difficulty of quantifying ‘shadow’ assets. The most recent figures cited by the Federal Reserve and computed by the financial stability board has pegged the global shadow market at approximately $65 trillion USD; having peaked in 2007 at 128% of aggregate GDP* now settling in at approximately 111%. Of the $65 trillion shadow market, the U.S. accounts for an estimated 35% or ~$23 trillion followed by the euro area at $

READ MORE →

Bubble Bubble Toil and Trouble

We had a perfect recipe for the “abrupt” correction that global asset markets have experienced. A quick look at the factors shows observant investors that caution was necessary leading up to the most recent FED meeting. 1) Leverage as measured by NYSE margin debt released in May showed levels greater than that of 2007 and close to all time highs. This excessive risk appetite can be attributed to an extremely low interest rate environment and low volatility in the broader market. Said simply – le

READ MORE →

Who Runs the Market? The High Stakes Players

Approximately $7.5 trillion in assets are controlled by 24 private financial entities. This list does not include central banks and governments. These numbers are subject to differences in estimations and definitions of AUM but it provides a nice ball park figure to let you know the influence these players have on the market. Two Lists: Primary Dealers AUM in Billions Cantor Fitzgerald & Co. Not disclosed Merrill Lynch, Pierce, Fenner & Smith Incorporated $1,800.0 Deutsche Bank Secur

READ MORE →

WHO RUNS THE MARKET?

A simple question, often overlooked to the investors' detriment.... In my ongoing pursuit to gain an edge in the market I’ve often thought it critical to analyze who the key players are. But even more broadly and perhaps of greater importance, I’ve often considered who or what forces have the power to “move the markets”. As a casual observer, or "unsophisticated" investor the most common market news you may encounter is pundits discussing stocks and the stock market, earnings reports, the FED an

READ MORE →

Chipotle Mexican Grill (CMG)_Part 2

Early January 2013, I did a write-up of Chipotle Mexican Grill and my thoughts on its value and whether I would buy it at that level for a long term investment. Based on my initial analysis I concluded that CMG was expensive as a growth company due to several factors. Data trends indicated that operating margins and revenue growth (while still growing) were beginning to level off. Additionally, earnings surprise momentum showed a negative trend indicating positive earnings surprises were less fr

READ MORE →