Thursday, October 08, 2009

Mad Hedge Fund Trader

8 October 2009

I haven't yet quite figured out who he is, but the mad hedge fund trader is brilliant, iconoclastic, nonaligned and witty (as well as occasionally blunt and/or rude).

He also knows the markets inside and out.

He's smart enough to recommend gold and silver.

But he has several hundred other very good ideas also.

And he will make you laugh all the way through - often at your own expense!

Check out his daily diary entry for starters.

There is a recent well-done interview here.

And this has been my favourite so far of his statements of his philosophy of life:

"My goal in life was always to get in the way of history, and let it run me over. It’s been an amazing life. I wouldn’t trade it for anything."

This fellow also lurks at Seeking Alpha. He tosses the current posts from his website into the ring on a daily basis, and they are most all enlightening reading. Click here for every comment he has entered on the site's "instablog."

(My own comments on Seeking Alpha are here, by the way.)

Or you can go directly to his blog, located here.

Just for fun, here is his recent post on the gold price. Note that he and his partners are open and accessible by e-mail (he's promoting his business, of course, which is fine with me):

"Of course you knew it was going to happen like this. After churning around just below the old high, and sucking in as many profit takers and short sellers as possible, gold blasted through to a new high for the year of $1,038. Never mind that the triggering event is complete balderdash, a story in Britain’s Independent newspaper asserting that the Middle East is holding secret global talks to price crude in the yellow metal or other currencies (click here ). It didn’t hurt that Australia cut its interest rates by 0.25%, the first G-20 country to do so. There probably isn’t enough gold in the world to finance more than a few weeks of global oil production. Total gold holdings would only fill two Olympic sized swimming pools. But never let the truth get in the way of a good trade. The confirming moves couldn’t be more ubiquitous, with the Canadian, New Zealand, and Australian dollars all up big, commodities strong, and silver also going ballistic. Regular readers will all recognize these as old friends of mine, core longs that I have been strongly recommending since the beginning of the year. I have been trying to get investors into gold since it was at $800. If you aren’t in gold by now, I can only tear my own clothes and flagellate myself for my abject failure to convince you of gold’s merits. US government debt is exploding, and with foreigners holding a large part of our paper, the only way to get out of this mess is to devalue the dollar. It’s like Obama invited China’s president Hu Jintao to dinner at an expensive Upper East Side restaurant, fakes a sudden case of food poisoning, leaving him with a big fat bill. Next stop $1,200, then $1,500, then the old inflation adjusted high of $2,400. If you want me to help you get set up to trade futures in any of this stuff, please email me at"

I was also taken with the underlying honesty and insight of his frank and inarguably insulting comments on Michael Moore's latest bit of fantasized exploitative cinema, as follows (I have cleaned this up in one place where his rudeness was gratuitous and tangential to his main point):

"Let me tell you why I turned down lunch with Michael Moore last week, and why I am reviewing a movie that I will never see. (He was in) San Francisco promoting his latest fiction masquerading as documentary, Capitalism, A Love Story. Michael has a problem with facts. He has a tendency to bend, twist, or alter real facts to fit into whatever story line, political viewpoint, or bias he is peddling at the moment. In Roger and Me (1989), he made the case that GM’s problems sprang from paying its workers too little, not too much. In Bowling for Columbine (2002) he equated violence in the streets with our missile defense shield. I find this approach an affront because I have spent a large part of my career bending over backwards to make sure my stories are accurate and true. Michael obviously harks back to an earlier age of reporting, when “You never let the truth get in the way of a good story.” In the trailers it appears that much of the movie involves humiliating security guards attempting to prevent his entry into firms like AIG (AIG) and Goldman Sachs (GS), ostensibly some of the same working stiffs he is trying to defend. I find this neither informative, nor entertaining. In fact, Michael Moore’s principal business is to dress up as a working class hero so he can make hundreds of millions of dollars selling questionable cheap shots to the uninformed. He is an embarrassment to the causes he claims he is advancing. I have never walked out on a film, but I’m such a tightwad that I hate wasting two hours of my life and $7 on my senior citizen ticket. Better just not to go."

Then there is his invitation to Mr. Obama's San Francisco dinner party (I suggested an 18% tip. He proposed making payment in silver dollars. I countered by advising that he take the occasion to unload his US currency as quickly as possible):

"If you wonder where I am on the evening of Thursday, October 15, I will be having dinner with Barrack Obama, President of the United States. I received the invitation to San Francisco’s exclusive Saint Francis Hotel to meet the Commander-in-Chief with 250 of the city’s “A-listers,” which I have reproduced below. Of course $30,400 for two is a bargain to sit down with the most powerful man in the world, but that doesn’t include another $10,000 for my date’s dress. I have been asked to arrive two hours early to provide for security screening. With my opinions plastered all over the Internet, that will no doubt involve a full proctologic exam. But hey, anything for some overcooked chicken. Times are hard, and we all have to do our bit to stimulate the economy. Maybe I should go for a table of ten for only $150,000? Until then I shall be boning up on subjects I know are dear to the President’s heart to make chit chat, like playoffs for college football, or how he got stiffed in his Chicago Olympic bid. He could have made such a killing renting out his Hyde Park house that I visited last December (click here for story ), which would have been walking distance from many of the events! How much do you think I should leave for a tip?"

OK, if none of this intrigues you, the MHFT can also be found in the USO scene in Coppola's Apocalypse Now. Yes, he happened to be trekking the Philippines at the time Coppola was filming.

Happy hedging... and gold investing!


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  7. for the win. Been reading for over 6 months now.

  8. I worship Mad Hedge. His stock tips are freakily accurate. Plus he's funny as hell.

  9. Laurence - your blog, your rules but removing posts without an explanation does not speak well to your character. Having read the deleted comments and the accompanying links one might ask why you don't remove your entire post or at least edit the first paragraph of your post. Asked by you (in a round about way), answered by someone and subsequently deleted by you... All said I am a fan of the MFHT but no longer of you.

  10. I am not willing to use my blog to promote allegations of the type that were entered. The decision to delete was undertaken following a discussion with MHFT. Anyone can say anything on the web. I adhere to a higher standard of evidence than was used by the original anonymous poster.

  11. I really appreciate your post and it was superb .Thanks for sharing.

  12. I appreciate your post, thanks for sharing the post, i would like to hear more about this in future

  13. Can you provide me with the names of attorneys who handle legal action against incompetent financial advisors. I intend on filing a lawsuit against the mad hedge fund trader, John Thomas for heavy losses I sustained as a result of his advice.