Is there any wonder why Main Street hates Wall Street? The sheer greed and rampant looting by the Street Vikings, and the pompous posturing, makes me puke. And get angry. The latest example is that multimillionaire lieutenant of Warren Buffet being such a hog that he just has to buy a huge position in a stock before recommending to Warren Buffet that Berkshire Hathaway buy the company at a huge mark-up. He was front running his own employer!
Despite vague statements, I doubt that the front running was legal; under simple, longstanding principles of common law, an employee's duty is to the employer in this type of action. Such front running is statutorily illegal in many analogous professions, such as real estate broker. It certainly was not ethical.
I'll give octogenarian Warren Buffet a pass ... he's ready for the dog track and might not be able to pay attention to details nowadays.
But in today's WSJ, the HOG claims that "I don't believe I did anything wrong or unethical," adding that he would "do it again tomorrow."
Lawyers and investment bankers on the Street are perfectly happy to screw the poor and ignorant, and then later claim "client confidentiality". Traders front run clients. Street firms sell clients garbage they expect to default. Street firms take opposite positions they are recommending to clients. It's endless. Paid hacks funded by the Street fight basic fairness in financial markets. Street lobbyists fight market regulations when even yesterday, exchanges have to cancel trades in ETFs that went awry under the electronic trading cluster FUBAR system.
Nothing has been learned by the Panic of 2008. The Vikings are back looting the nation. :((
None yet. A strong signal to add to cash exists, but no weak sell signals exist except in gold (for which I usually require a strong signal) before acting.
By the way, a "weak signal" is when an asset class is at least 5% out of balance; a strong signal is when the class is at least 10% out of balance. Example: An asset class with a canonical 20% position is out of balance by 10% when it reaches 22% of total assets. Here's the math: (22%-20%)/20% = 2%/20% = 10%. This calculation is easily coded into a spreadsheet to show the signals.
I may act at some time if cash gets further out of balance, but for now I will "Obey the Machine".
Word of the Day
"Jackleg" - adjective & noun [$100] a Big Al word! Chiefly South Midland and Southern US.
Jackleg means (adjective) 1. unsilled or untrained for one's work; amateur: a jackleg electrician; 2. unscrupulous or without accepted standards of one's profession: a jackleg lawyer; 3. makeshift, temporary; (noun) an unskilled or unscrupulous itinerant worker or practitioner.
Sentence: Wall Street is crammed with jackleg traders, bankers and lawyers. Can one find a single honest man there? Yes, I know a few ... just a few. When I went to work on the Street (1981), it was crammed with persons of integrity. When my partners & I left to form our own firm (1993), it was becoming dominated by knaves.