(As if you needed another reason. - ed.)

When I said yesterday

What I really meant to say was

They are wide.

Yet, stocks keep rising.

Someone's wrong.

The market was up hard today, but it was up on weak volume.  Total NYSE Composite volume was 3.73 billion shares, within the bottom quartile of daily volume for the year.

In fact, much of the volume came after 3:55pm, or at least hit the tape with five minutes to closing, when 600 million shares came across the tape.  Up until then, we were on track for the second lowest volume day of 2008.  Nearly 40% of the volume came in the last 90 minutes of the trading day after markets had made most of the gains. 

- Warren Buffett on the subprime debacle

- Harry Truman

Over time, stocks have returned 10% per year.  If one hires a typical hedge fund that charges fees of 2% of assets and 20% of profits, to attain the same level profits as the market over time, the hedge fund manager must generate 14.5% before fees. 

If one hires a typical hedge fund of fund manager, which charges fees of 1% of the assets and 10% of the profits on top of the fees charged by the hedge fund, then the manager must generate just under 17% to break even with the long-term return on stocks.

I have liquidated my long ProShares Ultra S&P500 ETF, ticker SSO, and bought back the ProShares UltraShort Russell 2000 ETF, ticker TWM.  Fortunately, I was able to do so just before the Dow dropped 100 points at noon.  Better to be lucky than to be good.

Frankly, last week's pin action concerned me, though I was heartened that we opened down and ended positive on Thursday and Friday.  However, it now appears to me that the market is rolling over again, and we could be headed back down to test the lows.

In a July 23 piece by Ned Davis Research, NDR notes that as of the end of June, the annual return for bonds over the past 10 years was 6.4 while the annual return for stocks over the past decade was 2.8%, the largest divergence in 68 years.  Since the summer of 1998, even cash returned a few basis points higher than stocks.

Perma-bulls will note that over 20 years, stocks outperformed bonds.  This is true, but I think this is a hollow argument.  Ten years is a long time for most individuals.  There is no reason why investors should settle for poor returns over 10 years.

From The Washington Post

Regulators had long classified a private Swiss energy conglomerate called Vitol as a trader that primarily helped industrial firms that needed oil to run their businesses.

Are you jealous of Blackstone?  Have a hankering to be like KKR?

No problem, dear readers.  We at Running of the Bulls are here to enlighten you on how to make 40% a year, just like the private equity funds, without having to pay the extortionary fees just to have the privilege of participating in a pool of capital in which you are not allowed to withdraw any money until your first born is in college.

First, one must understand how a private equity firm generates such magnificent returns. 

Its easy!  It goes something like this.

The single dumbest investment observation I ever heard came from a portfolio manager for whom I once worked. 

An otherwise intelligent and erstwhile fellow who at the time was in his early thirties, he said that this was a business - equity portfolio management - where age and experience was a hindrance.