Holiday Bell: 12.31.13

Winners of 2013: Boring Investors (WSJ)
In the best year for U.S. stocks since 1995, the smart way to play the markets has been to follow the dumb money. So-called dumb-money strategies, which involve buying and holding a plain-vanilla portfolio of U.S. stocks, did much better than the more complex approaches employed by hedge funds and other professional investors. Fueled by easy money from the Federal Reserve and signs of improvement in the economy, the Dow Jones Industrial Average goes into the final day of 2013 with a gain of 29% once dividends are included, while the S&P 500 index has climbed 32% with dividends. Those gains far outpace the rally predicted by even the most bullish Wall Street strategists. Many hedge funds were left in the dust, alongside investors who use “tactical” timing of the markets’ ups and downs and those who spread their bets among a wide variety of assets such as commodities, emerging markets and exchanged-traded funds.

Private Equity Enjoys A Record Year (WSJ)
Private-equity firms are set to return a record amount of cash to their investors for 2013, after taking advantage of buoyant markets to sell hundreds of billions of dollars of investments. From initial public offerings to company debt deals that pay private-equity investors hefty dividends—this year will be remembered for the gains earned by firms that specialize in buying and selling companies, and by the pension funds, university endowments and wealthy individuals that invest in them. Investors in private-equity funds are expected to receive more than $120 billion for 2013, topping last year’s record of $115 billion, according to estimates by Cambridge Associates LLC, which gets a glimpse of firms’ finances as an adviser to private-equity investors. In the first half of 2013, private-equity firms returned $60.8 billion to investors.

Pot Shops in Denver Open Door to $578 Million in Sales (Bloomberg)
Toni Fox plans to open the doors of her Denver marijuana shop at 8 a.m. tomorrow to a line of customers including some who camped overnight to be the first in the U.S. to legally buy pot for recreational use. Fox has arranged for canopy tents, heaters and a food truck to offer donuts and pastries to patrons waiting for the state-appointed hour. She expects sales at her 3D Cannabis Center, operating since 2010 as a medical-marijuana dispensary near the Denver Coliseum, to surge to at least $250,000 a month from $30,000, she said. “We’ll have people out the door,” Fox, 42, a Salida resident, said by telephone. “It’s going to be a very festive atmosphere. We all feel like we’re walking on sunshine right now.” Fox’s shop is among 14 in Denver that got state and local licenses in time to sell marijuana to anyone 21 or older starting Jan. 1, just over a year after Colorado and Washington voters made their states the first to legalize recreational use. Washington’s shops are expected to open later in the year. Colorado projects $578.1 million a year in combined wholesale and retail marijuana sales to yield $67 million in tax revenue, according to the Legislative Council of the Colorado General Assembly. Wholesale transactions taxed at 15 percent will finance school construction, while the retail levy of 10 percent will fund regulation of the industry.

‘Sell’ Report Fails To Chill Herbalife (NYP)
Herbalife shares look to be wrapped in Kevlar. The controversial diet-shake seller’s stock, one of the hottest this year with a gain of 136 percent, barely budged Monday after getting hit with its first sell recommendation. Shares in the Los Angeles company slipped 0.5 percent, to $77.92.

My ‘Wolf of Wall Street’ Review (TRB/Josh Brown)
I’ve known ten or twelve guys who worked at the Lake Success headquarters of Stratton during its heyday; all the stories are true and there’s very little embellishment in the movie. It all happened and then some. I’ve been hearing these stories for fifteen years. There was a diaspora of sorts that happened after that firm went down, a thousand others had opened up shop as the brokers were scattered like seeds in the wind. Boiler room brokerages had sprung up from Westchester to New Jersey to Staten Island to the Financial District in Manhattan to Boca Raton, Florida. But nowhere was there as heavy a concentration as there was on Long Island. At one point, there was a nickel broker-dealer in every glass office tower in Suffolk and Nassau Counties (and many big buildings had several firms housed on different floors, imagine the stairwells). The scripts used in the movie were the exact same ones taught to every NY metro area broker in the late 1990′s. I printed the entire Belfort pitch (which itself had been stolen from the Madison Avenue office of Lehman Brothers) in my book Backstage Wall Street, I’m fairly certain the producers got their hands on it for the film. I doubt Jordan had a copy lying around from twenty years ago. They also used the term “Wildebeest” which is something I use on TV a lot to describe runaway stocks. My friend Paul and I made it up in a finance context five years ago, so I’m flattered, I guess.

$375-per-person New Year’s feast – at Applebee’s? (MarketWatch)
Sure, you may think of Applebee’s as an affordable casual-dining chain, famed for its whiskey-flavored steaks and two-for-$20 dinner specials…But once a year, Applebee’s goes high-end. The chain’s franchise-owned restaurant in the heart of New York’s Times Square offers a $375-a-person New Year’s Eve bash that’s billed as “a night to remember.” (Those under 12 can get in for $250.) But this isn’t your standard Applebee’s bill of fare, the franchisee notes. The party, which starts at 8 p.m. and wraps up at midnight, features an extensive buffet, a “premium” open bar, a house DJ, a dance floor, plus party favors galore. And for those eager to see the ball drop, the restaurant lets patrons “make their way to the streets of Times Square.” As for the vittles themselves, be prepared for “a ton of food” (steak and shrimp included) prepared by “some fairly sophisticated culinary people,” says Zane Tankel, who heads up all 38 Applebee’s restaurants in the New York metro area. Add in the décor and “you wouldn’t know you were at an Applebee’s for that one night,” Tankel says.

From Taxes to Executive Pay, New Rules for 2014 (WSJ)
Regulators are set to unleash new business rules in 2014 that will push companies to re-examine issues ranging from their taxes and suppliers to auditor relationships and interest-rate hedges. Dozens of corporate tax breaks expire Tuesday, and some new rules kick in Wednesday, as the new year begins. Among the biggest changes will be the way companies can write off repair costs for fixed assets, such as windows or factory generators, and new accounting standards for leases on an array of property—from buildings to airplanes. Multinational companies, meanwhile, will face new tax laws overseas.

French ‘Millionaire’ Tax Cleared (Reuters)
France’s Constitutional Council gave the go-ahead on Sunday to the government’s so-called millionaire tax, to be levied on companies that pay salaries of more than 1 million euros a year. The measure, introduced in line with a pledge by President François Hollande to make the rich do more to pull France out of its financial crisis, has infuriated business leaders and soccer teams, which at one point threatened to go on strike. It was originally intended as a 75 percent tax to be paid by high earners on the portion of annual income exceeding €1 million, or roughly $1.37 million, but the council rejected it last year, saying it was unfair. France’s top administrative court later said that 66 percent was the legal maximum for individuals. The Socialist government has since reworked the tax to levy it on companies instead, raising the ire of entrepreneurs.

Berkshire Hathaway to buy Phillips 66 unit for around $1.4 billion (Retuers)
Warren Buffett’s Berkshire Hathaway Inc struck a deal to buy a Phillips 66 business that makes chemicals to improve the flow potential of pipelines for around $1.4 billion of stock. Phillips 66 said on Monday that Berkshire will pay for the unit, Phillips Specialty Products Inc, using about 19 million shares of Phillips 66 stock that it currently owns.

Drunk Driver Failing “Walk And Turn” Sobriety Test Explains To Cops, “I Can’t Dance Like Britney Spears.” (TSG)
Responding to a phone tip about a drunk driver, two sheriff’s deputies approached Jeffrey MacDonald, 43, as he pulled his Nissan Versa into the driveway of his Vero Beach residence late yesterday afternoon. MacDonald smelled of alcohol, had “slow and slurred speech,” and was unsteady on his feet, according to an Indian River County Sheriff’s Office report. Subsequent Breathalyzer tests recorded MacDonald’s blood alcohol content at nearly three time times the legal .08 limit. When MacDonald sought to do the “Walk and Turn” exercise–which required him to walk a straight line heel-to-toe–he failed miserably. The wobbly Floridian told deputies, “I can’t pass,” “I can’t do that,” and “I can’t dance like Britney Spears.”

Programming Note: Have a great New Year’s, whether it takes you to the Time Square Applebee’s or not and we’ll see you back here on Thursday!

34 comments (hidden to protect delicate sensibilities)
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Comments (34)

  1. Posted by guest | December 31, 2013 at 10:39 AM

    Paying $375 for an Applebee's dinner is like paying full ticket price for a Jose Banks suit. It makes no sense

  2. Posted by Once Lost Now Found | December 31, 2013 at 10:48 AM

    Now there really are things to do in Denver before you die!!!!!!!!!!

    "Toni Fox plans to open the doors of her Denver marijuana shop at 8 a.m. tomorrow"

    - Sigma Chi Reach Around Quant

  3. Posted by El Guesto | December 31, 2013 at 10:51 AM

    It's JoS. A. Bank, you retard. Jose Banks suits are actually highly priced.

  4. Posted by El Guesto | December 31, 2013 at 10:51 AM

    Prized.

  5. Posted by Liquor Lobbyist | December 31, 2013 at 10:55 AM

    Marijuana is a gateway drug to opiates and meth…! To legalize marijuana is to sentence the children of such users to a life of despair and misery.

  6. Posted by Ibuprofen | December 31, 2013 at 10:57 AM

    I heard Shazar works remotely from a bathroom stall located in Terminal 4 at JFK that takes in a lot of international flights. Apparently if you know the secret Sigma Chi handshake he will give you a tour of the place.

  7. Posted by SebastiaN | December 31, 2013 at 10:59 AM

    Whoa, went to the Fashinoista New Year’s party last year and let's just say I've never seen so many size 0s with daddy issues.

  8. Posted by Grindr VP | December 31, 2013 at 11:00 AM

    He's known as widestance.

  9. Posted by J. Belfort | December 31, 2013 at 11:01 AM

    Some end up in penny stock sales.

  10. Posted by Guest | December 31, 2013 at 11:03 AM

    They also used the term “Wildebeest” which is something I use on TV a lot to describe runaway stocks.

    Cool story, bro. Also? STFU.

  11. Posted by KingCo | December 31, 2013 at 11:08 AM

    "SebastianN" = Off-brand LaxBro.

    Off to Applebee's with you.

  12. Posted by login | December 31, 2013 at 11:09 AM

    being shepherded by a poor mans laxbro

    see your comment

  13. Posted by segoviacobain | December 31, 2013 at 11:21 AM

    I'm thinking there's a whole class of women out there who'd be thrilled to go to Applebees with some dude in a Member's Only jacket…take Ms Spears, for instance…

  14. Posted by Hobbes | December 31, 2013 at 11:22 AM

    I hope Shazar's New Year's resolution is to consistently produce Opening Bells on time.

  15. Posted by soopy | December 31, 2013 at 11:31 AM

    Nothing says 'bubble' quite like a 4-bill dinner at Applebee's.

  16. Posted by le miz | December 31, 2013 at 11:32 AM

    I dreamed a dream.

  17. Posted by Rebecca M. | December 31, 2013 at 11:36 AM

    So now where do we go for dinner?

    -UBS Analyst/MD/VP

  18. Posted by W. Tilson | December 31, 2013 at 11:36 AM

    How much for the around the world package ?

  19. Posted by UBS MD's wifey | December 31, 2013 at 11:39 AM

    Applebee's. Wooow.

  20. Posted by Texashedge | December 31, 2013 at 11:50 AM

    Jose Banks are where the Zetas wash their money.

  21. Posted by Guest | December 31, 2013 at 11:54 AM

    Sales of Pot, Tacos Boom, but Colorado Economy Stagnates, Economists Puzzled – "It doesn't really make sense, but whatever . . . hey, do they have White Castle around here?", Says Local Professor

  22. Posted by guest | December 31, 2013 at 12:06 PM

    $375 at Applebbes on NYE.

    The NKI.

  23. Posted by HSBC | December 31, 2013 at 12:10 PM

    Hey!

  24. Posted by Guest | December 31, 2013 at 12:13 PM

    Did it sting much, the rejection letter from The Onion?

  25. Posted by quant me maybe ... | December 31, 2013 at 12:14 PM

    Based on this cogent analysis I decided to buy White Castle stock. Much to my surprise there isn't any.

    –> Guy who is bummed that there is no White Castle stock because Pepsico (who owns Frito Lay) is too big to move because 1 state legalized pot.

    –> Guy who is also going to Boulder for business week after next and was soundly smacked down when he suggested that our hosts buy like a pound of weed and one of those giant hookas to cap the week.

  26. Posted by Corey Anus | December 31, 2013 at 12:23 PM

    Praise be the man who gets to witness Bess in her New Year's thong th, thong, thong, thong.

  27. Posted by Once Lost Now Found | December 31, 2013 at 1:40 PM

    How many hookers?

    How many guys are going??

    Are we going on a bus???

    Is there going to be a bus involved????

    - J Belfort's reminiscing pangs of jelousy

  28. Posted by TheodoreBallgamePhD | December 31, 2013 at 1:46 PM

    Or addicted to filthy, filthy porn.

    -J. Gundlach

  29. Posted by Valid Point | December 31, 2013 at 2:05 PM

    What’s so wrong about watching an 18 year old suburban teen with porcelain skin take so many black dongs that she turns a nice mocha color by the end?

  30. Posted by Phav | December 31, 2013 at 3:32 PM

    What did they expect from a Muslim born in Kenya?

  31. Posted by Guest | December 31, 2013 at 5:43 PM

    2008 called, they want their meme back.

    Fuktard.

  32. Posted by Guest | December 31, 2013 at 6:53 PM

    Little embellishment in the movie ? As depicted, the Stratton trading room had more people than the floor of the NYSE, before computers arrived. I don't think so.

  33. Posted by Turnip Truck | December 31, 2013 at 9:44 PM

    "I found a whole rat in my Cobb salad!"

  34. Posted by Rebecca M. | January 1, 2014 at 9:14 PM

    Shut your juvenile piehole, punk. You don't know crap. I've studied Communism in DETAIL for the last 36 years, so don't say SH*T. Before you open your festering piehole, READ the Venona Secrets or the Black Book of Communism, THEN come back, and say the same thing, you imbecile.