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Opening Bell: 2.10.17

The flash crash trader lost all his flash cash; Bridgewater is like basketball; boyfriend got shot over a cold taco; and more.
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(Getty Images)

(Getty Images)

How the Flash Crash Trader’s $50 Million Fortune Vanished (BBG)

A review of Sarao’s investments from 2005 to the present day, based on dozens of interviews and thousands of pages of documents, reveals another twist in an already remarkable story. Navinder Sarao, the trading savant accused of sabotaging the world’s financial markets from his bedroom, may himself have been the naïve victim of what his lawyers portray as a series of cons that stripped him of almost every cent he earned.

J.P. Morgan’s James Dimon: Make It a Double (WSJ)

Saturday marks the first anniversary of the J.P. Morgan boss’s big bet on the bank’s stock. With the market down more than 10% at this point last year and J.P. Morgan shares down 20%, Mr. Dimon bought $26.6 million worth of his company’s shares. Mr. Dimon’s purchase marked the bottom in bank stocks and the market overall, and the start of a strong rally, especially in bank shares. Financials have been the best-performing sector, up more than 40%. J.P. Morgan itself is up 62% since Mr. Dimon added to his already substantial holdings.

Citigroup Says Keep Calm and Carry On Buying Equities (BBG)

Citigroup is using the historical road map to point out that in about three-quarters of the time after such rallies in the past, the index has gained between 10 percent and 15 percent in the following 12 months. Still, even Citigroup sounds a note of caution, warning that following gains of this magnitude, any second leg up does tend to be bumpy, with pullbacks of at least 7 percent in about three-quarters of similar rallies in the past. “Remember that corrections can still happen,” they wrote. “Maybe political concerns could trigger this in 2017.”

China’s hipster indicator (FT)

Chinese pop idol Lu Han this week launched a venture capital firm focusing on lifestyle trends among Chinese millennials. Han is joining a cohort of celebrity investors like Angelababy and Zhao Wei, who co-invested in Jack Ma’s Alibaba Pictures. These kinds of things don’t happen when consumer sentiment is negative and a “get me out” investor psychology has taken hold. They happen at the exact opposite end of the business cycle. So, is China imploding… or overheating?

Bitcoin trading shrivels under Chinese government's glare (Reuters)

Business has virtually dried up on Beijing-based high-speed bitcoin trading platform BotVS, according to chief executive Chen Zhenguo. "With the transaction fees the profits you can get from hedging (Bitcoin) are too low...You might as well put your money in Yu'e Bao," he said, referring to a money market fund run by an Alibaba Group affiliate.

How the Bogle Model Beats the Yale Model (A Wealth of Common Sense)

I have to say that the numbers this year surprised me. I would expect the simple index fund portfolio to beat the average returns (that’s just math), but the fact that the Bogle Model portfolio was in the top quartile and even top decile of endowment returns is insane when you consider the depths these universities will go try to beat the market and how sophisticated they are in the eyes of other professional investors.

Federal Ethics Agency Site Crashes on Day Trump Adviser Plugs Ivanka’s Duds (CNBC)

The website of the Office of Government Ethics, or OGE — a federal agency whose job it is to help presidents and the executive branch avoid conflicts of interest — crashed Thursday because of "an extraordinary volume of contacts from citizens about recent events."

Top Bridgewater exec explains how its intense, unique culture helped the world's largest hedge fund make $50 billion (BI)

In a basketball game, there's radical transparency, right? Because you've got five players on the court in little short uniforms, and you've got a scoreboard, and you've got 20,000 people watching, and then you've got instant replays, and you've got a post-game interview. If you lose the game, A, it's crystal clear that you lost the game, and B, it's crystal clear why, and we can pin it to the players on the court and the coach who put him there and so forth.

Woman allegedly shoots boyfriend over cold taco (NYP)

Investigators say the woman and a male companion were at a taco truck in north Houston early Monday morning when the incident occurred. According to police, the woman became infuriated after she reportedly asked the taco truck worker to reheat her taco and was told no. Her boyfriend then tried to calm her down but the hungry woman then pulled out a gun and wound up shooting her partner.

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