Hedge Fund Blogs From HedgeCo.Net


DITMo Manager: “The Trouble With Banks…” (Top Short FCNCA)

Short: FCNCA: First Citizens

As a relative value manager of DITMo Strategies “relative stability” is the screening. There is a reason why it is almost impossible for “relative stability” to find trades in the bank sector.

Instead, the financial industry “relative stability” screen is relatively narrow including just a handful of exchanges, credit card companies and a few service companies.

Case in point: FCNCA. The DITMo financial screens require low degrees of operating and financial leverage. Also, ROE and COC must be easily understood and be consistently reflected in the accounting.

The worst offender of financial anomalies seems always to come from banking, example: First Citizens. I challenge any analyst to forensically explain what is reflected. The sum doesn’t connect with the parts and I am perplexed to understand why this bank isn’t considered insolvent.

Fortunately, I am not a L/S manager, otherwise this would be my top financial short as I cannot understand how laying off non-performing assets ends up in CI or income.

HedgeCo Manager Interview of DITMo Strategies is on pg 24 of the “DITMo Hedge Strategy Monthly” (May12, Issue10r) found on HedgeCo.net/blogs

Pj de Marigny, DITMo Strategies

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