I was having a few beers with an old Agora colleague last week, someone outside of Taipan, and the subject of the Taipan Daily e-letter came up. Is that Cash McDash guy for real?” he asked me. I was taken aback by the question. “Of course he’s real”, I told him.

“You think anyone who wasn’t actually hip deep in the new issues market day in and day out could dig up all that killer dirt, know all those names inside and out, and have such a strong roster of winning trading ideas week after week? Faking that level of expertise would be impossible. It’d be like pretending to be a PGA golfer or a five-star chef… The proof is right there in the pudding.”

Believe me, the trader behind Cash McDash is very real. And as Cash reveals this week, part of the secret to his information flow is “playing the game” — scratching the backs of his i-banker contacts so that they regularly scratch his back in return. The game can be rough at times, but the rewards are worth it… and you and I benefit by getting to ride shotgun on Cash’s info and expertise.

So without further ado, read on for this week’s peek into Cash’s world…

Warm Regards,

JL

JL: So, ready to get back to the action after that long holiday weekend?

CASH: You bet. Last week was pretty sobering, though… not only because of how the broad averages traded, but more specifically because of how the new issues market turned south.

JL: Right, you mentioned that late last week — the trouble brewing in IPO land. That discussion wasn’t on the record, though, so how about filling in the blanks for our readers?

CASH: Sure. To start with, our last on-the-record chat covered the shippers, and how the entire shipping sector had experienced broad strength. TBSI was poised to offer more stock to the public in order to raise capital, but there was some concern (from yours truly) about the shippers as a group being overextended and due for a pullback.

JL: And it looks like your concerns were validated.

CASH: Yup. That pullback in the shippers happened in a major way last week. It’s not surprising to see a white-hot sector give up some ground, but it was a bit surprising how fast it happened.

JL: So what type of exposure did you end up having? Hopefully you didn’t give up all of last week’s gains. I know you were pretty pumped about still making money despite all these curveballs being thrown at you.

CASH: Good risk management is a trader’s lifeblood over the long term, and I’ve had enough hard lessons to know to keep out of trouble. But yes, I did give up a little bit of ground. It put me slightly down on the week but a far sight better than what the S&P lost.

JL: So was TBSI a big part of the equation?

CASH: No, actually it was another shipper that got under my skin and stuck me with some red ink. This is a name that I had previously traded in and out of for a handsome profit. Picture a mature company, with an established business plan, that traded from below $50 to above $80 over the course of about eight weeks.

JL: Sounds like a nice move. What was the company?

CASH: Genco Shipping (GNK). The first time around was a nice win for me, but about two weeks ago I closed the position as the stock seemed to be getting ahead of itself.

JL: If you left the party early you must have booked some profit. How did you end up involved again this week?

CASH: Well, as you could probably guess, Genco issued more stock in a secondary, and I ended up getting a slug of it from my guy Marty at Morgan Stanley. (Marty not being his real name, of course. I always change the name — not to protect Marty, but to protect me.)

JL: Understood. So why did you take the stock from Marty? Or maybe I should ask first how much stock you took from Marty.

CASH: Well, I�m not going to give you specific numbers — just in case Marty or one of his friends read Taipan Daily — but I’ll tell you it was less than the number of Visa IPO shares he got me. Marty has a huge book of business, and because he generates a lot of commissions for Morgan Stanley, he often gets preferential treatment when it comes to getting good shares in hot demand.

JL: Sounds like a good guy to have on your team.

CASH: He certainly is. And he likes me. But one of the problems with having a big book of business is that he has a lot of clients begging him for the same deals that I want.

JL: Ah, competition. So you’re in a position where you need to endear yourself to him — stay in his good graces.

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