Shorts' Crew Thinning Like Tony Soprano's

As shorts vanish, it doesn't get any better for the bulls.
Publish date:

This column was originally published on Street Insight on June 4 at 7:27 a.m. EDT. It's being republished as a bonus for and readers.

Just one more week of this.

-- Carmela Soprano

More and more, the similarities between Tony Soprano and short-sellers grows closer and closer.

The writers of

The Sopranos

had a field day in last night's penultimate episode, ranging from the raw-meat metaphor, the "Blue Comet" episode title, the


magazine title and, of course, Carmela's quote above depicting not only son A.J.'s tenure in the hospital but also that the series concludes next Sunday.

  • The ranks of the short-selling community is following the path of Tony's gang of ne'er-do-wells. Just as the short-selling ranks are rapidly diminishing in 2007, the body count last night was five -- if you count Silvio. The slow-motion depiction of the "train running off the track" during Bobby Bacala's killing reminds me of the short-seller's steady and slow-motion headwind of 15 of the last 17 months of market gains.
  • Bulls, like A.J. Soprano, are self-obsessed and paralyzed with optimism, showing little regard for the warning signs of rising interest rates, growing geopolitical risks and moderating economic growth (attendant with vulnerable corporate profit margins). A perspective on stock market history is lost by investors who collectively view momentum as trumping discretion. Similarly, Carmela's view of her daughter, Meadow, is increasingly distorted. (She can't even remember what type of law she is planning to study.)
  • In each passing up day, short-sellers sit almost catatonically while stocks continue their giddy move, just as A.J. does in front of his television, collecting more and more pain in the form of bloody war reports from Iraq. Tony would rather pay $2,200 a day for treatment than show compassion to his son, and the pool-draining scene (the protective womb that Tony has provided for A.J. and where A.J. had attempted suicide) indicates that Tony is no longer willing to support his son with the protection of his wealth and position. Meanwhile, most institutional investors, during a time in which they might need such a noncorrelated return strategy the most, have abandoned the short-selling asset class and jettisoned short-selling managers, much like Dr. Melfi -- it was her curtain call -- did when she "fired" Tony at a time when Soprano needed her therapy the most.
  • Like the ranks of short-sellers, the Sopranos "family" is in disrepair. Quoting Carmine, New York's Phil Leotardo, like the bulls with regard to short-sellers, shows Tony little respect: "The Sopranos are nothing more than a glorified crew. We decapitate and do business with whatever's left." Bobby's dead, Silvio is on his death bed, and Carmela, Meadow and A.J. are in hiding. While I lie on the cold linoleum floor (drinking cheap tequila), Tony lies on a bare mattress, with his assault rifle as his goomah -- powerless and alone.

For the bulls, it doesn't get better than this.

For me, you can say the same about

The Sopranos


Doug Kass is founder and president of Seabreeze Partners Management, Inc., and the general partner and investment manager of Seabreeze Partners Short LP and Seabreeze Partners Short Offshore Fund, Ltd. Until 1996, he was senior portfolio manager at Omega Advisors, a $4 billion investment partnership. Before that he was executive senior vice president and director of institutional equities of First Albany Corporation and JW Charles/CSG. He also was a General Partner of Glickenhaus & Co., and held various positions with Putnam Management and Kidder, Peabody. Kass received his bachelor's from Alfred University, and received a master's of business administration in finance from the University of Pennsylvania's Wharton School in 1972. He co-authored "Citibank: The Ralph Nader Report" with Nader and the Center for the Study of Responsive Law and currently serves as a guest host on CNBC's "Squawk Box."

Kass appreciates your feedback;

click here

to send him an email.