No Do Overs

No one knows where the market is going this week. Anyone who tells you for certain is either under the influence of heavy narcotic usage or lying. But traders rarely lie, right?

If you missed out on the dot com bubble from 2000, just know, this is nothing like that. Those companies weren’t even banking revenues. Comparing this to that is a feeble attempt of reliving the past. There are no do-overs. You missed it then and you’re missing it now.

All of you jackasses can continue to play whack-a-mole, guessing the near term direction. I’ll stick to a long only position for now, as it has been the dominant position to be in for the better half of 1,825 days.

Make or Break Week: Time to Get to Work

I cannot stress the importance of this week. From economic data to a slew of important earnings announcements, I think it’s fair to say the fate of this market will be decided over the next 5 days.

To put it plainly, all of the carnage that has taken place in growth stocks is not significant, based upon historical precedence. In a previous post, I showed you this has happened in consecutive month’s several times before in leadership tech stocks. The thing is, April isn’t done. If tech rebounds from here and all of the month to date losses are erased, last month’s drop will be viewed as child’s play, entirely insignificant in the big scheme of things. Stocks will head back to new highs, amidst renewed euphoria and you will all ponder why you didn’t buy FEYE in the $40′s when you had the chance.

However, if this newly found perception of risk continues to plague the markets, month to date losses might triple from here. Last month’s losses were so severe, it demands that this month we either accelerate to that downside of completely wipe it out. This is not opinion, but fact.

Resolution will be had and soon.

Seasonality Data Dump: A Mirror Image

Draw Downs greater than 30% in two months, looking at the third.

MSFT

2000

April: -34%

May: -10%

June: +34%

1987

October: -27%

November: -8%

December: +12.5%

2000

November: -16%

December: -24%

January: +40%

 

CSCO

1997

Feb: -20%

March: -14%

April: +8%

2001

Feb:  -37%

March: -33%

April: +7%

2002

Feb: -27%

March: +18%

2001

August: -15%

September: -25%

October: +39%

2002

September: -24%

October: +6%

November: +33%

2000

November: -11%

December: -20%

January: -2%

 

ORCL

2000

January: -11%

Feb: -35%

March: +5%

1990

March: -17%

April: -16%

May: +24%

2002

March: -22%

April: -22%

May: -21%

1990

July: -26%

August: -32%

September: -44%

2001

July: -5%

August: -33%

September: +3%

1987

Oct: -21%

November: -13%

December: +31%

1998

November: -7%

December: -32%

January: +4%

SPLK

2014

March: -23%

April: -8%

FEYE

2014

March: -28%

April: -23%

WDAY

2014

March: -17%

April: -15%

 

Discuss, if you please.

COWARDICE into The Bell

What a milquetoast close.

I do not consider this a vital trading session, since we’ve been through a lot over the past two weeks. Cowards got flat into the long weekend. It could’ve been a lot worse.

On the constructive side:

Analysts are out pumping growth names hard again.

Treasuries got smacked today.

It doesn’t sound like Putin will invade Ukraine any time soon.

Earnings have been impressive, thus far.

As far as my positions are concerned: FEYE is in such a depression. It’s hard to believe this is the same stock touted by a certain analyst as a “once in a decade opportunity.” The street could not get enough of its shares; now no one wants them. Singular indeed.

I sold half of my WDAY position, for a loss, and have begun allocating into YELP.

I was flat for the day, -22.5% for the year.

I am down 28.3% in FEYE, -10.44% in YELP (after today’s adds) and -16.4% in SPLK. I expect to eliminate the entirety of my WDAY position over the next two weeks. It’s down 18% from my basis.

Ideally, YELP sprints higher, I sell my lower basis shares and swap into SPLK, then with the profits from SPLK, load up on FEYE for the grande finale. If I can pull this off, it will be one of my greatest turn arounds ever.

Stay tuned.

A Decision Has Been Made

I sold off half of my WDAY position, based upon it being the favourite stock in the online poll. By far, you hated FEYE, as do I, which is why I’ve decided to hold it for a little bit longer.

With some of the proceeds of WDAY, I began allocating it into YELP.

GET ‘EM: The Horsemen Shall Ride Again

The WB offering was much better than expected. It opened up at $16.70 and is now trading above $18. This gives full license for the bulls to press their case into the close. Let’s see if they step up, or wallow away like Ukrainians.

 

 

The Four Horsemen Shall Be Reduced to Three

Decisions, decisions.

Just in case you’re wondering why I want to sell one of them, quite frankly, you’re retarded. I don’t like being in the position that I am in. My basis on these 4 stocks are all very high and, realistically, if I do not put some real money behind 2 of them, I am going to be holding them for a long, long time.

So what’s wrong with holding them for a long, long time?

Well, I do not like the market to control me. I invest creatively and need to have moving parts in order to maximize my potential. Keeping me constricted to these four stocks has hurt me in many ways over the past 6 weeks.

I threw these stocks into The PPT to analyze their metrics, have a look.

FourHorsemen

As you can see, FEYE is down the most, while the other three are pretty much in lock-step to the downside, with a correlation around 1. I think the reason why FEYE is down more is due to a lower institutional shareholder base, which as you can see is markedly lower than the other three. In the social media poll posted in the previous post, the majority of you said to sell FEYE. The reason is pretty simple: it was the first option in the poll and has underperformed the other three.

As humans, we tend to avoid pain and most normal people avoid conflict (with marked exception to the lunatics in my comments section). So I expected FEYE would be tossed into the volcano. Quite frankly, I chose FEYE too, as it is my largest position and is the main source of loss for me, over the past 6 weeks. The size of my FEYE position is almost twice as large as the other three. Selling it will certainly leave a scar, but allow me to raise a lot of cash to be put to work smartly.

Even though FEYE has the highest growth, they also have less cash than the other three, lower gross margins than two of them and a much higher price/sales ratio.

But SPLK has the slowest growth, largest float and smallest short position, which is important to have if the market reverses higher. With YELP’s 9.4% of the float short, should this market rally, those fools will run for  cover at the first site of danger–sending the stock screaming higher.

Another option would be to really leverage up and swing for the fences. However, that would be hard-core gambling and I am not up for the risk.

I guess it will come down to price action, at the end of the day. I will make my final decision by Monday.

More Whipsaw Please

Just before the long holiday weekend, I want nothing more than some whipsaw. Let’s sell off the NASDAQ with reckless abandon due to growth being present. Any company that is growing their revenues by more than 20% should be sold, immediately. In its place, a good utility or REIT might do.

I’ve started off the day 0.7% in the hole, almost giving back yesterday’s gains. I’ve been combing over my pnl and have decided one of my four horsemen of financial disaster must be sacrificed. I must sacrifice one, not because its not totally awesome and worthy of my time and money, but because I need to raise capital in order to nimbly reduce the cost basis of the other three.

In other words, If I am going to escape this pickle with dignity, I need to absorb a loss, move on, then put that money to work in the other 3 to bring my basis back in line with reality.

At the present, I am -29% in FEYE, -16% in SPLK, -15% in YELP and -21% in WDAY, with WDAY being the smallest of the four. Other down positions include EGRX (-11%) and IFON (-14%).

If I do nothing, I will probably have to ride these stocks through earnings, something I am not exactly keen on, considering my recent foray into high beta hell. However, if I can reduce my cost basis in 2 or 3 of the four to a level that can be reached with any strong market uptick, why, I might be able to reduce my losses from -23% to -10% in fairly short order.

The stated goal here is to get down to at least -15% within the month.

UPDATE: I utilized some leverage to average down in SPLK, YELP and WDAY, bringing my basis down to $78.77, $75.6 and $97.40 respectively.

I Hope You Live Forever

I feel like I need torches of fire around these parts just to write a blog. I have to back down these dogs, subhuman monsters, on a minute by minute basis, with the chards from broken bottles and lash them with the ends of my belt buckles. When I told you about my “many enemies” I am sure you said to yourself “surely he jests.” After leaving the gates open, allowing the prisoners of the iBankCoin dungeons roam freely, you now see that I was not exaggerating.

Multiple positive bullets points are hitting my screen this morning, from price target increase for GOOG at Credit Suisse, to a GE/PEP/GS and MS beat to a massive beat for CMG, effectively shoving all of the Einhorns back into their burritos pressers.

This is day 4 of the recovery. I expect nothing less than an all-out rout to neutralize the idea that any measurable pullback is cause for alarm and crash-worthy. These monsters will all be put back into their rightful places, the dungeons, in due time.

No Do Overs

No one knows where the market is going this week. Anyone who tells you for certain is either under the influence of heavy narcotic usage or lying. But traders rarely lie, right?

If you missed out on the dot com bubble from 2000, just know, this is nothing like that. Those companies weren’t even banking revenues. Comparing this to that is a feeble attempt of reliving the past. There are no do-overs. You missed it then and you’re missing it now.

All of you jackasses can continue to play whack-a-mole, guessing the near term direction. I’ll stick to a long only position for now, as it has been the dominant position to be in for the better half of 1,825 days.

Make or Break Week: Time to Get to Work

I cannot stress the importance of this week. From economic data to a slew of important earnings announcements, I think it’s fair to say the fate of this market will be decided over the next 5 days.

To put it plainly, all of the carnage that has taken place in growth stocks is not significant, based upon historical precedence. In a previous post, I showed you this has happened in consecutive month’s several times before in leadership tech stocks. The thing is, April isn’t done. If tech rebounds from here and all of the month to date losses are erased, last month’s drop will be viewed as child’s play, entirely insignificant in the big scheme of things. Stocks will head back to new highs, amidst renewed euphoria and you will all ponder why you didn’t buy FEYE in the $40′s when you had the chance.

However, if this newly found perception of risk continues to plague the markets, month to date losses might triple from here. Last month’s losses were so severe, it demands that this month we either accelerate to that downside of completely wipe it out. This is not opinion, but fact.

Resolution will be had and soon.

Seasonality Data Dump: A Mirror Image

Draw Downs greater than 30% in two months, looking at the third.

MSFT

2000

April: -34%

May: -10%

June: +34%

1987

October: -27%

November: -8%

December: +12.5%

2000

November: -16%

December: -24%

January: +40%

 

CSCO

1997

Feb: -20%

March: -14%

April: +8%

2001

Feb:  -37%

March: -33%

April: +7%

2002

Feb: -27%

March: +18%

2001

August: -15%

September: -25%

October: +39%

2002

September: -24%

October: +6%

November: +33%

2000

November: -11%

December: -20%

January: -2%

 

ORCL

2000

January: -11%

Feb: -35%

March: +5%

1990

March: -17%

April: -16%

May: +24%

2002

March: -22%

April: -22%

May: -21%

1990

July: -26%

August: -32%

September: -44%

2001

July: -5%

August: -33%

September: +3%

1987

Oct: -21%

November: -13%

December: +31%

1998

November: -7%

December: -32%

January: +4%

SPLK

2014

March: -23%

April: -8%

FEYE

2014

March: -28%

April: -23%

WDAY

2014

March: -17%

April: -15%

 

Discuss, if you please.

COWARDICE into The Bell

What a milquetoast close.

I do not consider this a vital trading session, since we’ve been through a lot over the past two weeks. Cowards got flat into the long weekend. It could’ve been a lot worse.

On the constructive side:

Analysts are out pumping growth names hard again.

Treasuries got smacked today.

It doesn’t sound like Putin will invade Ukraine any time soon.

Earnings have been impressive, thus far.

As far as my positions are concerned: FEYE is in such a depression. It’s hard to believe this is the same stock touted by a certain analyst as a “once in a decade opportunity.” The street could not get enough of its shares; now no one wants them. Singular indeed.

I sold half of my WDAY position, for a loss, and have begun allocating into YELP.

I was flat for the day, -22.5% for the year.

I am down 28.3% in FEYE, -10.44% in YELP (after today’s adds) and -16.4% in SPLK. I expect to eliminate the entirety of my WDAY position over the next two weeks. It’s down 18% from my basis.

Ideally, YELP sprints higher, I sell my lower basis shares and swap into SPLK, then with the profits from SPLK, load up on FEYE for the grande finale. If I can pull this off, it will be one of my greatest turn arounds ever.

Stay tuned.

A Decision Has Been Made

I sold off half of my WDAY position, based upon it being the favourite stock in the online poll. By far, you hated FEYE, as do I, which is why I’ve decided to hold it for a little bit longer.

With some of the proceeds of WDAY, I began allocating it into YELP.

GET ‘EM: The Horsemen Shall Ride Again

The WB offering was much better than expected. It opened up at $16.70 and is now trading above $18. This gives full license for the bulls to press their case into the close. Let’s see if they step up, or wallow away like Ukrainians.

 

 

The Four Horsemen Shall Be Reduced to Three

Decisions, decisions.

Just in case you’re wondering why I want to sell one of them, quite frankly, you’re retarded. I don’t like being in the position that I am in. My basis on these 4 stocks are all very high and, realistically, if I do not put some real money behind 2 of them, I am going to be holding them for a long, long time.

So what’s wrong with holding them for a long, long time?

Well, I do not like the market to control me. I invest creatively and need to have moving parts in order to maximize my potential. Keeping me constricted to these four stocks has hurt me in many ways over the past 6 weeks.

I threw these stocks into The PPT to analyze their metrics, have a look.

FourHorsemen

As you can see, FEYE is down the most, while the other three are pretty much in lock-step to the downside, with a correlation around 1. I think the reason why FEYE is down more is due to a lower institutional shareholder base, which as you can see is markedly lower than the other three. In the social media poll posted in the previous post, the majority of you said to sell FEYE. The reason is pretty simple: it was the first option in the poll and has underperformed the other three.

As humans, we tend to avoid pain and most normal people avoid conflict (with marked exception to the lunatics in my comments section). So I expected FEYE would be tossed into the volcano. Quite frankly, I chose FEYE too, as it is my largest position and is the main source of loss for me, over the past 6 weeks. The size of my FEYE position is almost twice as large as the other three. Selling it will certainly leave a scar, but allow me to raise a lot of cash to be put to work smartly.

Even though FEYE has the highest growth, they also have less cash than the other three, lower gross margins than two of them and a much higher price/sales ratio.

But SPLK has the slowest growth, largest float and smallest short position, which is important to have if the market reverses higher. With YELP’s 9.4% of the float short, should this market rally, those fools will run for  cover at the first site of danger–sending the stock screaming higher.

Another option would be to really leverage up and swing for the fences. However, that would be hard-core gambling and I am not up for the risk.

I guess it will come down to price action, at the end of the day. I will make my final decision by Monday.

More Whipsaw Please

Just before the long holiday weekend, I want nothing more than some whipsaw. Let’s sell off the NASDAQ with reckless abandon due to growth being present. Any company that is growing their revenues by more than 20% should be sold, immediately. In its place, a good utility or REIT might do.

I’ve started off the day 0.7% in the hole, almost giving back yesterday’s gains. I’ve been combing over my pnl and have decided one of my four horsemen of financial disaster must be sacrificed. I must sacrifice one, not because its not totally awesome and worthy of my time and money, but because I need to raise capital in order to nimbly reduce the cost basis of the other three.

In other words, If I am going to escape this pickle with dignity, I need to absorb a loss, move on, then put that money to work in the other 3 to bring my basis back in line with reality.

At the present, I am -29% in FEYE, -16% in SPLK, -15% in YELP and -21% in WDAY, with WDAY being the smallest of the four. Other down positions include EGRX (-11%) and IFON (-14%).

If I do nothing, I will probably have to ride these stocks through earnings, something I am not exactly keen on, considering my recent foray into high beta hell. However, if I can reduce my cost basis in 2 or 3 of the four to a level that can be reached with any strong market uptick, why, I might be able to reduce my losses from -23% to -10% in fairly short order.

The stated goal here is to get down to at least -15% within the month.

UPDATE: I utilized some leverage to average down in SPLK, YELP and WDAY, bringing my basis down to $78.77, $75.6 and $97.40 respectively.

I Hope You Live Forever

I feel like I need torches of fire around these parts just to write a blog. I have to back down these dogs, subhuman monsters, on a minute by minute basis, with the chards from broken bottles and lash them with the ends of my belt buckles. When I told you about my “many enemies” I am sure you said to yourself “surely he jests.” After leaving the gates open, allowing the prisoners of the iBankCoin dungeons roam freely, you now see that I was not exaggerating.

Multiple positive bullets points are hitting my screen this morning, from price target increase for GOOG at Credit Suisse, to a GE/PEP/GS and MS beat to a massive beat for CMG, effectively shoving all of the Einhorns back into their burritos pressers.

This is day 4 of the recovery. I expect nothing less than an all-out rout to neutralize the idea that any measurable pullback is cause for alarm and crash-worthy. These monsters will all be put back into their rightful places, the dungeons, in due time.