A Decade for Dicks
With 2009 winding down and CNBC reminiscing over “The Bubble Decade,” I thought it would be helpful to some of you new-jacks to understand what it was like to be part of “A Decade for Dicks.”
In the late 1990’s, my business started to take-off. I was an early investor in a lot of internet stocks and the future looked bright. I had the energy of a coked out race horse and the stock market was my track. By late 1999, the market had gone fucking bananas. During that time, if your company announced that it had launched a website—just a fucking web address—that news would buoy shares anywhere from 10-100%—in a single day. Back then, before trading was done on the internet, my trades had to be submitted via old school order tickets. My partner and I would spend hours just filling out those fucking stupid tickets, in anticipation of monster runs in the market. Needless to say, our hands hurt from writing so much, as stocks—literally—disregarded all laws of reason and began to trade on sheer insanity.
I couldn’t go to lunch, from 1999-2001, for a variety of reasons. During the boom, going to lunch meant missing out on killer trades. I’m not talking 100,000 shares up a buck. Stocks sprinted back then. Stocks like CMGI, Inc. [[CMGI]] and VERT, both positions of mine back then, went up 100’s of points inside of a few short months. I remember buying QUALCOMM, Inc. [[QCOM]] at $1,000 per share, just before their odd-ball stock split. Whenever a stock was mentioned on CNBC, with regards to their internet exposure, that fucking stock took off. There was so many different ways to skin the cat. If you were a trader/broker/investor back then and missed out, you should shoot yourself in the face with a fucking grenade launcher, right now.
However, like everything in life, all good things end badly. When the bubble popped in 2000, my face was lit aflame; and as a result, I lost millions. Personally, I was losing like 10k per hour. The margin clerk was my mortal enemy, due to her insistence that I sell out by 2:30pm, or chalk up some dough. Fucking bitch. The problem that I had, not too uncommon with my stubborn personality type, was a severe case of hubris. I could not accept the fact that I was on the losing end of so many trades. When the internet bubble popped, it fucking popped bad, taking out an entire class of assholes with internet dreams—to the woodshed— AND MORE. All of the stocks that were trading at $200+ came crashing down to fucking zero, without rest. It was surreal.
One of my favorite memories was cutting a large personal check for a margin call at 11:00am, only to see it vanish by 4:00. Easy come, easy go.
I was absolutely staggered by the whole experience. After the 9/11 induced nosedive, I pledged to NEVER buy a Nasdaq stock again, as it was my belief that tickers with more than 3 letters represented evil. The market was so bad; it was almost comical. My friends and I would just leave the office in disgust, in favor of beers and chicken wings, on many occasions.
Shortly after, I began rebuilding my business, based around distressed debt and preferred bank shares. It was a boring way of life; but it gave me peace of mind. When the market bottomed in late 2002, I had a war chest built up in ultra-conservative bonds and preferred securities. I had to make a massive adjustment out of old man investments, back into the fire aka “technology stocks.”
Despite pledging to “NEVER buy Nasdaq stocks again,” by mid 2003, I was knee deep in the shit, long Amkor Technology, Inc. [[AMKR]] , MEMC Electronic Materials, Inc. [[WFR]] and Broadcom Corporation [[BRCM]] in size. Stocks like Nortel, which was priced for bankruptcy in 2002, took off like gangbusters in 2003, making lucky investors fortunes in the process. Thanks to the Federal Reserve pumping liquidity into the markets, stocks were back in play again. However, underneath the surface, another bubble was brewing—this time in housing.
From 2004 to 2007, there was a relative calm in the markets. A lot of people thought we were experiencing some sort of “economic Renaissance” or a “Goldilocks economy,” when in fact it was all bullshit. Because of my personal wealth destruction in 2000-2001, when the real estate bubble popped in late 2007-early 2008, Senor Tropicana was prepared, as you well know. In 2008, I sold short just about every investment bank and every regional bank located in California—all documented here on the site. Subsequently, I cleaned house.
The lesson to be learned from this decade is: we are all dicks. Nothing will change, because greed will never dissipate. I am cynical for a reason, stemming from my lack of faith in human emotions, which is why I am S.A.M. (space alien magician). I see people making the same errors today that were concocted 10 years ago. Small start-ups are being built to flip, instead of operating as a profitable businesses, etc.
Believe you me, over the next 10 years, we will be tricked into believing some sort of lie. We will all buy into an asset class or an investment theme, thinking “this time is different”; but it always ends the same.
Tread carefully.
Good story Fly.
I almost lost my job betting Dollar Yen would reach 250 in the 90’s and it went the other way. I have a special hatred for japan. Not the people of course just the state.
I think the best lesson I ever learned was from the old war horse- (Uncle) George Soros. Always looks for reasons not to have on a position once you have assumed the risk. It doesn’t mean doubt. It’s a little different. I wish I could always remember it.
Great piece, Fly.
I’ve been trading less these days, because of work.
But I make this blog part of my day — everyday.
Always great insights and superb writing style.
Phil:
We miss you, dude … I do at least.. What are you thinking macro wise these days. You in Brazil now?
What’s up, J,
Been working in Rio since March. Good times down here.
Completely different climate vis-Ã -vis NYC.
The city is living and breathing optimism with the upcoming WC2014 and the Summer Olympics 2016 and fundamentals are bullish. The basic interest rate (Selic) is at all-time lows (8.75%) and the population is just beginning to get access to loans (think America in the 1950s in macro terms). Unemployment also hit a 15 year low last month (at 7%). I’ve been busy with work and buying up properties in neighborhoods where new stadiums and olympic arenas are set to be built. Typically, real estate gets an awesome pop in cities that host Olympics. In sum, things are looking on the up and up over here.
Hope all is well,
Phil
Phil – Good to see you post. Thanks for the Brazil update.
Did you take Erin Burnett out for drinks last night in Rio?
That is a great story. You should write a monthly column in a magazine, if magazines weren’t mostly gay now.
Jake was right; I wish I’d left that extra zero on my GMCR buy error yesterday. Still wouldn’t have been worth the wrath on that particular account.
Thanks for all your work, El Chupacabra killer.
Direct, truthful and well written
Hear, hear.
So true.
That story has the makings of a CNBC book. You should call Gasparino and tell him that his book is a fucking joke compared to yours. That asshat believes he has a special connection into the Wall Street Elite. You should tell him, YOU ARE FUCKING WALLSTREET ELITE. When he laughs in your face call up that other asshole, Dylan Ratigan, tell him that Charlie is up to his bullshit tricks again, and that you have the skinny on the bs between them, which you are about to take public. After your done having fun with the damn network shills, sit back with your favorite k-cup and enjoy the limelight from your humble abode. I fucking hate CNBC and have chosen to never watch it again. Thanks for being God, Fly. Live long and prosper.
Fly:
Your new book title is easy: “And then the fucking world caved in, Asshat!”
Gold will be different this time.
coffee vs gold update?
anyone?
I’ll go with coffee, it’s cold as fuck here today….I have a tree guy coming at 1:00 to cut 5 trees and I’ll, of course, have to be outside to “supervise” I am not a happy camper, but the trees must come down before they come down on my house.
Believe you me…..(don’t you know)
haha! good call on GMCR Fly. I got in at low 60s. Thanx for the call out. I think I’m gonna go get myself a green tea K cup
I hope you bailed on that Cramer pump this morning.
Textbook “GS Sayonara.”
They don’t call em Goldmen for nothin’ folks.
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a cramer pump has a two day lifetime. I will punch on the first down day after that. gmcr will also beat 1q consensus, and thus i will be long the stock at the bottom ahead of the earnings call.
Nice.
Loved this story, Fly. I have been knee-deep in the market for 3 or 4 years now, but I am 26 years old, so I have not the experience that came with the tech bubble. Love it when you share your experience.
Hey Fly,
So your point of the story is…Short tech stocks? Hmm…interesting…interesting…
These types of stories rule.
Fooled by randomness
Going large with ENTR. just bought 21,000 @ 3.25
The best, bar none, piece I’ve ever read on the Internet and housing bubbles!
Man did I ever get burned by BRCM!
be nimble near the brcm analyst day
Hope is futile.
Long live Hollywood….
Hey, Fly thanks for GMCR you really are the best stockpicker in the blogesphere.
Unless it was your pet monkey hitting a decent stockpick with one of his darts
Fantastic stuff
Truely the best of The Fly
I sold out of CENX, north of $12.30
I sold half my CENX and am trying to make up my mind into which of these holdings to put my proceeds on a pullback: CRZO or TRMA.
great story. good reading to hear your experiences.
i concur.
Truly great post.
Most excellent tale, Monsieur Le Flea … most excellent
I think I’ll cerebrate with a good ole cup’o Joe.
Out of GSIT @ 4.61, thanks for lunch henry.
Le Fly, as usual good insightful stuff. I am kind of surprised that you didn’t have an article on AOL yesterday. Specially with the big spinoff IPO and shit.
Maybe an article around your experiences with AOL for us mere mortals?
Gracias!
-Panda Bear
GMCR is now my largest position. It is official.
K.O.D.
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” GMCR is now my largest position. It is official ”
You plan on holding that into new years?
GMCR is the greatest stock after IOC…
Scouts are reporting that the PG is ready for another sacking, V.King.
Hey homo are you still in DZZ?
A great bedtime story to tell the grand kids, in the morning of course.
That was an awesome read. I would like to know what made you go short on the banks. I find I can trade just fine with the broken robots, but its knowing when to step aside that I seem to F up.
Great Post
Excellent post. I love reading one’s specific thoughts during various investment periods of which I did not participate. This is why The Fly is the best out there.
Jake- you should take a shot at a post like this on your blog.
My post on the same period would get me in hot water with the SEC.
I was on the other side, selling those crazy stocks into the psychlone.
Maybe I will be…. euphamistic.
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The great thing about this website is the fact that my 2008 investments and shorts are all documented here. Feel free to peruse.
pouring out a little liquor for CMRC and ICGE as well.
Fuck, this is one boring market
I think I’ll watch treasury prices move around, more action
lol.
don’t forget to get some TBT.
__
All Stocks Are For ASSHATS………Fly went from being afraid to buy 4 letter stocks to going long YONG. Good Stuff.
I’m surprised your behind the K-CUP ,,,,, I thought anything that started with “K” was some sort of nutty militia organization.
Like Kongress.
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Sound advice in the above post. People with greed in their eyes never change.
You are your business. There will always be pullbacks in business and in life.
Thank god money is not the end of all things. Keeping it in perspective.
If we are blessed in health, then we are blessed. If we can see, Walk, feel,
If are children are well, These are the things that really matter in life.
mrkcbill, let me be the first to say, nice Gravatar!
Is there really a 30% short interest in GMCR….the stock, not the K Cups…apparently there is significant interest in the K Cup, speaking of cups, just saw a Victoria Secret ad that promotes a bra which enhances a woman by 2 cup sizes…..
Its a cup half full world
Going through your archives for my before bed read has my children asking me why I am laughing my head off in bed!!!! It is hard to explain to them without using all your creative language!
Thank you for sharing your insights with us pions!
Jascinthe
Market uncouples from the US $, c/d?
Um….
No.
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That of which legends are made!
GMCR doing well today, already broke Jake’s top call of $64 and change
I’d like to see it fly here and defy the charts if for no other reason than a good laugh
Betting against the Fly is pure madness!!
BTW: Dumped the rest of my CGA, nice profit but it looks like it’s rolling over here
Cramer induced manias are an anomoly, and fadeable at that. Signorelli will have his vengeance.
__________
Crunch (eating sandwich with pickle inside)
Good health club.
____
Awsome article love it lessons to be learnt but we will all make mistakes and learn from our own..
Long Live with King
I think it might be time for the “2:15 Friday Afternoon Before Dec Expiration Melt Your Face Off Rally”
Whoooahhh!
YONG got subway attacked by Falun Gong.
I followed Fly into YONG, and now look what happened….”$8 Chicoms will cease going to $12 on no news, and I may loose money.”
GMCR bit
http://ibankcoin.com/henry_fool/2009/12/11/the-fly-was-all-over-gmcr/
Bot 3,000 SHLD @ $74.45
Why?
Thinking of sending this out to a few people: http://tinyurl.com/eloroshorto
Time for QCOM again, SAM.
great post. Speaking of coffee is funny. http://comedians.jokes.com/lewis-black/videos/lewis-black—the-end-of-the-universe
Fly, this is your best post yet.
Sir Fly,
From a contrarian point of view, are you concerned that way too many people are now guessing prices in general will go down in January due to both the seasonality factor and the fact that in absence of further catalysts, every fund manager might want to preserve their 2009 gains?
Okay no response.. I now graciously open this question to everyone.
Fly – Thanks for the retelling of the great saga. Those certainly were heady days, but this year wasn’t bad either.
Dear sirs,
Is there an ETA on if or when the RSS feed of the newsbot will be up and running? Perhaps V.Queen could be the oil girl and tend to any squeaks on the bot yes?
Thanks
Okay, THIS name is a little too coincidental……
_____________
Coincidental to what? your horoscope?
I’d answer your question if you could frame the question in a language that I understand.
Newsbot stories display the second the post goes up. And, we keep the last 100 stories in the archive.
“Homo, fuge!”
RSS feeds are displayed by those orange wave icons at the top right of the page
One is able to use an RSS reader to be auto-updated when new posts are made in which can be read from the comfort of our own desktop without having to browse the crazy internuts
All the IBC blogs seem to have the link except for the newsbot
You are a lazy motherfucker.
You want an RSS feed of the RSS feed newsbot? LOL
Come to the site and stay awhile, Uncle Fuckface.
Speak fuckin’ ENGLISH, man.
Do not question NEWSBOT3000 ! silence!
NEWSBOT3000 will destroy your fucking house and your life. Do not question it.
GMCR just added to the S&P600. http://online.wsj.com/article/BT-CO-20091211-712836.html
Wow, Jake’s gonna leave a skid mark over that one!
Edit: I read this as GMCR moves UP to the 400 FROM the 600
“S&P SmallCap 600 constituents Senior Housing Properties Trust (NYSE:SNH), Green Mountain Coffee Roasters Inc. (NASD:GMCR) and Atwood Oceanics Inc. (NYSE:ATW) will replace Dycom Industries Inc.(NYSE:DY), Kelly Services Inc. (NASD:KELYA) and Callaway Golf Co. (NYSE:ELY) in the S&P MidCap 400, and likewise, Dycom, Kelly Services and Callaway Golf will replace Senior Housing Properties, Green Mountain Coffee Roasters and Atwood Oceanics in the S&P SmallCap 600 index. “
my bad.
I am not short GMCR.
Yet.
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consider a short after the next conf call. there will be a beat and raise there that will help justify today’s valuation. even then…not so sure…
Had my nads handed to me around septemberish 2001 and the weeks that followed. I learned quite a bit that year. The Robber Barons can take everything you have in an instant and leave you eating out of a dumpster and living in a cardboard box under some viaduct with a burn barrel. Throw in a good old fashioned police beating for good measure. Then you have a good lesson of what NOT to do in the market.
LOL
love the pick-GMCR, love the blog, love you…….youre a dick.
I ‘never’ post on forums, but I have to thank you for the post Fly – you’re as transparent as a streaker at Wrigley. You’ve been through the shit long term and I haven’t, but when I see brutal honesty like that combined with useful information I can’t help but wonder if there’s an altruistic motive in there somewhere. Keep posting, keep being a dick – I’ll keep reading.
Carlito
http://screencast.com/t/ZGJkZDNjMjc need I say more?
Wonderful post!
I look forward to membership in the PPT.
http://www.youtube.com/watch?v=9uI2GVbpWUs
Hmmmm. Stacked up FEMA coffins on Megadeth’s new album. Weird.
They usually aren’t quite that cynical.
http://www.rocknationradio.com/samHTMweb/rnr2/pictures/Megadeth-Endgame.jpg