Before I answer your pressing questions, I have a few things to say. Frankly, I don’t know why world markets are so calm when Italian yields are north of 6.5%. But, in my experiences, when stocks don’t go down on bad news, good news is likely around the corner. Something is brewing and it bodes poorly for bears.
As an aside, a friend of mine bought a NYC medallion 9 months ago for $660,000. A few weeks ago, 2 NYC medallions sold for a million a piece. What the fuck are we wasting our time with bullshit stocks, when we could be billionaire taxi drivers? Doubly aside, FUCKING APPLE SUCKS DICK these days. My God damned whole apple echo-system, from the iPhone to Airport to the MAC to AppleTV down to my motherfucking Safari browser is broken. I’ve been running in circles trying to fix this shit and I am not pleased.
Now here are your answers.
1. Fly, you still thinking with the elevator shaft lower before CYE thesis? If so, what’s the best way to play it? Specifically, what do you think of shorting the insurance industry?
2. GSVC: Does this thing eventually see $40?
I think the crisis will commence in Q1 of 2012, not during Turkey season. Let’s not be ridiculous. Best way to play it is via long TZA. GSVC to $40? I am not sure about that. But I do think it hits $20.
is God real?
of course not.
Is now the right time to buy a bigger house (NJ) or wait more time?
NJ is a piece of shit, tax sinkhole.
If this market goes parabolic into a Turkey Day and Santa Clause rally … what does that do to Precious Metals? Will my ZSL purchase be epic or the lump of coal in my stocking?
ZSL will be dismantled. The only way out of the EU debt crisis is via printing of money. That will, inevitably, lend credence to the precious metals story.
Fly, do you forsee a buy and hold market coming some time soon, maybe after the Euro finishes dissolving? This whipsawing is killing the ports of people who sometimes have to blink, or go to the bathroom, and who thus miss huge market moves. And it’s driving lots of us to sit in cash forever.
Unfortunately, the only buy and hold market is in NYC taxi medallions.
favorite way to play latin america? hold refiners thru march again?
If you like Latin America, buy EWZ.
what will destroy the market first and which will hit it harder?
China banking crisis
European implosion
When China hits, it will be game over for the “global growth story” for a decade.
Fly,
If you had to pick 2 or 3 metrics to look at as two good indicators for future stock price, what would you choose?
Also, please rank these NYC rappers: Biggie, Talib Kweli, Jay Z, LL, and Nas
ROE, FPE and gross margins expansion. Jay z, Biggie, Nas and the rest suck.
1. Planning anymore vacations with your Neighbor Steve?
2. Did Grandpa Fly invest in the stock market and was he proud how his Grandson Fly turned out?
3. Did you ever punch your fist through something or throw up watching a stock go big the opposite way(like in the internet bubble)?
4. What would do you do for a living if you couldn’t do this $$ management thing?
No. Grandpa Fly never “bought those fucking stocks.” I believe he was proud. I’ve punched through plenty of stuff, but never upchucked. If I wasn’t buying and selling stocks, I’d be a Blogfather.
Fly, how many times will Eli Manning humiliate the New England Brady Gurls?
The Giants will humiliate New England as often as they please.
is the market goin up or down? will i end up in prison? will all these douche bags really get a response? thnxs.
Up. Yes. Yes.
How do you think the upcoming budget battle will play-out? What should I invest in ahead of it?
Not seamlessly. No idea.
Fly – I’ve missed the ups, downs the last 6-8 months, by being completely, 100% in cash. It’s driving me nuts how little I earn, so …
where is the best place, investment, stock, strategy to earn a bit more than the money market rate if I so choose to stay in cash?! And if it matters, it’s a 3/4-1mm account, so enough to be flexible, dangerous.
Utilities with low beta and decent dividends should do the trick. For more, look towards the food and beverage space.
What do you think about taking a flyer on nviv for a few years!
WTF is NVIV?
I am down 8% on the year and hoping to close the year out on a positive note. What is your *best* idea into the end of the year?
Refiners.
Do crack spreads really matter intermediate-term to refinery stock prices?
More specifically, what priority do said spreads have on position confidence?
Superior to galactic alignments!?
Crack matters! It’s not the level of the spreads but direction. For example, the recent recovery in the WTI-Brent spread has given new confidence to shares of the refiners. Should 321 head back to $30, then refiners will explode to the upside.
What is the meaning of life?
To leave a legacy behind.
do you like sex?
What the fuck do you think I am, a eunuch?
Do we have free will, or is God making my trades?
Free will. God is a figment of your imagination.
After the Occupy Wall St movement is defeated… Will “they” erect a statue of Mr. Benjaman Bernanke in Zuccatti Park as a rememberence?
No.
Fly, why did you sell CIEN and did you sell all of it?
As a younger investor, is it better for me to just wait for downswings in the overall market and then throw money into mutual funds, rather than trade in and out of the market? Some trades succeed and others don’t, but I have a day job and don’t watch the market all day, and longterm, the market goes up. Is all the trading an exercise in futility?
I wanted to make room for DK. I will not dip into my 10% cash position. Therefore, when I buy something it must be paired with a sale. As a young man, you should trade to garner experience. If you lose money, chalk it up to an education. Trading can be incredibly rewarding.
Dr. Fly, I’m trying to put together my trading plan, in order to help detach myself from the daily circus put on by the business news media.
How do you detach yourself from the BS in the news so you can purely focus on the next correct trade?
Try to put things on a moving average and avoid watching the tape all day long. Expand your trading horizon to more than 2-3 hours.
You have one year to make 50%. High risk is implicit but you’re not looking to simply throw a hail mary. How would you go about doing it, and would you choose stocks, options, multiple trades throughout the year or upfront?
A combination of stocks and options. For example, long refiners and long puts on airlines is a high beta trade. Also, timing inflection points with TZA/TNA can yield 20% in a single trade. If timed correctly. 100-300% returns are possible in options trades. Be careful not to allow emotions get in the way of a cogent investment plan, however. There are no short cuts.
is andrew ross sorkin really gay,and does he have to spoil squawk box every morning. will michelle cabesa caboosa finally show some cleavege before becky quick comes back? signed joe kernan
Sorkin’s sexual orientation is not relevant and I don’t care.
Fly..The Question I have is What did you see at the start of Oct which told you there was going to be a Mega Rally??? Markets can be oversold for a long time, but what was the one special thing that told you?????
It was intuition. I’ve been studying the market since the early 1991. Sometimes gut feelings turn out to be the best trades ever.
Hypo Question…What would happen if the Turkey and Santa Claus Rally fails to come?
Turkey never fails.
What minimum cash poition do you recommend and does it change based on conditions? Is it better to have some cash with leveraged etfs or fully invested without leverage? How do you know when to really press your bets?
10% minimum. Leveraged ETF’s should not be part of a long term investment strategy. Better to go with stocks and leverage instead. The PPT has really fine tuned my inflection point trading.
FLY, does it ever get easier, or do you just more used to it?
With experience, you will get quicker and make fewer mistakes.
Fly, when did you understand you got ready to run other people’s money? Tell us the story how you started the business. That should be interesting. And, by the way, what is your estimate of assholes to smart people ratio on the Wall Street? Tell us about the smart ones, who are they (whom you personally know)?
After a summer internship at Seligman and Co, working under Paul Wick, I knew money management was in my future. I will discuss my whole story in another post. The ratio between intelligent life forms and miscreants in the money management business is 1:100.
As the elder statesman here I am compelled
to question you as to the portion of your household income allocated to a 401k/IRA .IMO the biggest mistake young guns make is
not understanding the value of these opportunities . Many of my peers failed
to understand the risk inherent with not
properly perparing and now they are wondering
how they will manage on meager low seven figure NAVs .Are you going to be in that group ?
No.
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glorious!
Stick to stocks not judging rappers. Shish! Jay-z??! Poseur, my angry little friend.
You lean more Vanilla Ice?
That was my question. It was left to NYC rappers. Jay Z belongs on the list, probably right behind Biggie. Musical taste aside, his music has defined NYC hip hop for the last decade, plus the dude is married to Beyonce. Much respect.
I know the old guys hate it, but The Fly has excellent taste in music.
squabbling over poser type studio gansgters is beneath me. Rappers who have fragrences,clothes,keycahins,cereal whatever aren’t the real deal, and I thot fly was the real fly so he mite want to listen to the real rappers. But whatever yea lets just check bilboard for the best ‘rappers’ and squab over which multi $ one is better than the other.
Very nice!
Rock solid, as always.
If I may squeeze in one more question Sir Fly:
“Where does the EUR/USD finishes year end and first quarter of 2012?”
“But, in my experience, when stocks don’t go down on bad news, good news is likely around the corner. Something is brewing and it bodes poorly for bears.”
Yes, and the only thing that will push the moarket higher is if I buy TWM or TZA. At least that’s the way it seems.
thanks!
Well done Mr. Fly. I didn’t think you’d actually answer all of the questions… especially the “do you like sex” one.
intuition…maybe at some point I may finally develope mine. Fly, I so envy your 20 years of market knowledge.
oh and STUPID AAPL, that 404 level is intact and has screwed everyone that has bought above that. I so dislike this AAPL hope rally.
The ‘Fly’ is that 1 in 100, pure GENIUS!
confession fly, i always wanted your nuts.
Excellent post, Blogfather. One of your best ever (IMHO). Highly entertaining at any rate. I don’t think your readers know how fortunate they are to have these pearls made available to them at no cost.
That was like a hotline with the President, only with more intelligent answers. Thanks!
The Fly is God
still no answer to the most important question – what is the status of the blue radio?
TY Fly. Although, I think your Neighbor Steve might like to go back to that water park.
Many ways of making a good living with much less stress.
Watch INTC. No idea why except it is holding up in the face of a chip hit.
Solid answers and hopefully we’ll all be here
another 30~40 years to see how it all plays out .
Gold.
Thanks for answering. This was a great idea. Much appreciated.
Fly, thank you for the gift of this post.
Just checked IT 10 years:
6.66
Berlusconi won’t leave until 69.15
He will leave when Italy runs out of hookers.
Solid!
That was awesome… Are you going to extend your hand of assistance again? Maybe a monthly segment like this?
Another question if I may~
Is it cheating to use scrabble word finder?
“Doubly aside, FUCKING APPLE SUCKS DICK these days. My God damned whole apple echo-system, from the iPhone to Airport to the MAC to AppleTV down to my motherfucking Safari browser is broken.”
Apple just gave each of their senior vp’s $60 million EACH as bonuses. Yikes. My Iphone is crap too, with half the range of my Blackberry. Ironically, many occupiers have iphones.
Thanks for that advice, Fly.
technically the meaning of life is to leave copies of your DNA behind, to reproduce. That is, in fact, the literal definition of life by some counts: the ability to replicate oneself.
You’re right about Europe andp rinting money, too, its clearly necessary.
On a side note, Europe’s problem is that unlike the US or Japan or the UK, they lack the capacity to create new currency. No entity in Europe has the ability to spend new money into the economy.
In a country that issues its own currency new currency is created when governments deficit spend, and those deficits are sustainable forever and to infinity, with the solitary potential consequence being inflation. The inflation of the last ten years is a normal cyclic phenomonon that’s happened plenty of times in history (most recently the 70s). These cycles of radical commodity inflation tend to then be followed by longer periods where commodities flatline.
In a country that issues its own currency, like the US, the net savings of the entire rest of the world in that currency are equal, to the penny, to the national “debt” of that countries government.
The US national debt isn’t debt at all, but rather voluntary paying of interest on dollar savings. We do not borrow first, spend later.
Europe, on the other hand, is a different system. Nobody can make new money, everybody has to borrow. So, accepting the differentiation between entities that simply use a currency, and entities that issue a currency, and noting that nobody in Europe can issue… What is the net savings in Europe, since the inception of the Euro, among currency users? (traditionally this would be seen as “debt” of a currency issuer in other currencies, like yen or dollars)…
$0. They are all currency users, everybody with Euro’s in their pocket is just a currency user. The currency user/issuer distinction and the reality that savings in dollars of the world is equal to the penny to the US national “debt” are courtesy of MMT.
That is an unsustainable situation. Completely unsustainable.
They MUST eventually create Euros (print money) and if they wish to avoid this problem again they MUST create a mechanism by which this can be done on an ongoing basis.
Or the euro must break up.
Can they fix it? Yes. But as noted in the headline blog above, there is no solution that doesn’t create new currency.
Period.
In the US we have this situation, widely discussed on the internet in recent months:
government deficit – trade deficit = private sector savings
So during the Clinton surpluses and the several years when Bush ran a deficit lower than the trade deficit, the private sector is forced (by math) to reduce savings.
Generally this savings reduction isn’t first reflected in private sector austerity, but in a private sector debt boom. Check, had that.
When the private sector debt is no longer sustainable, economic non-hilarity ensues. Check, had and having that.
Folks, the US national debt is quite litearlly, to the penny, the # of dollars in the world. And its silly to call it debt.
Your savings, the cash in your tills, the cash in the bank, the dollars in your pocket and the quarters in my couch come from… government deficit spending.
If the government doesn’t deficit spend, people can’t (net, as a whole) save dollars. If that deficit doesn’t exceed the trade deficit, the US private sector un-saves, forcibly, by math, not opinion, not magic Ryan plans that will reduce the federal debt to 0 and make everybody rich in the process (IMPOSSIBLE, btw).
Remember the gold standard? It created new currency all the time, constantly! When people found gold, NEW MONEY WAS CREATED, inflation and eocnomic growth would then ensue.
The Euro is harsher than either of these, as to date no new currency has been able to be created at all.
For the heck of it imagine that the Eurozone was an economy in and of itself, with no outside influences, no trade with the rest of the world.
Any country with a trade deficit must negative-save (because there is no governmetn currency issuer to help the private sector save, the governments are in the same boat as the citizens). So ONLY NET-EXPORT COUNTRIES COULD EVER HAVE SUSTAINABLE FINANCES, PERIOD.
Absent the ability to issue currency, no country can permanently sustain a trade deficit.
What do you think is going to happen when you impose harsh government austerity on countries that have trade deficits? It will brutalize the private sector, resulting in revolt and …
just like greece…
they will NEVER meet their austerity targets and the whole project will fail.
Currency issuance is absolutely the only way out.
checklist, to reproduce is only the meaning for those who are incapable of enhancing the value of the existing lives and leaving behind a legacy… Yet still have superior DNA to improve over the existing crop so that perhaps someday the younger generation can solve the world’s problems and “shortages” in resources. Steve Jobs for example, had a much better use of life over the octomom for example, unless of course all 8 of the octomom’s kids grow up to be the next Steve Jobs.
There is a reason you are known as The Blogfather. Now we have all seen it.