I’m No Guru

When I sold VHC I did it because I was done relying on the caprices of judge and jury. I had a moment to think about what I was doing and decided it was time to liquidate my entire position. I started to sell in late February and completed my final sale on 3/5. At its peak, VHC comprised 30% of my assets.

But keep in mind, I’m not a guru, just a space alien magician (SAM) trying to make his way–here on Earth. The gurus are guys like Bill Ackman, long JCP into the teeth of catastrophe. Bill’s other “big bets” include risky stocks like PG and TGT, a real genius that guy is.

I don’t know what will happen to VHC tomorrow or the next day. For those of you who are still long, I am pouring out some of my 40 ounce of malted liquor onto my persian rug, right now, in your honor.

This too shall pass and you will learn from this experience to never trust a sure thing ever again. I am guilty of being swayed into the trap of euphoria too. At one point I felt this stock was on a bee line to $100. But the way the stock traded, spoke volumes, much more than the news itself. It was frustrating to own it and most of the time it traded by appointment.

Perhaps this is a blessing in disguise. Maybe this is a buying opportunity of a lifetime. I am sure James Cramer will give it another “boo-ya” on CNBC this evening.

The important takeaway from all this is asset allocation. If this was just a 5 or 10% position, it would hurt, but not be catastrophic.

Regards,

Lord Fly, Commander of the Stock Exchange, King of Kings, President of Atlantis.

Via BBG:

*VIRNETX JURY CANNOT REACH UNANIMOUS VERDICT IN CISCO CASE

*VIRNETX JUDGE TELLS JURY TO CONTINUE DELIBERATIONS

Stock is getting hammered on the news.

With natural gas spiking, coal becomes more attractive to utilities.

For a trade, I went long $ANR.

I just heard Rick Santelli whine about our government not using natural gas to fuel our cars. Let’s not be naive, ok? The government is owned by large corporations. Companies like XOM, CVX and COP want to own the natural gas space, but were caught off guard by a slew of start up companies. Over the past 5 years, partly due to inaction by our government to use natural gas for cars, partly due to the advancement of horizontal drilling, the price of natural gas has plummeted, bankrupting hundreds of companies, as a result.

As we speak, there are many over-leveraged natural gas companies with the very best properties in America. Because they are now being controlled by debt holders, those assets will be sold or they will go bankrupt. When liquidated, the big oil companies will buy up the property.

Only after this process is complete will the quintessential American politician take action, promoting natural gas as a primary fuel for the US automobile market. Within 10 years, the price of natural gas will be north of $10 and the natural gas companies who survived this transfer of wealth would’ve enjoyed parabolic moves to the upside.

I started a position in BV.

This is a real bottom, not one of the head fake’s we’ve witnessed over the past 5 years.

We are seeing significant drawdowns in supply (the most in 20 years) and more importantly, the rig count is down 58% from 2010. In other words, supply is being dried out at a time when wells are shut in. Should we get a few supply disruptions this summer, the price of natty can spike higher.

The direct beneficiaries are companies who desperately need higher prices, like CHK, GMXR, KWK, UPL, ECA, SFY and CWEI. There are others and the sector is ripe for speculation.

In other news, Blackstone borrowed another $2.1 billion to buy more residential real estate. I’m telling you now, as I’ve told you for months, housing has bottomed and prices are going up–big time.

Human waste everywhere. This company is full of feces.

“We are not allowed off of the boat despite the fact that we have no way to use the restrooms on board,” Jonathan Evans of Reidsville, North Carolina, said in an e-mail early Thursday. “The cruise director is giving passengers very limited information and tons of empty promises. What was supposed to take a hour has turned into 7-plus hours.”
Carnival, in a statement, said the ship never lost power, “but there were periodic interruptions to elevators and toilets for a few hours last night. However, at this time all hotel systems are functioning normally and have been functional since approximately 12:30 a.m.”

Gregg Stark, who is traveling with his wife and two young children, told CNN, “There’s human waste all over the floor in some of the bathrooms and they’re overflowing — and in the state rooms. The elevators have not been working. They’ve been turning them on and off, on and off.”

Source

I am short CCL.

After selling BX and HLF, I need to plug a hole or two with larger cap names. Right now I am invested in an array of smaller caps, which is perfectly fine in an upswinging, penis chopping market. But if the blade swings the other way, I’m gonna get hurt.

I’ve spent all day and night looking for names, searching the darkest corners of the world for something of value. I’ve come up with a handful of names, none of which inspire boldness.

Here they are

CRUS (small cap at 1.5b)
GS
RF
RLGY
SWKS
SWK
WDAY
WFM
LM

On the other hand, I’ve got small cap ideas coming out of my nose (not really, because that would be gross). But there are chockfull of micros spinning higher. A new trend that I noticed today was to buy up beaten down names, just because they are more than 15% off their 52 week highs. You have no idea how hard it is to find stocks more than 5% of their 52 week highs. If that’s the case, SWKS, FIO and WFM are poised to rip tits, breasts and ball sacks to the upside.

There is one little internet name that is interesting, ticker DMD. They own Livestrong.com, Ehow.com, Cracked.com and are the #2 registra of websites in America, second to Godaddy, which is owned by none other– KKR.

Speaking of which, asset managers look great. I can assure you that my business is thriving now. I am in a growth industry, the very best industry in America, bar none. So, there isn’t any doubt in my mind that EVR, BX, APO, FIG and KKR aren’t knocking the cover off the ball too. One name worth noting is LM, old school asset management firm with big exposure to banks.

I like LM here, very much so.

Finally, there has been a secret society out there who’ve been buying up regional bank stocks like Ronald Reagan’s jelly bean budget. The trick to finding the winners is to look for banks with price to book ratios under 1.25 and debt/equity ratios under 3, with decent growth. The lower the debt/equity ratio, the higher the stock. Add in a little dividend and you have a winner.

I would reveal this list to you, but it’s for closers only. Plus you have plenty to chew on now, so hop to it.

I’m not here to amuse you, jackass. I never have been, nor will be. Whether you read the site or not is immaterial to me, not so much for the other top hatted folks who shovel coal into the iBC furnaces. I want to be very specific when I say, 2013 is the most important year of my career. I’ve been building up to this point for a long, long time. I was supposed to launch a fund several years ago, but procrastinated, then delayed some more.

Following 2011 and 2012, with returns in the mid single digits, I find myself less than enthused with my market approach and have subsequently put my big plans on hold. Well here I am, off to another gangbuster year, up 20% so far, trying to hold it together. Pardon me if I place my clown hat, gloves and scarf on the side, as I attempt to restore a sense of normalcy into The House of Fly. If you happened to be anywhere within 100 yards of me, I’d break your jaw bones into 10,000 pieces with a clawhammer. If, however, you were at 101 yards, I’d simply snark at you and warn you to “steer clear” with my faux southern accent.

I sold HLF because Ackman convinced the NCL to take a negative position on HLF, requesting the FTC open an investigation. While I did enjoy the specter of causing him pain, then anguish, via a “barbell’d” approach long HLF, short JCP, I cannot remain long a stock that might undergo a very negative news event. I wish Icahn the best and I am sure he will win in the end.

With the sale and the bulking up on my AG short, I am now in a net 95% long position, down from a record 140%. I am, however, looking at a series of banks trading below 1x book for possible purchase and might allocate funds there soon. My other big positions are all subject to sale, irrespective of what my core thesis might be.

2013 has to stick. If I cannot pull off 30-50% gains in 2013, I am underserving of the title of Blogfather and will resign from the post, vacating it until a new Blogfather is chosen, just like the new Pope.

I sold out of my HLF position for a 4% loss. I have no interest in sticking around for a possible FTC investigation. You’re going it alone Carl.

10,000 apologies.