BREAKING: KING TEPPER WOULD LIKE TO HAVE A WORD

Widely-followed hedge fund manager David Tepper told CNBC Thursday his chief market concerns have “alleviated.”

 

Last month, the founder of Appaloosa Management said at the SkyBridge Capital’s SALT conference said investors should approach the market with more caution, citing Europe rates, China and U.S. growth as concerns.

source: CNBC

Deep from the bowels of the Short Hills shopping mall, King Tepper speaks and the markets moveth.

As you were citizens.

If the bulls do not grab the initiative soon, we can possibly drop a quick 1% here, as the sell the news feeling controls market sentiment. If we do, I am not concerned in the least, as this is normal business during bull markets.

Two things I am watching:

SGEN– but I can’t buy it, according to my rules, unless I sell a speculative stock. I own three spec stocks: IFON, TEDU and XON, none of which I am willing to part with yet.

Also, Capesize rates are surging again, up 30% over the past month. I’d rather not give you picks; but you know I love me some BALT.

This is a very unenthusiastic tape. Pardon me as I take a nap.

Europe has officially lost its mind, ushering in an era of negative interest rates. ECB Chief, Mario Draghi, is now one upping the US Federal Reserve in central bank interventionism, all for the sake of equity price valuations. Surely, by now, they know that their actions do not result in jobs being created. This is specifically designed to withdraw money out from the investment accounts of the readers of Zerohedge, Peter Schiff and others in that genre, regular blue blazers–Original Don’s.

Now tell me again: why in the world are you bearish and when do you expect the central banks to “lose control”? You do realize you sound absolutely mad, right?

Futures are higher. All is well. Long live higher equity prices and the people who own them.

The growth department has been besmirched over the past 3 months, thanks to the likes of FEYE, SPLK and others of their ilk. However, from the ashes of unprofitable pervert stocks is born an era of resurgence amongst new sectors with stocks that openly urinate into the faces of those who stand before them. Without further adieu, I give you a small view into a world that you will become all-too-familair with soon, as the soda jerkers on CNBC propagate innuendo and salacious stories about their prospects to further enhance the public erosion, humiliation and decapitation of a Mr. Rickard Santelli.

The full list is now running inside of The PPT (ten thousand apologies to the leeches who read this site).

BX
ZBRA
AKRX
GILD
AET
TPX
THC
CHK
DVN
SLCA
EMES
HCLP
EOG
XEC
SN
HLSS
BBEP
CLR
CXO
OAS
KMP
CBG
AVGO
FSLR
SUNE
POL
KATE

BTW: I am now +35% from my initial purchase of XON and have yet to hear from some of my staunchest critics.

The US oil production boon will lay waste of foreign exporters of oil, eventually. But until we can lay waste, we need to get the oil, via horizontal drilling.

Very simply, I am going to provide you with a few names, touching upon a theme. Feel free to add in a little expertise to assist our fellow self-directed gamblers scalp a few trades or two, to feed his son–Tinied Tim.

Fracking is the boom. These companies provide the drillers with the sand that they need to drill.

SLCA
EMES
HCLP

An old favorite, FTK, provides parts of drilling rigs. I am sure there are a slew of well-to-do companies that will benefit from this explosion in domestic production. As of now, SLCA is my favorite–despite what JESSE LIVERMORE has to say.

I sold EL for a 1.3% profit. If I was a banker in London during the early 1800’s, I’d be quite pleased with a 1.3% return in 1 month’s time. I might even treat myself to a shepherds pie. However, being that I am a man stuck in a hole, 1.3% in entirely ridiculous, if I were to celebrate it and all.

I swapped it out for MET, based off of the PL deal. Both PRU and PL are trading at a 20% discount to where the PL deal was done. But I mainly like it for its dividend. It is a reduction of risk on my behalf.

This is for the misinformed canaille, men clad in velcro under-garments, carousing and gerunding about the market place in a very solicitous manner.

Instead of giving you stupid subjective opinions on whether or not you’re holding onto a pin-less hand grenade, I offer you mathematical certainty, something absent and abhorrent to the clowns shooting themselves out from carnivale cannons all day long on Twitter. My beef with Twitter is uncompromising and relentless, so do not attempt to dissuade me from killing them.

I ran a screen to find stocks down more than 20% over the past 3 months, with market caps over $500 million. These are some of the traits that these bastard companies possess. Keep in mind, these stocks are already down.

Average loss: 32.2%
Average PE: 69.31
Average Qt. Revenue Growth: 55.6%
Average p/b: 10.8
Average p/cash: 4.86
Median mkt cap: $1.1bill
Median p/s: 4.2

The bottom line: If you own a stock that is losing money, it is subject to crush your skull in. If you own a stock with a PE above 50, it is subject to crush your skull in. Although your company is growing rapidly, should its hairy chested price to sales ratio be above 5, it’s prone to crushing skulls in during periods of duress.

By definition, an old man stock is one with a dividend yield above 2%, market cap above $5 billion, PE ratio below 15 and p/s ratio under 2.5. Now if you want risk and safety (oxymoron alert!), you’ll need to do some research into what I like to call GARP names. I’ve mentioned them numerous times on this blog and if you cannot remember the damned hallmarks of a growth stock at a reasonable price, then I am wasting my time here.

Futures are lower. Expect to see further blood letting in “bubble stocks.”

NOTE: Should your company ever parade animated candies on the NYSE, it’s probably a bubble stock.

Looking over today’s aftermath, I was surprised to see that over 185 stocks went down more than 4%. You’d think with the indices flat there wouldn’t be this sort of damage being done to the skulls of the lazy people still waiting for papa to come home with the chickens. Papa isn’t coming home with the chickens, ye lad, because he’s dead and now you have to go live with your one eyed uncle.

Old man stocks still rule the roost. Oil and gas stocks offer growth plus security, whilst FEYE and SPLK offer nothing but idle, or not so idle, degeneracy.

Brazil sucks again and Europe is up way too much. America is the best investment choice for people with real money and reasonable expectations. Do not become hoodwinked into Nigerian get rich quick schemes, for those gents mean to do you harm. Trust in that.

There will be trading opportunities, stocks that we can nimbly exchange our time for modest 20-100% short term gains. However, in the meantime, I strongly suggest that you exile yourselves under the isolation and comfort of an olde man wheeled chair.

(God knows what half this blog post was about)

For the past 4 years, I’ve been winging it, using “artistic” license to balance out portfolios the way I deemed fit. After all, I am a genius and what could go wrong?

Since my comeuppance, I’ve implemented a series of rules that must be adhered to, dated until I make back all of my losses–which should take about a year.

For example: 40% of my holdings must be earmarked for conservative, long term, positions. Frankly, the word “long term” only means until they stop working higher. I am cutting losses at 5-10% from basis.

Another 40% go towards my GARP strategy (growth at a reasonable price). And, lastly, 20% go towards the sewers, craps shots in the dark, vagrant securities without a hope in the world, if only for a brief period of momentum. For the time being, leverage has been ruled out.

In the past, I’d toss positions around carelessly, uninterested about my prints and I’d oversize XYZ straight out of the gates, like some savage animal out in a field of garbage. But now, the more refined tea drinking Fly exercises a bit of discretion when buying securities. Although I still rip out offers like Sub Zero rips out spines, I size them at 5-8%, 8-12% and 12-20% of holdings–staggered over a number of days. In the case of XON, for example, I started off at 8% of holdings, upped it to 12% of holdings a few days later, then finally super-sized it to 20%, after my urinal shadows had a sit down with me and told me “the fucking stock, see, is heading higher, now” (Edward G. Robinson voice). Post victory, I dialed the position down over two days to 10%, then finally back down to 6% of holdings, where I intend to hold it indefinitely.

In the case of JAZZ, SLCA and now TEDU, all three positions are between 10-15% of holdings.

These are my new rules, ones that must be adhered to and respected, if I am to walk my way back up the boulevard of dignity– without throwing myself into lit fireplaces along the way. I am sure there will be a time and place for unchecked hedonism again, a time when “The Fly” might throw a glass of beer on his monitor and buy ten million dollars worth of stock because of dream that I had the night before. But times are tough now and we must comport ourselves like good stewards of coin, respecting the labor that went into acquiring said coin.

Amen.

I added to my TEDU position, overweighting it.

I am 100% invested long.