I Might Just Sell These Horsemen Today

They’re all down a good 1-2 points this morning, under a barrage of selling pressure thanks to the litany of incredibly bad news. Now if you asked me what that bad news was, honestly, I couldn’t answer you. I am sure it has something to do with Jim Cramer’a guacamole expenses at his Mexican eatery, or maybe something is brewing inside of the Kremlim. Those sneaky devil Russians are always up to no good.

But selling before 10am is child’s play. You know what else is “child’s play”?

Answer: not selling after 10am.

All of the “weak hands” are selling tech/growth/bubble stocks again because they’re probably going to be ground into dust. Like the last dot com bust, this one will offer a bit more flare and much more “pizzaz”, dare I say. By the time this crash in the NASDAQ is complete, there will be very few human beings left in the market. All of the trading will be done by robots, buying and selling, experimenting with the market using the pension funds of firemen and police officers.

In short, I don’t sell before 10 am because that’s just stupid. Interestingly enough, I also don’t sell after 10 am. Sometimes, when I get the urge, brought on by sudden and indiscriminate bursts of energy, I average down in my tech stocks, whilst eating grass from my yard–like a fucking wildebeest.

Trust me, I am laughing at myself more than you’re laughing at me for being caught with my pants down in this prison called the stock market. It’s not like I loaded up in a bunch of small cap crap. I was cordially invested in “the very best companies in America”, with markets caps ranging from 5 to 15 billion dollars. Why was I in these stocks and continue to lose money in them for 8 consecutive weeks?

Programming.

For a moment, I will blame other people for my mistakes; but ultimately, I am responsible for my own actions.

1. The vulture capitalists live in a fantasy land of lies. They’ve bid up these private companies to the point of grande perversion. Nearly 70% of these new IPOs lose money, yet possess price to sales ratios that resemble the very best companies at their peak. I was given the task to find a company that went from large operating losses, in hyper growth phase, to making money, conforming with traditional valuation metrics, with its share price outperforming the markets. It was a much harder task than I thought it would be. I found a handful of stocks, like EQIX, DDD, TSLA and SPWR. But solar was utterly wrecked a few years ago, so they’re disqualified.

The point: there isn’t any historical precedence for success when investing in companies that are losing money.

2. Investment banks accepted the private markets absurd valuations and dumped it on the investor.

And lastly, the analysts came out with rave reviews, justifying the high valuations with excellent sophistry.

Come to think about it now, and of course in hindsight, there is rarely a reason to buy a stock that has operating losses. The reason why these stocks are being mauled is because the street has decided to punish any company who loses money to the point of barbarism. The capital markets will close on these companies soon and they will have a very difficult time raising money to keep operations going.

All of these growth stocks are down a good 30-50%. Perhaps they will bounce in May; but can we ever trust them again? The way these stocks dropped at 9:40 am is something I will never forget, for as long as I live. I was keyed in on NOW like a hawk, considering it the tell for the day, since they just reported great earnings. The stock went from +2 to -8 or -14% in a matter of minutes. There is no way human beings could’ve done that. Some asshole algorithm nailed that stock to the wall, and everything followed with it. WDAY, DATA, YELP and of course FEYE went straight down the chute. These stocks traded like bank stocks at the height of the Lehman collapse, loaded with toxic paper and too much debt.

These tech stocks are dead. They’re going all the way to single digits; that’s how they’re trading. It’s more than just margin calls or crazy short sellers. This is a high conviction trade for people who know better, especially me. Period, end of story; it’s time to take the lumps.

I’ve just been consulted as to the current state of my holdings as being “somewhat dire” and “unsustainable.” I then reached out to an industry expert who relayed to me some analysis on growth stocks as being “uninvestable”, “merely shells built upon rocks” that were only good when they were going up. Now that they’ve gone lower, and continue to do so with vigor, they shall continue to go lower.

Do you follow me champ? Good.

To find the true value of you securities, you need to take the Mr. Wonderful approach to its balance sheet and ask “how much does this company earn?”

For example, if the CEO of Yelp, Jeremy Stoppelman, went on Shark Tank and asked Mr. Wonderful for a bridge loan, Mr. Wonderful would ask “how much money do you make?” Jeremy would reply “zero.” After hearing those words, Mr. Wonderful would say “you have a good website, but a bad business. It’s worth zero. I am out.”

DATA is making a little bit of money, so it might be worth, say, $3-10 per share. But FEYE and its 6 billion dollar market cap of madness, it is worth a donut, a big round zero. Their products might be good and their growth “cool,” but they are losing money. Therefore, ergo, their NAV is $00.00.

Moving on, SPLK is worth $00.00 and WDAY is worth a touch over $100 million, which is over $13 billion less than its current market cap.

In other words, my holdings are very bad, especially bad actually. I still own IFON and they are making money, so they are worth more, mind you, than YELP and FEYE combined, despite having just a $40 million market cap. My point is, all of these names that have losses are on their balance sheets are worth no more or less than zero.

It’s also worth mentioning, iBankCoin is a very profitable organization, with gross margins in excess of 90%. We, in fact, are worth more than YELP and might make a tender offer (of $00.03, how generous of me!) for the entire company, very soon.

FYI: If you’re thinking about buying stocks now, don’t. Tomorrow is Friday and no one wants to get long over the weekend. Who knows what will happen on Saturday and Sunday. Then we will get the classic “black monday” 15% gap lower. So, if you’re gonna buy, do it then for the Tuesday-Wednesday bull market.

All of my securities have opened their wings and flocked to the sky, unafraid of Einhorns or other nefarious anti-aircraft devices. My positions have tested time and won.

Now all of you out there, reading these scribes, are probably losing your horses in this tape, scared of shadows, sick to your stomach from the churn. Rest assured, this is the 5th time the machines have destroyed Zion; they are becoming increasingly efficient at doing it. You have a choice to make now.

Either you ignore what you see in front of your faces and go play a game of tag with some of your adult friends outside. Or, you can sell everything, buy a bunch of oil stocks, and arrange for your own funeral. There isn’t anything left to do, other than play with the mirages.

The market started to drop, in lockstep, with NOW today. They reported better than expected results, had a few nice chaps at the old brokerage houses reiterate $84 price targets, only to see its shares eradicated from trade within 10 minutes of the opening tick. People in my business watched, in horror, as the stock dropped 14% from yesterday’s close. Panic set it, as the realization of nothing being able to arrest this decline set in, not even great earnings, and everyone ran for the exits, cloud stocks in particular. As we speak, some of those shares have recovered a great deal. What we are looking at is either the beginning a complete and absolute collapse in growth companies without earnings, or something less sinister in nature, but equally depressing–nonetheless.

What we are bearing witness to is the end of speculation. Very soon, all of the IPOs will be canceled and brokerage firms will fire 50% of their work forces to make ends meet. The economy will respond by tailspinning into the ground, completing the Obama legacy of nothingness and ineptitude. As this occurs, the Federal Reserve, chaired by Yellen, will continue to ignore the fact that this economy is dead without stimulus and there is nothing that can be done to save it, without artificially pumping it.

The better alternative will be to see this morning’s panic and subsequent reversal extend into the afternoon session, erasing all losses for those of you out there, less fortunate than I.

Fingers crossed, for the sake of America.

How wonderful. All of my stocks are +5% for the day, exing out their horrendous morning openings of course.

Look, I’ll shoot though my list of winners.

FEYE +3%

WDAY +4.5%

DATA +6%

YELP +4%

Do not become jealous, small pleb from middle earth, of my splendid ways. It’s not everyday that you come across a man, such as myself, who partakes in such daily stock market winnings.

The NASDAQS are putting in a nice showing this morning, +30 points from the lows. All of my friends and colleagues are making a great deal of money today. I have some good friends who are long NOW and are delighted with today’s +6% show, again exing out the most unfortunate opening tick.

My advice to you is to relax, sit back, and enjoy the programme.

Sure, the market looks great this morning, thanks to a slew of “better-than-expected-earnings.” I even promised to “punch the meat loaf out of the mouths of short sellers” today, declaring “100 NASDAQS” to the head is all but a foregone conclusion.

Howsoever, under the harsh exterior, the cold steel facade, I know this market is diseased, filled with people who are tripping over themselves to sell.

So, I am hoping to recover some of my ridiculous sized losses that were delivered to me yesterday, like a god damned African spear through my chest. But we’ll probably sell it off again, afraid of companies who grow their revenues because “this is another dot com bubble” and the pathetic perverts who manage money, professionally, have deemed innovation to be something of an albatross for economic growth.

May you all enjoy 10,000 years of uninterrupted stagnation in your electric utility holdings.

Looking at my pnl, I don’t have the right to gloat over a positive opening. As a matter of fact, please check me if I brag about anything, until I make it all back.

Might I impose on your Wednesday evening with news of your demise?

I realize the sting of my battle ax is a bit soft these days, considering I’ve missed out on the second popping of the tech bubble, down more than 22% for the year. However, for the sake of imagination, let’s surmise I’m a guy who was up 70% last year and who’s made money every single year, thrashing the markets to bits, since 2006–all live on the internets for the public to consume.

Now let’s suppose you went short today because of David Einhorn and his “bubble basket”, which was leaked on the youtube station two weeks ago. You went into the hole to sell stocks twice, bought a bundle of puts, then ventured off to iBankCoin to make fun of this chap who calls himself “The Fly”, an utterly ridiculous name. It’s almost too painful to watch, as he carelessly tosses good money after bad, all to be incinerated inside of flaming barrels of garbage. To add insult to injury, electric utility securities, as well as municipal bonds, outperform the broader indices, indeud.

You call this fellow, “The Fly”, all sorts of sordid names, under the protection of what you consider to be an inpenetrable wall of secrecy. The internet is your bestest of friends and you are empowered to let this poser know how very stupid he is, indeud.

Until your plan started going sideways. The panic that you invested in, rubber stamped by a certain David Einhorn, was predicated on the fact that high growth stocks weren’t going to grow anymore. But then they came out with better-than-expected-results, throwing acid into the faces of the people who gawked at them, waiting for execution. The stocks who were on death row broke loose–and were given sharp axes, made from VG 10 steel, and sent out into the crowd of watchers to exact a medieval brand of revenge. All the while, Le Fly, as he is known in France, activated his internet tracking software to find your exact whereabouts, for reasons soon to be revealed.

You might find yourself enjoying dinner, over a nice chardonnay, discussing politics with your brutish wife, when a man appears, kicks your door clean off its hinges and punches your jaw loose, ramming the chards from your chardonnay glass–all the way down– your– big– fat– mouths.

100 NASDAQS TO THE HEAD TOMORROW.

Both AAPL and FB are set to post earnings tonight. The street cannot possibly be more negative heading into these reports. So.very.exciting.

I can hardly wait for my stocks to leg down another 5 points tomorrow, should FB miss. Did I tell you how appreciative I was to see all of the vagrants back in the comments section after 6 up days?

I am going to stop talking now, as I feel with a deep sense of superstition that the more I talk the lower my stocks dive.

Bidless tech sector, once again, plunging the dagger of speculative fervor deeper into the hearts of traders.

NOTE: But the Dow is barely down tho.

I don’t know whether to mock all of this talk about being in another tech bubble or be scared of it. Truth be told, it’s a very subjective topic, as the market, in some form or another, is continuously in price discovery mode. Whether it be tech, housing, banks or biotech, the valuations of these hot or cold sectors wholly depend on the mood of investors–plain and simple.

So, if people start to believe we are in a tech bubble, guess what: we will pop said bubble and the valuations of once rich tech companies will be reduced to garbage cans. My opinion won’t matter, as the chorus of bearish investors will scream at the top of their lungs to get out of tech. We can harbor opinions as to where XYZ belongs and we can buy those shares as they appreciate or decline, hoping to time it perfectly. But we’re never gonna nail it right. Investing is a messy thing, especially when you’re trading around a lot.

What is FB and YELP worth? Are we to value them at similar metrics, or should the smaller company be valued higher due to a possible takeover premium?

Will Bill Ackman assist in the next social media hostile takeover?

The world has a lot of questions and I have very few answers, sadly enough. However, don’t that stop you fine folks in the comments section from relaying certain truths about investing: how it should be done and where stocks are heading in the immediate, intermediate and long term.

After six days of gains, it’s depressing, frankly, to see most of my stocks down $3. It’s repetitive and even boring to lose money in such wanton fashion. I guess I could sell a bunch of stuff and “lock in” a cool 23% loss. Or, maybe I can weather the storm and wait for earnings to be the true arbiter of price discovery. Either way, you’re only as good as your last thesis trade. Thus far, I am an abohhrent mess–but can still find the time in my day to track down each and every one of you little trollops and correct your misdeeds–so remember that.

All of yesterday’s hard fought gains have been wiped out in the first twenty minutes of trade.

We were treated to a worse than expected PMI number and then an atrocious set of housing numbers. Apparently, the recovery in housing has taken a back seat to a FULL FLEDGED DEBACLE in housing. This is all very fine and dandy. As the world turns, a barrage of egg yolk pies splash me in the face.

For the sake of arguing with all of you, dare I say, buy the dip? Well, if you’re not gonna buy the dip, perhaps you can at least think about it? Or, if you don’t want to think about it, maybe you could just jot it down on a scrap of paper and leave it on your desk somewhere?

Naturally, the Dow and the S&P are barely lower because they don’t build houses or manufacture stuff. All of our homes are built by high growth tech and biotech companies, now’er days. YELP and FEYE are huge in the California housing market and might need to lay off some workers into this downtick. Also, the fine folks at DATA must be up in arms over the PMI miss. I am sure their factory line workers will not appreciate the pink slips to come.