Socially Awkward

These are supposed to be the finest companies. They’re not babies anymore, most having impressive streams of revenues and an idea of prospective earnings. So then why do their shares suck? Most social media companies have been crushed over the past year–companies at the forefront of revolution, enacting change in human behavior and commerce.

Here are some social media stocks, with 1 yr returns.

ANGI -67%
YNDX -58%
SALE -54%
P -49%
YOKU -47%
TWTR -38%
AWAY -35%
QIHU -34%
GRPN -31%
YELP -30%
TRIP -14%

On the other side of the ledger, only FB (+37%), Z (+28%) and LNKD (+7%) are up over the past 12 months. I have to believe share price performance will, once again, track the growth rates of the aforementioned companies. The culprit? Fucking vulture capitalists and investment banks for pricing these companies so expensively. They came public at such high valuations that they were bound to disappoint. As such, they’re now trying to meet their elaborate valuations somewhere in the middle.

For my money, anything less than 12x sales is reason enough to get long, providing they are still growing and exceeding estimates.

The Euro is now 1.12 and change to the dollar, the lowest level since 2003. The USD/Canadian dollar is over $1.24, leaving the mapled syrup iceberg to the north in shambles. The Aussie dollar is now 0.79 (LOLz). Remember when it was $1.10?

All of the gold bugs swore the dollar was worthless, when in fact the exact opposite was true.

How do we play this trend?

Go on a foreign vacation and behave like Boss Hog. Also, buy foreign exporters or real estate in these lands.

The drop in crude should equate to a +0.7% boost for both US and Chinese GDP. The big winner, however, is the Philippines, who will enjoy upwards of a 2% GDP boost thanks to spiraling lower crude oil. At the same time, China is expanding their strategic oil reserve, which has more than doubled over the past year.

Look, it’s real hard for me to suggest a stock here, with 11 countries at zero % interest rates and bonds soaring to new highs. This isn’t a normal pattern and something is wrong. It’s indicative of crisis. Nonetheless, I am 90% long.

Barring a crisis, the following foreign names might offer some upside, when considering the size and duration of the european QE programme.

LUX (sunglasses)
LULU (yoga clothes)
PHG (electronics)
UN (processed/packaged goods)
PHI (Philippine telephone co)
ALU (telco equipment)
BUD (beer)
FCAU (autos)
TTM (autos)

Today’s rally was 100% horseshit, with just 75% of stocks higher. For a +300, this is the very definition of fuckery.

A person asked me today “if you think we’re going lower, then why aren’t you selling?”

My answer could’ve been told by the Captain of the SS Titanic more than 100 years ago. This is my boat and I am going to drown inside of the cabin, playing with the buttons and the furniture.

We will trade hundreds of points lower from today’s close. The whip-saw volatility is going to kill many people. Deflation is here to stay and there is nothing you or your stupid central banks, sans US Fed, can do about it.

Eventually, stocks will trade up. However, in the near term, we’re going down–led by a wide swath of broken stocks in ruined sectors.

DEATH BECKONS AND AWAITS YOUR ARRIVAL.

$1.3 trillion in quantitative easing means there will be an attempt at reflation. Post US QE, we can see there wasn’t any discernible affect on inflation, sans stock market gains.

I expect the euro will trade to parity with the dollar. Since oil is priced in dollars, oil will trend lower, as long as the dollar trends highs. European QE all but assures lower crude.

Stocks will benefit and bonds should trade lower.

Gold and silver might catch a bid, as a de facto short against central banks. But the number one place to be, over the next 12-18 months, will be european exporters.

Ignore the volatility and short term moves. Everything I just said will come true, as the Gods are my witness.

The market is up today, which is unacceptable. Before the day finishes, let us prey for sharp reversals of misfortune, whereby everyone gets tossed into the chopped meat grinder, broiled, then served to monsters for expeditious devouring.

There isn’t a reason in the world to trust anything on the screen. But there are trends worth pursuing, long term. With gasoline in the shitter, gas station plays will work higher. Names like TA, MUSA and IMKTA look solid.

Consumer sensitive names that cater to the bedraggled, my former and future class, benefit the most from lower gas prices. Now what do the lower class folk do with extra coin? Having been from this class as a young lad, I can tell you, with unequivocal confidence, they eat at the panned cake house (DIN) and buy Nike (NKE) air jordan’s, from either Finish Line (FINL) or Footlocker (FL). It’s part of the hip hop culture now, to be fashionable with $200 rubber basketball shoes on one’s feet. The quality of one’s clothing and brands that he/she advertises (free of charge) tells the rest of the world how important/unimportant one is, truly.

So, if you’re poor and living off grilled cheese sandwiches and cup o’ noodle soup containers, be sure to buy some fashionable $200 basketball shoes at your local FINL this week, in order to ‘pop off’ and acquire easy to impress female counterparts, who are equally bedraggled and of course highly fashionable, with all of the decadence and splendor that one can muster from the bottom of the capstone.

I made one final purchase of NDRM. The market looks real good, which probably means we will reverse lower tomorrow. Either way, a man has to stay true to his convictions. Right or wrong, “The Fly” is true.

Like I said earlier, The PPT hybrid (mixture of both technical and fundamental scores) are indicating biotech stocks are about to bounce hard.

You cannot pay me enough to do this job. Stocks are up now, as people finally realize that the ECB is dead fucking serious about inflating their shit filled economies. The world is in one giant ‘fag-box’ and it wants inflation now. Why does it want inflation?

Because they fucked up and burdened their people with an unseemly amount of debt, an amount of coin that can never be paid back. Under normal circumstances, these countries would fold and restructure the debt, then get to enjoy true inflation, true growth. However, everything is inter-connected these days. Banks in Germany can’t sneeze without a bank in NYC feeling the breeze.

So, we find ourselves in a situation where central banks desperately attempt to keep the party going. Scott Bleier called it years ago: We are all Japan.

The silver lining in all of this is we are not in the dark ages. Quite the contrary, since we are in the midst of the greatest advancement in the human race ever, both medically and technically. These things have a way of working out and I invite you to keep the faith–because that’s the most valuable currency in the world. It always has been and always will be.

Biotech stocks are now at the lower end of the hybrid score range, a level that has resulted in sharp upside reversals. This of course is data found in The PPT.

The ECB announces QE and the market went down. If the ECB didn’t announce QE, the market would go down. If space invaders landed in Nebraska, the market would go down. If God himself appeared on Wall Street and told everyone to buy stocks, the market would go up, then reverse lower after bears spread the rumor that God was secretly short.

Everyone is a cynic. No one believes the ECB or the Fed; and as a result, stocks are going down.

Despite the market being near new highs, multiple sectors have been obliterated over the past year, laying the the groundwork for a diseased investor sentiment.

Be a trader. Swing in and out of stocks like a gorilla on a vine. We are in a trough and it feels like hell. Understand that life is all about peaks and troughs. Survive the troughs, slay the peaks. If I ever say “rinse and repeat”, you have my permission to attempt to kill me.

Why not just buy TZA, kick up your feet, and throw a few logs on the fire?

I hate the word “market” now. I don’t even want to write about stocks anymore; that’s how sick this tape makes me. Just do the opposite. When the market opens down, buy stocks. When it reverses up, start shorting. Keep doing this until you become the world’s richest man, then come back here to pay me homage, kiss the coin.

Do you see how the market is looking real shitty now and how it looks like a dunkshot for some downside spiraling action lower? Yeah, well the opposite will probably happen. We’ll dip to China, then spin around and kick higher.

Ah, as I just finished typing that sentence the market went from -13 to +1.

FUCK MY LIFE.

***Housing starts rise 4.4% v est. of 1.4%***

Mortgage refis are on pace for +60% year over year and new home sales continue to show strength, despite the fact that housing related stocks have recently been skinned and char-broiled. As the laws of the land would have it, my burgeoning TPH position only started to knife lower, in an ultra violent way, after I started to brag about how great a position the housing market was in. A rather fresh and inviting +10% profit quickly morphed into a nuanced loser of sorts, leaving me, Le Fly, in shambles about the rocks and the dirt.

I’ve been trying to figure this market out my entire life. Sometimes I get it just right and make so much money, my arms involuntarily start punching people in the face. I toss money around, like the world is my strip club, and chalk up the wanton excesses to “what goes around comes around.” This, of course, is a recipe for idiocy, largess; but its never stopped me in the past. I’ll be damned if its gonna stop me now.

The older I get, the more ridiculous the market appears to me. I consider it to be a living entity, who is literally trying to murder me, via hook or crook. The moment I escape its wrath and celebrate a transient victory, I am presented with a Byzantine endgame, whereby I become pre-occupied with a myriad of puzzles and death-traps by which I have X amount of hours to see my way through to safety.

A man of my talents can pursue this unrequited passion for so long. From the moment I entered this business in the late 90’s, I’ve been met with rolling market catastrophes, on a regular and continuous basis. For the love of God, shortly after I got on my own, after a period of vagrant cold calling, the market halted for trade, shut the fuck down, and went straight down the toilet. Out of the class of 100 or so young men who entered the training program at the firm I was employed at, only a handful of us are still in the business.

This is a business, for better or for worse, of attrition. It wears you down until you have nothing left. Only then, when you are faced with a decision and a path, will you learn if this business is for you. I’ve been faced with this reality numerous times over the past 17 years and have always chose to bear down and make it work. Only through ox-headed perseverance will you succeed at being a trader, money manager, operator of coin, in this god forsaken avenue of employment.