Still Want to Invest in China? Read This

I came across this riveting article, albeit a little old, and was awestruck by it.

I recall hating on that Alfred Little guy–because he went after one of my Chinese positions. Although the process of trading ahead of market moving short reports is something I disdain, in hindsight, Mr. Little was correct.

China is a giant pile of heaping shit.

You want to invest in China? You like their ideals, their dog eating ways? Look at what they did to this guy for publishing bearish articles on SVM.

The punishments I jest about, that should be inflicted upon short sellers, aka bear shitters, are actually implemented in China.

Barbarous savages.

The stock is up over 60% 100% now on news that Shkreli, Anthion  management (David Moradi) and some guy with a last name that sounds like steak in spanish, are taking control of KBIO, claiming ownership of 70%.

I have my biases and definitely think KBIO will have to, one day, prove to the market that is deserves this absurd valuation. But, truth be told, this is a massive short squeeze, with the majority of the shares locked up by three guys–fucking with all of you.

I read commeents on Twitter and StockTwits, with all of these self proclaimed experts trying to pump their bias and have people follow them into hell; and I just shake my head.

Listen to me you little shits. Stop trying to ruin other people’s lives with your haphazard opinions and false intentions. You’re telling people to short KBIO, or buy KBIO, because of why? The kindness of your heart?

Please.

Sometimes a stock or a market is so fucked, you just need to sit back and watch. Slow the fuck down and stop embarassing yourselves.

It looks like the market wants to end the week higher. I’ve been doing some research in Exodus, trying to profile the winners of 2015, and as of late, and have some data to share.

I scanned for stocks up more than 20% year to date and here are the median metrics for the 792 stocks that was produced.

FPE: 18.95
YTD return: 37%
Qt earnings growth: 26%
Qt revenues growth: 9.6%
Market cap: 1.39 bill
P/S: 2.77
P/B: 3.58
Free cash flow: $39 mill
Debt/eq 0.10

I was surprised by these results, but not shocked. I expected a higher market cap number. Nevetheless, what this data tells us is the market wants free cash flow generating, in-line with market PEs, clean balance sheet, and fast earnings growing companies.

For members of Exodus, here is the screen.

For winners of 10% or more over the past month, here is the median profile data.

645 names produced

FPE: 18
1 mo return: 15%
Qt earnings growth: 14%
Qt revenue growth: 7%
Market cap: 1.1 billion
P/S: 2.33
P/B: 2.81
Free cash flow: $24.3 mill
Debt/Eq: 0.1

If you’re managing money for other people or for yourself, you want your portfolio to be in line with what the market is valuing. In other words, plug your portfolio into Exodus, providing you have a membership, and see where you diverge and how you might want to fix it.

I’ve already written a risk analyzer algorithm and will implement it in the next iteration of the software, along with robust portfolio functionality. Others try to do it; but I find their methods flawed. When assessing risk, there are a wide array of things that can go wrong; but this is basic stuff.

If you’re underperforming the market this year, I can guarantee you, your portfolio’s median metrics look nothing like this.

I love this guy like vampire hunters love vampires. It looks like Martin has 70% of KBIO shares and has even set up some financing. I’m guessing a reverse merger of Turing into KBIO is not likely to occur. Instead, Shkreli is going to try to turn around this dog of a horseshit stock into a player.

SOUTH SAN FRANCISCO, Calif., Nov. 19, 2015 /PRNewswire/ — KaloBios Pharmaceuticals, Inc. (Nasdaq: KBIO), today announced that an investor group led by Martin Shkreli, the Founder and Chief Executive Officer of Turing Pharmaceuticals AG, has acquired 70% of its outstanding shares. KaloBios also announced the appointment of Martin Shkreli to the position of Chief Executive Officer and his election as Chairman of the Board. In his new role, Mr. Shkreli will work with the company’s senior management team to ensure the Company’s continued operations. KaloBios further announced that David Moradi, Tony Chase and Marek Biestek have been elected to the Board of Directors. In connection with these developments, the former directors have resigned, effective immediately.

KaloBios has received a commitment from Mr. Shkreli and other investors for an equity investment of at least $3.0 million. In addition, Mr. Shkreli and the group of investors have committed to a $10 million equity financing facility, subject to applicable shareholder approval.

Martin Shkreli, Chief Executive Officer, said, “We believe that the KaloBios’ lenzilumab is a very promising candidate for the treatment of various rare and orphan diseases. This monoclonal antibody neutralizes soluble granulocyte-macrophage colony stimulating factor (GM-CSF), a central actor in leukocyte differentiation, autoimmunity and inflammation. Lenzilumab has particular promise in Chronic Myelomonocytic Leukemia (CMML), a disease with no FDA-approved treatment options and a 3-year overall survival rate of 20%.”

An IND for a Phase I/II CMML monotherapy study of lenzilumab has been cleared by the Food and Drug Administration (NCT02546284). Preclinical studies have shown lenzilumab can be used to cause apoptosis in CMML cells by depriving them of GM-CSF. Lenzilumab may also have clinical utility in other rare autoimmune and inflammatory disorders. A 31-patient Phase I/II clinical trial of lenzilumab will begin enrollment at eight leading oncology clinical trial sites by year end 2015 with interim results possible as soon as the first half of 2016.

The company has approximately $5 million in cash and will endeavor to file its quarterly results on Form 10-Q as soon as possible. Mr. Shkreli will continue as Chief Executive Officer of Turing Pharmaceuticals AG and the two companies will operate independently.

Anyone want to guess where KBIO opens up tomorrow?

My cash is less than 5%. I am exposed to grande fuckery, largess into the pagan holiday’s.

Why am I doing this, when up 15% in an otherwise horrid tape?

I’m probably hoping for miracles.

COST remains my largest position by a factor of 2. PAH is number two, a bet on Ack, Ack Ack attack Ackman.

SHAK is my third largest holding and my biggest disappointment, down 13% from my basis.

CNC is number 4 and it fucked my face in today, all thanks and praise to UNH and the entire healthcare system in shambles.

After that is AAPL, JAZZ and PANW.

My risk profile is moderate. My appetite to leverage up and get bold is zero.

I believe, almost emphatically, we’re in a clandestine bear market, which will reveal itself as a true monster in 2016. As always, I am looking forward to being wrong about that and instead making money on the long side. I fear the greatest risk to the system is the oil and gas debt going bad.

According to Exodus, there is $550 billion in oil and gas debt, whose underlying stock’s debt/eq levels are greater than 2. For truly distressed debt/eq levels, above 5, the total debt is $103 billion. So you see how this can get ugly, fairly quickly, Should equity prices continue to languish and debt/eq levels rise, a half a trillion dollars in oil and gas debt can face rape the global economy into the debilitating inferno, often described to us by that sage Dante.

I spoke about this earlier this week and the timing was rather good, if I don’t say so myself.

CHK bonds are plunging to new lows and there is a problem here. As debt/eq levels rise, capital raises will become impossible.

Nine of the energy producer’s unsecured notes plummeted, some losing more than 12 cents on the dollar, as it was the most actively traded company in the junk-debt market. Credit-default swaps, which are used by investors to protect against defaults, rose to the highest ever.

The company’s $1.1 billion of unsecured notes due 2017 dropped 12.2 cents to 70.75 cents on the dollar at 11:48 a.m. in New York, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. One of its biggest bonds, the $1.5 billion of floating-rate notes due 2019, fell 7.4 cents to 43.6 cents at 11:48 a.m. in New York, the data show.

Five-year CDS contracts rose 5.5 percentage points to 53.5 percent upfront, according to S&P Capital IQ. Swaps are used to protect investors against losses on company debt, and the price increases along with doubt about a firm’s creditworthiness.

I know the lot of you would rather gossip about the evil Martin Shkreli all day long; but this is far more important. CHK’s $12 billion in debt is only the tip of the iceberg, of what could doom $100’s of billions in commodity related debt.

At some point, banks will need to start writing this stuff down. It will be interesting to see how the market responds to suchness (extra Mrs. Fly).

New SEC documents show a Marek Biestek, long term friend and partner of Marty, a 200,000 share position in KBIO.

As far as I can tell, he’s merely an investor trying to make a few bucks. If he sold out of KBIO today at around $15, good old Marek might’ve netted $2.8 million in profits. It’s good to have friends like Marty.

This gent has a Twitter account and he goes by MANIAC8480. How fitting.

But peep what he retweeted yesterday afternoon. He was mocking someone with his RT, already knowing that vey soon Marty’s SEC filing would be known and he’d be a rich man.

If this isn’t insider trading, I don’t know what is anymore.

Having experience in investing in shipping companies, I can tell you that, aside from China sucking wind, part of the problem with shipping rates are zombie ships. Because of cheap, available credit, there are scores of shipping companies out there, flooding the seven seas with tonnage capacity, forcing prices lower. These fuckers will work for crackers and spam.

The Baltic Dry Index, a measure of shipping rates for everything from coal to ore to grains, fell to 504 points on Thursday, the lowest data from the London-based Baltic Exchange going back to 1985. Among the causes of shipowners’ pain is slowing economic growth in China, which is translating into weakening demand for imported iron ore that’s used to make the steel.

“The main issue is the lack of demand for iron ore from China,” Eirik Haavaldsen, a shipping analyst at Pareto Securities AS in Oslo, said by phone. “This market is looking like a disaster and the rates are a reflection of that. It is looking scary for the market and it doesn’t look like there is going to be any life in the market in the near term.”

In this one instance, Federal Reserve hikes will help clear the market of weak balance sheets and permit this industry to begin to recover. Without mass bankrupticies and liquidations, the BDI will remain depressed.

I don’t even know what to think about this. I guess the Chinese are serious about cracking down on corruption, something we all know is a real issue. We see it in the share price of WYNN, as that company is unable to properly ruin lives and steal from families in Macau, forced to rely upon Vegas for its winnings.

HANGZHOU, Nov. 19 (Xinhua) — Police in east China’s Zhejiang Province have busted the country’s largest underground banking case, which involved transactions totalling 410 billion yuan (64 bln U.S. dollars), the Ministry of Public Security said Thursday.

A total of 100 suspects from eight gangs have been detained since the police launched the investigation in September last year.

Police say the gangs were loosely united by a ringleader, Zhao, who operated dozens of shell companies in Hong Kong. The companies were involved in foreign exchange transactions and money laundry.

In December 2014, arrest warrants were issued for 56 suspects and more than 3,000 bank accounts were frozen. It took almost a year for police to sort through the over 1.3 million suspicious transactions.

One gang boss, Yang, told Xinhua that many customers wanted to avoid China’s strict supervision on foreign exchange trade. The gang could earn over 50,000 yuan a day thanks to this.

China has faced an “increasingly arduous and complicated” problem with unapproved financial institutions often used for laundering money obtained from corruption, online gambling and fraud, the ministry said in September.

Police have shut down 37 such banks since August, according to the ministry.

Also on Thursday, police in south China’s Guangdong Province said they had busted 10 unapproved banks, responsible for 51.6 billion yuan in illegal transactions, earlier this month

Don’t act sanctimonious. This country went through the same rigors of growth in the 19th century. So the Chinese are 125 years behind us. One has to start somewhere.

I feel so bad for this poor little injured, piece of fucking shit unicorn. I hope it trades from 9 straight to zero. Apparently, this is a 56% discount to the last round of financing. DOWN ROUND FOR YOU (soup Nazi voice).

The steeper discount to $9 – a 42 percent drop from a year ago – suggests widespread uncertainty about the profitability of the payments industry and the future of Square itself, which has seen slowing revenue growth.

The weaker price set on Wednesday puts Square’s market capitalization at $2.9 billion, a far cry from the $6 billion valuation it had earned from private investors.

“The way that Square was valued as a private company is they were just going to disrupt everything and change payments,” said Andrew Chanin, chief executive officer of PureFunds, an exchange-traded fund that includes mobile payments companies. “And the reality is not that.”

Square has raised $243.5 million in its Wall Street debut, about $80 million less than expected.

What will @Jack do? If I were him, I’d fire myself from Square and go full retard into Twitter. Square is, essentially, doomed. Companies like PYPL will eat their lunch, make them regret ever coming public.

The world of Frederick Wilson is fracturing, ever so slowly.