$GNC, $VSI CRATER ON DOJ INVESTIGATION

I view GNC and the Vitamin Shoppe as modern day retailers of snake oil. If you want protein, in the form of whey, I suppose these stores can provide you with an expensive alternative to what you can find on Amazon. However, the rest of the garbage that they retail there is the equivalent to 19th century snake oil, tonics designed to cure everything from obesity to cancer.

The other agencies involved are the Federal Trade Commission, the Department of Defense, the Anti-Doping Agency and the U.S. Postal Inspection Service.

GNC has been under scrutiny by state law enforcement authorities this year, and last month Oregon sued the company claiming it sold supplements made with illegal ingredients. At the time, GNC called those claims “without merit.”

GNC in March reached an agreement with New York Attorney General Eric Schneiderman on its Herbal Plus products, pledging to more stringently test its supplements and follow FDA manufacturing recommendations. Schneiderman’s probe, which was also focused on retailers including Wal-Mart Stores Inc., Walgreens and Target Corp., sought information about the origins of ingredients in supplements and the health benefits described on labels.

Both GNC and VSI are prey, not predators, in this new retail landscape. The great Amazon anaconda is coming for them, to swallow then whole (no homo).

The DOJ will be holding a press release at 3:30 to discuss these matters.

NHTC is down in sympathy too.

Even though Carl “fuck you, give me three seats on your board” Icahn is long FCX, the stock has been careening lower. It’s as if Devil’s were inside of it, driving it into the pits of hell. I had ample opportunities to exit at a profit. For my lack of intuition and foresight, I am now sitting with a loss.

My position is small and the loss means nothing to me. I spit on it and cast it away like a stone skipping over water. Nevertheless, that 1 yr chart of copper is rather telling of the economic climate that is gripping China now. All is not well and I am fairly certain the last thing we need are Federal Reserve rate hikes. But you don’t get what you want. You get what you’re given and you don’t make a fuss about it.

Stocks are higher today and respite is the word of the day. Market breadth is a tepid 55%; but most of my stocks are higher, including my largest position COST–which is one of the few stocks in retail that is doing well.

There are have’s and have nots in retail. The have’s take away from the others, causing hysteria and pain. The have nots are drowning in their own blood, caused by the debilitating effects of the have’s. I view COST, AMZN, AAPL, HD, WBA, CVS and LOW as part of the cabal that make up the core of the have’s. These giant corporations are insidious beasts whose sole purpose in life is to churn out profits, destroy competition, grab market share. I don’t see this trend reversing any time soon, which is why my COST position is 2x the size of my #2 position.

It’s been a hard, hard year, the type of year that turns your hairs gray. But I think 2016 is going to be harder, so enjoy this little respite while you can.

It has always been a desire of mine to write that title. It was on my bucket list. I’ve always felt DKS was too expensive. I’d leave that store, $500 less rich, mumbling to myself “why hasn’t the deflationary vortex stricken them dead?”

Alas, the vortex will get them all, one by one. If you have cash, you are King. Dick’s sporting goods has been chopped by a solid 15% guillotine in pre-market trading.

Reports Q3 (Oct) earnings of $0.45 per share, $0.01 worse than the Capital IQ Consensus of $0.46 vs. $0.45-0.48 guidance; revenues rose 7.6% year/year to $1.64 bln vs the $1.66 bln Capital IQ Consensus.

Consolidated same store sales increased 0.4% vs. +1 to 3% guidance.

Same store sales for DICK’S Sporting Goods increased 0.7%, while Golf Galaxy decreased 2.9%. Third quarter 2014 consolidated same store sales increased 1.1%.
Co issues downside guidance for Q4, sees EPS of $1.10-1.25 vs. $1.42 Capital IQ Consensus; comps -2% to +1% vs. ests above +1%.

Lowers FY16 EPS to $2.85-3.00 from $3.13-3.21; lowers comps to +0-1% from +1-3%.

“Our positive same store sales for the quarter reflected a strong back-to-school selling season tempered by slowing trends later in the quarter. Strength in athletic footwear, accessories and athletic apparel was moderated by the impact of record warm weather in more seasonal categories.”

“As we look to the fourth quarter, we anticipate a more promotional environment.”

These numbers just fucking suck. I’m actually putting together a buy list of my favorite ravaged retail names. I’m basing my analysis on current valuations v historical norms. The ones with the greatest variance are of elevated interest to me. Case in point: GPRO.

I know the fucker is acting like coal; but at these levels, you have to be interested–trading 1.6x sales down from 8x. This is a staggering drop in the way Wall Street perceives the company.

I am optimistic for certain retailers, after seeing shares drop by a third over the past 3 months. Let’s see if the market can mount a rally today and build upon yesterday’s momo.

European markets are ripping to the upside, up more than 20%–led higher by France’s CAC which is up 2.38%. As such, Dow futures are up 90, as traders fix their bayonets and prepare to impale the bears and kick them back into hell.

Dollar v Euro is continues to gain, heading towards parity, now with a $1.06 handle. Oil is lower by 0.5%.

Today’s rally isn’t contingent upon oil or currencies. Apparently, people are wholly interested in buying stocks, which makes me wonder about traps being laid out by the evil muppeteers of this market.

Nevertheless, I look forward to a fun filled day of higher equity prices, even if they’re fleeting.

This is more of a matter of gawking at the sheer ferocity of the market than mocking fund managers for making really bad investments. The events that have transpired in VRX over the past 3 months, with shares dropping 70%, is nothing short of spectacular fuckery on a grandiose scale.

Andreas Halvorsen’s Viking Global Investors, long a top performing fund, bought 376,615 Valeant shares sometime between July and the end of September to own 4.9 million shares at the end of the quarter, according to a filing made on Monday.

Brahman Capital raised its stake by 958,300 shares to own roughly 4 million shares while Hound Capital bought an additional 1.2 million shares, making Valeant the fund’s biggest position with nearly 4 million shares, the filings show.

Marble Arch, Blue Mountain, Farallon and Adage also spent more money on Valeant during the summer months after Valeant became one of the market’s best performers during the first half of the year, notching gains on an aggressive acquisition strategy.

The notable fund missing from this pastiche, of course, is William Albert Ackman’s Pershing Capital. He made sure to buy more, upping his stake to 21 million shares–because 19 million simply wasn’t enough.

Seriously, he’s too old for this shit. I hate to see the elderly abused like this. I much prefer to do it myself, tossing them into traffic strapped inside of their wheeled chairs. Truth is, T. Boone is a boss. But life is cruel and unforgiving. Even the best of us go through downturns. It’s unfortunate, that in the latter years of his life, he’s going through his–thanks to fuckery largess.

Billionaire investor T. Boone Pickens reversed course in the third quarter by slimming down his energy holdings as the worst oil market downturn in decades drags on longer than many expected.

The value of energy holdings in his Dallas-based TBP Investments Management fund fell by more than half in the quarter to $35.6 million, according to data compiled by Bloomberg. The fund exited stakes in 13 companies including smaller oilfield contractors Pioneer Energy Services Corp., C&J Energy Services Ltd. and Patterson-UTI Energy Inc. It also sold off smaller positions in exploration companies Apache Corp. and Occidental Petroleum Corp.
Many of the positions Pickens’ fund sold were stakes it had bought in the second quarter.

The fund added stakes in three new exploration companies: Whiting Petroleum Corp., PDC Energy Inc. and Synergy Resources Corp.

Say a prayer to one of your Dennis Gartman statues tonight, in the hopes of a V-shape recovery for old Pickens.

The damage to the retail sector has been extensive and also draconian. We all hate retail stocks, shopping malls and restaurants. We’ve become a hermit class of people who hole themselves up in our Mcmansions, grilling chicken in secrecy, ordering wares online. Human interaction is something of the past, things people did in the 80’s and 90’s, for old people.

The cycle of life is perpetual and what’s hated now will be loved later. I am sure most of you hated NFLX at $60, HLF at $25 and you all bought oil at $140.

Thanks to the Market Intelligence Platform known to you as Exodus, I am able to quantify the valuations of the retail sector to determine whether or not they are cheap, from a historical standpoint.

One industry that isn’t 2008 cheap, but instead 2012, are the restaurants. I’d ask that you look at the median p/s ratios for all of the data I am about to display.

Textiles and Footwear are the cheapest in a decade.

Apparel stores are cheapest since 2008.

Grocery stores are cheap as fuck. Judging by this, Americans are dieting. We both know that shit isn’t true.

Specialty retail are 2008 cheap. No one gives a flying fuck about them.

What the fuck is going on here? Is Amazon bankrupting the entire economy? This looks like the gloomiest shit I’ve ever seen. These valuations are retardo cheap, pricing in absolute and a very resolute collapse.

On the restaurant end, I’ve been pointing out to the massive spike in valuations. I even had my guys doing the Exodus demos point this out to people. By the way, if you need a demo, email me.

This is a classic under promise heading into the best time of year for the sector. If they were entering the X-mas season with big dicked gains, I’d be reticent about posting such an egregious article. However, all these morons have to do to avoid disappointment, from my vantage point, is open up the god damned stores. Investors are treating retail as the misfit asset class of the U.S. economy, tossing them into the flaming trash bin and writing them off as bankrupt.

I was reading an article on Reuters today and it really resonated, discussing share buybacks. As shareholders, we all like them, mainly because we think they’re going to increase shareholder value.

But are they?

Corporations are now spending more on buybacks and dividends than net income. WTF?

You know the guilty parties: IBM, HPQ, as well as scores of other failures. These CEOs are simply golfing all day, buying back their own shares, firing workers, then having their lunches eaten for them by competitors. I have to believe HP would’ve been FAR better off spending all of that money on innovation or accretive aquisitions.

Now we have all of these fucktard activist shareholders demanding large buybacks, simply to make a quick buck. All the while, innovation is being stifled. Apple and Samsung are innovating plenty. But, you have to admit, the vast landscape of former tech heavy weights is dwindling down to a select few.

The financialization of America is at hand. Get off the golf course you lazy fuckers and into the boardroom.

I know you want to discuss stocks. They did great today, up more than 200 and for the first time in a week, I wasn’t tortured at the Catherine Wheel. But, without stability through safety, we can never enjoy market premiums.

So, I am going to broach the subject of Syrian migrants. President Obama wants to take in at least 65,000. Since the Paris attacks, multiple US governors have lined up against it and said they’d refuse their entry into their states. You have to love our founding fathers for setting up the government this way, state’s rights ans all.

Here are the state’s against allowing Syrian migrants into their fiefdoms.

Naturally, Donald Trump chimed in, shaming Germany’s Merkel for allowing zombie hordes into her country. Trump also said, if elected President, he’d expell any Syrian migrants who were allowed in under Obama.

I did a poll on Twitter and asked the question: Should we Allow Syrian Migrants into the U.S.?

Suprinsingly, 38% of you lunatics said yes, even after the Paris attacks. You people are going to kill us all.

This is making the rounds today. Apparently, SUNE is trying to pull a fast one on the market by reclassifying $700 million in debt from non-recourse to recourse.

Here’s CreditSights:

When updating our SunEdison debt tracking spreadsheet we noticed SunEdison subtelety [sic] reclassified its $403 million Margin Loan and $336 million Exchangeable Notes as suddenly recourse switching … from the non-recourse disclosure used in the [second quarter of 2015] 10-Q filing. We are not accountants and realize this might be sufficient disclosure but we are fairly confident many investors missed the dropped foornote “(a)” … It is also entirely possible this is just a typo but since SunEdison stopped returning our emails and phone calls over a month ago we have no way to confirm this.

None of this has been confirmed and it’s not a smoking gun until someone gets shot. Well, judging by the share performance, one could argue that lots of people have been shot long this steaming pile of shit.