Jamie Dimon is Insane and Thinks the 10yr is Going to 5%

I’m trying to wrap my head around the idea that rates ‘should’ be at 5%, according to our most eminent banker Jamie Dimon. The question, as a people living in a country highly indebted, why the fuck would we want that? Moreover, why in the world would we permit our own central bank to increase to cost to borrow and hurt our balance sheet?

“I think rates should be 4 percent today,” Dimon said. “You better be prepared to deal with rates 5 percent or higher — it’s a higher probability than most people think.”

I realize these questions are mostly rhetorical, since we all know the Fed is a bastard organization. Nonetheless, it must be said from time to time. There is no inflation. Our currency is not on the precipice of collapse. To hike rates simply means to hurt people who borrowed money at the margins to buy a house they could hardly afford; moreover, it would increase the amount of money it takes to service our $20 trillion debt load.

On the other hand, and this is a theory that some people share, higher rates begets inflation — just like lower rates causes deflation. It’s a theory worth examining closer — especially since we saw the deleterious effect of zirp here and negative rates in Europe. It seemed to heighten our difficulties. Also, since rates have been going up — things have been much better, especially for stocks.

In other words, maybe just maybe, Jamie Dimon isn’t insane and maybe hiking the 10yr to 5% will cause a inflation to rise strongly and the stock market to speed up to upside, creating a cascade wealth effect that will last for decades.

Or he’s insane.

Your call.

Some of this year’s best trades have been in the new issues, especially those in the right sectors growing rapidly. Most of the time these companies come public at valuations that are unsustainable and often get mowed down by sellers. However, for whatever reason, in 2018, people don’t give a fuck.

Two of my favorite new issues are SONO and SPOT — two of the more popular names. But there are others worth keeping on the radar.

I created a screen, in search of companies that’ve come public over the past 12 month, highly ranked by Exodus.

Tech score (weakest 1-5 Strongest)
FNKO 4.6
ACMR 3.8
HUD 3.8
TRNS 3.8
OMP 3.76
CARG 3.75
EYE 3.75
IIN 3.75
SECO 3.75
SR 3.75
AGS 3.65
ILPT 3.65
CELC 3.55
IEC 3.55
RLF 3.55
RYTM 3.55
AQUA 3.45
ROKU 3.45
BCML 3.35
BE 3.35
NVT 3.35
OPTN 3.35
LEVL 3.30
BAND 3.25

For members and free trialers, here is the link to the screen. I encourage you to tweak it to your preferred specifications.

During my years as a financial advisor, I dealt with a lot of high net worth investors. Their investment behavior was often rigid and structured. The younger investors tended to take on more risk, thinking they needed to make up for their lack of net worth, ironically.

Running a finance site and financial software platform, I interact with a lot of self-directed investors, many of whom are smart and talented, but often lack structure. Without a skeleton, or a foundation, the exterior is nothing but a facade.

Remember, your number 1, 2, 3, 4, 5 things to avoid is blowing up. Draw downs are the enemy. You should avoid them with all of your might, push back against the current of greed that ensnares you into honeycombs of death, and stop worrying about becoming a rich man/woman this year.

For the sake of brevity, I’m going to rattle of my top 10 rules for traders, more specifically geared towards people who are trying to create a net worth than preserve one.

1. Stop trading on margin.
2. Stop using aggressive option strategies. Matter of fact, stop using options altogether.
3. Stop trading futures.
4. Don’t allocate more than 15% on any single stock idea, and try to start as low as 5%.
5. Be sure to trim your big winner when it becomes more than 15% of your account.
6. Never trade on rumors or inside info.
7. Avoid averaging down.
8. Diversify your investments across the 8 principle sectors.
9. Stop being a contrarian.
10. Never let a loss exceed 10%. Sell it and move on. Sell losers fast, all the time. Zero mercy.

I could probably add another 20 to that list, but I’m fairly confident that I nailed the essence of danger for most investors, which ultimately, when reduced to a singular motive, is greed.

We’re in a very bull’d up market. I hate to hear your stories of mishap and ruin during such ebullient times. This might come across as corny, but I’m here to help. If you need some help, an objective point of view — you can email me at any time and I’ll offer you my two cents.

Bad day for tech. But other sectors did fine. My quant fund managed to trade up by 0.2%. I’m mostly positioned for a correction in my active account now, in spite of all the decadence. It’s merely a reaction to what I see in the high growth stocks, namely SAAS and Chinese burritos.

I’ll quickly fasten to a more bullish tone next week should tech recover. Truth be told, I have little to no interest cavorting in other areas of the market now, so I won’t even explore retail, energy, utilities, or old man stocks.

I’m bullish, but cautious. Hence, and ergo, I am 55% cash with a spot of TZA.

I’m about to go for a long bicycle ride, not the type of faggotry one would expect from professional bikers in speedos, as I am a man of distinguishable qualities and must maintain an air of masculinity at all times. Nonetheless, I shall pack a bottle of wine for refreshment and maybe a log of bread for nourishment, and make my way down and around the windy paths of Princeton.

If you’re new to these confines, take a free trial for Exodus. It’s my brainchild and my passion, a financial tool from the future befitted by a top hatted community of cultured gents and well mannered ladies who discuss life, getting drunk, and also stocks. And, please do not forget to knock on your neighbors doors to tell them the Exodus algorithms are now available on FreeStockAlgos.com — a new property of mine.

It’s raining out here, so I can’t travel down to the beach and stare into the horizon today. I normally like to do that on Friday’s, but will instead head into the kitchen and prepare a great meal, with lots of red wine involved. Beef of course.

The trade war is having a deleterious effect on Chinese related stocks, as sentiment sours, so does my IQ. Not a problem! I sold out of IQ and took an 8% loss. When your positions are measured and small and contained, taking losses is not an issue. It’s part and parcel of being a responsible trader.

I also sold RNG, and booked a 6.7% profit. Let’s call it a wash.

The HUBS triple sized position is really hurting me today — but I’m okay with exhibiting a little patience with this one. The market is poor and SAAS stocks are the first one’s to get hit. People always hate on success and target it, so it should come as no surprise to anyone paying attention that short sellers piss on SAAS stocks first.

I have an inclination to be careful, rolling into the balmy days of August. I’m 55% cash, 100% content. Let the chips fall where they may — we’ll do our duty and profit from this mess.

Also, and lastly, I bought TZA as a hedge, in order to sleep well Sunday night.

Ciao (the most annoying form of goodbye).

This is a brief foray into the world of speakers. I came, I saw, I killed it, for +24%.

Proceeds move to cash, which is now upwards of 45%.

I feel like heading back for a small siesta, a re-charger of sorts. Making all of this money is boring and gets me sleepy. I’ll probably drink a TopoChico and then head back for a slumber.

Mind the store, would you?

Meh. It appears the Chinese are softening their stance. Plus, last night the Japanese stock market overtook China as #2 most valuable exchange in the world. There’s a lot of worry about if your China and nothing at all if you’re Trump. It appears, at least from this viewpoint, that the US is in fact winning again.

“The implementation date of the taxation measures will be subject to the actions of the US, and China reserves the right to continue to introduce other countermeasures,” China’s release said. “Any unilateral threat or blackmail will only lead to intensification of conflicts and damage to the interests of all parties.”

On that news futures are slightly higher, a moderate nothing-burger.

Unrelated: Sonos is ripping higher in the pre-market.

Find out how Exodus ranks your stocks at FreeStockAlgos.com

You’re extreme fools if you thought Le Fly was going to sit out this foray into hedonism. Immediately upon seeing this tape, I seized upon SONO like a rabid animal in heat and fornicated with it for an intra-day 17% win. I did not sell it because I intend to use it again during tomorrow’s session. I am so confident in this trade, why, I am willing to cease blogging for the entirety of my life if it doesn’t trade sharply higher.

I enjoyed a harmonious session, with SAAS related stocks jimmy-rigging higher by 4%, in addition to my newly minted MEGA-capped Quant fund. My only set backs were IQ and HUBS. But, believe me, it’s good for my soul to endure a sense of loss-hood, as it keeps me grounded and in touch with the working class shlubs who toil day to day for scraps of beef to eat in their sparsely decorated parlours.

“The Fly” is a man of the people, born inside the sewers of Brooklyn, rising from its shit-filled ashes to become the renaissance man he is today — a distinguishable force of good and culture for the people in finance. I’ve dedicated my life to this trade and have done so with the utmost degree of satisfaction and responsibility. Gone are the days of needing retarded stock’d brokers or “financial advisors” to waste away your savings and fribble away at your gains with their onerous fees. Say “no” to their oversight and tell them you’re under the auxiliary auspices of Le Fly and have joined Exodus after FREE TRIALING and have never been happier, or pleased, with the profound think tank commentary taking place in the Pelican Room.

Some would argue “The Fly” is the single best trader to have ever lived, in the entire multiverse. I’d simply say I am doing my job to the best of my genetically superior abilities.

(Tips hat)

It’s never coming. You’ve been warning others of impending collapse in true chicken little fashion. I am here as a reminder of sorts that it’ll never happen. Stocks are designed to trade up. If you’re not making money in this tape, you’re genetically defective. Come inside the comfy confines of Exodus for one week and if I don’t make you a better trader and person, I’ll toss myself into a lit fireplace.

Here are the facts.

SONO is going to $20, on a fucking bee-line.
Breadth for tech is 70% and climbing.
My Bubble Basket is +2%, indicative of risk on.
My SAAS basket is +3.7% for the session.

The bull run is on. Get in or get fucking steam rolled.

You will be liquidated and inserted back into the matrix and repurposed. Anyone who isn’t carefully considering owning SONO for the long term is seriously retarded, and in a bad way. There are various forms of retardation. There’s the one that isn’t funny at all and deserves the empathy of all. There’s the type of raucous behavior that is often considered ‘retarded’ because callous men decided the word applied. And then there’s those who do not deserve empathy and aren’t behaving wildly. Those people are just really dense and stupid. They are the bad form of retard.

I will have you know, and this is without question and cannot be debated, SONO will trade higher.

Superior Audio Devices, Designed for Intelligent Humans

On this being the IPO date, let it be known that Le Fly stepped in sideways and purchased shares of SONO at $17.80 for the explicit purposes of profit. I do not care about valuation, nor what your feelings are about the market. I know this and this alone: everyone worth talking about enjoys their Sonos speakers.