Fly Buy: $VRNS

I started a position in VRNS.

With just one day left in July, I am pleased to announce that I’ve managed to hold onto June’s gains, despite a most egregious and unfortunate event in the shares of RUBI. We will not talk about said stock until its shares are removed from the exchange. Also, it’s worth mentioning, the very scenario that I laid out for you appears to be coming to fruition. Risk names are back in vogue. Everyone is circle jerking around TWTR, YELP and others (by the way, I went long YELP yesterday). And, TLT is crashing lower today.

Everything is great–until it isn’t.

I do not mean to scare you. I invite you to look back on August of 2000 and try to put yourself into the shoes of a younger Fly, crazily running about the boardroom with trade tickets needing to be filled. Lunch wasn’t an option, unless of course you were fine on missing out on $5-10k in commissions, which was fine on occasion.

Why did I invest a significant amount of my own money yesterday if I feel this could be another 2000?

2000 wasn’t all that bad for the overall market, just dot coms. I’ve reserved nearly 30% of my money in TLT and a short term trade, which is ZPIN. With my accounts, I am fully invested, zero TLT, and a whole lotta high beta.

I am positioned exactly as I should be, heading into an era of unmatched decadence and debauchery. The market is going to soar over the next three weeks and I want to be fully exposed (extra flasher in a trenched coat) to Mother Market and her glorious ways.

Sure the market reversed today and idiots are abound comparing Twitter to Pets.com. But does that mean that The Option addict and his band of goons have to give back their gregarious wins in X and TWTR call options? Does it mean that YELP, BCS, VNET and everything else that is holy and sanctimonious will stop working higher? You people are kidding yourselves. This is only the beginning of the end for your kind of people (no Hitler).

You’re being fooled into a false sense of insecurity. The reader class always responds last, easy to trick and certainly dumb enough to waste time.

Do yourselves a favor and stop thinking. The economy is smoking hot again. Janet Yellen is getting cremated in her social media/biotech shorts. And “The Fly” is hosting his 7th annual iBankCoin dinner this weekend. All is good, my friends.

I’m liking VNET and ZPIN here. Longer term, HCA is a dunkshot.

Who cares about Russia? Since when have they meant anything to us at all? Our companies are dependent upon China and Europe. The soviets will now begin to understand their place in the world, underserving to sit at the table of nations because they are a rogue, corrupt and tirelessly evil regime. American industry will sap the life from the Russian markets, forcing their oligarchs to beg for our treasury bonds. As such, Le Fly smartly placed 25% of his assets in TLT today.

TWTR is through the roof, higher by 25%. Wow.

My allocation is complete. Go in peace or leave in pieces.

With the remaining 10% of my assets divvied up between high beta tech and life sciences, I decided to buy ICPT, JAZZ, SGEN, N, YELP and PANW.

The allocation is now complete.

I had second thoughts about my second thoughts and decided to allocate dollars earmarked for long term capital appreciation. We are talking about a wide swath of securities, so I will not inundate this blog with the details. If you are curious as to what I bought, all trades are posted and listed inside of The PPT.

The details are fairly straight forward. No position is bigger than 5% of holdings. Everything is divvied up between the 7 principal sectors of the market. 66% of the stocks earmarked for long term capital appreciation  are mega caps, greater than $10 billion in market cap. The median cap in the S&P 500 is $18 billion. I am purposely imitating the index.

33% of the stocks are under $10 billion in market cap. I set aside 5% of my capital for short term trades and another 10% will go towards high beta stocks, intended to be long term holds. The mantra of the allocation is GARP (growth at a reasonable price). And, finally, 25% of the capital is reserved for cash because of seasonality. In the event of a market pullback, the 25%, which is now placed in TLT as a cash equal, will be liquidated and allocated amongst the current holdings.

The only thing left to do is position into the high beta names, which I will attempt to time perfectly.

This is a large purchase, which is replacing my cash for the time being.

I only bought ZPIN, which is a trade. I don’t want to micro manage entry points in what will probably be 5 year holds. However, the news about new and effective Russian sanctions, followed by a sharp sell off in the markets, has me waiting for lower prices.

This is a trade.

I will begin allocating capital today, self funded, for the explicit purposes of achieving extreme gluttony through stock market winship. I will be doing this in stages, with some dollars earmarked for short term opportunities, others for high beta longer term holds and finally a portfolio that is designed to last the test of time–even very cold nuclear winters. It is my belief, very sincerely, that the market is on the verge of going ape to the upside, banana and all. Therefore, virtually anything that I buy now, sans an earnings shortfall, should be profitable within days or weeks of my actions.

For the time being, the hottest short term stocks lies in China (pun intended). Their markets have done very well over the past two months and we are seeing strong momentum to the upside. I have one particular name that I want to buy and will talk about it shortly.

Stay tuned.