Stuck in the Penalty Box

I’d love to be long the variety of stocks up 10% today. Sadly, I am only long one of them: IFON. I cannot afford the risk of being long river boat gambling casino stocks because I was a loser a few weeks ago. Until I can recoup some of my losses via these olde man stocks (dated till 2100), things are gonna be a little moribund around here. Then again, boring for me is race car driving for you ham and eggers.

Today was a day to reminisce about the good old days, the times when stocks forklifted short sellers right out of their chairs and ramming  their big stupid heads into their respective computer terminals.

Top picks: JAZZ, WCC,ACE and FANG

Bear caves: a place where angry people cavort with one another, plotting for the extermination of mankind and the Earth. They amuse themselves with tall tales of the apocalypse and would rather people die from starvation than pestilence. Whenever the stock market goes higher, they warn others that the end is near and “just because stocks are hitting new, all-time, highs, that doesn’t  mean the world isn’t coming to an end.” Anyone buying stocks, at any price north of 5,000 Dow, is merely an idle idiot, deserving of a verbal lashing and mockery. Like children, the bear only responds to proper scolding and will not keep quiet unless you teach them a lesson in civility. In this case, magnanimous stock market gains are necessary, especially during inflection points and historically significant periods in time.

For the better half of 9 weeks, “The Fly” has drunkardly stood by and watched his business burn up in flames, as the bears farctated themselves on his positions to the point of sheer lunacy. All of that is about to change. God willing, on Jupiter’s Stone, you are all deserving of my most caustic attacks upon your person– and a grande assault upon your purse. Even though I’ve dialed my positions down a bit, favoring profitable business over river boat gambling, I still have every intention of recapturing all of my lost coin. I haven’t forgotten and will never forget, for as long as I live.

To that end, I wish you good luck, bears. I will pray for a most gruesome and drawn out death for you.

https://www.youtube.com/watch?v=9EdxTiu9CwI

I wanted to write that title for two reasons.

1. To remind myself, even though my positioning was wrong, there are plenty of stocks going higher. This is a healthy market for the vast majority of stocks out there.

2. To invite the more pessimistic aspects of the barbarian horde who cavort around here to moderate yourselves, as it is betting boring.

As you wait for the world to burn, companies are merging with one another (PF was acquired this morning) and there are plenty of deals in the works. The problem that most of us are having is seeing the forest through the trees. So many of us have lived in this world of high-tech, social media, biotech degeneracy, always interested in the Fast Money, that we’ve forgotten about the real economy. Companies like PG, ACE and EL are doing just fine. Valuations are reasonable and their businesses have never been better.

This whole IPO business is really making me sick. My friends at some of the large bracket firms are flipping out of these IPOs on day 1. I was surprised to hear this, as it’s usually customary for underwriters to encourage their brokers to hold for a minimum time frame. Back in the old days, they’d place a ‘penalty bid’ on any deal flipped for quick profit, basically snatching away commissions from the broker. It was his job to keep clients in. However, these days, the banks are actually encouraging 1 day flips, essentially getting liquid on the unsuspecting public.

There are many things I do not like about this market. The way high growth stocks collapsed, the behavior of bonds, the unbelievable earnings blow ups, and the extended nature of the current bull run all have me a bit on edge. But I must remember: markets do not crash from all-time highs.  Markets are not supposed to be feared at all-time highs. There is a great divergence taking place between profitable vs unprofitable companies. However, other than that, the Dow Jones Industrial Average is at new all-time highs and there is nothing bearish about that.

It’s that time of year again, gents: Mother’s Appreciation Day.

To preface this article, I will ask and answer the following question: What is Mother’s Day?

To put it simply: it is a day by which men celebrate the achievement of his mother and wife. Let me be clear, siblings SHOULD NOT be subjected to the ceremonies of this prestigious day. To do so, quite frankly, is incestuous blasphemous balderdash. Tell your sister to buzz off.

I will now walk you nelipots through a typical Mother’s Day, a model for all gentlemen between the ages of 21-47.5 (no one cares about persons under 21 and if you’re over 47.5, you aren’t supposed to be on this site anyhow, as it is prohibited by law).

8am: Wake up, shave, shower, partake in all of the morning rituals that you normally partake in, only this time entreat your wife to break her fast in bed. To do this, simply crack a few eggs into a pan and scramble them around for about 2 minutes. DO NOT use butter, as it is your duty to make sure she doesn’t acquire a pyknic physique (I am assuming your wife is short, on a relative basis). If you’re lax in this department, let me inform you now, this marriage is doomed for a ventripotent ending.

10am: After lounging about the reading room/office/den, digesting breakfast and reading your favourite Doctor in financial bloggery, do a walk by your wife and remind her that it is Mother’s Day, have the kids jump on her back, and then excuse yourself for a little more relaxation outside (the weather is usually splendid on Mother’s Day and you have every right to enjoy it).

12pm: It’s time to receive guests. You’ve invited your mother, mother-in law, male companions/Dad/Father in law, over for brunch. This should go swimmingly.

1pm: Carelessly toss a few pounds of chicken onto the BBQ. It doesn’t need any real preparations other than a quick rinse with water and vinegar to crush the bacteria that has designs to murder you. After about 10 minutes or so, take the chicken off the grill and cut it up into pieces. Slap the chicken into a bowl and toss a bunch of lettuce and tomatoes on top. Listen very carefully to what I am about to tell you: DO NOT ADD DRESSING OR OLIVED OIL. This is a major mistake on behalf of husbands, worldwide. Look, if you permit a child to eat as much candy as they want, they’d end up with no teeth and be 100% overweight. Being the leader of the household, patriarch of the family, it is your responsibility to be on the look out for potential health hazards that might afflict your wife. Being fat, most certainly, falls into that category. Having said that, squeeze a lemon and fling a handful of salt onto the chicken salad and serve.

2pm: After lunch, gracefully accept the praise that will undoubtedly come your way from all of the women in the house. Take your bow and retire to the study with the gents, for several copious glasses of brandy.

3pm: By this time, the women should have performed their motherly duties and fed the kids, cleaned up the mess they made with the chicken salad feast, and made the dining area generally acceptable for your reentry. Invite the gents to rejoin the ladies in the living room to bestow Mother’s Day gifts upon the ladies.

4pm: Your wife, mother, and mother in law, should be quite pleased with their prizes. For this, I strongly suggest buying them one of the following (whatever you decide determines the sort of man you are): 1. diamond necklace 2. shirt 3. inappropriate lingerie 4. a stick-free frying pan 5. new blender 6. a book 7. bag of cocaine 8. an iPhone or iPad 9. an envelope with a nonsensical spa gift card inside of it 10. nothing at all (NOTE: making the wrong choice is on par with being a skopet).

5pm: Inform everyone of the time and remind them of their long drive home. The men will immediately understand this is code talk for “get the hell out of my house.” See them to the door and wish them well. At this point, you might want to throw in another “Happy Mother’s Day” to the prize winners. Do not worry about it being gratuitous, for they do not think so.

6pm: Receive praise and proper appreciation for your magnificent Mother’s Day ceremony. Mother’s Day is now over. Allow your wife to go about her regular duties. You may now retire for the evening, smoke a pipe, drink some wine, become a gongoozler, etc.

All day I’ve been forced to read these racist screeds on twitter and listen to Klansman-like commentary on the teevee, regarding the good Doctor (street pharmacology) Dre and his deal with Apple. People even went as far as to spread scandalous rumours that Apple was said to be in negotiations to buy FUBU clothing, Rocafella records and the Maybach Music Group (BOSS). They’ve said that Dr. Dre would be able to purchase plenty of “bling” with his winnings, as if he were some sort of person who would purchase such items–frantically desperate to support the African blood diamond exchange for perverted reasons only.

Do all black people covet diamonds?

Do all white people drink Budweiser?

Why can’t Apple simply be interested in the product that the good Dr. has to offer, at an absurd price tag of $3.2 billion dollars, aka 152,380 kilos of pure Columbian cocaine?

So what the Dr. Beatz are gaudy, superficial and generally a retarded item to put on your head?! Steve Jobs would’ve wanted it this way, have his company serve as a piggy bank for persons of interest, celebrities and hall of fame record producers, and the like.

I, for one, am quite pleased, as both an Apple shareholder and rap aficionado, to see Dr. Dre lay the smack down on Tim Cook, handling his business like a G.

GYEAH, west coast. 187 on an undercover cop!

NOTE: There was no form of racism in this post, as some of my best friends growing up were in fact of African descent (300 years back, but African descent nonetheless).

https://www.youtube.com/watch?v=s2e5ZibypDk

With today’s pin action in JAZZ, CRTO and RKUS, I decided to sell the one’s that won’t earn $10 per share next year, currently trading 10x next year’s earnings. I sold out of CRTO and RKUS and ponder to myself: “when was the last time I made money?” This has been a death march for me, albeit an expeditious one. Over the past 9 weeks, I’ve managed to lose coin each and every week, but 1. I cannot recall being this wrong for so long.

With today’s sales, I bought GSK, PG and ACE.

Inside of 3 months, I’ve gone from a leveraged gorilla, tossing banana peels at my enemies to olde man being kicked down an idle manhole while in a wheeled chair. Absolutely dreadful.

All of m hard work, the goodwill built from 2008 is gone, poof, in a bat of a lash.

As for PG, it traded 23x eps in 2001, 2002 and 2003. It’s trading a touch under 22x earnings now and just 18x 2015–so there is room for expansion.

https://www.youtube.com/watch?v=s2e5ZibypDk

After I got blown to smithereens in 2000-2001, I restricted myself from even looking at tech stocks, or anything deemed to be “hot.” I rebuilt my business on preferred stocks, bonds and regional banks, trading under 1x book value. As the market cratered in 2001, I was completely insulated from the carnage. However, the damage was already done. Nonetheless, my approach proved to be prescient and it resulted in my business expanding in assets, to new highs, putting me in a great position to play growth again in 2003.

I did not buy a tech stock, at all, from 2001 to 2003. A typical winner for me, during 2002, was buying a new issue preferred stock at $25, receiving two quarters worth of dividends, then selling it at $27. Two points on a $25 stock, over 6 months, was huge for me. True story.

Prepare to dial back your expectations, should this market enter bear mode.

In case you’re dividend hunting, here is a list of companies scheduled to go ex-divvy over the next two weeks.

DLPH, 0.25, 5/12
DD, 0.45, 5/13
LLY, 0.49, 5/13
ACC, 0.38, 5/14
DUK, 0.78, 5/14
GSK, 0.64, 5/14
WHR, 0.75, 5/14
CVX, 1.07, 5/15
AFL, 0.37, 5/19
LUX, 0.89, 5/19
TGT, 0.43, 5/19
MPC, 0.42, 5/19
VLO, 0.25, 5/19
WAG, 0.32, 5/19
MRO, 0.19, 5/19

Sounds boring. But it could be rewarding, if you apply a little leverage to the mix.

For a moment, let us pretend the market isn’t going back to 666. Because if it is, this site will be militarized and all of you will be drafted, whether you like it or not, to fight in the wars to come. We will not discuss stocks at 666. Instead, we will discuss anti-aircraft batteries vs WWII era bombers and how to serve human meat and how to convince the children it’s really pork.

I digress.

One of my companies blew up in the after-hours: JAZZ. They missed earnings and that’s all that was needed to drop it 13 points in after hours. These is a highly profitable drug company, who will earn in excess of $8.00 per share in 2014. That, apparently, means nothing to the savages who are selling it down to the ground. I will likely sell it, alongside CRTO and RKUS. Coincidentally, all of my recent losers were stocks that were once deemed “momo.” I’d prefer not to sell CRTO, coming off a great qt and trading less than 3x sales. However, one of their competitors, FUEL, had a glass of acid thrown in its face–in the after hours- down 30% (LOL!) because they missed earnings. CRTO will likely trade down in sympathy and I need to cut the loss.

Moving on. I put together a portfolio of 25 stocks for your perusal. Members of The PPT can view the portfolio here.

The criteria is fairly simple:

-large cap
-pays a dividend
-brand recognition
-has performed well over the past 3 mos
-FPE below 20

Here is what I have now. PG is one of the higher multiple stocks. The only reason why I tossed it in is because of its brand recognition, which comes in handy when people are uncertain of what to buy.

PG
GIS
LO
PM
MO
DKS
GSK
LMT
KMT
MHK
MSFT
BAX
WMT
DGX
ETN
T
DE
AAPL
ALK
DLPH
ACE
WHR
AET
LEA
WNR

All of the earnings coming out are dreck. The liquidity that once drove stocks higher, provided by the Fed, is gone. The economy, once led up by a recovery in housing, is now on the decline. I ask myself “other than the fact that stocks have gone lower and are seemingly on sale, why should I be long?” It’s a question I should’ve asked myself about a month ago. However, sometimes it’s better to be late than never at all.

Stocks suck, especially the one’s with big growth rates. They’re not growing fast enough because the economy is rotten. The only companies that seem to be doing well are basic necessities: beer, toilet paper and cheap clothes. Other than that, it’s casino time, all day, every day.

Bounce or no bounce, I’ve seen enough of this cancer. We’re going much lower from current levels. The growth stocks are only the beginning and serve as the proverbial “canaries in the coal mine.”

Tomorrow, once again, I will be making wholesale changes to my holdings.

It’s likely that some of you were out celebrating today’s market bounce, over a cold glass of chardonnay. You ordered the surf and readily updated yourself with stock quotes from your stupid phone. Upon leaving the restaurant, a giant anvil fell on your head–now you’re dead.

That just about sums up the NASDAQ, a great ancient land of mystery and phantasm.

Don’t bother buying anything with a PE north of 13. Please, do yourselves a favor and try to make back the money you lost methodically, as opposed to all at once. My greatest catastrophes always occurred when I was most desperate.

As an aside, I find it readily (there’s that word again) amusing how CNBC is trying to blame RISING rates for today’s decline. It must be quite enjoyable to be that stupid.