No More Leverage

To outperform the indices, I have to think outside of the box, gain an edge on the brainless dogs called my competition. Sometimes it’s important to go with the flow, be a trend follower and other times I like to go against the tide. In this case, I am simply removing the leverage from my holdings, now sitting at 100% invested, after taking profits in HLF and selling a little FWM.

This isn’t exactly a conservative position. However, for me, it’s a step in the right direction, a tapering of the risk if you will.

For the month of August, without a doubt, I will go long TLT. Bonds always outperform in August and I must be long, if only for the novelty of it all.

WDAY, WIT, USG and EMKR are holding up well, and IMMR, FLSR and SCTY suck. All in all, I am barely down 0.6%, patiently waiting for this bastard of a stock, IMMR, to give me some love.

I stopped punching Bill Ackman in the face, taking profits in HLF in the process.

This is part of my lightening up plan.

Is anyone else excited to see oil at $109 for no god damned reason at all? We have plenty of the stuff, but can’t seem to bear witness to a price decline, ever. It used to go up because of China, then inflation, now it just goes because it can. You’d think oil stocks would outperform too. But they’re mired in their own feces, unable to enjoy any sustainable run higher.

Judging by this satanic weather, I’ll bet dollars to donuts oil will keep going higher, especially if we get some of those awesome hurricanes again.

I haven’t an investable name off this debauchery, only to suggest you should beware of inputs and how the price of crude might start to scare people from living leisurely. Maybe the refiners make a profit or perhaps solar continues to win, as “anything but oil” appeals to Wall Street, except coal of course.

Watch the prices ever so closely, for oil is on a collision course with our GDP.

If forced to choose, I’d say CLR will do the “hundy” roll here and press higher until $115.

The city of Detroit filed for bankruptcy protection today, burdened with $20 billion in debt, thanks to democrats and unions. This is your future, American–prepare for MOAR.

The S&P 500 is +4.7% for the month of July, so far. Looking for precedent, there have been bigger gains for the month in the past. During the years of 1997, 2009 and 2010, the market soared more than 6% in July. But in two out of three times, the market fell sharply in August.

Either way, I think it’s time to take the foot off the pedal and reduce exposure to risk. We’ve been running red hot for weeks, with hardly any pullback. Yet, I feel somewhat stunted, almost cheated, by some of my positions sitting idle amidst an orgy of buyers.

In the past, whenever this happened, a correction was just around the corner.

Earnings are about to start rolling in and I think a near term top is anywhere from 1-2% away.

Oh yeah, I had a shrimp ceviche for dinner.

I box watched all day long, hardly any breaks–nothing. I’m here thinking to myself: all of my friends are on vacation, getting fat and stupid, and I am here, literally in my basement–watching the box. To boot, it’s not even interesting.

Watching IMMR makes me want to take a blade and cut myself, just to make sure I’m still alive.

Do you know what I am going to do now?

I am going to the backyard to big dig a big (I am so mad, I can’t even write right), giant, stupid hole–and plant a tree in it. The mexicans are not the only one’s who can take shovel to dirt. Might I add, I used to tend to the garden, until I realized only slaves do that. I am a slave to no one, especially you little trollops.

I made a little bit of money today; but that doesn’t interest me–at all. I am pissed off. Today was one of those days that etched curse words into my black soul. It made me feel like I am wasting time, hamster wheeling in the basement like a troll.

Let me just say this and I mean it: if my stocks don’t go buckwild to the upside tomorrow, I am planning a vacation straight away. I haven’t gone on vacation for two years. Now I have this stupid dog to look after and the local kennel charges human being hotel rates. I hate them on principle.

And that is reality.

Like I said yesterday, stocks aren’t trading up because they’re awesome. This is a liquidity driven rally that begets momentum and vice versa. This ends when earnings come in worse than expected. So the big risk to your portfolio now isn’t the Fed tapering or a broad market pullback, but the earnings that drive these companies itself.

Due to the extent of the rally, the pullbacks on a bad downside surprise will be brutal, rapish. To avoid jailhouse accommodations, you should avoid names that might disappoint this earnings season. By the way, that entails almost every single small cap stock that is publicly traded. I have many reservations about holding my positions into showtime. I view these dates as deadlines that offer the specter of heinous, animalistic, attacks upon my physical structure.

That being said, I just nailed the RKUS trade, but was a little late to the game. Many members of The PPT bought in at $13 the other day when it flagged oversold. Ask about it.

Leveraging up a bit more, I bought RKUS.

Imagine you jumped off a mountain with a bungie cord attached to your leg. At the bottom of the mountain is Bill Ackman’s face, and you have boxing gloves on. That’s what I am doing now, long HLF. Carl Icahn is killing the guy and the squeeze is most definitely on.

It’s worth noting, Icahn has a beard now, which tells me he is ready for war and likely carrying a rambo knife on his person.

There isn’t anyone “The Fly” likes more than Carl ‘give me your damn company’ Icahn.

Moving on, I am up another 1.4% this morning, still leveraged at 125%, +40% for the year now–pal.

No one really talks about the anatomy of a melt up because we all want to be viewed as smart, clever managers who deserve to get paid obscene amounts of money. The truth is, melt ups are fairly straight forward to play and the dumber you are, the greater chance you have to bank some serious coin. Don’t act like that last sentence isn’t true–cause you know it is.

My first Wall Street gig was a sweet one: personal mail opener/slave to up and coming super mutual fund manager, Paul Wick at Seligman. I was in high school and knew very little about stocks, yet managed to beat his ass in a bet–regarding some stock that I said would move an astounding 25% in a week. I got very lucky and won a dollar.

This evening I was running some screens to understand the profile of this rally and it’s exactly what I thought.

Growth and earnings don’t mean a thing.

The vitality of the company is moot. All that matters is market cap, number of shares in the float, trading volume,  and sector.

Based off this information, like any good detective of the markets, I scoured, mind you, the market for small capped stocks with less than 50 million shares in their floats. Also, the stock had to be +2% today and trade at least 250k shares in volume per day.

Lastly, I am only interested in tech, healthcare and services.

Here are the stocks, cherry picked by yours truly, that should snatch chains on the way up within a week.

ALLT

BIOD

DRWI

HTCH

INFI

PERI

RKUS

SCTY*

TSRO

XONE

SNTA

* INDICATES MY BALLS SWING LOW ON THIS NAME, MEANING I HAVE OWNERSHIP.

This criminal I once knew used to call up his clients and propose that they make ‘lateral moves’ with him, selling gleeck to buy gloik. He did this, namely, so that he could charge 5% out and another 5% in, making a grand total 10% of his clients account transferable to him in just one swoop.

I remember when he went out of business. It was a glorious day for all of his clients, indeed.

Towards the end of the day, I sold WETF, ANGI and SHLD and swapped into WDAY and FSLR, none of which were ‘lateral moves’ of course, but instead necessary actions that will result in fantastical, almost mystical, gains.