THE HOLY SPIRIT HAS CURSED ME!

Twitter is public and its share price has soared, at the expense of the rest of the market. It’s a sell the news scenario and it’s all the rage. At $26 billion, Twitter is cheap, based off 2020 earnings.

EVERYTHING THAT I OWN IS DROWNING IN PIG VOMIT.

These stocks can’t drop fast enough, crushing me into a vise lined with steel spikes.

I am down another 1.5% this morning and will continue to suffer, as ALJ, BALT and RBCN get steamrolled.

My advice to you is to run. Run as fast as you can from this cursed place and go live a simple life of sheep herding or raise some llamas. This Wall Street business can be very rewarding. It allows you to spend money, gratuitiously, while laughing at the plights of the working class. However, every so often, this god foresaken job sucks the life out of you, tossing you onto the Devi’s BBQ to be slow roasted during periods of mediocrity and underperformance.

As for BALT: earnings were exactly where I thought they’d be. This company is on the verge of profitability. I am sticking with it.

Oh, by the way, remember that loser from Seeking Alpha who was wrong on AMBA? Well, he did another hit piece on FLTX and was wrong again.

After the bell, Twitter priced its stupid ipo at $26. If done correctly, the opening tick will be north of $35, sucking the life out from the market, just like FB.

Also, my ALJ reported WORSE THAN EXPECTED earnings. This was expected, from me at least. The refiners are a forward looking play, not last quarter. There’s a reason why these stocks are down 35% in recent months, so you shouldn’t expect stellar earnings.

BALT reported BETTER THAN EXPECTED earnings and will paint a portrait of grandeur tomorrow morning. Things are getting better and the company is leveraging up to sail the seven seas, taking bounty along the way.

I was down 4% for the day.

Leverage can be a bitch sometimes.

NOTE: BALT’s beat was its first upside surprise in 5 quarters, a big deal. Going forward, I expect them to get into the black and report profits, during 2014.

There isn’t anything left to say or do here. It’s obvious to me that I’ve been singled out, cursed by some celestial being to suffer from mediocrity. This same mediocrity has plagued me for the past 2 years, always occurring in the 4th quarter. It creeps up, ever so slowly, then BAM!: decapitation.

Just to recap what I’ve witnessed today, in a nutshell.

The Dow Jones went up 50 points in the morning, all the while my holdings roared out of the gates, like hungry lions trapped inside of a sweat shop. “The Fly” took this opportunity to head over to the gym, for a little bulking up. By the time he got back, his position were covered in blood, but the Dow Jones was now up 100 points!

REVERSAL! in NSTG

REVERSAL! in BALT

REVERSAL! in JAZZ

REVERSAL! in TRLA

PLUNGE! in RBCN

More downside action in ALJ.

Like I said, there isn’t anything left to discuss. I’ve made my bed of fleas and now lie down in it, drifting away like a log in a stream.

BALT owns and operates 4 Supramax vessels, making more than $12,500 per day to do so.

If you look at the internals of the BDI, you will see consistency in both Handysize and Supramax rates, both to the upside. While capes have gone lower, over the past 30 days, both supras and handys have risen by more than 20%.

As far as I see it, the only risk to this trade is dilution. These greedy pirate bastards wants to raise capital in order to buy MOAR boats–because they know the trend. They understand the fact that overall vessel population is growing at a historically low 4% per annum and it’s only a matter of time before rates soar.

Having said that, I am merely talking my own book, so take it with a grain of salt.

Z posted great earnings. TRLA will trade higher, as a result.

I want you to come out from under the stairs and have a look at these stocks, derived from a very special screen inside of The PPT. Not only does it look for technically strong stocks that are heavily shorted. But it also scans the entirety of the market for such names that’ve moved past, or attempting to move past, the all important 20 day moving average.

One time inside of the urinal room I overheard some chart people discuss their affinity for the 20 day moving average. Therefore, being the generous host that I am, I digitized your repugnant charts into list form.

Here are my favorites, from a layman’s point of view.

KWK

RBCN

MYGN

OCLR

Z

SAM

YELP

WAIR

NAT

UVV

Members may access this screen here.

My patience is being tested on an extreme level. My purchase of RBCN this morning resulted in instant winship, as the stock spiraled up to $11.90, up $1.84 from my basis. Considering the amount of shares purchased, it was a handsome (extra Fly) win. However, as the day waned on, perverts sold the stock, and with it my gains dissipated in the inferno.

Being up a mere 15 cents on the stock, as I write this post, makes me want to commit arson.

I’ve been busy all day, partaking in extreme coffee consumption, chewing on espresso beans as if they were bubble gum.

At the moment, my gains are being enjoyed by the moves in JAZZ and BALT. Earlier gains in NSTG and RBCN have all but vanished, again pushing me towards committing arson.

My largest position, ALJ, is lower, further entrenching myself in the mud, amidst the grass and the sheep. I’m still up 0.8% for the day, down from +3.5%. However, given the current trajectory, it will be getting very hot around these parts soon.

First off, BALT acquired two new Capesize vessels today, upping their fleet to 13 (4 capes, 4 supramax, 5 handy size). I love the deal and feel BALT in keenly positioned to profit from a rising BDI, more than any other publicly traded company, due to their solid balance sheet and age of fleet, which stands at an industry low of just 3.6 years.

As you know from an earlier post, I acquired shares of RBCN today, based off the GTAT-AAPL arrangement.

Sapphire is a commodity and will trade higher, as supply gets taken off the market. The fact that Apple is paying GTAT $500+ million dollars for sapphire supplies means this is a big deal. I believe it will be used for screens, which will force competitors, like Samsung, to follow suit. Due to the exclusivity of the GTAT deal, the only other supplier of note left is RBCN. I view this in the same vein of how the industry  shifted to flash memory, away from DRAM. Early buyers of SNDK were richly rewarded.

The plain truth: sapphire is a superior material to gorilla glass. As an aside, companies like ZAGG will go away, once sapphire is adopted, since it’s scratch proof.

I bought my RBCN position at the opening tick and have an average cost of $10.06. I didn’t mind paying up because I feel the stock is heading to $20, if not higher. With 35% of the shares sold short, bears are in for a house of agonizing pain for the foreseeable future.

It’s also worth noting that the decline in WTI is outpacing Brent, also bullish for refiners like ALJ, DK and WNR.

I am +2.5% for the day so far.

I started a position in RBCN because it’s going higher. Details forthcoming.

Many month’s ago, I highlighted one of my thesis plays, regarding GTAT and its product “sapphire.” Naturally, I owned hundreds of thousands of shares in the $3 range, only to sell them out for a 25% profit, well before the real run.

Here are some of my early notes from The PPT.

Last night, during GTAT’s earnings announcement, they had this to say:

AAPL Agreement

• On October 31, 2013, GTAT and Apple (AAPL) entered into a Master Development and Supply Agreement and related Statement of Work, pursuant to which GTAT will supply sapphire material exclusively to Apple for consumer electronics. GTAT has granted Apple certain intellectual property rights in connection with its sapphire growth technologies. Although the agreement does not guarantee volumes, it does require GT to maintain a minimum level of capacity. GT will be subject to certain exclusivity terms during the duration of the agreement. GT expects this arrangement to be cash positive and accretive to earnings starting in 2014. Gross margins from this new materials business are expected to be substantially lower than GT’s historical equipment margins.
• GTAT also entered into a Prepayment Agreement with Apple pursuant to which GTAT will receive approximately $578 million in four separate installments, as payment in advance for the purchase of sapphire goods. GTAT is required to repay this amount ratably over a five year period ending in January 2020, either as a credit against Apple’s purchases of sapphire goods under the MDSA or as a direct cash payment. GTAT’s obligations under the Prepayment Agreement are secured by certain of its assets. While the MDSA specifies GTAT’s minimum and maximum supply commitments, there are no minimum purchase requirements under the terms of the MDSA.
• Finally, on October 31, 2013, GTAT entered into a lease agreement with an affiliate of Apple in order to lease a facility in Mesa, Arizona that GTAT will use for the purpose of manufacturing the sapphire goods under the MDSA.

Impact on 2H13 results

• To service the sapphire material agreement announced today, the company has dedicated the vast majority of its ASF capacity in the second half of 2013 to expanding its own materials capacity. This shift in business model has effectively precluded the company from shipping significant levels of ASF units to other customers during the second half of 2013 and will continue to do so for the balance of the year.
• Given the impact of its shift from ASF equipment sales to building ASF capacity for its own internal use as the company prepares to service the Apple agreement, GT is revising guidance for fiscal year 2013, which ends December 31, 2013, as follows: Revenue in the range of $290 million to $320 million Gross margin in the range of 30% to 32% Non-GAAP EPS in the range of a loss of $0.40 to a loss of $0.50; GTAT sees 2014 revenues in the range of $600-800 mln.

On October 30, 2013, GTAT terminated its credit agreement with Bank of America and the other lenders from time to time party thereto. As of October 30, 2013, there was approximately $96 million outstanding under the term loan component of the Credit Agreement, which amount was paid in full on October 30, 2013 by the Company using its available cash.
And here are some analyst notes:

• Pac Crest notes GTAT misses and lowers as it changes its model and inks a deal with Apple. GT tossed old 2013 guidance out the window after it inked a deal to provide sapphire directly to Apple rather than sell sapphire tools. GT will now be supplying tools to itself as it builds a sapphire plant in Arizona. GTAT misses and lowers as it changes its model and inks a deal with Apple. Firm notes the Apple deal is likely for watches, not phones.Recurring Apple rev should support R&D funding, but lowers GTAT’s EPS outlook.
• Canaccord notes, while Apple has locked up GTAT in the near term, firm believes this deal could result in a more competitive sapphire furnace due to the increased R&D. Firm believes this has been the major challenge for GT sapphire LED customers. Initial reactions in the after-market are positive as approximate 2014-2016 guidance plus a large $578M prepayment from AAPL are leading firm to believe that this agreement is rather significant and possibly transformative. Its initial view is that it could result in $500M+ in annual revenues over a 5+ year time frame. Tgt to $13 from $10. 
• As mentioned, GTAT was upgraded to Buy from Neutral at BofA/Merrill and upgraded to Overweight from Neutral at Piper Jaffray.

Anyone who is doubting this as being anything less than ‘transformative’ is unable to read the tea leaves and should cease offering advice to others, on the basis that one can only be stupid for a finite period of time. This is the moment when smartphone makers walk away from gorilla glass in exchange for sapphire. This is the turning point that we will remember for years to come.

There are just two ways to play this, one of which is to be long GTAT. The other, for sake of discretion, will be revealed soon. However, I am sure most of you already know what stock I speak of.

The nerve of you fat catamites, coming to this place of stock market wizardry to offer me advice! That’s like going to the Pentagon and offering your strategies of war, learned from the countless hours of studious concentration derived from droning about the couch playing the arcade games.

Just because I am stuck in the mud, frolicking amongst the sheep, doesn’t mean that I am destitute to the point of accepting advice from the plebians in the readers class. I’d rather die a horrendous death of barbarous torture and amputation before submitting to the mercy of your intellect.

That’s not to say a great lot of you aren’t great traders and overall decent folks. As a matter of fact, I find your company to be entirely transfixing, in a good way. I draw an abundance of laughter and amusement from the internets and will continue to do so for the next 1,000 years, as it is the fate of iBankCoin to live forever, immortal and immune from the pangs of death.

But, do not believe for a second that “The Fly” is in the market for advice, especially of the financial variety. Respect these simple boundaries and you and I can be friends for as long as you live. Disobey them and we will speedily become arch enemies, just like the stories in your comic books when the anti-hero rips a beating heart out of his enemies chest cavity and eats it, while laughing at the CNBC for telling great jokes.

Good night.