Premonitions Abound

I cannot help shake the feeling the market is going to swan dive soon. All of the oddball disruptions in the price of gold, NIKKEI, treasuries and foreign banks has me frozen in a state of fear, with pallor the color of that of a vampire.

Nomura is down 26% over the past two weeks. Am I supposed to blow it off as if it doesn’t mean anything?

Most of the people in my industry are fixated on created new relationships, raising more assets, not having to worry about how the money gets managed. They either toss the money, carelessly, into a set group of large cap stocks, mutual funds or ETFs, and then sit back, collecting fees along the way. Or, they simply hire qualified analysts to do it for them. They don’t worry about pullbacks or when they should go to cash. They will never go to cash because all they promise is to outperform the SPY, by passing the money off to someone else to manage. It’s the most absurd thing in the world and clients don’t even realize it.

They’re paying some schmuck 1-3% per annum to be a middle man, a seasoned salesman only interested in the next kill.

When the market’s get killed, these “investment professionals” pitch them new mutual funds with guarantees attached, only to earn more fees. I say, if you’re not incredibly busy at work (which most successful people are), try to direct your own investments.

The people I meet here on the internets are not very busy at all, since they have the time to rifle through my missives and learn about HORATIO CLAWHAMMER. There isn’t any reason for you to pay someone what you can do yourself, so give it a shot.

As for the market, I bought nothing today, even after I threatened to buy a bunch of stuff this morning. The more I think about the market and how it pertains to myself, the more I feel like putting up the “gone for a siesta” sign on my door and coming back to play in September.

Fifty percent of stocks were lower today, despite the 100+ point rally in the Dow. When this happens, I always feel terrible about my positions, clearly underperforming in an upward biased tape. From the FRO to IMMR to ANFI to USG–lower values across the board.

But I intend to sell some IMMR, north of $20, with the CEO, who is selling the stock in 5 point intervals. You will all panic when he sells at $20, and again at $25, then $30, then $35 etc.

Having my thumb in the wind, I can tell you the retail investor has very little patience for down periods. At the first sign of weakness, I am bombarded with text messages to liquidate and hide inside of a bunker.

Japan is off 17% in recent weeks, taking WETF with it–just a tad. I am hoping to buy back in south of $12. I’m also looking to buy back RAS, BX and others. Although the market isn’t appreciating good, sound, businesses now, I don’t feel at ease owning crap, exclusively for the purpose of ripping out quick trades. If I was 90% long and content with my holdings, I’d have no qualms taking 10% and rolling the dice with it. But with 45% cash and sucky positions losing value, I’d be acting in a manner not traditionally known as “gentlemanly” if I was to partake in outright gambling now–buying the crap.

In summary, it was a very depressing day for me. However, my greatest trade has yet to have been made.

I see so many stocks ripping to new highs, small cap dice rolls like OSH and HYGS, companies that I’ve been eying for a long time–like TEAR and CPST, yet do not feel the urge to play. That’s the problem when getting burned; it strips you of your desire to play with fire.

Into the bell, I remain a coward, 45% cash, taking hits in IMMR–although half of what they were before my eloquent post.

My largest position is cash. After that, unfortunately, IMMR is my largest holding. The shares are being dismantled today, on light volume, because the CEO exercised options at $7 and sold north of $15.

He’s getting rich.

Does that mean the stock price is done going higher?

Well, let’s have a look at his recent sales.

First of all, these are automatic sales, likely part of his estate planning routine. Second of all, he’s a god damned idiot, if judged by his sales. He’s been selling since $5. Each and every time he sells, the stock takes off to new highs.

Look, the stock has been very hot and expectations are high. This is THE play for the Samsung Galaxy. Say haptics.

When investing in something with a story, a catalyst, understand insider sales mean nothing. There are a thousand reasons as to why someone sells, only one reason why they buy.

IMMR is still kicking ass and with the stock down, based off some absurd notion that the CEO has a clue with timing tops in his “automatic” sales, you’d have to be a complete idiot to join the sheeple by selling here.

Over the weekend I saw a great documentary called “Searching for Sugar Man.” For those of you who’ve never heard of it, I highly recommend watching it. It’s such an unbelievable story; it’s almost too good to be true. I won’t give away the storyline. But it’s an important reminder to never give up on dreams. I do believe we all have our own, unique, special talents. You just have to exert the effort and courage to make them come true.

Turkey is going “full mohammed” on their government. I wouldn’t worry too much about revolution there. The country is protected by a secular military, who will drop cluster bombs on powerful religious zealots, before ceding control of the country to them.

Futures are higher and stocks look poised to recover some of Friday’s losses. As always, at the first sign of weakness, I got scared out of stocks, turned all bearish, and starting reading Zerohedge again. I really need to stop over-thinking the market, trying to time tops, and just get long the names that I like. I can’t tell you how many huge winners I’ve missed out on this year, and over the past two years, due to fear of losing money. It’s more than that, actually. I want to avoid losses and time bottoms too, also a ridiculously hard task–even with The PPT.

Bottom line: I have a few names that are worthy of my time and I am going to buy them today.

I’ll tell you how, you stupid bastards. It goes lower. That’s what it does.

Down, miserably, in 5 of the last 6 years. You might be saying to yourself “self, but, it was up nicely last year, so it might do it again.” However, what you should consider is the fact that the market moved LOWER in May of last year by 6%. Therefore, the move higher in June was nothing more than a bounce.

Let it be noted, this year, the SPY closed up by more than 2% for May–leaving it naked for abuse in the showers by junior traders on Wall Street (extra homo).

Good night Lucy.

The Caesars who manage America’s money all went to the Hamptons this weekend and will stay there until late August. In there place are junior traders who are scalded with hot, boiling, coffee– if they should spoil the treasure. They are told, under the crack from a leather whip, “do not mess anything up while I am gone. I am off to party with pounds of cocaine and hookers. See you in the Fall.”

As soon as the senior traders and managers leave, the juniors set their goals on destroying said institution via really dumb trading, desperate to make a name for himself.

Yes, it’s true, most of this is occurring in my head, exclusively. However, I think it’s fair to assume, with the SPY +15% for the year, the summer is going to be a snoozefest. We should all prep ourselves for a different type of market, one that doesn’t bend to the caprices of gamblers.

I just can’t get over the fact that my FRO got shaved for a quick 70 cents inside of a week. I knew I should’ve sold some. But I am going ‘full maniac’ on this one, even though (and this is a very important though) I haven’t any formal expertise in the shipping industry. I don’t even know how to tie a bowen knot, let alone be onboard a shipping vessel and not throw up on someone’s face.

I like to believe my intuition and experience count for something, when making bold decisions. The truth of the matter is, the market doesn’t wait for logic. My rationale might be spot on– but is the time frame? We shall see inside of a year.

Aside from that, I’ve been dealing with my allergies to the Earth. I am not from this planet and do not like your pollen. Where I’m from, one can breathe the air without violently sneezing into the wind. I’d like to hit the person who invented pollen with a god damned shovel–right in the nose.

Just when I thought the cocaine addicts from CNBC could not hit a new low, they did it again. At the end of the trading day Maria Bartiroma and some other talking stick said “this sell off is the result of rebalancing.”

Really, stupid?

This sell off has NOTHING to do with end of month rebalancing. I cannot believe they are spewing this crap. Get to cash and get your defenses up, for the rollover happened when bonds rolled over.

This sell off is a result of a risk off environment in Japan, which threatens the yen-carry trade perversion. On top of that, interest rates have been spiking. See TLT. With that, REITs and mortgage related names are under pressure. These are the market leaders. The big cap dividend leaders are getting smashed too. You have to recognize when the tape becomes difficult and respect it. Don’t make asinine excuses for the sell off. There are many people on margin who need to be blown out.

Basically, the dumb money is being clawed back, as it always does through time. It’s been too easy for too long.

Watch Japan. Watch IYR. Watch TLT. Watch XHB. And don’t watch CNBC.

With the proceeds from my PAMT sale, I added to both IMMR and ANFI.

It doesn’t feel good having one’s $FRO deflated like this, long 1.2 million shares into what appears to be a death spiral. Clearly, the market is testing my resolve here, as I do not need to hold the shares any longer, being up in the high 20% range for the year. Me doing so equates to being a “maniac investor” and I wouldn’t have it any other way. With the types of draw downs that I endure on a monthly basis, it should come as no surprise as to why I do not manage a fund and instead have opted for an advisory role. People who toss money into funds do not like beta and I certainly bring a lot of that, along with the alpha.

The point of this post is not to bore you with cheap psychiatry sessions, but to inform you that people who bought gold and silver miners yesterday are complete fools. Listen to me now: the sector is dead. Buy the blood only, avoid the momentum trade.

My price target for IMMR is $20. God knows it will take a miracle for me to hold it that long. Look at RBCN today. Ughh.

I am looking at the REITs and they’re getting the old back of the trunk knife action. On the other hand, regional banks are doing great. They benefit from a steepening yield curve. Short RETIs-long banks? It might work. But I’d rather not sell short REITs, thank you very much.

The top two stocks on my watchlist are HOV and HBAN.

Oh, and MDB related stocks are getting poleaxed: UNXL, PAMT, CLIR etc.