It’s All About the Homies

Toll Brother just smashed earnings:

Toll Brothers beats by $0.06, reports revs in-line (36.01 )

Let’s have a look at residential construction, on an apples to apples basis, to see if there are any disconnects.

Fastest growing by earnings:

RYL, TOL, MTH, MDC

Fastest growing by revenue:

TPH, CHCI, MDC, RYL

Most levered, based on debt/equity:

BZH, HOV, KBH, SPF

Lowest PEGs:

TOL, MTH, RYL, MDC

Least owned by Institutions:

CHCI, HOV, SPF, AVHI

Lowest FPEs:

HOV, RYL, MTH, NVR

Lowest by P/B:

SKY, AVHI, SPF, TPH

Lowest by P/S:

SKY, BZH, HOV, CVCO

Smallest by market cap:

SKY, CHCI, AVHI, CVCO

I happen to be a very methodical planner, but impulsive trader. It’s an odd combination, sort of like watching and old professor go nuts inside of a laboratory trying to create Frankenstein for no god damned reason. I start off my days, as most gentlemen should.

Breakfast is austere, nothing more than a cup of earl grey tea and a piece of toast or maybe a greek yogurt, with the sounds of classical music being played, gently in the background.  I turn on the CNBC and chuckle as the comedians tell funny jokes to the cameras. I pen a blog, email important people, text Jeremy (our IT guy/my partner on the site) threatening messages regarding the servers and then sit down to give the market a look over.

I have a list of stocks that I am willing to buy, procured, diligently, the night before. I look it over and think about a few of the names, request research on the ones that interest me, then watch the market open for trade.

As soon as the market opens, I turn into Dr. Jekyll, screaming at people and punching plants in the face. All of my watchlists are immediately shredded to pieces, then burned. Frantically, I search through the most active list and most up list, looking for trends. I want to see a common theme. I am looking for correlations and reasons to buy into a given sector. If the sector isn’t hot, I’m not interested. This is trading after all, not investing.

From about 10am to 11, I speak to some friends about the markets, pick their brains for ideas.

I do another blog.

Over the past few weeks I’ve been spending my trading days inside 12631. I love it so much, I don’t think Chess and RC will be able to kick me out. Jeremy tells me over the past week 12631 broke all activity records in its 2+year history. The room has never been so lively. All day long I am posting thoughts about stocks that pop up on my radar inside 12631, before I buy them or even think about buying them. It’s just a great place to hang with people who are serious about making money. Hat tip to Chess and RC for that.

I switch back to The PPT and post comments in there regarding stocks that look good, maybe create another screen to find some trades for members, or post some research.

I find a stock worth buying.

For the next 10 minutes, I am entranced with getting orders filled. Typically my trades are anywhere from $50k to $200k per, with normal positions sized up to about $2-3 million. I know to some that sounds like a lot, but for people in my industry, it’s chicken scratch.

When I am buying stock, I do not micro-manage the fills. I want in the stock, so I buy it. If I am afraid of moving the stock higher, I buy small, with plans to buy more later.

I blog again.

By the end of the day, I have probably blogged 5-10 times, spoken to 15 people, left 10-20 PPT messages and 50 12631 comments, filled 10-20 orders and sucked down 4 oversized mugs filled with the blackest earl grey tea (milk and honey) the earth has ever produced.

Then in the after hours I build a watchlist of stocks to buy for the next day. You know the routine: rinse and repeat.

NOTE: Someone just reminded me that I tend to chat it up a bit on Twitter too, yelling at the internet in grossly sardonic manner.

Why bother giving you a market summary?

I’m long 1.2 million shares of FRO into the bell. Let’s see how I fair tomorrow.

I was +3% for the day

I’ve been in and out names so fast, I am sure it’s hard for many of you to keep track of what the hell I am doing.

In summary, I am at new highs, +32% for the year, up more than 3% today.

My largest positions are JIVE, FRO, YZC and MT, in no particular order.

I’m also long and liking ANFI, IMMR and MCP.

Things have been very fluid and I am still liquid for 10% of assets, which are in cash. I’m also not limiting myself to cash on hand, open to the idea of using leverage for trades.

Eventually the market is going to stop going higher. Until then, I’ll keep trading whatever the people crave.

Shares of HLF are halted for trade, news pending.

Montauk Bill Ackman is short to the tune of $1 billion dollars and is now underwater on this position, after driving HLF down into the $20’s.

Is an Icahn bid coming?

Stay tuned.

UPDATE: It appears HLF might name a new auditor. False alarm.

UPDATE II: PWC will serve as new accounting firm for HLF.

I added size to a new position, YZC, making it a top 5 position of mine.

It’s gonna go.

I sold out of my CZR for a 5% loss. There is no point in holding onto a trade acting retarded, when there are 100 other names going up as we speak.

My solar index was +18% yesterday and up even more this morning, with a wide array of names up more than 50% for the day. I kicked out of a 100,000 SOL purchased yesterday for a cool 20% gain. Had I held onto it for another 10 minutes, the gain would’ve been 45%. If I still held it now, the gain would only be 7%.

These stocks are coming in hard off their highs. I would not bottom fish them today. Many of them are overdue a 20% beat down.

Seek risk elsewhere.

I followed The Devil and bought a little MCP, only 10,000 shares. I will hold it for a week.

Other than that, I am waiting for my shipping stock, FRO, to explode to the upside. I am long 1.1 million shares and know, without a doubt, the stock will be heading higher over the intermediate term.

In summary, risk is coming off the table now and it’s a glass of nitroglycerin. Do not try to catch it.

I booked profits on SOL.

YGE is +22% pre-market and the 100,000 SOL I bought yesterday is going to pay off nicely this morning, with the stock up 15% so far.

Let me entertain myseld by affixing rudimentary valuation comparisons in order to justify higher prices.

Year to date, who are the laggards?

EMKR (-15%), STP (-45%), DQ (+15%+), STRI (+23%)

Who are the cheapest on a p/s basis?

STP, CSUN, SOL, HSOL, JASO

Lastly, who are the most impaired on a debt/equity basis?

STP, CSUN, LDK and DQ

As an aside, I’m thinking it’s time for the shippers to run again, hard-core, 1970’s pornographic style, extra mustache. Morgan Stanley issued a bullish report on them yesterday.

See?

If the shippers are gonna run, solar style, the following names have the best chance of ripping.

GNK, FRO, EGLE, TNK, NAT, VLCCF, DRYS, GLOG, DSX, NM and BALT.