Fly Buy: $USG

I started a position in USG.

New homes sales are expected to eclipse 1 million in 2013, that’s a 25% increase from 2012 for you home-gamers out there. You can play games with restaurant and retails stocks, trying to time the superfluities of the often fickle American housewife. But if you’re a man, the only way to play the US economy is through housing.

It was the root cause of all of the pain and suffering and will be the savior. The Fed is intent on inflating home prices. Nationally, home values surged by 5% in 2012. I am expecting more of the same, AND MORE, in 2013.

I’ve talked about this thesis trade for years–but it’s coming down the home stretch now. The profits are about to get serious, moving out from “dead cat bounce” to boom.

Prices for materials are soaring and the price increases will go straight to the bottom line, pushing growth rates way up, making an argument for “multiple expansion.”

I bought FBHS today, a major play on kitchen cabinets and Moen brand plumbing materials. Another kitchen cabinet play is MAS.

If you’re into wallboard, look no further than USG. Price increases were implemented on 1/1/12. If they stick, the stock is going “full wallboard” to the upside. It’s worth noting, Pershing Square is the largest shareholder of FBHS and Berkshire Hathaway own 15% of USG.

The pure plays are the builders. I prefer BZH, PHM, SPF and HOV.

Other material plays that will go higher in a housing boom are FAST, VMC, EXP, CX, TXI, LPX, GVA, JHX, PATK, MTX.

Roofing: BECN, OC
Paint: VAL, SHW, CE, FUL
Furnishing: ETH, PIR, BBBY, WSM, RH, NWL
HVAC: GNRC, LXU, FIX, IR, LDL, SPW, SJI, NTK, RBC
Doors: GFF
Carpets: MHK
Mortgage software: ELLI
Contractor Review Site: ANGI
Landscaping: POOL
Faux Wood Decks: TREX
Real Estate Sites: Z,TRLA
Appliances: WHR, SWK
Electric: AYI, HUB-b
Windows: NX, PGTI
LED Lighting: CREE
Flooring: AWI, TILE, LL

NOTE: I took profits in SNE.

I started a position in $FBHS.

Disclaimer: If you buy FBHS because of this post, the FBI will raid your home due to a twitter comment that you made when drunk. And, you may lose money.

Early on in 2013 the theme is to buy the biggest nerds the world has ever seen and sell short the cool kids. As AAPL declines, nerd stocks like NOK and RIMM soar. This must mean something, perhaps detrimental–but I haven’t figured it out yet.

I ran a screen looking for stocks that have grossly underperformed over the past two years that are +10% this year. Here are some names of interest.

RIMM +25%
AMD +11%
TRQ +12%
IRE +40%
HPQ +19%
MRVL +19%
CTCM +16%
BBY +22%
ALU +21%
ODP +29%
YOKU +19%
NOK +14%
SNE +13%

I can go on and on. I gots nerds for days.

Eventually this nerd stuff ends and the cool kids throw them down flights of stairs, snatch their lunch money, and give them wedgies.

Here are some underperforming “cool kids.”

MLNX -13%
IACI -11%
LULU -11%
FDO -9%
FIRE -8%
ASNA -9%
GME -6%
AAPL -6%
ANN -6%
CSTR -6%

This is not exactly a huge outlier. January tends to be a buy the dip month, following the tax loss selling of December. Ultimately fundamentals win and the nerds get stuffed back in their lockers. Only a select few get to put the suspenders down and join the football team, lift dumb-bells in the hallways, whilst talking to hot chicks wearing cheerleader costumes.

They’re either getting bought out for an absurd premium or the stock is going to get crushed. I am talking about MNST, an old time favorite of mine.

Front page of Yahoo, right now–punks.

Most of you jelly bellies have never went “all in” on an energy drinking binge bonanza, like Le Fly–circa 2006. It’s going to murder a whole lot of idiot teenagers.

20,000 visits to the ER pal.

You’d have to be a raving lunatic to buy the stock now. The fact of the matter is, Americans are getting keen to unhealthy diets and have moved towards better lifestyles. You can tell by the share prices of HAIN, WFM and UNFI. Another name to own for the long term is BNNY. All of the unhealthy crap like MCD, YUM and BKW, in their present form, are long term shorts.

In other news, here are the top performing ETFs over the past two weeks. Ex out WETF, as it’s not an ETF and is being moved.

After enduring a few days of taking punches to the scrotum in VHC, I caught a respite. Gains for the day stand at 1.6%, putting me +3% for the year.

Here are my current holdings, listed inside of The PPT

The yen isn’t going down, it’s being destroyed. Pay attention to Japanese equities, for they are by far the most attractive macro story in the world right now. Their new leader, Abe, is hellbent on creating inflation. Think of “The Bearded Clam” times 100. That’s Japan. They are the quantitative canary in the coal mine.

Patiently, I await the judgement of Leonard Davis, presiding over the VHC v AAPL trial. After this event is concluded, VHC will prepare to wipe the floor with CSCOs attorneys, who, by the way, assisted AAPL in this trial and LOST.

Wins ahead gentlemen. Enjoy the ride.

Some of you are quite perturbed that “The Fly” stopped using profanity. You found it to be eloquent, as you warmed your hands above flaming barrels of garbage. Out there, in the wild world of the interwebs, there are thousands of Fly counterfeits, men who’ve explored their darkest side and found nothing, so decided to copy the life force of another, superior, being.

There have been rumors that “The Fly” has taken to the interwebs again, authoring doubly anonymous blogs, under an alias of his current alias, in order to use the language of the profane. I am here to tell you, nothing could be further from the truth.

Le Fly is a distinguished gent, a man with many hats, resources and etiquette. The internet is nothing more than a sandbox for him, but it must reflect his person exactly else it isn’t genuine. If it isn’t genuine, then he is no better than your average finance blogger, devolving into the pits of vagrancy and dishevelment without art.

For as long as you live, you may never read of “The Fly” cursing again, at least here on iBC. You can access the archives for “the good old days” and in the future you will be permitted to talk about “the old Fly”–but right now there isn’t any time for that.

Make haste and get to the markets, for there is money to be made. Get your hands out from your vaginas and go get some.

I started a position in ELLI

Disclaimer: If you buy this stock because of this post, your favorite child will grow up to be a NY Mets fan. And, you may lose money.

http://www.youtube.com/watch?v=sjc5LFThDTQ

http://www.youtube.com/watch?v=R7boUa5FXBg