PREPARE FOR LOCUST ATTACKS AND DROUGHT

The sell off in corn is overdone, just like the sell off in poultry related stocks was overdone last year, when the shoe was on the other foot. Shares of PPC have skyrocketed in the first quarter of 2013, as predicted. But now it’s time to take the foot off that pedal and fix your sights on corn.

This great, big, fat nation lives on corn, especially of the syrup variety. Don’t let a little deflation get in the way of a bad corn crop. We are just months away from enduring horrifying locust attacks and droughts that will suck the land dry. I expect stocks like BWLD to top out soon, as corn prices begin to rise again, so will chicken wings.

Your play is very straightforward, mate. I will be buying shares of LNN, for its irrigation business. Moreover, I like BG, ANDE and maybe some MOS. But my favorite play is LNN, which has been wrongfully punished due to fears that lower corn prices would hurt their business.

Unbeknownst to the idiots playing with themselves and the money of their clients, LNN is not a play on corn, but a play on the inevitable depletion of the most precious of resources: water.

I will be buying it because idiots sold it. I will be selling it when the rivers run dry and your local bartender is making cocktails made from sand.

I am playing in the sewers today. I started a position in JRCC and added to FRO.

The most hated sectors are on fire today, from coal to nuclear to gold. Shares of WLT and CLF are on fire, helping others in the process.

Here are a few names that might follow suit.

JRCC

Beaten down shippers. My fav is FRO.

GG

PVG

ACI

ANR

TCK

BTU

CMC

MTL

X

CLF

I’m against basic materials long term. However, in the short run, some of these hated stocks might squeeze higher.

In about a week the media will be “celebrating” the one year anniversary of The Facebook IPO, the event that fleeced pikers for their coin. In my opinion, the FB ipo should be remembered as the very worst ipo in US history, crushing retail investors on a scale never seen before. The aftershocks were devastating in the social media space. Stocks like ZNGA and GRPN never recovered and people fled the sector, en masse, because it had been tainted.

Back then I was a big investor in YELP. I liked YELP because they help people make smart decisions on where to dine. Along the same vein, I like OPEN, TRIP, ANGI, TRLA, Z and LNKD.

When everyone was bailing out of the sector, these stocks were being accumulated. Truth be told, I have no regrets about selling YELP, since I was fortunate enough to sell around $27. My real anguish lies in the shares of ANGI, because I never pulled the trigger.

My custom index of social media stocks have almost doubled since last year. Have a look.

I’m not going to lecture you about missing out on an epic run or point to names that might continue to trade up. But this is a lesson we all need to remember. Just like the energy debacle post Enron or the dot com bust of 2000, when whole sectors get taken down due to bad publicity, opportunity waits in the balance. When XYZ is getting dismantled because ABC committed fraud, take a closer look at XYZ. When BP spills oil in the GOM and its shares drop like a stone, take a closer look at BP and companies affiliated with them.

There is going to be another FB ipo one day, a stock that ruins the party for everyone else. Shortly after it bombs, the media will decry foul the Twittersphere will mock anyone buying into the sector. More often than not, in my experience, money is made buying the blood of names down only because of the reputation of a peer.

Here are 6 month and 1 year returns of some of the members in my Social Networking Index.

6 month

1 year

The company is halfway retarded. I should’ve put this money into The Devil’s CLIR or PAMT play. Nonetheless, here I am sitting in a position that is +5%, less than a day away from dinging me for a cool 15%.

What went wrong?

Their biggest customer didn’t order anything for two quarters in a row. It’s pretty hard to claim they’re your biggest customer when they urinate on you like that.

Pricing for silicon on sapphire is abysmal. They need to see prices rise 25% in order to break even.

The good news is three fold.

1. I sold 30% of my position before the bell, told here and inside of The PPT. Oddly enough, before I put in orders, a trading desk called my office and asked for my stock. Apparently there was an aggressive buyer out there, for 50,000 shares, who wanted in just prior to the execution.

2. The company has $31 million in cash and no debt. They don’t expect to burn any cash next qt.

3. Silicon on Sapphire is in its nascency stages. It’s pretty hard to justify selling this stock as the LED market takes off and sapphire is being used in smartphones. That’s supposed to heat up, in earnest, during the second half.

My plan is to buy back the shares I sold today at lower prices, between $5.75-$6.00. This is a second half play and the stock could easily double if prices continue to rise, as the sapphire market expands into the smartphone space.

We keep running and running without pause. All of my friends believe the market is nearing a top. I felt May would be a very bad time for the market. However, price action has minimized my conviction for a downward reversal.

The conundrum is knowing tops happen when no one expects them.

CLIR is up today thanks to a company conference call last night that obviously attracted new buyers. Keep an eye on that stock, for it is the favourite of The Devil.

Speaking of which, he is very eager to get started on iBC. But he will not be penning missives or explaining his ideas in detail. He is paranoid about his identity and wants me to post his ideas for him, in bullet point fashion. So don’t expect to be introduced to the person called “The Devil” any time soon. For now, his top ideas will have to suffice.

After the bell are earnings from RBCN. They’ve disappointed every quarter for as long as I can remember. Expectations are very pessimistic, which might work in favor of the share price action post report. For the record, I am not enthusiastic about earnings tonight. I am in the stock for the turn in the sapphire industry, fueled by 2nd half wins at certain smartphone makers.

UPDATE: I trimmed my RBCN position by 30% and bought ARG for the $100 roll.

Companies that are in solid uptrends filing for secondary offerings, below market, are buys. We saw it two weeks ago with RLGY at $42 and GNRC today @ $37.

About a month ago, The Devil’s stock, CIMT, filed for a secondary in the low $5’s. Now look at it.

You don’t want to get in ahead of the secondary announcement of course. But if you get in after the dip, the way this market has been roaring, odds are you stand to make some easy coin.

Both gold and silver are getting smoked today, down about 1.5%. You can ponder all you like as to the reason behind the drop. Look no further than the power of fiat currency, backed by the full faith and credit of the US military apparatus.

While you misfits “invest” in bitcoins, the market trends higher daily, taking out gold bugs and curb stomping them until their jaws break off their faces.

I strongly advise you to avoid buying the dips in precious metals. The central banks have complete control of the markets now and have brought “stability” to the commodity markets too. They want it all, higher asset prices without the side effects of inflation. You’d think when a central bank creates new currency out of thin air, it would give life to inflation, most readily seen through commodities. Well, that might happen one day down the road. But for now, commodities are contained and alternative forms of currency are–essentially– in the fag box.

The hardest part of investing, in my opinion, is knowing when to let go of a loser. It’s easy to sell a winner. After all, there are gains to realize and victories to lock in. But locking in a loser is admitting loss, a pox of shame upon your household. Such shame may live forever, in infamy, as a tale passed on through the generations of how you lost the family fortune.

Or it might be some piker trade where you lost 3 grand. Either way, losses are hard to close out.

Often times, trades become investments when the trade goes bad. After the trade goes bad, we look for reasons to hold onto the stock. Sometimes we convince ourselves that merely trading the name in the first place would’ve been a ridiculous proposition. After doing all of that hard work and research, we unveil true value in places that no one ever thought of looking.

This is called desperation. More often than not, when we grab for straws, based upon a losing trade, we start over-fitting. In other words, we look for excuses to hold the stock, even buy more, in order to preserve our delicate egos.

After all, we are all genius, a gift to the earth and the stars. How could we be wrong when we are so smart?

If you think about it, this sort of rationale transcends every aspect of living, from marriage, friendships to dead end jobs. People always tell me “the best thing I ever did was divorce so and so.” Or “thank God I quit that job.” But we all fear making that commitment because it means we’ve failed.

Isn’t it better to realize a small loss than a gigantic one? This is common wisdom, not exactly trade secrets. But we keep reading about famous fund managers committing fraud, blowing up billion dollar funds, risking their freedom by trading on insider knowledge. Why? The answer is quite obvious. No one wants to fail, ever.

This mentality has climbed to the top of the capstone. The controlling elite now accept failing as part of the business cycle and allow poor stewards to continue to run good companies into the ground.

I own one stock that is underwater: FRO. Had it went up to $3 after my initial purchases, I would’ve sold it. But since it’s down 17%, I am a long term investor, very prim and proper–interested in the ongoings of the shipping business. I care for shipping in the same way I care for a banana less gorilla jungle. Sometimes I feel like smacking myself in the head with my tea mug for being so stubborn. All of my money losing ventures are the result of pride.

I’ve been blogging on the internets since 2002, one way or another. In the world of finance, I’ve been blogging since 2006. I’ve written more blogs than you could imagine. The pinnacle of iBC was back in the frantic days of 2008-2009. This isn’t exactly a growth industry, as there isn’t anything very innovative about reading the missives from a group of traders. Twitter is to blogs what the internet is to newspapers.

All of my time and energy have gone into making iBankCoin successful. But my opinion of success might differ greatly from yours. Some are happy with a little recognition and influence. Others only want to make money. My opinion of success is fairly straight forward: is the endeavor creating value? If so, is the time spent to create this value worthwhile?

Mrs.Fly often queries “how long will you blog?”

Ideally, I’d like to pass on the torch at some point, crowning the next “Fly” in the same manner as the catholic church selects a new pope, black smoke and all. Perhaps in 500 years, your great, great, great, great grandchildren will be reading the insane missives of King Fly the XIII. Or, maybe I’m just over-fitting again.

http://www.youtube.com/watch?v=eCre5lvlEcY

Poof! Why isn’t this damn wand working?

-Merlin