The Important Matter of Wasted Talent

I just got my series 7 license, working at some boutique firm filled with nefarious figures. It wasn’t a bucket shop because they were pitching real stocks and didn’t underwrite scams. Nevertheless, between the cigarette filled boardrooms and shifty criminals (a story for a later date) roaming around the office, it wasn’t exactly the place where I wanted to stay long term, if you know what I mean.

Starting out, my job was to get new accounts through cold calling. More often than not, people hung up on me; but it never bothered me because human behavior always fascinated me. If you say certain words to people, in a specific cadence, you can literally control them. I experienced this salesman mastery on several occasions, when the words flowed off my tongue perfectly, allowing me to address all concerns with ease and confidence. But it was impossible for me to maintain, consistently, due to the variables of the personalities I had to deal with.

“First one to talk loses”: that’s what I was taught when closing someone. Ask for the order and shut the fuck up. There were times when I’d be on the phone with a prospective client for minutes in total silence (it felt like hours), a game of discipline and will. I shit you not, if he uttered a word before me, 9 out of 10 times he was buying. But cold calling is a hard business. Most men can’t hack it and quit inside of 3 months, after running into walls–fact.

In comes “Ed Motta.”

The seat adjacent to me was idled, apparently reserved for a “professional” account opener. As always, I was skeptical, especially after learning he was getting paid 3x my $200 per week salary–a great sum of money for a piker like me back then.

On a Wednesday morning, around 11:30 am Mr. Motta staggers into work and introduces himself to me “Ed Motta, nice to meet you.” He was in his early 30’s and had an unusually large jug-head, short legs and stocky build. He was a Ray Liotta look alike–to the tee. His arrangement with his senior broker was straightforward: $600 per week salary and an additional $100 per new account opened. He didn’t manage a book or ever speak to a client after opening him. His job was to get clients and move on–like a locust.

He picked up the phone and started to “dial for dollars” as he liked to call it. He made a contact and started to pitch some rich guy out of 0hio some bullshit biotech stock. Ed’s voice was built for radio: it was stentorian, with perfect enunciation and he had an extensive vocabulary to boot. To my amazement, on his first contact he opened a new account. Flabbergasted by his showmanship, I put down the phone and watched him for a next three hours. No one ever hung up on him, literally. He could keep anyone on the phone, for hours if he wanted them to. To test this, I gave him leads of people who “slammed” me on contact and he was able to hypnotize them with his voice and make them buy something. He had the ability to open accounts, almost (some people will never buy), at will. He was a great talent, the best I’ve ever seen.

After his first week at work, Ed invited me out one night “for some drinks.” We hopped in a cab and he told the driver to take him somewhere. At the moment, I was drifting off into outerspace, wondering how this singular man was able to control people like elephants under a stiff whip, so I didn’t hear the address. When we arrived at his “spot,” I was taken aback, finding myself in the middle of Washington Heights (shitty area, like you wouldn’t believe), outside some seedy building. He told me, “Fly, I’ll be right back, just stay here.”

Okay.

After 10 minutes, Ed came running down and said, “okay, let’s go have some drinks.” We hopped in a cab and headed to midtown NYC. After getting out of the cab, some homeless fucker approached us for money. Instead of giving this bum money, to my astonishment, Ed gave him his fucking business card and told the homeless guy “call me Monday, I’ll give you a job.” I queried “are you out of your fucking mind?” That guy’s a crackhead.” His reply was “nah, he has a good voice. I’ll throw him on the phone and he will be a killer.”

Okay.

So we’re at the bar and I have no idea what to do there, as it was my first time in a real NYC bar. I was barely the legal age to drink, by the way. Ed was chatting it up with just about everyone he encountered, jovially having a blast. He told me, “hey, I’ll be right back bud, I need to go do something.”

Forty five minutes later and Ed is nowhere to be found. It was getting late and my wife and baby were at home waiting for me. Actually, my wife thought I was working late and had no idea I was out having drinks (thank God she never reads my blog). I paid the tab and left, thinking “crazy Ed” met a girl and left somewhere with her. No big deal.

As I turned the corner, an ambulance stopped in front of me. I turn to my right and it’s Ed Motta sprawled out on the fucking street, knocked out from an overdose of cocaine. From what I understand, he survived the ordeal; but I never saw him again. Rumor had it that he went to another firm to continue his illustrious career as a “professional account opener.” He could have made millions if he used his unbelievable talents of persuasion to build his own business. Instead, because of character flaws and drugs, he’s probably dead or working as a janitor at some shopping mall right now.

When markets trade against its victims, bad feelings tend to rise to the surface. Contrary to what you may believe, I harbor no ill feelings towards the market. Just because I’m not milking it for every single cent doesn’t mean I’m “missing out.” It’s gonna be a long, long year–trust me when I say that. It makes no difference to me, whatsoever, since I know exactly what I am looking to do.

My biggest mistake in 2011 was calling the massive correction and missing it by just two days. I was about 70% cash a few days before the summer crash, loaded to the balls with TLT, but went long because the smell of crack cocaine was too tantalizing to resist. I went long names like DECK, LULU and WNR and got my balls handed to me while on vacation, losing 100’s of thousands in my personal aggressive account in short term dated call contracts. In about two weeks, I went from being +16% to -8%, only to make it all back shortly thereafter. Considering I barely made 5% last year, that was the error that trucked my year, tossing me under the axles, grinding me into dust.

Poof.

Going into 2012, I was long idiot amounts of DECK, LULU, GSVC and others. My stocks were the best performers during the first three weeks of the year, leading to a +18% start for yours truly aka “gift horse.” You don’t look a gift horse in the face without looking at its mouth. The teeth are old and this fucker is about to break a leg. If I repeated the same errors from 2011, that would be an unforgivable crime, one deserving of egregious loss of business. I am in this game to win and win big. To do so, I need to trade my tape. Understand something, only pikers find it necessary to trade all the time. I’ve been bowling on you fuckers since 2005, so don’t step to me with criticisms. I’ll knock your mustache off your face and use your teeth as fertilizer for my plants.

I need a reprieve from dealing with the whimsical nature of investors. People who invest in stocks are not like other people. Investors are glorified gamblers, steered by emotions, delving into the deepest depths of depravity.

Everyone is right and there isn’t a single idiot amongst us. When things go terribly awry, it is simply a case of “bad luck” or being cursed by stock market magicians who control trading robots. I find myself dealing with the same vagrancies over and over again, with the lot of you now eagerly bullish to the point of mental retardation. It was as clear as the day was long, just two months ago, that the market was doomed for terminal failure. It was end game for the world, then the calendar flipped the script and ensnared the bears in a lethal choke hold, courtesy of the numbers 2-0-1-2.

To be clear, we’re going up only because we’re going up. Stop fucking overanalyzing it, trying to convince others that’s it’s based on something real– because it isn’t. It is all fantasy, a magical carpet that can be pulled from underneath you at any time. I know the feeling of not giving a shit about risk aversion, pushing the envelope to dangerous levels because it’s possible. I’ve been levered 250% to the upside, long short dated options, into overbought tapes, not giving a fuck about the consequences. Likewise, I know the feeling in my stomach, the feel of a knife twisting inside of my guts, when suffering from a -10% single day drawdowns–thanks to market “surprise sex.”

Have you ever lost more than a million inside of a single day? I know some of you have, most of you will never see that type of money.

It’s true, the very best traders, during upward surging markets, are young and ignorant. You can be very smart and a God damned idiot at the same time. Once you get older and conditioned to the eccentricities of the market, due to the battle scars, trading in momo names will never the same, unless of course you remain an ignorant fucker.

I’m only 35, but have been investing in one form or another since I was 13.

Don’t direct your fucking rancor at me because I decided to stay in cash. You fuckers need to catch up to me first, before you can take the fucking high road, bitches.

The ECB, with the help from Germany, will fund bankrupt countries, indefinitely. The EZ is in recession and cannot grow out of their debt burden. As a result, people clamour for stocks. They want them (stocks) all the time because, well, it’s a bull market.

If you think about it, literally, nothing can stop stocks from going higher. If growth slows, the central banks step in and print more money. If a country or two fails, someone else will step in and bail them out. The end result is the same: stocks trade higher, not because economies are robust, but because no one is permitted to fail. It simply isn’t an option.

Do you remember, back in 2011, when European indices were knifing lower by 5% per session and our basic material/financial stocks got cut in half? That was all fucking fear mongering horseshit. Like it or not, President Obama is getting reelected, via landslide, because he makes stocks go higher. Bush was a fucking gorilla who threw banana peels at the economy.

As an aside, I’ve booked a mini-vacation for next week, heading out to Florida. The kids want to visit Universal, maybe Disney, and I want to eat grotesquely large turkey legs. I was down 1.5% on 8% of my money today aka a big nothing burger. Despite all of the fun and excitement outside, Le Fly remains indoors, reading books, drinking tea, shutting the blinds to avoid seeing all of the depravity being committed by outright perverts.

http://www.youtube.com/watch?v=HSrVIX_jfdg&list=FLEIciWvVLqrS9jdkxpjKL9A&index=4&feature=plpp_video

Eagerly waiting in the tall grass, clamoring for the taste of meat, I find myself lazily lounging, spectating, awaiting a great event. As people pass by, I scowl and snarl, calling them names, whilst monitoring the winds for change.

Being a reformed greed-monster, purveyor of chinese burritos, gambler of the first order, captain of crack (spreads), I spectate the ham and eggers mixing it up. Knowing the feeling of unchecked rapacity, I wait for them to err, so that I can go in for the kill, biting their heads off with savage aggression.

http://youtu.be/nAE0UH1v02k

I made 4.4% on 8% of my money today, also known as 0.35%–nothing.

The response to your flagrant barbarism will be an unrestrained blitzkrieg on your greedy asses. You fuckers will have seizures– freeze up your central nervous system– from the surprise– bright lights blinking in your face.

Today was day one of the attack. Tomorrow the blood will flow, freely, alerting all of the small headed fund managers to consider raising cash. By the time the lame-duck over at John Hancock figures out what is taking place and attempts to correct his position, your funeral suit will be at the dry cleaners, while “The Fly” plots and schemes, plots and schemes (in that order) to buy your margin call liquidations.

You should all spend a lot of money to procure provisions and fine wine to celebrate the gift that Bernanke has bestowed upon you. This respite that you are submersed in will not last forever. I can promise you that AAPL will not go up $15 per day, everyday, until the end of your time here on earth.

No, what is in store for you is far worse than a mere correction. Pah, don’t chalk up your misfortunes to happenstance, small man, things occur methodically and you’ve made your bed. Very soon, you will have to sleep in it.

The insidious nature that is Greece will reverberate– and the crisis that tightly clenched your arteries in late 2011 will reemerge– this time for finality. Do not think for a moment that just because the EU said they’d lend Greece all of this money in exchange for submission that it’s a done deal.

Haven’t you seen the movie 300?

With the Greek economy spiraling lower, -7% on its GDP, it’s only a matter of time before the people take pitchforks to the heads of their leaders. When that happens, you will regret the day you were born, gayly pressed inside of a panini machine, long TNA because it reminded you of a perverted acronym.

SHAME ON YOUR HOUSE you vile creature of a man, beast of all beasts, barbarian of rocks and dirt.

Nevertheless, as an innocent spectator of the market, having 5% long, 3% short and 92% cash, I wish you well in the near term. My only request is that you cease and desist from agitating me with your bold ignorance. I will rack your brains with stovepipe for less!

Top Pick: VXX

Shares of IBM, CMG, V, MA, AAPL, and a number of others, have done extraordinarily well over the past few years. Even so, picking out a few outperformers doesn’t mean we are in a “bull market” You fuckers are so desperate for a bull market, you’ve become delusional to the point of seeing mirages of grandeur; but, unfortunately, it’s just a big pile of shit. Take a look at the chart of the SPY above. Pray tell me, have we gone anywhere since 2000? That’s 12 fucking years, Jack. A bull market doesn’t cut dicks off every few years. And I am not talking about your garden variety 10% correction either. I am talking dick guillotines, like we saw a number of times since 2000, most notably in 2008.

When you dive lower by 55% in a year, I think it’s fair to declare the fucking bull market dead, no?

Right now we are in a strong trending market. Moreover, this may be the beginning of a long sustainable bull run, one that enriches the baby boomers and bails America out of its debt crisis– but I doubt it. Why am I so cynical? For one, the fundamentals are far different today than back in 1992, when the last bull market started–lasting until 2000. Nevertheless, it is my job to give the market the benefit of the doubt, so I will do that.

If your first investment was made in 2009, then you are enjoying a bull market. Happy? For everyone else, we’re simply getting back lost ground, trying to cherry pick winners and avoid the next collapse, which is surely right around the corner.

How do I know that?

Because that’s what we fucking do. Boom and bust, the vicious cycle that remains constant.

Today’s end of day extravaganza, likely purported by nabobs dressed in turbans, crushed the hopes and prayers of millions of bears worldwide. Prior to the run, they were feeling all mighty, some even a bit pretentious or haughty. Plainly, I was profiting from the decline via VXX and TZA; but 92% of my assets are still in cash, so it was something of an after-thought, frankly. But the incessant pressing of the bears’ heads inside the panini press is almost too painful to watch. Day in and day out, they come to play, only to be beaned in the face and cock by 105mph, Nolan Ryan style, fastballs.

When irrational things occur in stocks and markets, frustrated participants tend to chalk it up to “idiocy”, declaring the markets to be devoid of reason. For a while, I fell into the trap of casting aspersions, lamenting over losing positions and hating the people who bet against me. But as time went on and I stopped dragging my knuckles on the ground, I came to realize markets are both genius and stupid. They are filled with the biggest idiots the world has ever known, as well as the sharpest minds. The markets cannot be stupid, ever, since it is the collective brain-trust of the entire world.

Granted, from time to time, a situation like ENER presents itself, where idiot bulls bid soon to be bankrupt companies up to the exosphere, only to, ironically, bankrupt themselves in the process. But for the most part, markets ebb and flow, moderating through emotions and news flow, eventually arriving to the right price. You just see it as “dumb” because your time frames are all fucked up. You want stocks to drop right now because of your shorts or your inverse ETF’s. But the market doesn’t give a shit about your financial well being and its time frame to produce an accurate price is non-descript.

XYZ may be worth 0; but it can take 10 years for the market to figure it out. That doesn’t make it “dumb”, only methodical.

With regards to this tape, I find myself out of my comfort zone and would rather stay in cash than make egregious errors. Look at FOSL. I had fuckloads of that stock in the $70’s and $80’s. I even declared it to be a prime candidate for the $100 roll a few days ago. Now it’s $120. Fuck me running sideways with an alligator.

Never mind dry bulk shipping rates in the gutter. Dry bulk shippers are off to the races, just like the homebuilders, despite fundamentals. After all, the market is a discounting mechanism. Therefore, it is discounting all of the bad news and putting it in the glove compartment, to be forgotten forever–until a cop searches said car of course.

Normally, I wish good fortune upon everyone. I have no desire to strip you of your coin, unless you have it coming to you. I read your comments and feel the vast majority of people here do not deserve to have money. You should and shall be stripped of it!

Good heavens, FOSL was down 5, now it’s doing the Michael Johnson. I guess I was right about that fucker too when I was buying in the high $70’s. The same people who talked shit then, talked shit about LULU, DECK, GSVC, WNR and now the SPY. Generally speaking, and I mean this with the utmost sincerity, you have no fucking idea what you are talking about. It’s hilarious, actually. My colleagues throw mashed potatoes at the screen, rolling on the floor, laughing at your folly. Some of you are the worst investors in America.

You do realize I speak with thousands of investors, right? See, unlike the other piker finance bloggers out there, or talking heads on the teevee, I run a multimillion dollar money management business and talk to some of the wealthiest people in the country. I get a feel for the economy and test the winds through candid discussions. I’ve encountered some truly talented people in my career and some pretty awful ones. By far, some of you are the worst investors I’ve ever had the dishonor of meeting are people from the internet. So many of you are disheveled, unemployed, small fish, trying to skirt responsibilities through trading. Doubly painful, it’s the very people who think they are so good, calling me (chuckle) a contrary indicator, who live on the bottom of the barrel.

This is your wake up call, pal. Get to work.

NOTE: Today’s VXX buy represented 3% of assets.