It’s Not 2011, Jokers

2011 was so 19 days ago. The idea that we will trade down because of European debt or a staggered US recovery is simply wrong. Do you want to know why it’s wrong?

Answer: because it’s not 2011.

Back in the destitute days of 2011, investment managers lamented over balance sheets and overwhelming debt burdens. Now they just look at that shit and eat potato chips. They can’t hear the shorts anymore because the chips are crunching loudly in their ears. People are eating pickles and playing with ham sandwiches. Life is good again and the shorts are on the run, scared to death of serial killers stalking them for their skin.

Everything goes up. Whether we are talking housing or NFLX, investors want a piece of that action. Semis and fiber stocks are stabbing short sellers in the face, whilst snorting loooooooong lines of uncut cocaine. Obama has it going on and will be elected for another illustrious term, effectively decapitating the GOP into an austere faggot box (no offense to guy guys of course).

As for me, I am interested in DMND because it’s nuts. So the company is running a fucking walnut mafia, what are you going to do about it? Exactly. It’s not like they have exposure to some sort of fucked up Walnut-Peacan derivative trade gone nuclear. They will simply whack a few people, pay off some bribes and the stock will rally. I’m also long FSLR because Europe is back and so is Obama.

Ladies and Gents, it’s time to forget about the year of 2011 and embrace the essence that is 2012, which is winship.

Chessnwine has been alerting people to the meteoric rise in housing stocks as of late. A few weeks ago, I successfully traded out of BZH. For months now, these stocks have been leading the market higher–to the dismay and illustrious detriment of “professional short sellers.” As a matter of fact, many housing related stocks are making new 52 week highs, with nothing but fresh, clean, leprechaun air in front of them. Their shareholder bases have been rebuilt from the ruinous catastrophes that followed the great housing collapse of 2007.

This trend is not only helping construction companies like TOL, LEN and NVR; but it’s also lifting the prospects of derivative housing plays, like LOW, PIR, PATK and USG.

Inside of The PPT, I put together a very comprehensive housing resurgence watchlist to monitor this phenomenon. Keep in mind, all of this is based upon expectations and not reality, as new builds remain at absurd levels. As a matter of fact, housing starts are at their lowest levels since World War II. But that’s not necessarily a bad thing. Accordingly, the firms that exist today and profit in such an onerous environment are built to win and win big should the housing market rise from the ashes.

Here is a snapshot of the biggest housing related winners, year to date, courtesy of The PPT. Pay attention to this very carefully, for it may be a super trend in its nascency.

(note: the entire list consists of 66 names)

Seeing titles like that, degenerate in nature and style, makes me laugh. But it’s 100% factual that I have indeud “gone monster” (NO METROSEXUAL) through buying MWW. It’s a cheap stock and—seemingly—everyone is going to make a hostile bid for them. It’s one of those names that gets lost in the deck, until it’s hitting 52 week highs and urinating on your face.

The earnings are due to come out on 1/26. I am not expecting great things. As a matter of fact, I think the company sucks balls. However, the stock price–historically–is tightly tethered to the US unemployment index. By hook or crook, I expect the US unemployment rate to downtick, which should offer tinder for MWW to fire higher. Priced under $10 per share, I feel my downside is extremely limited, while my upside is anywhere from $3 to $10 per share–based upon the laws of science and mathematics.

Moving on. I sold out of MTW to make room for MWW. I simply removed a T from the portfolio and added another W. Also, I wanted to keep my cash position pegged at about 35%, where it stands now following my earlier purchase of DMND.

It appears David Einhorn started a position in XRX and DELL, while covering shorts in FSLR and DMND. Incidentally, I am long both FSLR and DMND. I don’t quite get the XRX purchase. However, he seems to know his value plays and will be giving it a closer look.

If there is a God, the market will trade lower, in order to give me a chance to buy dips. Sadly, it appears God is as real as a healthy donut or gentleman McDonald’s aficionado.

Back to work.

I booked profits on MTW.

I averaged down on DMND.

After one of my servants in the comments section alerted me to SOPA, I did a little research and, much to your chagrin, have pledged solidarity with our lowly government. This may come as a surprise to many of you, since I run and operate one of the more successful and popular finance blogs in the world. However, the fact remains, vagrants must be put in their places.

What does that mean (chin scratcher)?

It means the majority of the bloggers and content providers should fall under the government auspices (hammer) and perhaps be arrested, for crimes against the republic. Remember, in a post 9/11 world, our clam-shuckers in DC cannot afford to let you have freedom. There are terrorists everywhere and pirates cannot enjoy the luxuries of internet access, like tax avoiding, insider trading government representatives. The internet “kill switch” will be used and many of you shall be detained for hate speech.

How is that just?

Quit thinking about things in black and white. This is a gray area, Sir, where fat chinned lawyers dictate the will of the American people through the proxy of the law. As a gentlemen of this republic and active member of Gentlemen Against Plebs (GAP), I’d like to see many of my competitors shut the fuck down, via government laser beam aka kill switch.

In other news, the market doesn’t want to go down; it’s honey badgering higher and there is nothing you or your stupid friends can do about it. We can all hope and pray for stocks to fall, basing our dreams on inevitability. Look at the fucking Mayans; apparently, their calendar ends this year–which can only mean one thing: the man who made the calendar died when he was mapping out 2012.

These messages are all very convoluted and prolixity seems to plague this blog post with unparalleled eloquence– but know this: “The Fly” drinks tea with the Gods and converses with shadows near his favorite urinal. The secrets of the world–as well as the market–are revealed to him in dreams and delivered here in riddles for all of you to decipher.

The bottom line: I like FSLR.

A huge market short cut that many people take is buying up the 52 week high list. Well versed investors often scoff at such behavior as being “sheepish” because it requires zero thinking. For the intelligent investor, there is nothing like buying a beaten old stock, like FTK, when it’s nothing and watching it rise to grandeur. However, I will be the first to tell you, those are rare occurrences.

For the most part, price action is correct, until things get too overheated or over-frozen. If you knew absolutely nothing about stocks and wanted one strategy to study, buying stocks near their 52 week highs is a great start. After all, big winners live on that list. Apple was on it at $50 and again at $100, then $200, then $300 and now north of $420. Get my drift?

Naturally the danger to chasing momentum is timing an exact top, like NFLX north of $300. However, you can simply put 10-15% stop losses underneath some of these high fliers and try to mitigate risk by buying a basket, as opposed to just one or two.

Here are some stocks that caught my eye that are within 5% of their 52 week highs, with market caps above $100 million–sorted by industry.

Chinese Burritos
SNP
HNP

Textiles
PVH
CRI
OXM

Steel & Iron
ROCK

Sporting Goods
SWHC
RGR
HIBB
POOL

Specialty Chemicals
SXT
NEU
FUL
WPZ

Security and Protection Services
FBHS

Restaurants
SBUX
YUM
PNRA
MCD
PZZA
EAT
CMG
CBRL

Residential Construction
TOL
LEN
DHI

Railroads
UNP
WAB
NSC
KSU
CP
ARII

Processed and Packaged Goods
THS
MJN
SJM
MKC
LNCE
GIS
CAG
BGS

Personal Products
ULTA
PG
KMB
EL

Paper and Paper Products
IP
KS
TIN
NP
BKI

Oil & Gas Equipment and Services
MIND

Oil and Gas Drilling Exploration
PACD
CIE
MWE
CLR

Medical Instruments and Supplies
ELGX
CMN
SONO
OSUR
ICUI

Medical Appliances and Equipment
ZOLL
VAR
SYNO
ISRG
ALGN

Internet Information Providers
RATE
HSTM
INSP

Industrial Equipment Wholesale
MSM
GWW
DXPE
ARG
AIT

Independent Oil and Gas
VOC
SDT
SUG
STR
EPD

Home Improvement Stores
HD
LOW

Home Furnishing and Fixtures
MFRM
SCSS

Home Furnishing Stores
PIR

Healthcare Plans
WCG
UNH
MDF
HUM
HS
HNT
CNC
AET

Grocery Stores
WFM
CASY

Machine Tools and Accessories
ROLL

General Building Materials
VAL
AWI

Food Wholesale
CORE

Food-Major Diversified
LANC
KFT
HNZ

Farm Products
CVGW
CALM

Entertainment Diversified
MSG
TWX
NWSA

Electronics Wholesale
VOXX

Electronics Equipment
GRMN
GNRC

Drug Manufacturers
VRUS
SNTS
MDCO
CBST
AGN
SHPGY
ADLR
SPPI
PFE
MRK
LLY
JNJ
GSK
GILD
CELG
BMY
BiiB
AMGN
ABT

Diversified Machinery
CFX
SHFL
PLL
MIDD

Diversified Electronics
AAPL

Diversified Communication Services
EQIX
COR
CCOI
NSR
CCI
AMT

Discount Stores
DG
WMT
NDN
FRED
DLTR

Department Stores
M
TJX
CPWM

Defense/Aerospace
LMT
TDG
GR
BEAV

Credit Services
NNI
GCA
EFX
DFS
ADS

Confectioners
HSY

Business Services
VRSK
WXS
V
UNF
TSS
SNX
INWK
HPY
CTAS

Biotech
CLVS
EXAS
INHX
VPHM
REGN
ONXX
NBIX
MITI
MDVN
HALO
ELN
CBM
ARIA

Beverages-Soft Drinks
MNST
KOF

Auto Parts Stores
ORLY
AZO
AAP

Auto Parts
SMP
LKQX
GPC
CLC

Auto Dealerships
SAH
GPI
CRMT
CPRT
ABG

Apparel Stores
FL
BEBE

Application Software
MSFT
SAAS
NUAN
INTU
AMSWA

Ag Chemicals
TNH
MON
AVD

After studying this list, I want you to find out why these stocks are hitting new highs. Is there a theme here? I see it. Let’s face it, the super-trend to come, if it’s coming at all, will be found by studying this list. Once you get a grasp on why these stocks and sectors are being bought, get yourself a powerful screener, like the one found inside of The PPT, and compare then contrast the stocks on this list with others in the same industry, with the hopes of finding under the radar winners.

Most of you bird brained jelly mixers will opt to drink yourselves into a coma tonight. For the industrious men and women out there: get to work!

That’s was not a rally, but a warning shot across your filthy keyboards. I am happy to be 45% cash and although I added to my FSLR position today, I pride myself for saying no to the giant bottle of soda that is this market. Subsequently, my TZA position closed in the green. My MTW position performed admirably, despite broad market weakness.

On the other hand, both FSLR and DECK sold off, while DMND took the day off. The result was a +0.1% day and I have zero regrets.

We can only continue this charade for so long. The market Gods grow weary of this tape (they tell me this when I drive in my space capsule). But certain industries still look robust, like the refiners. Crack spreads are widening again and if Iran gets shut down they will soar. Why? Because the divergence between Brent and WTI will widen again, lending to the idea that companies like WNR, DK and CVI have it going on, indeud.

I doubled down on FSLR.

Many years ago, I made a conscious decision to eat healthy. Now eating healthy doesn’t mean venturing off to MCD’s just once per week, as opposed to five. It means adhering to a certain discipline, being aware of everything that enters your fat face. I don’t drink soda, ever. I rarely drink anything but water and I am rather serious about an organic food only diet. Do yourself a favor and research the benefits and learn why eating corn fed beef is an abomination and how pesticides and sugar are poisonous.

For me, the result was a 35 pound weight loss and increased vitality.

Having said all that, the market is on a sugar high now. It’s like one fucking giant bottle of soda that people keep drinking, passing it around, getting fat and stupid off of it.

However, there are some odd things happening in the market. Look at the divergence between natural gas and oil. Understand that low natty is a big win for chemicals and other industries that use it. I feel under-invested today at 50% cash. But I will make money and that is the point, is it not? Being disciplined with a trading strategy and eating healthy share many attributes. namely doing things that go against our inner animal. Let’s face it, we all would love to drink beer, eat steaks and buy tech stocks on margin all day long. But it’s not always good for us.

My rules dictate it’s time to take my foot off the gas and slow things down. I don’t give a shit about faux Chinese numbers or asinine European bailouts. The bottom line is, I am up 7% for the year and we are still in January. It would be piggish of me to ignore the lessons of yesterday for the unknown future that lies ahead.