How Was Your Year?

Even though I talk EXTREME shit here and make it look easy — I fully admit that 2023 hasn’t been easy. From the onset of the year with the fucking banking crisis until now with the nonsensical price action in crude, you either needed to do nothing and remain long $QQQ and $SPY or timed the rotations like an extreme champion of the very first order.

I, of course, am the latter and preside over you at +61% year to date — matching my returns from 2022. Whilst we’re broaching the subject, let’s review my publicly trading performance against your best index: the fucking NASDAQ.

NASDAQ vs The Fly
2020: +47.6% / +300%
2021: +26.6% / +218%
2022: -33% / +61.6%
2023: +52% / +61.2%

This is why when my detractors come out from the wood works and yell out things, such as “TOP” or “FARCE” I don’t take it seriously. None of you, if I am being honest, are serious people.

Into tomorrow, I am long but with a 15% hedge via $TZA and $UVIX. I did shift funds into RISK AVERSE names like $KR, $KMB, and $MCD because the tape was a little tepid today and I wouldn’t want to soil my good name by having even 1 down day.

The returns are good. The market is strong. And both my health and mental state are in top shape.

If you acknowledge the fact that “stocks are rigged”, then logic dictates you should not be short. If you believe *this is the top, I’d like for you to explain to me the impetus to sell?

This is reality.

Annual highs. It’s fun to pretend that the cabal is collapsing and all of Biden’s diabolical schemes are failing. But the truth is — markets are stronger than ever. The US economy isn’t collapsing and US hegemony is still in place. These are important checks for you to both hear and confirm because to bet against the market without any real support is just going to end up in slaughter for you and your loved ones.

The second things look sideways and they’re back on the ropes, I will be at the front to lob grenades into their trenches — because I hate them. Meanwhile, I will profit from this system and use the money to buy meaningless trinkets and baubles.

We have some good narratives this morning and I’m here for the bear carnage. I blew out of my tanker / shipping plays at the open because how many missiles do the Houthis have?

I may revisit this trade for sport.

I’m a big fan of oil here, especially with the Middle East cooking. It won’t take much to see oil jimmy its way back to $100.

I have various swords in the fire, +130bps early going. I’m also 44% cash — because who knows what is around the next bend. My overall opinion is bullish and since I’m stubborn — I’ll likely remain this way for the day.

Themes worth exploring: heavily shorted stock, heavily leveraged balance sheets, companies who might be affected by Middle East wars etc.

More details later.

My presumption is lower rates will help highly indebted companies because those companies’ stock prices priced in HIGHER RATES. As their debt came due they’d have to finance at a more expensive rate; ergo, this would reduce their cash flow. But now since we’ve figured out inflation and we’re pricing in 5 rate cuts in 2024, we should refactor valuations for said companies.

Here were the biggest winners, industry wise, last week.

Solar was the highlight with nearly a +20% return last week, reducing losses for 2023 to -40%.

Debt-wise, the solar industry is extremely leveraged.

WTD the median return for ALL stocks was +4.2%
WTD the median return for stocks with debt/market cap over 2 was 5.64%

Debt growth (TTM) for all stocks is +1.93%

Let’s take a look at returns for companies who grew debt greater than 10% TTM.

+5.1%

+20% debt growth TTM

+5.8%

+30%

+6.03%

+50%

+6.22%

One thing to consider when looking at this data is the pool of stocks shrinks each time I constrict the data. So let’s look at the opposite, companies who reduced their debt and see if this exercise was a giant waste of time.

-10% debt growth TTM

+4.19%

-20%

+4.13%

I think it’s fair to say my assumption is correct. So now let’s take a look at some heavily indebted stocks that haven’t moved yet — for the sake of greed.

My criteria is debt/market cap (which is a real time assessment to company leverage unlike debt/equity) +0.75x, debt $1b+ with returns less than +15% YTD.

(SORTED BY DOWN MOST)
IEP, ACDC, DISH, HE, LUMN

(SORTED BY BEST TECHNICAL SCORE)
CMTG, TFSL, RUN, MS, CRBG

(SORTED BY TOP AGGREGATE TECH SCORES OVER 1 WEEK)
CMTG, DB, USB, BK, ARI

Conclusion: If rates continue to come in, we are likely to see these trends continue: rotation into capital intensive industries such as solar, mortgage, banks, biotechs etc.

One final note: which industries have been growing debt the most in the past 12 months?

Again, I’ll revert to data inside Stocklabs to search.

Debt Growth TTM
Biotech +3.47%
Gene Editing +4.97%
Alt Energy +14.97%
Electric Vehicles +24.2%
Autos (major) +4.8%

Financials as a general sector have universally grown debt by 8%

Industrials almost universally have negative debt growth, and have incidentally been the best area to invest the past year. There is one industry that is the exception: Defense, which is one of the worst performers YTD. Defense debt is +5.72% ttm

Restaurants +4.3%
Railroads +4.2%
CATV +3.04%
Lodging +5.8%
Trucking +5%
Auto parts stores +13%

SAAS we know is heavily dependent on private equity, which is driven by public markets valuations. It’s a bifurcated area — but you will see stocks like SNOW, WK, SPT and many others sports double digit debt growth while at the same time some like BOX, AMPL, ADBE and SHOP constrict debt — likely due to the environment. But I think it’s fair to assume lower rates will be a big net benefit for SAAS.

Semis +5%
Solar +16%
3d printing +26%

I think it’s fair to say, as a whole, lower rates help balance sheets and thus should propel share prices higher. As a stock picker I am more likely to pay attention to current trends in share prices much more than relying simply on the above data. However, it’s worth bearing in mind that some of the worst performers of 2023 might have motive to head higher into a much more accommodative refinancing environments in 2024.

Good Day —

I managed to squeak out a gain of 5bps in HIGHLY PROFESSIONAL, HIGHLY ASTUTE trading — all to do with two new themes I am rather enjoying.

Today shipping giant Maersk announced they were halting shipping in the Red Sea due to attacks. On this news, shipping and tanker stocks BUSTED THE FUCK LOOSE and I am here for the panic. Also, the Iranian Navy escorted the USS Eisenhower from the Persian Gulf. That’s right, the fucking Iranian Navy is making moves on the US Fleet in the Gulf. All of this, and much much more, led me to this trade.

I leaned in heavily about mid afternoon — even taking a position in Israel shipping scam stock ZIM. My focus is entirely on this over the weekend and I’m hoping RPGs will fly — enabling me to bank a little coin come Monday. It sounds evil, and it is, but just a little. I have no control over these things.

My other focus is on biotech — which are CORE HOLDINGS for me now. If you chanced upon me in person and quickly quizzed me as to what in the fuck I owned, I could only tell you their profiles and revenues — nothing else. I have no idea what they do and honestly don’t care. My thesis is rates are going down and once bedraggled stocks who were punished due to restrictive financing will be alleviated and freed from their shackles to prance about the corn fields as FREE MEN.

Also, I have various others interests, such as Bitcoin and Uber. I am a very astute and sophisticated investor and my moves are calculated 10 steps ahead, most of the time. But on this rare occasion, I am late to the shipping/tanker trade and fully expect to lose money on them come Monday. But in the event the RPGs fly and these fucking stocks soar — I could never forgive myself for not being in. I can accept losing money on a late trade — but I could never live with myself knowing the possibilities of MAXIMUM HAPPENINGS were present and I did nothing about it.

GOOD SIRS —

The Fly acts upon his urges and takes action all the time, then talks about it here later.

Have a good weekend and don’t forget to join Stocklabs — all proceeds go to me which is great and I’ll also yell at you inside the platform until you trade better.

I don’t know. How about that, pal? You want to know the future, peer into events that haven’t occurred? I know a place for you to loiter inside Coney Island with people who can tell you such things. After that, you might want to read up on aliens and flat earth theories.

If there is one reliable metric for life it is to expect the unexpected. Once per annum we’ll get a panic of pseudo-panic and the VIX will spike, accompanied by me or Zerohedge collapse tweets. The world will officially end and all will be lost. And then the riggers will rig and we’ll be back — just like now.

How long this can last is also up for speculation. It might last until I am dead or maybe longer or perhaps much sooner. The point I am making is, fucked face, stop thinking you know everything and start treating the tape like you would any other sport, or perhaps how you might acquire wealth or love in rea life.

React in real time and make smart decisions, taking into account risk elements that your distorted mind conjures up.

Take me as an example: the sky is always falling, will always be falling, and I am almost always bearish. However, I was also a STAR ATHLETE as a boy and know that to be right is to be in the now. I can’t hit a fast ball from last week, or one in the future. I need to look at what’s coming now. And for now, it appears that, unfortunately, stocks are going higher. But that doesn’t mean I can’t hedge or take short selling gambits in the hopes something will go awry. I do these things under the auspices of proper risk management and correct myself in real time to protect myself from myself. There are layers of crazy here.

More later.

I was going to do an educational post in order to “help them plebs out” after this barn-buster of a session. But then I remembered that I had nothing in common with any of you and decided to talk down to you, as it is my right to do so.

I am especially ebullient with gains of +128bps in trading, +244bps in my swing account — feverishly focused with laser precision on the art of trading. Whilst some of you might’ve made more than me today, I’d like to remind you that the quality of my returns outpace the quantity of yours. Ergo, and this goes without saying, I did better.

Into tomorrow, I am fully long and expecting to be rewarded in what I deem to be a “STAKE INTO THE HEART TRADE” — whereby short sellers will be entreated to a morning panic and frenzy — NASDAQ UP 100+ — causing them to soil their pantaloons as we descend upon them with sharpened stakes –driving them into their chest cavities until they’re dead.

If you want to learn to trade — go find someone else pal. We bank coin here on the regular and do not concern ourselves with the betterment of others. As a matter of fact, I endeavor to outstrip you — get in before you get in and get out before you have a chance to sell, which is the whole purpose of this gambit. We trip over each other until we cross the finish line and there can be only one winner and it’s not going to be you — believe me.

No but in seriousness, I hope you did really well for yourselves today and made enough money so that your wives can spend it for you on Xmas presents and big fat faced cakes adorning the table this holiday season. I hope you made enough to New Year’s too, shrimp COCKED-TAILS and champagne aren’t going to buy themselves. Get the fuck back into the market, wade into it with all of your might, and outstrip me. I dare you to try.

The big story today is short sellers got poleaxed at the open in unrelenting buying. We had names +15% on no news, fucking the long-short hedge fund managers into early coffins.

Now the chasers are being beaten across their faces, as the $SPY ebbs into the red.

So what is the play?

My suspicion is this is a trap. We have markets diving lower and the water is once again inviting for the bears. However, bear in mind several things here.

1. the dollar is 1.02% v the euro. It was down more, but still down as we price in rate cuts.
2. Gold, silver, oil and copper are all sharply higher because of the dollar.
3. Massive gamma squeeze took place due to heavy short positions amongst the first class citizenry in asset management.
4. The Russell is still +2.3%

How am I responding?

I was long but in defensive stocks at the open and had to cull them early. My gains ranged from +0.8% to 1.3%. When markets broke lower I hedged and then began to sell off my longs as we ticked lower. When hedged, each time I sell a long increases my short exposure, obv.

About an hour ago I went NET SHORT at 25% of holdings, $UVIX, $TZA, $FNGD. $LABD — but now I closed them all out for handsome gains (+2.1%, +0.8%, +2.4%, +1.5%) leaving me with longs and 60% cash.

BOTTOM LINE: the thrashing back and forth is due to an ideological battle taking place with chasers against non-chasers. Ultimately, the chasers always win and if forced to bet here — I’d bet on 10 green candles into the close followed up with a +100 NASDAQ tomorrows to insert the final dagger into the heart’s of the bears for 2023.

+63bps in highly professional trading.

Stocks are OFF THE HIGHS now — but just a short while ago heavily shorted stocks were +5.5% for the session, high beta up in kind. The only way to describe the pin action is “incredible” but not unique. This is what happens when the bears lose their shirt and the ram is pressed against the wall.

You’d be wise to avoid thinking the market will reverse lower and collapse here. There is weakness in risk averse stocks — which stymied my trading gains this morning. Even still, I am +80bps for the session, down from +120bps. I got a little overzealous this morning and chased some things and ended up taking some Ls. These things happen.

My longer term strategic was +3%, now +1.8%.

Is it over?

I don’t think so. However, I am 90% cash in my trading here — only because of the time of day coupled with the idea that perhaps, just maybe, we might see a downside reversal. I am not suggesting it will happen, but merely open to the idea.

The thing about rallies such as this: you needed to be in yesterday before the close to bank the coin. You can possible scalp a little here and a little there — but if you missed out and find yourself chasing stocks already +15% for the day — YOU PLACE YOURSELF AT GRAVE RISK in the event of a reversal.

It’s important we all understand our places in the big scheme of things. Not all of us are destined for greatness. Some of you will never be great and have been designed to plod along merrily in ignorance. This is not my journey, as I am burdened with the task of greatness and battle each and every day to escape the pangs of mediocrity.

Let me explain something to you pal. I will choose my words very carefully here as if not to be unclear about what I am trying to convey.

I stand before you a very intelligent man, perhaps the best trader ever, accustomed for winning over decades of toil and tumult. I’ve grown used to winning and expect to see the Ws line up aside my name, no matter the case.

Up nearly 400bps in my strategic and +244bps in trading for the session.

I have undergone a transformational event since 2020, following the creation of Stocklabs — which has increased my annual returns by a factor of 5. I don’t tell you this because I want to sell memberships — but because it’s a fact.

BEHOLD as the grandiosity of the market lays waste to the last remnants of the bears — ripping their heads off and skinning them for their fur. The colder climes are here and with it is my indifference to your stubbornness, missing out on what is the best run since 2021.

We do not trade with our emotions and succumb to our feeeeelings. I couldn’t give a fuck about my own feelings; imagine how I feel about yours. We trade with our heads and our balls, swinging hard and low into the tape — methodically and also with purpose to increase the wealth of our estates for the future.

The reasons for today’s +200 NASDAQ meltup are in fact IMMATERIAL. We do not care why stocks were up, at some point, we merely observe and react. If you’re not prepared to react and do what is the right thing to do for yourselves and your loved one’s — you should cease playing in the sand box of men — take your money and stick it in the wall.

As for me, I closed fully long and leveraged in fact at 118% of equity — interested in MOAR — in spite of the fact that I retire into a glass of Bordeaux at recourd highs.