Dow Explodes Higher; Tech Stocks Wrecked

I’m through spelling wrecked incorrectly. It’s not only juvenile, but also fucking retarded. All of my stocks save 1 went lower — because tech growth got nailed to the wall, in spite of the Dow rising by nearly 500. Markets like today are most frustrating, but part of the narrative of man — which is to miss out. No one likes to miss out on all of the fun. It leaves a sinking feeling in one’s gut and causes us to make errors. While yesterday’s purchases might look like FOMO from your end, on my end, it was simply normalizing my trading account to its pre-virus conditions.

I’m heavily long SAAS and those stocks got wolloped today, in earnest, because of an earnings miss or two.

Without question, ZEN is heading for $100 and much more than that. In the SAAS sector, two stocks stand out to me most as long term holds: HUBS and ZEN. When they go lower, you should consider buying them.

Towards the end of trading, I bought two biotech stocks — because that’s where the fast money is. Speaking of which, and just to recap, I bought some TSLA puts yesterday at around $35 and sold them at $115. That trade saved my profit and loss today and for that I am eternally grateful to all of those longs out there who got sheered on the altar of Musk.

SAAS stocks are getting lit up because of PCTY and NEWR. This is partially sad because I own a bunch of fucking SAAS stocks. Good thing I kept some dry powder for average downs. Market is up 50 Nasdaqs, but it feels like it’s down.

Maybe I’m just in the wrong stocks, for today.

Speaking of wrong stocks, TSLA is getting lit up and I actually bought some puts yesterday, my first options trade since 2012. Why did I stop trading options? Long story, but let’s just say it brings out the gambler in me. I had the 2/7 900s — up a cool 220% from basis. Not a bad way to make a living — but I will admit it’s too enticing. If I could make these sort of percentage gains all the time, I’d immerse myself all the time in it and my life would be absolutely miserable. This will be the only options trade I do for the year. Maybe I’ll do one per annum.

As for my other positions, I’ll be a little patient (not too much) and think about buying more if they drop again tomorrow.

Last night after the state of the union address, futures were slightly lower. Then about midnight, or possibly later, they fucking exploded on a report from Chinese media of a coronavirus breakthrough. Separately, UK scientist claim to have sequenced and now working towards a fucking vaccine, all in 14 days.

I’m too cynical and jaded to report on this type of stuff, especially when the WHO comes out and says ‘WHOA, fuck off, nothing to see here.’

The World Health Organization (WHO) has played down media reports of a drug breakthrough against the coronavirus outbreak, saying there are “no known” drug treatments against the virus.

“There are no known effective therapeutics against this 2019-nCoV and WHO recommends enrollment into a randomized controlled trial to test efficacy and safety,” WHO said in a statement on Wednesday.

“A master global clinical trial protocol for research and prioritization of therapeutics is ongoing at the WHO,” it added.

Earlier in the day (See 7:00 p.m. update), Reuters said a Chinese TV media outlet had reported that a research team at Zhejiang University had found an effective drug to treat people with the new coronavirus. The news agency, citing traders, suggested this was a reason for the move higher in stocks.

Separately, Sky News reported Wednesday that a scientist from Imperial College London had made a significant breakthrough in the race to develop a vaccine for the coronavirus. The vaccine is thought to be able to reduce the development time from “two to three years to just 14 days,” Sky said.

Nevertheless, futures have given up zero of their splendid gains and stocks look to chop hands and dicks off at the open. We’re looking at another 100 Nasdaqs when it’s all said and done. NO BIG DEAL. This is good, especially since I bought all of them stocks yesterday.

A younger Fly would’ve held his shorts like a fucking moron and ignored the things on the screen, obstinately declaring my positions to be correct and the prices wrong. None of that shit matters, quite honestly. You can still see the world burn and you can still see $TSLA collapse, but why go against the grain to see those things happen?

I stepped in and allocated some funds, preserving 40% cash for average ins. I am leaning into SAAS and other tech names because they’re easy to trade and they correlate well with the broader markets.

I also bought some TSLA puts, merely for fun. I don’t think the stock is ready to collapse, but make no mistake — THIS IS BITCOIN 20k.

Ask me if I care about the money I invested in the puts. Ask me. Go ahead.

Fuck off.

It happens. I had so many wins the past two weeks I placed myself into bear mode, trying to have my cake and eat it too. That’s the problem with fat people, always scheming ways to eat cake and look good too. You cannot have both. You can either look great and have abs, or you eat cake. Which will it be?

Life is a game of choices. Some of us do not have many choices, however. For example, one simply doesn’t choose to go to an Ivy League school or better yet one simply doesn’t choose to be smart. That comes with DNA. But you can learn to the point of being wise. You have a choice in the matter, especially when investing. You can make bad choices and keep repeating them, or maybe you can identify the issues with your choices and switch it up.

That’s the thing about intelligence and I don’t mean this to be too heavily philosophical — but often times the difference between the moron and the dimwitted is a matter of awareness. The moron is dumb and unaware, so he goes throughout life happy, fucking and drinking until he dies. He also thinks everyone else around him is an idiot, due to narcissistic tendencies. The dimwitted man is a tragic story, but not sad. He understands his limitations and purposely tries to improve his situation by self education, creating an air of sophistication around himself with books and hobbies, employing wisdom as a pseudo-intellectual replacement for actual intelligence. And he knows not to make the same errors over and over again, which is why he rarely heeds his own advice, but instead has learned to accept the advice of others. In a way, the dimwitted man has it made, enjoying the benefits of smarter men without the burden of making those decisions and being responsible for others.

You as the dimwitted man have a good life. You visit Le Fly daily, never meeting him in real life at all, and profit from his insight into capital markets — insight that has been honed and sharpened like a knife for decades of investment experience. But even I have a bad day, today being one of them.

I sold the following stocks today, and booked the losses.

(CPHI -20%)
(SOXS -8.3%)
(LABD -15.8%)
(JNUG -10.1%)

The silver lining is, I was 65% cash in my trading account coming into today, so those losses aren’t magnified by leverage or anything. And, if I might say so, my trading account is only 25% of my overall portfolio, the rest is invested fully and enjoying the nectar of today’s supple rally.

HOWEVER, I do not take lightly this sojourn into loss. The CPHI, for example, was a 25% winner yesterday and I watched it sour and go bad almost immediately after markets opened today. The X factor here is greed and I must be mindful not to permit base behavior, the inner beast in me, get the better of me.

Does the market go higher? No real idea. I’ll just judge it on a stock by stock basis and buy what I like when I like to.

During the financial crisis Volkswagen manifested a short squeeze for the ages and became the world’s most valuable company, if only for a day.

Source: FT

On Monday morning Volkswagen’s ordinary shares opened at €348, up 66 per cent from Friday’s close, and kept rising. The shares closed at €517: a 149 per cent gain in the space of one day’s trading.

For those who had not squeezed out the fire escape, the worst was yet to come.

The first tick on Tuesday was a touch lower — €497 — before the shares took off again, rocketing to an intraday high of €999, before easing off to €940 at close. For those who sold a share short on the Friday, the losses were brutal. If they had borrowed €100m of stock, it would have cost them €450m to buy it back. (This calculation has been updated since publication to clarify the cost of buying back the stock.)

Similarly, TSLA has catapulted itself over the past 6 months, and hastened the pace most recently, to become the 2nd most valuable car company in the world — currently valued at $160b. Toyota is #1 at $196b. At this pace, with TSLA +13.5% in the pre-market, they’ll probably surpass TM sometime this week.

As for the overall market, looks like +400 by the open — thanks to PBOC liquidity injections. China was up 3% last night, so the machines want to get back every cent that was lost on Friday, and more.

In a bid to cushion the economic blow of the epidemic, China injected 1.7 trillion yuan ($242.74 billion) via reverse repos on Monday and Tuesday, helping Chinese stocks reverse some losses and lifting the world equity index.

The monetary intervention boosted investor sentiment even as several economists cut their forecasts for 2020 global growth as the death toll from the outbreak mounts and business operations in China remain suspended.

Bottom line: Nothing can stop it.

My trading account is up 50% for the year so far. What the fuck are you doing?

Today’s bounty.

BIMI +33%
(CODX -4.1%)
SILK +3.2%
SMAR +3.5%

Don’t feel bad because I keep doing this shit. Let me reveal something to do (no brag, dead serious). I’ve always been able to pick stocks and I excel during periods of tumult. At any brokerage firm I was in, I was the guy the other brokers came to for ideas and they still do. During the day, my emails and phone are bombarded with messages by faggots in need of financial advice. The fact you are able to access me for free, more or less, is a gift.

Intra day, I only bought one stock — CPHI — in at 75 cents — presently holding a profit of 23%. Watch how it opens in the morning.

Ciao (the most annoying form of goodbye).

I had two virus stocks on Friday, both sold today — BIMI for +33% and CODX for -4.1%. My Quantitative portfolio posted a return of +5.6% vs the SPY -0.16%. And my trading account — well, you be the judge. Here are all of my booked trades for 2020 so far. Presently I am 65% cash.

(TVIX -11.9%)
(AXGN -3.8%)
(PPC -4.4%)
(SQ -5.5%)
HMI +6.5%
DRIP +3.5%
DRIP +13.9%
(AUPH -7.3%)
GSX +5.4%
MDB +7.2%
ETSY +2.5%
(PDD -5.8%)
NVS +0.9%
HUYA +4.3%
SPT +2.3%
HUBS +9%
IIPR +1%
ZEN +4.2%
SAGE +4.5%
(NEWR -0.58%)
(JNUG -8%)
(SOXS -3.5%) x 2
TLRY +28.6%
MNK +34%
AAOI +16.8%
KRTX +8.9%
(LABD -8%)
(SOHU -9.5%)
FTSV +9.2%
MTCH +2.5%
NOAH +3.4%
SAIL +2.2%
NET – wash
BILL +5.7%
(JMIA -4.7%)
NFLX +0.9%
RPAY – wash
SPCE +9%
OSMT +18.8%
PRVB +9.7%
LK +0.6%
(BTAI -0.5%)
(PYX -6.8%)
FOSL – wash
ALT – wash
(APT -14.5%)
KMDA +1.5%
WATT +7.7%
(OSTK -6.66%)
(PRNB -7.9%)
(VRNA -4.8%)
(CALA -6.7%)
SILK – wash
(AXSM -2.9%)
(CARA -2.4%)
SE +12.8%
(KOD -6%)
(CLVS -11.8%)
AGIO – wash
NNVC +32%
NNVC +319%
CODX +28%
CODX +61.4%
VIR +25.9%
INO +50%
AHPI +48%
NVAX +11%
NVAX +28.9%
APT +29.3%
LAKE +17.5%
LAKE +25.2%
ZLAB – wash
(BCRX -3.8%)
(CDTX -2.3%)
AEMD +14%
LLIT +15.5%
(LK -8.9%)
(TWTR -2%)
(INMD -2%)
TVIX +3.6%
BIMI +33%
(CODX -4.1%)
SILK +3.2%

See pal, that’s who I am — master fisherman out there in the woods finding fish to kill. You might try to kill fish in the woods too and have a nice time finding fish in said woods, but you’ll never find them. You don’t know where they hide. I go into the market each and everyday and crushed helmets with my pike and when I’m bored of that, I develop quantitative systems that urinate on your financial advisor. After I’m bored with that, I create a ‘Best Ideas’ portfolio (coming soon) designed to relegate your FinTwit followers to the trash heap of history. While some of my comments might sounds brazen, even obnoxious to some, I challenge you to do better.

Considering markets dropped 600 on Friday, I’m not too ecstatic about this scheduled 100 point bounce. Often times in bounces like this — they exhaust early and then fuck everyone who tried to BTFD. Granted, buying dips since 2016 has been a very profitable venture. However, all good things eventually end and maybe just maybe a fucking epidemic is something to tip us right over the edge and into the crevasse.

I made my Quant changes in Exodus today. It looks like I made ~5% for the month using this strategy, which was renewed and improved in late 2019. If you’re new here reading like a moron, my quant fund represents 75% of my liquid investable assets, invested using a systematic approach using the algorithms in Exodus. Last year it returned only 18%, so I went to the drawing board in an attempt to improve it for 2020. The stated goal with this, as it is a work in progress, is to have something that is repeatable that can be passed down to future generations — a method of investing that uses my calculator like brain for the next thousand years to bank coin.

As for virus stocks, looks like some downside with the up market. I do have some longs in my trading account to offset my two virus positions. Bottom line: China is in lockdown mode and the world is frozen stiff with fear over the Coronavirus. I seriously doubt we’ve seen the end to the recent volatility.

I bet you’re all getting drunken stupid — watching the FOOLSBALL game. I will have you know, Le Fly is still BOOZE FREE and will be so until summer, maybe longer. Although I do believe I’d like to sip on some champagne this summer at my beach house in NC.

I spent my day at the gym, the way a man should spend his Sunday. I came home and cooked dinner — because if you want anything done right you do it yourself. And now I am watching Chinese markets scream lower, now off by a staggering 8%.

All that aside, US markets are preparing to bounce — with Nasdaq futures +60. Europe is looking at a flat open and the commodity markets are stable. It’s hard to declare the rout over just yet. Things could change rapidly by the open. However, we were down 600 on Friday and markets hate to go down for more than a day or two.

My number question is, how will those virus stock trade at the open? They have been trading contrary to markets, so higher futures would imply a gap lower for some of those gambles.

More later, if needed.