The Shit-Show is Over — Moving On

I sold NUGT today, which was an overnight trade from yesterday — for a quick 6.5% gain. If you annualize that return, you could in fact become the richest man in America inside this decade. No big deal. Just another day at the office.

I also blew out of my last two vestiges of SHIT-STOCKS: MNK for a 12.5% ding and CCO for a 4.5% profit. It was a nice sojourn into the depths of depravity — but now it’s over.

What’s not over is the move in gold. We could be, very well, in the beginning stages of a GORILLA APE run higher. Look for lower yields to confirm this narrative.

We Work fashioned themselves to be a $47 billion company at the beginning of their IPO roadshow. The market told them to fuck off and signed a value of ~$10-15 billion. Even at that depressed -78% level, no one wanted it. Lo and behold, they announced yesterday their IPO was going to be delayed, to maybe October.

Reason being:

The CEO didn’t want to come public during the jewish holidays.

WSJ

We is now expected to wait until mid-October at the earliest to start its investor roadshow following the conclusion of the Jewish High Holidays, which Mr. Neumann observes.

The delay could also last longer and some existing investors, including SoftBank, have pushed the company to wait until next year to launch its IPO, The Wall Street Journal has reported.

Who the fuck do they think they’re kidding?

In other news, Saudi oil production, which was supposed to come online right away, might take months to resume.

Reuters:

Saudi Aramco’s full return to normal oil production volumes “may take months”, two sources briefed on the company’s operations said on Monday, after attacks on Saudi oil plants knocked out more than half of the country’s output.

“It is still bad,” one source said.

On Sunday, an industry source briefed on the developments told Reuters that Saudi Arabia’s oil exports will continue as normal this week as the kingdom taps into stocks from its large storage facilities, but that Aramco may have to cut exports later if the outage in output continued for long.

Futures are flat.

As I grow older and crankier, I often reflect upon my mistakes and cringe at the idea that I once thought a certain way. Having a diverse readership, filled with young punks, I should probably spend more time educating the youth about learned errors.

Someone in Exodus posted this passage from a book he recommended and I felt it was worthy of your attention. Absolutely perfect prose.

Wanderer by Sterling Hayden

“And in the worship of security we fling our lives beneath the wheels of routine – and before we know it our lives are gone. What does a man need – really need? A few pounds of food each day, heat and shelter, six feet to lie down in – and some form of working activity that will yield a sense of accomplishment. That’s all – in the material sense, and we know it. But we are brainwashed by our economic system until we end up in a tomb beneath a pyramid of time payments, mortgages, preposterous gadgetry, playthings that divert our attention for the sheer idiocy of the charade. The years thunder by, The dreams of youth grow dim where they lie caked in dust on the shelves of patience. Before we know it, the tomb is sealed. Where, then, lies the answer? In choice. Which shall it be: bankruptcy of purse or bankruptcy of life? ”

Compound your returns. Quit spending money on stupid shit. You’re not your fucking khakis.

I grew up in a black place of crude oil, one of the very few enclaves inside the inner pits of Brooklyn, NY where men still drilled for oil. Sometimes when the drills would break, they’d send small boys into the pits to dig with their hands, scratch and claw for that black gold. As a boy, I always walked upon the black earth of the Brooklyn oil fields, with petrol on my face and gold in my pockets.

Not much has changed from then until now. I speak to you today a proud and boisterous individual, long the black gold and the gold gold. I would provide you, the reader class, with my picks; but quite frankly, you wouldn’t know what to do with them if I did.

See, picks are exclusive for Exodus — the sort of thing that is shared between men of property and leisure. Sure, you have a few bucks in the market and you’ve had some ancillary success. But who hasn’t? We’re in a never-ending climb to death here, bunch of Eddie Barzoons running around shooting rockets at people from ships, borrowing money until our eyes bleed — fucking the poor every which way but loose.

As founder of this fine establishment, I do not require your money, only your understanding — to know that Le Fly is, and always has been, an oil man — ever since birth.

Where is oil heading next?

Sharply higher.

Why?

War, gentlemen. War.

Simple yes or no question. You’re all internet tough guys. You see the markets want higher.

Do you have the balls to buy crude up here, or will you fade it? There isn’t a right answer. It can go either way, obviously.

But I’d argue for higher prices, since the crisis hasn’t been resolved and Trump is talking greasy, as if they’re ready to donate American blood for the cause of protecting Saudi interests.

I’m having a later morning, so after I properly view markets I’ll offer my take.

WTI is off to a roaring start, higher by 12% to $61. Brent is up 13.5% to 68.2. Also, gold is up nearly 1%, which is both notable and exceptional.

The knee-jerk reaction tomorrow will be to sell crude short — because you’re all fucking geniuses and able to time tops and bottoms. Truth is, no one knows what the fuck is going on, other than uncertainty abounds. This is not an environment to fade crude. This is what short squeezes are made from.

Dow futs are -150 — but I doubt it’ll last. I’ll be trading like a motherfucker tomorrow inside Exodus.

Look at how stupid we all are, falling for the olde war in the Middle East gambit. Meanwhile, we have limitless supply of crude at home and in our attic, aka Canada.

Nevertheless, this is the narrative that will now be trotted out. You should expect to see sharply higher crude prices for a sustained period of time.

WSJ:

Yet Saturday’s attack could be more significant than that. Technology from drones to cyberattacks are available to groups like the Houthis, possibly with support from Saudi Arabia’s regional rival Iran. That major energy producer, facing sanctions but still shipping some oil, has both a political and financial incentive to weaken Saudi Arabia. The fact that the actions ostensibly were taken by a nonstate actor, though, limits the response that the U.S. or Saudi Arabia can take. Attempting to further punish Iran is a double-edged sword, given that pinching its main source of revenue, also oil, would further inflame prices.

While the redundancies in Saudi oil infrastructure mean that output may be restored as soon as Monday, the attack could build in a premium to oil prices that has long been absent due to complacency. Indeed, traders may now need to factor in new risks that threaten to take not hundreds of thousands but millions of barrels off the market at a time. U.S. shale production may have upended the world energy market with nimble output, but the market’s reaction time is several months, not days or weeks, and nowhere near enough to replace several million barrels.

Zerohedge has the coverage. I’m merely a trading fool with a sharp intent to gamble in stocks until I die. This is very reminiscent of Hurricane Katrina. Any of you fuckers remember that?

Oh, it was sublime — not the death and destruction part, but the rise in oil and especially natural gas. Stocks were fucking ripping out spines and tits to the upside. The initial move was grande, but it lasted a solid week — with plenty of money to be made for Johnny Come Latelys. I suspect, we will see the same type of trading action next week, as the world tries to adapt to 5 million barrels per day being stricken from their reservoir of oil. It is going to be outrageous.

Brief snippet from WSJ:

A coordinated drone strike hit at the heart of Saudi oil production on Saturday, sparking an enormous blaze and forcing the kingdom to shut down about half of its crude output, according to people familiar with matter.

Iran-alled Houthi rebels in neighboring Yemen claimed responsibility for what would be one of their largest-ever attacks inside the kingdom.

The Saudi production shutdown amounts to a loss of about five million barrels a day, the people said, roughly 5% of the world’s daily production of crude oil. The kingdom produces 9.8 million barrels a day.

I don’t care who did it. I would not be surprised to learn they did it to themselves, on the heels of Saudi Aramcos IPO. What I am interested in are the consequences. People are throwing out scandalous numbers like $100bbl next week. Fuck all of that. This is a temporary shut-down, but it can last weeks. My back of the envelope prediction suggests crude will easily Jimmy up to $75 next week and sustain those levels — because the market is going to interrupt these attacks as a permanent risk to Saudi oil production. Having said that, you’re gonna want to get long a fuck load of crude stocks, especially those evil frackers, into the melee.

I’ve had this fucking DICK TEA (DTEA) for a long time, always falling back on the notion that this piece of shit Canadian retailer would need some sort of business disruption to save itself from getting BOGGED. That disruption should come in the form of drugs, cannabis tea. I’m sitting on this fucker, waiting for news to break.

Long from $1.39 and I doubled up above $2, at these levels — zero fucks given because the Gods favour me and I know it.

So many moving parts today, as I swished out of APRN for a 12% 30 min sojourn, in addition to gains in BYND, STMP and AVP. I’m sitting in a few fast runners, waiting for them to Ben Johnson the fuck out of my portfolio.

We’re all hobbits now in a post Orc world, sashaying throughout the prairie eating strawberries and cream.

The curious case of We Work isn’t the proposed valuation of $47 billion, but instead why lead investment banks were’t able to price it at those levels. Over the past decade, these fucking banks have dumped one bullshit VC deal on the public after the other. Now, all of a sudden, they found religion?

What in the fuck is going on here?

Via Reuters:

WeWork owner The We Company may seek a valuation in its upcoming initial public offering of between $10 billion and $12 billion, a dramatic discount to the $47 billion valuation it achieved in January, people familiar with the matter said on Friday.

The deliberations indicate that WeWork does not feel confident that the corporate governance changes it unveiled on Friday will be enough to woo investors concerned about its lack of a path to profitability.

The sources cautioned that no decision has been made and asked not to be identified because the matter is confidential. WeWork did not immediately respond to a request for comment.

For you home gamers, that’s a 78% discount from private valuation “models” or a $37 billion haircut.