Category Archives: Year End Review
For the second year in a row I blew massive gains towards the end of the year, underachieving. Following big years from 2008-2010 (60%, 90%, 60%), I was mired in mediocrity in 2011 with a measly 6% return and I am careening lower in 2012, up just 11%–down from +36%.
How did it happen and what the fuck is going on?
Answer: really unfortunate timing, greed, hubris, lack of resolve and stupidity.
That just about sums it up.
See you fuckers in 2013!!!
I will now list my biggest losers by dollar value.
DECK- greedy fucker I was taking on this cocksucker, after knowing they were going to miss earnings. I was a deer in headlights. Chalk this one up to stupidity.
SWHC- the events at Sandy Hook elementary clearly had an adverse effect on this stock. It just so happened, SWHC was a 20% position of mine at the time of the tragedy, truly unfortunate timing to be long a gun stock.
VXX- I lose fucking millions in this stock every year, BUT NO MORE. I’d rather deep dry my head than buy this again. Stupidity.
SVU- my thesis here was to be long into some sort of buyout. To put it plainly, I got shaken out, and as a result, fucked myself–because the stock came roaring back shortly thereafter. Lack of resolve.
CPST- I held this stock throughout 2011, waiting for a turn around– but it never happened. Finally, I booked the loss in 2012. I have to chalk this one up to hubris.
JIVE- retarded timing on this one. Stupidity.
UA- This is my 7th biggest loss in 2012 and I only lost 4 points in the stock. I stopped out above $50, after realizing my timing was off. Although this loss was the result of greed and bad timing, it should be noted that I do not let many stocks fall too far before cutting losses.
Now for my biggest gains.
ANR- Going into the 2012 Presidential elections I executed a series of perfectly timed coal trades, ANR being my best.
CTRP- I executed this trade in the summer and it came and went in a blink of an eye. I had massive size in the trade and banked coin quickly, then vamoosed the fuck out of there.
WNR- had I held this stock from my basis of $14, I’d be singing a different tune right now. It was my #1 thesis trading call, bullish on refiners when no one else wanted to touch them. Well played.
NAK- This was another Romney play and I fucking nailed this for 80%. I just sold my last piece the other day for a pettily 18%.
GSVC- This was my original social media play, before all of the fucked up ipo’s. I played this like a BAUS, from $12-$18 and never looked back.
ALJ- another refinery play, banked coin and left for good.
YELP- This stock defied logic and reason, blasting higher as Facebook, ZNGA and GRPN plunged. I got in as low as $15 and liquidated, never looking back, north of $27. I was very adamant about the name.
EL- I leveraged up on this one and played it fast from $53-$59.
BZH- I sold this yesterday, playing it from the $14′s to $16.65.
Those were my biggest winners and losers. There were numerous other winners and losers, but none of great substance. I overtraded because I am paranoid as hell, thinking the market in on the verge of collapse on a minute by minute scale. And, I should NEVER play a stock into earnings, unless I am prepared to average down 20% lower. Clearly, I cannot continue this pattern of paranoid greed and stupidity, for it is a combination for acute failure.
My greatest strength is market timing. With the help of The PPT overbought/oversold algorithms, I’ve been able to time the market better than most. However, due to the individuality of stocks, coupled with my lack of broad diversification. I’ve had the unfortunate experience of booking losses, even when being right. Hence the inverse of “The Fly’s” mantra.
I don’t like the approach of owning 20 stocks, with 3-5% weightings, because it leaves one open to sheer fuckery should the market plunge–due to the difficulty in selling all of those stocks in a timely fashion.
Back in 2009-2010, some of my biggest winners were ETFs. I believe it is time for me to start implementing the use of the ETF universe (yet) again, one that I am keenly aware of and well versed. I maintain a complete database of useful ETFs inside The PPT and I will be putting them to use in 2013, utilizing my gift of market timing.
The market will always be unforgiving to those who bet big and bold. You might make some outrageous trades and come out the other end successful; but there will be a consequence to that success: hubris. You will try to repeat past successes and become frustrated when things go against you. You will believe yourself to be infallible, and when things go awry, you will bet bigger and lose. The gains will be bigger and so will the losses. Hence, you will live the life of an investor crackhead, dependent on a rush to fulfill your degenerate desires.
Walk away from that path in favor of a methodical one. Take my word for it.
There is so much to talk about when reflecting on the bullshit that was 2011. For me, it was incredibly hard to make “high percentage” trades. It was a year that surprised me, as the unexpected and surreal replaced the normal, easy trades. Without a doubt, if you weren’t nimble, you lost a tremendous amount of money.
Because of the extreme volatility, I suspended my options account, since it proved to be an exercise in futility. The very essence of momentum was disrespected over and over again by rumors and rumors of rumors, purported by viagra addled bureaucrats dressed in ugly suits–hellbent on interfering in capital markets.
Following one monster year after another, from 2005-2010, I will be lucky to close out 2011 with a +10% gain. However, if there is one thing I did exceedingly well this year it was controlling losses. I’ve had my MOTR boats and unlucky endeavors in VXX and certain nefarious dealings with Chinese burritos. But my yearly range has remained tight, between -5% to +15%. At the very depth of 2011, I was off by just 8%. I held the course and successfully navigated my way back to profitability. But the cost was great, purely from a quality of life point of view.
Like many of you, the volatility emanating out of Europe has led to constant uneasiness, sleepless nights, vacations that entailed 10 hour work days, and a perpetual state of mania that has resulted in numerous trading mishaps. There has been no clear direction or thesis to fall back on. A few months ago I endeavored to park cash in food stocks and laid the ground work for capital infusions into 10 companies. Luckily I never mustered up the confidence to invest because two of those stocks were TEA and DMND, both horrendous losers.
Once again, we had to deal with the typical Wall Street corruption that we’ve all grown to expect and love, which of course goes entirely unpunished. Jon Corzine and his fucking beard lost a bunch of money, fucking MF Global and its clients. As usual, Congress will call hearings and promise to “investigate.” But they will never prosecute “one of their own.”
We learned that our beloved elected officials have been profiting from insider trading, which is legal for them. This is the Roman Senate and no one seems to give a shit. There is one group of degenerate animals who got mad in 2011 and that was the Occupy Wall Street crowd. But what was their demand? These filthy idiots want us to give the corrupt government even more power. Ha! In other words, they feel the way to help America is to give more money to the cocksuckers who conduct themselves with the most undistinguished dishonor the American people have ever seen, the same people who gladly sellout the American worker and expedite the greatest transfer of wealth, from west to east, the world has ever seen. They want to do this by taking my money and literally giving it to union chiefs who in turn will make political donations to the democratic party. No thank you and fuck you very much.
This was also the year the proverbial chickens came home to roost. All of the excess and waste that led to giant European debt loads was firmly rejected in the debt markets this year. As a result, the continent teeters on financial disaster. I suspect, the chickens will die in 2012, leading to a finale of sorts, a conclusion if you will, to the drama we see playing out here on a daily basis.
There are days when I question whether I want to be in this business. In so many ways, I don’t need this shit. But I love it and would not know what to do with myself without it. The truth is, as many of you know, it’s real easy to hate something when you suck at it. Well, by my standards, in 2011, I sucked. For all of the research and long hours that I dedicate to this trade, I expect to outperform by grotesque proportions. All of my big thesis trades flopped, with exception to one sweet run in the refiners.
I can’t keep dodging bullets like this– because eventually one is going to hit me between the eyes.
Here I am at 11pm, penning this article, worrying about Italian 10 year yields, reflecting on my failures. I have a great book waiting to be read in the bedroom and a hot cup of Earl Grey tea right next to it. In many respects, I’ve made my bed already. Now I’m gonna go lie in it.
From GM to CIT to AIG to C to LEA, 2010 was the year when moral hazard went out the door. Companies with fucked up balance sheets, like SIRI, CPWM and FTK, stared into the abyss and spit, pissed and shit in it. It was a year that transformed losers into winners, sort of like black magic, but only cooler. We threw hundreds of billions at the wall and prayed for it to stick. Luckily for us, it did!
I understand why investors were hesitant to invest this year, as the normal order of things disconnected. Markets aren’t supposed to go higher on the prospects of sovereign nations going belly up; but they did, nonetheless. At the same time, the main drivers of growth, namely China and Brazil, sat out the great rally of 2010, allowing western nations like Germany and the United States to steal their plantain fried rice. It all makes sense, if you think about it. Like it or not, we are highly levered to Chinese growth, same with Germany. And, like Senator Gint likes to say, “as long as China is pegged to the U.S. dollar, we are their central bank.” In essence, Bernanke is the overlord of all things Chinese, raping and pillaging along the way, a local magistrate if you will.
Commodities were big standouts, with outsized gains in Cotton, Corn, Coffee and pretty much everything but Natural gas and Cocoa. They went up on the prospects of a weak dollar; but the dollar went up too, so go figure. Treasuries were a non-event, year over year, and tech stocks surged higher, led by lunatics invested in NFLX, PCLN, AMZN, CRM, APKT and FFIV, just to name a few.
As the year winds down, expectations are very high for 2011. You will see my predictions for 2011 in about a week. To summarize my notes, I think it will be a mixed bag.
At the moment, I am thinking about adding some dollars to municipal bonds, in light of robust January seasonality. And, I am pulling in the reigns here, upping my cash position close to 40%. It is tempting to short a little, if only for a hedge. However, I’ve been burned too many times this year, banking on disaster. I’d rather lower my beta, via large cash position, and buy dips. If I was interested in hedging, I’d bet against oil. But that seems like a lunatic trade now, especially in light of all the snow on the ground and asset allocation models pining for $100 crude.
In short, celebrate the New Year’s without fear. Lighten up the load and take some hard fought gains. There will be plenty of time in 2011 to buy Maseratis and new homes, off of equity gains.
It has been a moderately successful year for “The Fly.”
During the early going of 2007, I was as hot as a pistol, with smoking gains in [[MVIS]], [[BWLD]], [[CENX]], [[NTRI]], [[LNN]], [[IVAC]] and [[HANS]].
Then, all of a sudden, things stopped working.
First, I got knee capped by a variety of bullshit stocks, like [[ARWR]] and [[MCHX]].
Then, the [[MVIS]] bandwagon got “dewheeled,” sending “The Fly” scrambling for safety. For most of the summer, I was forced to endure painful declines in a variety of key holdings, like [[NTRI]] and [[BWLD]].
I missed out on a lot of big winners, particularly in the solar sector. But that’s ok.
I find it easier to buy and sell what I understand. Most of my big mistakes come from speculative dice rolls, which end up being long term capital losses.
I must say, during 2007, the market was very difficult to game. The retailers, ethanol, homies, trannies, banks, semi’s and networkers all blew the fuck up. And still, the major indices are up, year to date.
To put things in perspective: I went from being up 47% in June, to up 20% now. A staggering decline, yet still up nicely.
Because of this, I forced myself to divorce from key holdings and put protective hedges on accounts, via inverse ETF’s.
Furthermore, I made sure not to take unneeded risk in momentum sectors, like solar or emerging markets.
To sum things up:
The only reason why I’m still up 20% is due to my long term strategy to hold quality stocks. Within my top 10 holdings, three of them (RIMM, AAPL and GME) enjoyed triple digit returns in 2007.
However, going into 2008, I seriously doubt they can repeat. The law of large numbers will eventually kick in and those stocks will become legacy.
So, like every new year, I will be hard at work, trying to identify the next RIMM or GME. Additionally, I need to stick with my short sales longer. Looking back, I nailed short calls on [[CWTR]], [[HLYS]], [[RACK]] and [[LAZ]]. However, due to my bullish disposition, I covered them too quickly.
In 2008, I believe China will drop significantly, enriching those who hold [[FXP]]. Also, on the long side, I sense agriculture and filtration companies will do well. Stocks like [[MON]], [[MOS]], [[VMI]] and [[DCI]] should be bought on dips. Also, considering we are entering an election year, many sectors will be jolted by poll stats.
In other words, investors will have to be nimble in 2008, in order to adjust to the political headwinds and economic instability.
My goal for 2008 is to double my 2007 return of 20%. If I cannot accomplish this task, without doubt, I will be moving to the cold mountains of Romania, where I will milk goats for the duration of my life.