Happy New Year’s

Quit being a cheap ham and egger and hire a driver to drive your drunk ass about town. Next thing you know, your big, giant, fat, head is split down the middle–through the windshield–because you wanted to operate the automobile whilst drinking 40 ounces of malted liquor.

I hope everyone enjoys the New Year’s festivities. If you had a bad year, sweep it under the old 2014 rug and start anew tomorrow. I am very ritualistic on New Year’s eve, for it is the night of renewed hope and reaffirmed commitments.

I can’t believe it’s 2015 already. I remember New Year’s eve, 1999, like it was yesterday, hauling the fucking gallons of water up the stairs, for Mrs. Fly, who actually believed all of the computers were going to melt down because the number “2000” was too much of a burden for our antiquated computers to handle (cue visions of giant IBM computers circa 1955). Me, being a regular jackass, went to go buy them to make her feel happy, safe, and like I gave a crap about clean water and living in a post apocalyptic world.

She doesn’t know what you already know. “The Fly” WAS FUCKING BORN TO LIVE IN A POST APOCALYPTIC ERA, ONE THAT ESCHEWED STRONG MEN AND TRIBAL LEADERS, A TIME WHEN A MAN WITH AN ORBITAL SPACE CANNON (OSC) WOULD REIGN SUPREME AND ALL FELLOW FINANCE BLOGGERS BOWED DOWN TO HIS SUPREME, YET ELEGANT, RULE.

Happy New Year’s.

-Fly
https://www.youtube.com/watch?v=twnUE2yLdZA

This New Year’s eve, my family and I will be toasting to the Ackman’s, whose patriarch, ‘Montauk’ Bill Ackman, walked into 2014 an injured/disheveled man, but walked out a fucking ax wielding viking warrior. Not only did he destroy Carl ‘give me three seats on your fucking board’ Icahn’s stupid HLF short squeeze, he conducted a legal inside trading scheme, by which he allocated 40% of his $10 billion hedge fund into a takeover of AGN, with champion results. Jay Gould, Commodore Vanderbilt and Daniel Drew would be proud.

Some other winners of 2014 include TQNT, SWKS, Airlines, PANW, EA, PPC, AVGO, biotechs, GMCR, NXPI etc.

Semiconductor companies had a massive year, as global demand for electronics swelled to new highs. Truth be told, these parts makers have always been dicey and I am surprised AAPL didn’t squeeze them more. I’d be careful about riding this wave in 2015. We can talk about a thousand different ways 2014 sucked and was awesome. This year can be summed up by two things.

1. Epic breakdown in oil.

2. Amazing melt up in biotech stocks.

Forget about treasuries and Bill Gross’s juvenile lateral move over to Janus. Forget about Yellen, the ECB, Russia and the middled east. What I want to know, heading into 2015, will this trend continue?

Social media took the year off, as well as a number of software stocks. They merely regained lost ground from March’s epic melt down. It was a mixed bag; but ultimately another successful year for Wall Street 1.0.

Cheers to my readers and long term members of iBankCoin’s services and double cheers to ‘Montauk’ Bill Ackman.

Brent oil in a contango will encourage traders to take delivery of crude and wait for higher prices, according to U.S. economist Dennis Gartman.

Brent for February delivery is $6.10 a barrel cheaper than the February 2016 contract. February Oman oil traded on the Dubai Mercantile Exchange is $8.30 cheaper than the year later contract after being $6 more expensive about six months ago.

“Not enough people pay attention to the importance of term structure,” Dennis Gartman, author of the Suffolk, Virginia-based Gartman Letter, said yesterday in a phone interview. “The market is saying it will pay traders to go into storage.”

source: BBG

My favorite way to play this is FRO. Other tanker plays include VLCCF, NAT and DHT.

As long as contango exists in a weak crude environment, producers are going to store their product in these tankers, in order to realize higher rates. This bodes well for oil tanker stocks and their day rates.

Since oil is trading like a convoy, meaning all stocks behaving as one, I expect investors will book losses these last few days of the year and simply buy another like-minded oil stock. For example, if you own COP and have a loss, book it and then buy CVX.

We can talk stocks if you want to, throw out some top ideas for 2015 and waste time. But let’s talk about something important.

NORTH KOREA DIDN’T HACK SONY?!!! Really?

That’s the news. Is it possible that our Grandest of Presidents had bad intel heading into his press conference, where he read off the teleprompter that the bedeviled North Koreans can menace its neighbors with nuclear apocalypse but NEVER, EVER fuck with Hollywood? Frankly, it’s pathetic how influential those dick-grabbers in Hollywood are these days. Back in the old days, Hollywood was relegated to being considered a freak show of sorts, where people would point and laugh at, but never take seriously. Nonetheless, I do not like ‘Golden Age’ thinking and realize ALL PREVIOUS generations to my own was and is inferior on every level, sans bravery. Then again, I invite you to spend 100-1,0000 spare hours reading old newspapers, like me, and learn about how the ‘greatest generation’ during World War 2 were considered to be a bunch of nebulous lazy clam fuckers.

War changes people. In this case, it changed an entire country.

Oil is 100% gay and oil stocks should be taken with a grain of salt. What I mean by that is oil should be in everyone’s portfolio, but to a much lesser degree than before the collapse. At some point, oil will stop going lower and these stocks are going to forklift higher. You’re gonna want to be long for that. Trust in that.

In the meantime, biotech and retail sensitive names are overweight in every growth/momo portfolio now.

Hate is cancerous and spreads like wildfire. Be careful about planting seeds of dissent, hatred, and disbelief in others, for you might regret it later on. It’s fun to talk about conspiracy theories and faux lunar landings; but there are some of you out there who become obsessed with such things and it stifles productivity. I am talking about Federal Reserve, gold bug, Illuminati, New World Order, Bilderberg Group, World Bank, Zionist conspiracy theorist lunatics.

When you dive into that wormhole of dissent, disbelief, you will see everything through a different prism. Some of you believe these “truths” need to be exposed. I contest that if exposing said truths doesn’t have a material positive affect on your lives, you’re better off doing something else.

Believe in people. Believe that there is good to offset the treachery around you. There is a whole world of innovation, competence, creativity and compassion out there. Choose to focus on that, instead of the stuff that will drive you to store gold bars and fucking dried food in your nuclear bomb shelter.

Don’t waste time.

I added to BLCM.

I sold out of most of my FEYE position. Being up a little more than 10% in a stock that nearly destroyed, me earlier this year, has left me somewhat satisfied. Therefore, before things start to go astray once again, I took profits.

With the proceeds, I allocated my January funds to HABT now. I do not want to wait for a SHAK ipo to buy. This stock will be $45 by then.

I also started a position in TPH, as it is my belief that US homebuilders are on the verge of busting loose.

When I buy a stock, I embody said industry. Therefore, it goes without saying, I am now a burger flipping homebuilder.

Before I rejoice in the soon to be public Shake Shack, ticker symbol SHAK, I want to tell you a horrible story (fair warning given).

Once upon a time there was a small boy living in a foreign land. He was staying at his Uncle’s house during the summer, taking in the ocean breeze, hamming it up with his cousins. One morning his Uncle woke them up and asked them if they’d like to go on a journey. The boy and the cousins celebrated this idea with vigorous tenacity and packed a small bag to head down to the beach with their Uncle.

It was very early in the morning. The sun was barely out and the weather was a bit damp and cold. His Uncle told them of an ancient ritual that could cast away disease, bad luck and give him the vitality he needed to be a successful man. Barely 12 years old, none of these things meant anything to the young boy. But he agreed to undergo the ritual with his Uncle and cousins for the sake of sport.

While walking on the beach his Uncle said they needed to head over to the rocks. The young boy was so excited over this mysterious adventure he was nervously shaking with a smile from ear to ear.

They arrived at their destination and his Uncle stepped in the water with his eyes focused on the ground peering near the rocks. Ah, he found it! Uncle pulled a giant turtle out from the water and raised it up to the sun. The boys were ecstatic. They’ve found their treasure and now the ritual was complete!

But the Uncle wasn’t done.

He pulled 4 shot glasses out from his bag, one for the boy, two for the cousins and one for himself. He then turned the turtle over on his back, pulled out a knife, and removed the turtle from its shell. By this time the small boy was in shock, unable to move. His great Uncle then picked up the turtle, raised it to the sun and stabbed it in its heart. He then squeezed the turtle’s blood into the shot glasses and demanded everyone to “drink now”, while hot, before the blood congealed.

The ritual had been completed. The boys and the Uncle then went back home to watch a soccer game.

I am keeping some of my oil stocks, no more than 10% of my overall portfolio as a call option on crude. I am only bearish on crude because the trend is now lower. However, if we’d simply use our grey matter and understand that the recent price decline will eventually lead to a great reduction in US rig counts and subsequent cap ex budgets, at a time when the economy is growing at an astounding 5%, we’d easily surmise that lower oil prices is now something that is unsustainable. That’s right. Despite all of my arch-pessimism, there is an extremely bullish case for oil stocks setting up in 2015.

To that end, I remain long SLCA, DVN, FMSA and ECR.

However, I am not keenly focused on crude at the moment. There are global games being played in that arena and I don’t have an edge.

These are some of my stronger ideas, with a one or two liner explaining my thesis.

DTSI: Electronics maker and chief competitor to Sonos. I wrote a piece on it a month ago.

JAZZ: Don’t sleep on narcolepsy.

FRO: Super-contango and lower Brent prices is bullish for oil tanker storage.

AMZN: Fuel prices.

SBUX: Aspirational.

HABT: The MCD killer.Shake Shack ipo should keep this popping throughout 2015.

LB: Thongs.

KMB: Domestic sales. Staple.

BID: One of my 30 year hold stocks.

PZZA: Fuel prices.

WFM: Aspirational.

Gas station plays: CST, CASY, TA and IMKTA.

STZ: Domestic sales.

Researching: AIRT

In summary, I am bullish on aspirational brands because lower fuel expenses pushes the poor guy to his local SBUX for a frappacino. Think of the economy as a video game and a bunch of disheveled poor guys just got upgraded. They will take their new found riches to stores that were slightly out of their price range, in order to bask in their new found riches, and spend it all. They will also extend their credit and delve deeper into debt, which is bullish for COF. I am bullish on cleaner eating and healthier choices. Rich or poor, Americans are moving in this direction, which is also bullish for WWAV, HAIN and CALM. Yes, eggs are healthy for you.

Domestic retailers are where you want to keep your money, thanks to our walled gardens. Avoid companies who whore their wares to third world neanderthals. These corporations are gluttonous and shall be punished. Stocks like CHD, CLX and IR will do well.

I also think AMZN busts loose soon and YELP catches a bid.

All of my bad trades in 2014 were in retarded stocks. I will try my hardest to avoid these cavernous black holes, until I fully regain my mojo of course.

I seem to be alternating between greatness and mediocrity, every other year. Coming off a +80% 2013, I will end up losing about 20% in 2014. Although I didn’t lose money in 2012, I certainly underperformed. I had stellar 2007, 2008, 2009, 2010 and 2011’s. So what the fuck is going on?

That my friends is developing.

All that I can do now is focus on the future. I am setting up for 2015 outperformance. One of the things I used to do, when building positions, is buy in small increments. I ignored that in 2014 and it cost me dearly. In the past I’d assume my initial entry point would be wrong and I’d buy it in two or three tranches, sort of what I am doing with HABT. This methodical manner gave me time for my ideas to work out. If you’ve been following me a long time, you know I have great ideas, but sometimes get flushed out early. That is due to position sizing and stress points.

Case in point: GPRO.

In 2015, I intend to focus on winning industries, avoid bottom picking and leave that to the degenerate out there in the woods. I will re-establish my dominance in macro-market calls by positioning in stocks that correlate well with the indices and avoid smaller capped names. A certain percentage of assets will be set aside for high stakes poker. But for the most part, my methods will be fairly strict and structured.

Desire is man’s greatest vice. It is what drives us to greatness and then ruins us. The manner by which we set out to achieve desired goals is what separates the winners from the losers. In 2014, my desire for outlandish returns resulted in my person being placed into a ‘fag-box’. But that’s okay, since I still have plenty of powder left and the skill-set to make it right.

Off to see about a 2 1/2 inch rib eye.