Let This Be a Lesson to You

Never panic after a big sell off.

Quit betting on crash scenarios, for they are as rare as intelligent Presidents.

Never, ever, short into the hole and do not dare buy VIX instrument ETNs after a sell off.

There are some things that never change in the the market. The seasons change and so do the players; but the rules remains intact. Ultimately, you and I are simply transferring fear and greed back to one another. One of us will be right, the other miserable. Temper your emotions and know that you know nothing (extra Jon Snow). After coming to grips with the fact that you aren’t God’s special creature placed on this planet for the sole purposes of self-aggrandizement, you will become a better investor.

We just had a very sharp oversold bounce. Euphoria is high and greed is trending. Look to raise cash tomorrow and prepare for the possibility that we might retest the lows. At the very least, we will test the hands of the newly minted geniuses to see if they are up to the task of holding during periods of duress. After the next flush out, I believe we might have a straight shot through Thanksgiving.

Look at what you’ve done. Don’t say I didn’t try to warn you.

I added to my MU position.

Your IRA account is now at zero. That UVXY trade that you kept adding to will now define your headstone.

“HERE LIES THE FUCKHEAD WHO THOUGHT IT WAS A GOOD IDEA TO BUY VIX INSTRUMENT PRODUCTS…INTO THE HOLE.”

For the day, I am up 3.7%. Catch my vapors, son–because you’re never gonna get the chance to touch me again.

Top Picks: TRN, ANET, FMSA, MBLY

I scaled back on some of my CYBR position and started a new one in ANET–devil endorsed.

Yesterday, TRN lost a lawsuit at the hands of a scoundrel whistle blower, some guy with an ax to grind trying to recover damages for the purpose of self-aggrandizement. The judgement went against TRN, after 3:30, and the shares got slammed in very illiquid, panic-confused, trading. In the pre-market, the stock is down a little more.

Why?

Apparently, jackasses about the internet enjoy to spread rumors. Mind you, the DOJ didn’t join in this lawsuit and it will most certainly go to appeal. The so called whistle blower will see $500+ million, just as fast as AAPL will pay VHC a gagillion dollars for stealing all of VHC’s precious patents.

Here are some facts to understand, before throwing the baby out with the bathwater.

TRN has a billion dollars in cash.

TRN makes a billion dollars in pre-tax income, per annum.

TRN is a cash flow generating machine.

TRN will NEVER, EVER, pay $500+ million for guardrails that were already approved by the FHWA.

TRN lost $700 million in market cap yesterday, hardly justifiable considering this is going to appeal and judgment will not affect balance sheet in the interim.

TRN has an insurance liability converge of $500 million, potentially insulating them from any damages.

TRN has a long, rich, history of smashing analyst estimate to pieces.

With earnings scheduled to be reported on 10/29 and the stock severely discounted, if short, ask yourself: Am I feeling lucky, punk?

I am a buyer at these levels.

This man, this reprobate of a human being, had the audacity to speak on the Fast Money today and compare Apple to Blackberry. Yes, gents, he said Apple could very well be going down the path of BBRY, despite not showing any signs of that whatsoever. I suppose Ralph Lauren could become the next Coldwater Creek or Nike could become the next Fila. Anything is possible, right?

ASIDE FROM THE FACT THAT THE APPLE COMPUTER CORPORATION IS THE LARGEST COMPANY TO EVER GRACE EARTH AND HAS UPWARDS OF $150 BILLION IN CASH RESERVES.

Aside from all that, Collin kindly kept his $98 price target intact, which makes this award all the more necessary.

Listen and cringe to this man’s, this beer swilling bedlamite, double speak all the way to Asshatville.

Full disclosure here: that fucking judgement and subsequent drop in TRN’s share price, ironically, had me feeling like a UVXY shareholder late this afternoon. Everything was going peachy, up until the point when the guillotine descended upon my anatomy.

I don’t know what else to say, other than “I hate lawyers.”

I am sure there will be an appeal and this sell off had the stench of panic. Let clearer minds chime in on this one first, then make a judgement. Frankly speaking, seeing my intra-day gain of 2% morph before my eyes into a small loss was more than tragic, it was an abomination.

‘Tis the life of a railman.

This didn’t turn out as you planned, did it mate? The dogs of hell have been released upon you. Markets are trending higher, despite earlier weakness in crude. In a nutshell, you’ve been had and now your face is a chew toy.

I believe this rally will continue till Wednesday, then reverse to retest the lows. Of course I’m just guessing, merely using my reservoir of vast experience to navigate these troubled waters, might I add, with sublime and harmonious precision. Then again, I am sure all of you predicted this would happen back in April, like me, calling for a major rally in TLT. Yes?

I didn’t think so.

As I write this my largest position is careening lower, based off some trial decision. God damn it, I hate the courts.

Nevertheless, the market still has lift in it and those TNA positions should profit over the next few days.

Off to deal with a crisis.

Post IBM, the market was supposed to crash. But it didn’t–boo-hoo.

Oil is lower, which makes me uneasy. For the moment, my FMSA purchase looks like an act of genius, as I am up 21% on the position since I purchased it on Thursday. It reminds me of when I was buying WNR, circa 2011. Do you remember that? I was on vacation in Turks and Caicos and the market cratered. My WNR went from $17 to $11 in a flash. I bought it up down there and before I knew it, I was selling it north of $20. That stock, eventually, went north of $40, where it resides today.

In addition to FMSA, I am up nicely on MBLY, AAPL, GILD, ICPT and SGEN–just to name a few.

My top 5 positions are TRN, FMSA, MBLY, CYBR and CLR. Only TRN is greater than 10% of my assets, so everything is pretty drawn out, diversified over many sectors, and market caps.

I’d like the market to not give back the 275 pieces it gained on Friday. That would be a pleasant start to the week. On Friday, I was up 1.9% for the session and right now I am up 0.9%, down about 1% from my intra-day highs. I’d like to keep these gains too.

There is winship brewing in this market. You just can’t see it yet.

Great floods will be avoided this winter, as the rivers and the lakes freeze into solid mass. The hurricane season will be non-existant by November, as the country prepares to feast on large birds and seasonal squash. The Turkey Gods will make an appearance on the NYSE and swallow one trader whole, as is the custom during that time of year. Shortly thereafter, a buying frenzy of discretionary goods will sweep the nation, with little children running about–asking men with giant white beards to buy them things.

Rumors of flying reindeers, with incandescent noses, will run rampant and the Coca-Cola corporation will propaganda the idea of strange fat men breaking and entering the homes of millions of Americans to be, not only an acceptable practice, but preferred.

And the stock market will trade up on most days, down on some. There will be periods of panic and greed, hedged by periods of consolidation. Men will be broken over the knees of Mother Market, like stale pretzel sticks, for not exhibiting patience. Persons of little to no experience will make great strides early on, then lose everything, AND MORE, during downturns.

This cycle will repeat itself for all of eternity.