Rocketship

In case you’re wondering, yes, my computerized version of my brain, The PPT, called yesterday’s bottom. Did I go balls to the wall long? No. Why not? Because I am dealing with issues.

I was already invested in ETR, EXC to name a few. A few days prior I had bought a large position in SOL, in the $3.50’s, so I had to buy it here lower.

Why?

Because if the reflation trade takes hold and oil moves up, solar will give you twice the returns. It’s like a derivitive version of a premium driller. There aren’t any news events that might shock it, so if the market is good here–so am I.

I did not sell my TLT or utilities, as they now serve as a hedge against my other large positions, namely SOL, ARWR and GILD.

In summary, I consider TLT and my utilities to be cash equals, low beta plays designed for a bad market. There is still time left in September and I committed myself from 9/1 to seeing this through. We’re almost there.

I dumped all of my cash into SOL.

Zero cash, TLT, ETR EXC, SOL, ARWR, GILD and SLCA make up my largest positions.

Some of you people are just fuckheads. I don’t want to be mean or ban you; but you leave me with no other options. How many different ways do I have to tell you “I am not short stock”? Being embedded in some treasuries and utilities doesn’t equate to me losing a fortune in today’s run. Moreover, (need I remind you again?) I haven’t sold a single fucking share of any of my long term commitments.

What does that mean?

It means I am long JAZZ, SLCA, ARWR, HAIN, ICPT, SOL, just to name a few. I own over 35 stocks, fucked face. So the next time you step to me, come correct, else it’s out with the landfill.

When I said I was distracted, I meant it–so behave while I am away.

Sorry, but I am dealing with a clusterfuck of epic proportions. After I am done killing the people responsible, I will be back here, talking shit amongst you good people.

Stat tuned.

This is a tough one. Every inch of my cold soul wants to buy stock today. However, I’ve thought about it and will not buy anything until tomorrow or Friday. Today is the knee-jerk reaction day, the day when all of the plebs at all of the discount houses lever up their accounts to do business.

If I were to take my warnings that “this is 2000 all over again” seriously, I’d be using this bounce as an exit opportunity for some of my trading positions. But, truth be told, the conviction isn’t there for me yet. I’ve been programmed to believe there is a bid in this tape, no matter the circumstance. Deep down, under the cynicism, I am an optimist, just a guy trying to find his way in the wilderness of man.

I am walking away from the desk now, as it is the only way to prevent myself from buying something.

Talk to you gents in a few hours.

Listen to me. I’ve had all but 4 hours sleep over the past two nights, so I don’t have the mind to debate, offer links, research notes, or what have you. Just know, James Cramer is an idiot. I’ve eaten at his restaurant and it’s recklessly terrible.

The other night he said he wasn’t a believer in the great sand super cycle for fracking companies, SLCA, EMES and HCLP. He further elaborated that if forced to choose between the three, he’d buy EMES. Coincidentally, Goldman Sachs had upgraded the shares that very morning.

At the same time, old line fracking ceramics company, CRR, had just warned and its shares were and still are on death watch. This gave great opportunity for the perverts clad in burlap’d undergarments to sell short some of America’s finest companies, with a little help from the lunatic on the boob tube.

What people failed to understand is that CRR sucks and missed earnings because SLCA, HCLP and EMES are snatching share like a gold chain on a white guy in Harlem.

There is an opportunity ahead. Great American companies of industry are on sale because of miscommunication and fear. I will triple my SLCA position once the selling exhausts.

Instead of listening to me or Cramer, read the Cowen note from the other day.

U.S. Silica target raised to $83 at Cowen; Outperform (69.29 )
Cowen raises their SLCA tgt to $83 from $67. The U.S. Silica story keeps getting better. The 2014 analyst day included a positive update to current year guidance, the announcement of accretive capacity expansions, and the introduction of long-term targets which seek to double EBITDA every 3 years with 2020 possibly reaching $1B. Firm sees the investment case evolving to a more durable long-term thesis; Outperform.

Good night.

I don’t know when they will collapse; but I can all but guarantee that they will. If you point towards some recent deals, like TRLA or CNQR, they were done at and below 10x sales. This market is riddled with a group of stocks with valuations we have not seen since the dot com bubble.

There have been zero instances, aside from biotech FDA bonanzas, when a high valuation tech stock simply grew into its valuation, gracefully. A perenniel “high valuation” stock, CRM, is trading 7x sales and at its highest point of “crazy price to sales” status, it only traded 14x–back in 2005.

The following stocks have 50-75% downside potential.

CSLT
TWTR
SCTY
WDAY
FB
Z
FEYE
SPLK
ARMH
YELP
ATHM
CMCM
NOW
ZEN
DATA
WBAI
QUNR

Even the ludicrous TSLA is trading 12x sales. Bear in mind, the above stocks are all trading above 15x sales and I own a few of them, super bullish on names like YELP and FB for the long haul. But I am not disillusioned when looking at these stocks; I know what I am getting involved with.

It comes down to this.

Does the bubble continue and if so for how long? That’s all that really matters. When this run is over, the high valuation stocks will correct and resemble the endless names listed in the old tech cemetery, indexed by some old crowd favorites like CSCO, SCMR and JDSU.

Over 150 stocks are down more than 10% this past week, at the same time the Obama administration starts to fly armed drones shaped like Noble Peace prize awards over Syria. Coincidence?

I think not.

You’d like to remain in your cocoon indefinitely, then emerge later on to flowers and honey bees buzzing about the garden. But the winter is coming and up ahead is nothing but icy roads and homicidal zombies.

In the greatest lexicon of all investor handbooks, you’ve ignored the most important one of them all: The Book of Fly.

Judgement day is coming and when it does, you best to have some treasuries and utility shares to withstand the wrathfulness of it all.

After I penned my first blog of the day, I said to myself “Fly, why don’t you partake in a game of opposites?” I then answered myself, saying “asshole, what the fuck are you talking about? How does one partake in opposites?” I then retorted “whatever you think you’re going to do with all that money, just lying there, do the opposite. In this case, specifically, you would permit me to buy something instead of you.”

“Oh, so you want to wear the pants, tough guy? I’ll tell you what: I’ll give you 50% of the money to invest. After you make a complete jackass out of yourself, I get to kick you down a flight of stairs, laced with jumping jacks and mustard. Do we have a deal?”

“Done.”

With 50% of my cash, I bulked up on my utilities, buying size in both ETR and EXC.

The market looks very good this morning, doesn’t it? Apparently, all of you are ignoring the ominous HINDENBURG OMEN and have taken to the market like drone on ISIS. This is the part of the story when the hero takes a bold stand, only to be ambushed and held captive in a Siberian work camp for the next 6 months, before escaping and then finally defeating his enemies.

I am very pleased to see my stocks trade higher. I was going to buy some SLCA this morning, following Cramer’s inane comments, but opted to wait it out. I think the NASDAQ can run a quick 20 points from here and all will appear to be good again–until tomorrow when death itself calls upon you.

Be patient and remember the good days and the bad, when forming opinions on where to place your hard earned dollars. The last part of that sentence is important for you to acknowledge. These aren’t digits and numbers we’re playing with, but a lifetime’s worth of labor.

At any rate, my cash position is so high I might be forced to put a little money to work here.

Stay tuned.