Fly Buy: $DRNA

I added DRNA to my biotech basket. I am now fully invested.

Target: $24

You probably think I am permanently stuck in a state of stubborn bullishness; but you’d be wrong. My natural tendencies are pessimistic. Each and every day, I drive myself to the point of delirium to believe in the optimistic base case scenario. I’ve witnessed the phantasm  and great things of splendour take place in these markets over the past 5 years. On numerous occasions, I’ve attempted to short it, only to regret it shortly thereafter. During the flash crash, by  sheer chance, I had 30% of my book long volatility, which ended up being a longer term negative–as that 100% move in VXX-tits only fueled my appetite for that bastard ETF, eventually leading to heinous losses.

Enough chit-chat.

The recent decline in tech/biotech mirrors the tech bubble of 2000, without question. For this exercise, I will use an old school tech favorite SCMR as an example.

When the bubble popped in March of 2000, SCMR traded north of $30. By early May, the stock traded to a low of $11, a treacherous drop of 65%. Sound familiar?

After the bottom was in place, the shares rose until the end of August, climbing as high as $28.

As a person who was managing money back then, I can tell you that we all felt the worst was behind us. I recall attending this grande partners dinner, hosted by my employer at the time. It was a get together for the largest producers of that firm. We had a lot of laughs and everyone was making money. Little did we know, shortly after that display of grotesque hedonism, the markets were going to collapse and punch the faces in of most of the two-bit salesmen in attendance, myself included. After all, back then, my best trait was sales. I always took a liking to stocks and always knew how to pick winners; but at the end of the day, raising money is a full time job when you’re working at a brokerage firm. You don’t have much time to analyze and mull over investment strategies.

By Thanksgiving of 2000, SCMR hit $7, crushing the helmets and the skulls of everyone who believed in the hype. That was the beginning of the end, a death that lasted until 2003 when the zombies were revived for another go, thanks to George Bush’s tax cuts and his wars.

Bottom line: I do believe there was a bubble in tech and it popped. I also believe we are enjoying a respite that will last through the summer. And, I also believe the markets will be incredibly trying this fall, in others words heading lower in broken elevator fashion. Keep your stops on a tight leash and don’t believe the hype. You can take advantage of it, but never believe it.

By the time this year is through, I fully intend to be in a position to torture and perform mayhem upon the vast hordes of catamites who’ve tried to kick me while I was down. Very soon, I will have a very big win–one that will astound, amaze and cripple those who’ve followed in my wake–hoping to derail me.

This comeback shall be one of the greatest ever performed on a live blog, in front of millions of people. This comeback that I speak of is ongoing, it’s alive, and is destined to make you all look incredibly stupid.

We’re going chinese lotto and biotech madness this week, long TEDU to the gills, alongside SGEN and AEGR.

I have several other names worth buying, but can only do so after I book profits in one of the names mentioned above.

I am very sorry that I do not have stories for you fribble minded people to enjoy. “The Fly” is far too busy partaking in elephantine comebacks,  finding new winners, things of that nature.

https://www.youtube.com/watch?v=4qAAPRbRSc0

I made another 0.7% today, lowering my deficit to almost 24%. I’d like to write a grande article, discussing my philosophies and how biotech investing is being done, almost scientifically, by certain investment professionals (Baker Bros, Randal J. Kirk, Baupost). However, I came across the end of this movie, titled “Tales from the Hood”, and I couldn’t help but to see the current plight of Rick Santelli and his fellow bear travelers in his glorious motion picture. Be sure to watch it to the very end!

https://www.youtube.com/watch?v=D33B6Y7JaKk

Ciao

I added SGEN to my roster of future winnings.

TSN upped its bid for HSH to $63, making this takeover attempt one for the ages. MRK acquired IDIX for an absurd 240% premium and ADI bought HITT for a very rich premium. As long as interest rates are low, expect to see more of these types of deals, companies making acquisitions to fuel growth. The futures aren’t moving much, but I think this IDIX deal is a huge one for the biotech space.

Look for similar companies to get bid up in biotech, specifically those who treat hepatitis C. Doing a quick company profile search, I see ACHN, ENTA, ARRY, BLRX, CNAT, NNVC, MDGN, INO, GALT, ENZN, VRTX, SCYX, SCLN, RGLS all have hep c in their profiles. Look for some of them to make some massive moves to the upside today.

It’s also worth noting that Seth Klarman’s Baupost Group owned more than 30% of IDIX. Other biotech stocks in his reported holdings are THRX, KERX and KIN.

We are a bit over-stretched to the upside. I expect a minor pullback today, followed by more of the same frantic to the upside buying tomorrow. Either way, M&A is in full swing and the bears are eating their own feces now.

Oh, by the way, Carl ‘give me three seats on your goddamn board’ Icahn took a 9.4% stake in FDO.

1 week

Computer peripherals +7.8%

FTNT

ZBRA

EFII

Aluminum +7.4%

AA

CENX

KALU

Silver +7.4%

MVG

PAAS

FSM

Hospitals +6.4%

LPNT

SEM

AMSG

Industrial Equipment and Components +6.2%

SNHY

EMR

PH

2 Week

General Contractors +9.03%

CBI

EME

ABGB

Airlines +8.4%

AAL

UAL

DAL

Pollution and Treatment controls +7.9%

DCI

CECE

MFRI

Computer Peripherals +7.7%

see above

Medical Laboratories and Research +7.4%

RDNT

IRWD

GHDX

1 mo

Home Healthcare +17.9%

GTIV

AMED

LHCG

Long term care facilities +16.8%

KND

CSU

DVCR

Airlines +15.2%

see above

Hospitals +14.2%

see above

Data Storage devices +13.6%

WDC

STX

VMEM

I got a few names for you. There are so many options in The PPT, I doubt many have every fully grasped its capabilities.

This screen is a personal favorite. It looks for stocks that are within 1% of intra-day highs, up more than 2% for the session, average daily volume of 500K, and with 10%+ of the float sold short. In other words, here are some heavily shorted, liquid, stocks that closed near the highs of the day on Friday, into strength.

KOG
COTY
XOMA
KING
NAVB
MDR
IDIX
ENT
VRNG
CDNS

The very essence of a short squeeze relies upon relentless strength in a heavily shorted name, forcing bears to cover, out of fear of realizing substantial losses. During periods of irrational upticks, like now, I’ve found short squeeze plays to be the easiest places to make short term gains.

People belonging to your bloodline decided to vacation and go for a swim at Omaha Beach, France. Fast forward to today, you stupid shits are shorting the biggest, baddest, bull market the world has ever seen.

Somethings never change.

https://www.youtube.com/watch?v=OZJMtJtrsnE

I started a position in GIMO.

Target: $21.