Picking Up Some Steam

You’ve got to love Option Addict. His pick from Friday is up a mere 26% today (KNDI) and he doesn’t even mention it in his daily scribes. There is certainly a method to his greatness that can be gleaned and very soon the plebs (you) from the internet are going to be invited to an event, in which he will be attending. More on that later (He’s doing a seminar, people).

Up until the last 10 minutes, I was unimpressed with this tape. But now, all of a sudden, there is vigor and tenacity to the ascension. With the market up 150+, you’d expect to see a broader participation in the market, with just 73% of stocks higher. But maybe I am just being a little impatient. Even still, I am underperforming, up just 0.5% for the session. Like all bad markets, I was up more earlier; but that sort of dissipated with time and now I am hoping for a second wind into the bell.

We’re at a point in the market where the bears are getting cocky. They see the news flow and think the market is topping. I wouldn’t place too much confidence in the bear call here, especially in the month of March. If you’re gonna bet against the tape, you’re better off waiting until May or June to execute some short sales.

One trade I am thinking about revisiting is natural gas. It’s going to take a monumental effort to rebuild the natural gas reserves back to 5 trillion bcf, following the bitter cold winter. We are likely to see continued strength for the duration of the year. I haven’t picked out my plays yet, but ECA, UPL and KWK are interesting to me.

I am sure many of you are disheveled over the lack of transvestites in today’s St. Paddy’s day festivities. This being one of the most sanctimonious holidays of the year, I feel it’s important to drink excessively and to pair that forced impairment with the direct purchase of stocks. This is the one day of the year when “The Fly” actively encourages and recommends to drink at the desk.

As for me, I did my drinking on Saturday night, so I won’t be doing any of that today. Nevertheless, I will be buying stocks–because that’s what gentlemen do when properly motivated.

I own the very best stocks. I do not own them because they will go up the most or even because they have the most potential. I own them, frankly, because I deem them to be “the best”; therefore, and this goes without saying, you should have a look at them too.

The Russian problem is on pause (extra homo) and the Crimea has been cast aside for something far more important: an opportunity to partake in debauchery. That, my friends, is the American way.

Cheers!

You’ve got to admit, the similarities between what Russia is doing to Ukraine is awfully reminiscent to what Nazi Germany did in the 1930’s. They are annexing Crimea to “protect Russian speaking citizens?” Do these people really think we are that stupid? A simple glance at an atlas will reveal that the Ukraine is fertile land, the bread-basket of mother Russia, being the #3 producer of corn in the world (hello Monsanto!) and #6 in wheat. Aside from that, strategically, the Black Sea ports in Crimea are vital for the Russian navy.

So Russia snatches Ukraine’s chain and as a result we slap meaningless sanctions on Russia. I read that one of their talking heads said they could “reduce America into radiative ash.” I must admit, after reading that sentence, I got a good, hard, chuckle out of it. I’d like to see them try to get away with it, however. We have nuclear silos in Atlantis, hidden islands in the sea with the ability to reduce Mother Russian into a garbage can. But that’s just talk and propaganda.

This is the bankable trade.

The Russians are controlled by corrupt oligarchs. What do oligarchs like to do? They like to throw parties in Monaco, whilst socializing with non-Russian aristocrats. They enjoy fine French wine, American clothes and London banking centres. Plus they are living fat off the German hog, being the #1 provider of natural gas to Europe. My bet is for peace via status quo. The Russians are the very worst people in the world, the very worst in the history of mankind, and I suspect they would like to retain that distinction, without the spectacle of war to muddy their designs on fine dining in Paris.

This, like all of the other crises of the past, shall whither in the wind, just like the useless tales of caution, spouted out, sloppily, by a certain Rickard Santelli.

Do you know what happens to your portfolios when the markets goes down? You lose money, banana brain. My stocks and “picks”, as you like to call them, have done poorly this week. Do you know why they did poorly? BECAUSE THE MARKET WENT DOWN, banana brain.

Am I supposed to curl up in the tub and cry myself until I drown? Or, perhaps I should ready myself for St. Patrick’s Day festivities tomorrow, hosted by yours truly, with a sincere intent to get inebriated?

Once again, for the new readers on the site, I will have to demonstrate how this works and what is going to transpire.

Because I own, what people like to call, “high beta stocks”, my drawdowns will probably outpace the general indices. The SPY was down less than 0.3% today, yet I shed another 1.5%. Naturally, whenever the market decides to bounce, my stocks will do better. So it’s important to do two things now:

1. Stay in the game.
2. Position myself for success.

Staying in the game means that I should prepare for worst case scenarios, stress test my portfolios to see if I could withstand a serious market drop. Leverage should be reduced, if not eliminated, and holdings should be diverse.

In order to position myself for success, it is imperative that I establish exit strategies for my losers. This entails a very specific and methodical labeling of my holdings. If XYZ drops by 10%, do I cut the loss or buy more? How low should I let XYZ go, before averaging down? Should I buy XYC into what looks like an upside reversal or continue to buy the dips, in 3,5 or 10% intervals.

The goal is to keep average cost in line with current prices. In the case of FEYE, since I bought it today above $80, I have no choice but to either sell the whole thing if it trades lower, or buy more. It would be foolish for me to do nothing and wait around for my cost basis to be realized, especially since I have 10% of cash on hand and another 50% or so in buying power.

I intend to stretch my buying power to the extremes, by managing my current positions, then letting go of some of them on the next bounce, like a god damned harpoon thrusting into a retarded whale, spastically galavanting about the sea.

The PPT will be my guide.

I hate Warren Buffet, him and his refusal to split his shares. Because of him, there are countless wannabes (Biglari Holdings, ticker BH, comes to mind) who allow their share prices to go higher, and higher, and higher–following the model of Berkshire. I must admit, this tactic has proven to be effective against the fickle shareholder base. Most retail investors are afraid of invest in stocks worth more than $100. Therefore, higher priced stocks tend to be less volatile these days.

There’s a bubble in super high priced stocks. Someone with resources ought to short the hell out of these bastards, just for the sake of doing it. These CEO’s deserve a comeuppance, believe you me. They think they’re so coy. Some of these hoodlums even reverse split their shares (Biglari Holdings, ticker BH, comes to mind), to wash out speculation. Well, someone ought to bring forth extreme speculation, of the violent sort, to the names mentioned below.

BRK
SEB
PCLN
GHC
MKL
AMZN
BIIB
CMG
PCP
UHAL
CLB
PNRA
MCK
VIPS
BH
NEU
MIDD
CF
SAM
NWLI
TSLA
ACT
WYNN
CSGS
SHW
PPG

Have you ever seen a more obscene group of stocks? Just looking at the symbols makes me want to punch someone in the face. Obnoxious and condescending at the same time. To hell with them.

I got to admit, I was tricked into thinking today would be a good day. I am looking at wheat, corn, oil, gold, silver, even coal, and they’re all higher. Treasuries were down earlier today and tech looked great. So, I bought more IFON and FEYE, thinking “what could go wrong?”

Apparently, everything.

The world is now on the brink of destruction. This is a double blue blazer market, folks. For those of you who’ve been around for awhile, you know exactly what that portends.

I am now down more than 1% for the day, yet I feel so complacent. It’s as if I were actually making money. Can you imagine that, making money in stocks?! Pffff.

Give war a chance, people. It’s not all that bad, aside from the occasional casualty.

Oh, by the way, retarded investors of America: when gold and silver trade higher, that’s BOOLISH for the pawn shops, since they hold more than Fort Knox and initiate loans based upon the collateral of personal jewelry, which happens to be gold.

Back to my electric chair.

I am adding to FEYE, SPLK and WDAY methodically, almost everyday. Today I bought FEYE, in small increments, just to build the position.

I also added to my IFON position, as their claim to glory vis a vie their “Ifon” in South American shouldn’t be derailed by a mere World War. The people from the ancient Indian lands of the equator don’t trouble themselves with word wars and anything that might distract them from their duty. Therefore, it goes without saying, IFON is a buy.

So GM’s ineptitude led to the untimely deaths of at least 300 people. Remind me why you people buy American cars? These death boxes are made in Detroit. I don’t want to own anything that is made in that city, by those people. Even if they were built in Japan, I wouldn’t buy an American car, since the engineers and management are part of the same organizations that have personified the definition of mediocrity for decades.

Tesla, on the other hand, represents the future. It’s not that I am against American made cars, only GM and Ford. If Apple made a car, I’d buy it in a second. American innovation is alive and well. We need new blood, fresh ideas, that aren’t represented by the duapoly of GM and F. I am not bullish on TSLA’s stock here. However, I am rooting for them.

The markets look weak this morning. Again, this is thanks to the Russian problem. Their currency is in the tank and bond yields are soaring.

Russian 10yr govt bond yields

If you recall, the Asian contagion crisis of 1997-1998 started with Russian default. Naturally, Russia is in a much better position now, thanks in large part to oil. But we shouldn’t ignore what the market is broadcasting either. Government yields north of 9% spell danger. Couple with the fact that the Russian stock market is down over 30% since November, I think it’s fair to say the R in BRIC is dead.

NOTE: What do you think of this?

This just in…

According to the oracles at the Dow futures pit, located at a pub near you, the Dow Jones Industrial Average will rise by 22.61 points tomorrow. In case you’re wondering, that is after “fair value”, just to give you a much more “precise” reading of the prophecy.

Although last night’s reading was off by about 220 points, give or take a few, I am told that tonight’s prophecy holds considerable weight, in that it has been delivered by the Chief of the Futures Clan of Tomorrow himself.

Happy tidings.

Here it is. I am throwing it out on the table for you to feast on. We’re all gonna die anyways. I might as well let it all hang out now, while I can.

Equity Exposure: 90% (10% cash)

1. EZPW
2. SALE
3. EGRX
4. FEYE
5. SPLK
6. WDAY
7. SB

How did an illiquid biotech stock get to be so big of a position? Slowly. It’s worth mentioning, I have several other positions of similar size. Aside from my EZPW position, everything else is under 10%. I have a bunch of small positions, something unusual for me, done purposely due to market conditions.

BTW: The new 300 was fucking awesome.