Back in the Saddle

I am back in the north, where the wind is cold and the people are smart. Ninety percent of the people who live in Princeton are somewhat intelligent, as opposed to 90% of the folks in Richmond, who are in fact drunk–including children.

I did, however, enjoy my stay at Fredericksburg. I did all of the usual tourist stuff and was fascinated by the rich history that is preserved in that town. I highly recommend it for anyone who is interested in going on a road trip down south.

If in fact you ever stay in Richmond, be sure to steer very clear of The Westin hotel. It is a 100% hovel, this is easily bested by the very clean and accommodative Hampton Inn. When it comes to hotels, “The Fly” doesn’t aim for the most luxurious, but the cleanest–analyzed closely by the reviews left on Tripadvisor.com. If, by chance, there is a 4 star, highly rated hotel, in the city I am staying in, then I will book it. Otherwise, it’s Hampton Inn all the way– or a top notch bed and breakfast.

I see the market sucked this week. I’ve been out of the loop, so why don’t you fill me in on why the market fell?

All opinions are welcomed.

Just when you thought gold was dead, it climbs out of its grave and runs throughout town eating the brains of its inhabitants.

Every single time I think to myself “Jakegint must be dead”, gold and silver bottoms. It’s amazing, frankly. But the bounce in gold has been nothing less than stellar. I’ve missed out on it, but there is a lesson in this.

The lesson is, with reference to this particular market:

NOTHING stays down. Certain stocks might “go away”; but rarely do we see entire sectors/industries stuck in a bear market for the long term. Had you bought gold miners when I was saying “they are going to zero”, you would’ve made 50-100% on your money. I shouldn’t be slighted for having this position. I am merely a reflection of the market and I don’t have strong feelings for the miners. For me, saying “miners suck” is as natural as a person from Fredericksburg to lament “yankee invaders” from dining at their truck-stop eateries.

Down sectors that have catapulted higher include: shippers, alternative energy, refiners, nuclear, solar, chinese burritos etc.

The moral of the story is, buy the blood and be patient.

As for this market, it looks awful, which probably means it’s going to bounce soon–and hard.

Look, if you’re biased long, this is what you want, down stocks and stupid money. This is a process and I hope you were smart enough to raise some cash when things were good. Be patient with the average ins and you’ll end up a winner. Buy quality.

My purchase of YELP was a loser today, but I will buy it all the way down if I have to. Do you know why?

Conviction.

I’ve concluded that I need to be long a certain sector and a select group of stocks, and I will do exactly just that. If I lose money in the short term, that is perfectly fine with me, as long as I don’t “Bill Ackman” myself into a fag-box.

http://www.youtube.com/watch?v=wZjms7rRAQw

How dare you talk to me, like I am some sort of panhandler in the streets, begging for scraps of bagels! I informed you, whether you took the advice or not, that I sold out of my non-core positions because the market felt weak. And you have the audacity, the gall, to tell me that market is beating me because of my hubris?

You should be ashamed of yourself and this shame should last for 10 generations, staining your family name for the next 500 years.

I am very tempted to buy here. However, since I am on “vacation” and away from my data, I am just going to leave things the way they are until next week. I’d hate to start buying, then see the market down 5%. That would mess up my vibe.

Truth be told, it’s CHINESE LOTTO TIME again. Every single day another chinese stock hits the lottery for its shareholders. Today, that name is FFHL, up a modest 200%. WH is a sideshow, up a mere 35%.

I am compiling some names for purchase and will be ready to act soon. I might even nibble on some YELP before I head out.

UPDATE: I added to YELP in the $48’s

It’s time for you to shut up again.

This isn’t an econ blog, or some place where muppets go to trade stocks and gossip about business. This is the blog of “The Fly”, where men die trying to outsmart him and women are strictly prohibited. I am a firm believer in the olde school. Some of you jelly fondlers  think old school is 1990 or 1950. Le Fly is going way back, to the damnest part of the Dark Ages, the year 476 when men died over friendly contests and women stood at home to make stew out of water and grass.

I will talk about stocks when I am good and ready.

I took a lashing to the face today, with IMMR heading lower again. YELP and POWI are dripping daily and the market is generally stupid. I have 35% of my assets in cash and have my eye on two biotechs. But, they’re thinly traded and cannot allocate much to them.

I do like the dips in OWW and TRIP and will consider adding to my YELP position at around $48.

For now, my core positions are IMMR, YELP and POWI. Everything else is simply a trade, designed to finance my core.

Futures are lower because John Chambers still works for CSCO.

See you suckers tomorrow. And remember, shut up.

GREETINGS FROM THE PART OF VIRGINIA WHERE SOUTHERNERS HOLD DEAR.

I sold CXO, booking just a 5% gain. I squandered an opportunity to book 10%, so I drew a line in the sand here, closing out the position. I am sure it will trade higher, eventually. For now, I am out.

In addition, I sold GPRE, OPEN and ONVO, all for a profit.

With the proceeds, for now, I will leave them in cash, in order to “better enjoy” my “vacation.” When I get back up north again, I will redeploy the capital in earnest. For now, seeing the market weak again, I am 35% cash.

I know Carl Icahn is going to push for AAPL to borrow hundreds of billions to buy back their own shares, creating the illusion of stronger earnings through lesser shares. After the company burns through its cash, magically, the share price will be $700, using the same multiple and earnings growth that currently exists. However, you and I both know this doesn’t fix the structural issues at Apple. I can’t believe I just said that.

BUILD A BIGGER PHONE, MR. COOK.

You stupid bastard. The people demand a larger phone because they like shiny things. Your phones are starting to look like laughable toys, compared to the Galaxy. If it wasn’t for the fact that I own 3,000 songs, I’d make the switch too.

Under your leadership, Apple has done nothing exciting. Where’s the god damned teevee?

Hopefully Carl will oust Cook and get the shares going again.

Egypt is killing protesters now. I am bullish on them building more pyramids and optimistic about paying taxes, so that we can give them a few billion dollars in aid per year.

I am up slightly this morning and might make one or two purchases before heading out.

I’m driving a rental car with Pennsylvania plates on it. Here in Richmond, VA, it’s a tale of two cities: one a disgusting slum filled with ham and eggers. The other part of the city is for the drunken red necks, who possess very little in the way of decorum, like their ancestors.

Whenever someone asks me where I’m from, I point to the plates and say “Gettysburg,” with a smile of course.

Just today I had the pleasure of witnessing a couple having a foul mouthed ruckus, in front of my family of course–southern hospitality at its best.

Speaking of hospitality, I am pleased beyond words to see Carl “give me three seats on your god damn board” Icahn announced a large position in AAPL. For those of you who are young and stupid in this business, read his biography “King Icahn” and understand why Mr. C is the best activist investor who ever lived.

I own shares of AAPL and have been bullish since $400. Going long some AAPL $500’s, DEC, is probably a good gamble here, considering Carl is likely going to oust Tim Cook and punch him in the face.

CREE missed earnings, which is very customary for them to do. The company has horrendous management, despite being in a white hot space. I’d wait for it to dip, then start a position with size.

I had a decent day in the markets, nothing really exciting. In case you’ve forgotten, I have been researching into the biotech sector, with the assistance of a very intelligent doctor, who happens to believe he is a good investor too. Needless to say, he’s been very accurate with his picks and has confirmed that one of my ideas was in fact a good one, taking a position, in for the long haul.

I will reveal said position soon.

Night ya’ll.

Since 2002, buying TLT in August has been a profitable venture, every single year but last. TLT dropped 1.3% last year, and thus far, has continued its downward spiral of death this year, jarring stocks because “the rate of change” is happening too quickly.

There isn’t anything wrong with higher rates, per se (no homo). But the speed in which it is happening is something to worry about, which is why equity markets have stalled.

I don’t ascribe to the idea that “earnings” are growing too slowly or that the economy needs to “do better” before we can jack-lift (no idea what that word means) higher. Stocks go up all the the time, because that’s what they were built for. When God made man, he created war. When man created stocks, he created winship.

I have nothing exciting going on today and really need to get back to my family, else Mrs. Fly will strike me down, like a dog, with her purse.

In summary, the August TLT trade isn’t dead yet; but it’s not looking too promising either.

Disclosure: No position.

I don’t care where the stocks trades tomorrow. I am making a commitment, a very public one indeed, to never sell this stock–ever. The only way I am going to sell YELP is when they get acquired. See, it’s not a matter of if they get bought out, but when.

I’ve made a determination, long ago, that companies like YELP, TRIP, ANGI, OPEN, LNKD and Z should never be sold. However, due to the vagaries of the stock market, there are times when I try to “time the top” in a feeble attempt to show off market savvy.

The smartphone market is a $300 billion per business. Companies who are able to capitalize on mobile win. No one does it better than YELP. Hands down, the stock is a screaming buy at any time you are able to purchase its shares.

As of now, I am long YELP, OPEN and FB. Regrettably, I did not buy GSVC in the 8’s, even though I highlighted it for being $4 under its NAV a few weeks ago.

Moving on, I am in Richmond, VA, in a hotel that is filled with southern bone-heads. They rate this hotel top tier. I rate it scum of the earth. Their gym equipment is antiquated and the clerk at the front desk needs a psychiatrist and fast.

As you know, “The Fly” will be fulfilling the duties of any respectable northern man of commerce and nationalism, treading in the foot steps of the great northern general, William Tecumseh Sherman.

DEVELOPING…

The social media topic and investment opportunity never ceases to amaze me. I was uber bullish on the space, back when YELP sported a market cap in the private markets of just $500 mill. Everyone was excited, heading into the Facebook iPO, then calamity struck.

I was amazed at the carnage by the “leaders” of the social media space, namely ZNGA, GRPN and FB. All of the homeless people who circulate on Twitter had called for this destruction, based off something inside of their heads that makes them hate success. But they were right. My large investment in YELP went from $30 to $12, ZNGA, GRPN, FB collapsed and every name in the space dropped by at least 25%.

Back in 1997-98, I was researching and buying internet stocks, before it was popular. No one believed in them yet and the shares were thinly traded and heading lower, until the renaissance of speculative investing was born in 1999, lasting through 2000.

We are a similar situation today with social media stocks. However, the big difference is they are making money or close to it. The dot com era was riddled with names that meant nothing. Buzz words, such as “B2B” and “eyeballs” ran rampant Henry Blodget was the guy atop the roof yelling “buy.”

Now Henry resides at the helm of a different roof top, in charge of the best financial news site on the internet. Internet stocks are all the rage again, and slowly but surely, investors are starting to believe the hype.

Have a look at my social media index, found in The PPT.

It doesn’t even matter if this sector drops 30% from present levels. All of the bozos out there screaming “bubble” missed out on a huge buying opportunity. More than that, you will continue to miss out on future gains because you’re too stubborn to accept what is staring you in your face.

Fresh highs and new buyers come into the space every single day because it is, without a doubt, the best place for growth, hands down and bar-none, in the world.

Chalk up another L in your column, friendo.