Fly Sell: $CLIR

I booked a 36% overnight gain in CLIR.

h/t: The Devil

A new front on the war to “Kill Bill” has opened up.

Dinan, who heads York Capital Management which manages $15.1 billion, this week told an audience at a Morgan Stanley investing conference in New York that the firm is shorting JC Penney’s debt, effectively taking a dim view of its future.

That puts Dinan at odds with Ackman and his $12 billion Pershing Square Capital Management hedge fund. Ackman has become a big JC Penney cheerleader since his firm started buying the stock in 2010.

Ackman is now under pressure from big-name investors taking the opposite side on two of his positions – the other being nutritional supplements company Herbalife Ltd in which he has a $1 billion short position and has been battling hedge fund manager Daniel Loeb and legendary investor Carl Icahn, who have both taken long positions.

A spokeswoman for York declined to comment on whether the hedge fund is betting against the retailer’s debt.

Morgan Stanley’s high yield bond desk is also betting against JC Penney bonds, said a person familiar with the firm. The firm is betting on a decline in the value of the retailer’s bonds using credit default swaps.

A Morgan Stanley spokesman declined to comment.

 Source

York Capital join the cabal of like minded gentlemen who are opposed to the success of both Ron “Business Man” Johnson and “Montauk Bill” Ackman.

Before JC Penney dies, it will respond violently, volatile, whip-sawing both longs and shorts alike. Nonetheless, the trend is firmly to the downside, in both equity and bond prices–let alone the underlying business. For now, it is a 3% short position of mine.

I’ve been through the best bull markets and the worst bears throughout my career. I’ve enjoyed two frantic bubbles and multiple implosions. We are in the midst of what is going to be viewed upon as a renaissance for degenerate gamblers, people who could only make money when markets traded up–every–single–day. And it did.

Over the past month or so, I’ve been knocking the ball out of the park, through the building outside the stadium, and into people’s faces. Web traffic is meh, similar to the response I’ve gotten from people in real life. No one cares. If you are interested in the mystical world that is the stock market, you are in the minority.

The craziness of Europe and flash crashes, following the unbelievable stupidity that was 2008, has driven the retail client out of stocks. Most of the people that I know, who have a lot of money, are buying real estate again–not stocks. No one trusts the market because it is widely believed to be unfair and inequitable.

Look what they’re missing out on.

Fools.

I kicked out of my BX and MTU positions for handsome gains. BX was my largest holding, but not anymore. I’ve replaced part of it with RAS. I intend to make RAS my largest position, which should mark my final salvo of extreme risk taking until the fall. As you know, I intend to “cash up” near tax day.

I purchased CLIR, based upon the musings of The Devil. Being that he’s had an incredibly hot hand, I gave it a go. I am looking for $8.

It looks like I am finishing out the day up another percent, pushing my gains to +20% for the year. Keep in mind I’ve done this for the past two years, this being the third, only to give most back in the 4th quarter. Things will play out differently in 2013; I promise you that.

At the present, my largest positions are USG, RAS, BZH, WNC and HLF. Both CALL and my JCP short are respectable–but within the bounds of reason.

Another day floats by and another win is chalked up for Señor Tropicana.

I started a position in RAS.

I started a small position in CLIR.

Disclaimer: If you buy this stock because of this post, The Devil will claim your soul. And, you may lose money.

In case you didn’t get the memo, this Friday Ron Johnson, alongside his team of fashion experts, will launch Joe Fresh in their stores. The Joe Fresh brand is what Ron has been telling us we need all along. He convinced Bill Ackman to wear the attire to Pershing Square board meetings and now he’s going to dress America.

Starting Friday, the future of JCP shall be revealed, from the visionary himself RONALD “BUSINESS MAN” JOHNSON. The entire company, the employment of thousands and supply of cheap wares for millions of misers across the country depend, hinge even, on this one sweater.

BEHOLD:

The company has $685 million in debt maturing by 2017, with a burn rate of $1 billion per annum and $800 million in the bank.

Everyone has sources, some are good–others are great. I have numerous sources of information, one of which is from someone we call “The Devil.” I’ve highlighted his calls here before, from VHC to IOC to KRO.

His last successful call was PAMT, highlighted inside The PPT @ $8.70. At first, I did not buy because of the thin volume. After some cajoling, I finally gave in and bought @$10.74.

Here are the time stamps on his PAMT calls.

His newest pick is CALL- The MagicJack. The stock trades by appointment and is surrounded by controversy. Nonetheless, the company consistently smashes earnings expectations, which are slated to be released on the 16th.

Past results does not mean future returns are assured. Nonetheless, I am a small buyer of CALL– a 5% position.

By executive decree, I am adding Zenhunter aka “Tradingmytwocents” (insanely stupid name) as interim blogger to iBankCoin, joining the illustrious ranks of, umm, Rhino. Very soon, Vincenzo Illuminati will add him to the front page and you will begin to curse him out in the comments section, almost immediately.

As I watch CNBC, they’re playing rap music again. Can someone please tell me who these morons are appealing to? Perhaps the urban investor class is somehow supporting TD Waterhouse ads?

The main problem with people is they try to be cool, as if it mattered. What do you want to be cool for? You want people to like you, or think that you’re somehow dangerous or appealing? You are a jackass, nothing more or less.

The rally will continue. The core thesis revolves around housing. We will see high single digit appreciation in housing this year, lending to new home builds. Again, my top housing picks are USG, BZH and by extension BX (they are the biggest corporate owners of residential homes in America.)

However, I am only playing this game of thrones until early to mid-April. Every market is subject to pullbacks, some very severe, enough to ruin one’s year. I am targeting year to date gains of 25% by next month, at which time I will “dial it down” and fall back into a large cash position. But now is not the time for “cowardice cash.” Now is the time for glory, the time for sacrifice and honor, throwing metal spears through the faces of stupid short sellers with animalistic fervor.

Now is the time for winship.

First off, Bill Ackman is hurting JCP more than helping.

But it wasn’t long before trial-watchers discovered that Martha was wooed into a separate and seemingly parallel deal with JCPenney with the help of Bill Ackman, the always confident and controversial hedge-fund manager who has a huge stake in the ailing retailer.

“Great work, Bill. You get a huge assist here,” crowed Johnson in an e-mail after Martha signed on. “We put Terry in the corner.” Court-ordered arbitration will determine whether that boast is true.

Martha had an exclusive deal with Macy’s and was lured to JCP and now people need to pay. On top of everything else afflicting Ron Johnson at JCP, he may soon see his stores without products on the shelves, depleted of the Martha Stewart brand, all thanks to “Montauk Bill” Ackman.

But what else is JCP up to, aside from the once legendary god of retail, Ron Johnson, crashing the company balance sheet into cinderblocks made from dynamite?

Their sales down 31%, that’s what.

The company now has less than $1 billion in cash and has been delaying accounts payable to preserve cash. Last quarter, they’ve stopped paying people for their products for a new high of 48 days (up from 34), in order to “save” $214 million in cash.

Ron is trying to convert JCP from a coupon clipping discount retailer to high end. It’s laughable, really. Only a true narcissist, devoid of basic common sense, like Bill Ackman, could believe in such a strategy. Legacy store sales for “everyday prices” declined 36% YOY and 33% in Q3.

After Ron crashed the JCP balance sheet into cinderblocks of dynamite he announced that they’re gonna bring back coupons, since people like them. Johnson to date, they’ve only converted 11% of stores to his moronic vision. It will cost JCP, on average, $1 billion per year to convert to the new–higher end stores.

Bond holders say no, with paper trading anywhere from 10-30% below par. On top of that, JC Penney CDS are now above 1,000, a level seen by all of the winners of bankruptcy, just prior to their demise.

Two things are going to happen if JCP is to survive.

1. Ron Johnson will be fired.
2. JCP will issue a massively dilutive secondary to shore up the balance sheet, at a big discount to current prices. They need to raise $1 billion, right away.
When this happens, Ackman’s thesis for owning the stock will be destroyed, forcing him to eat crow and sell the stock.

If Johnson stays and the company continues the current path to doom, the company will be bankrupted by 2015, maybe sooner. There is a distinct possibility, considering the current trend of accounts payable, that suppliers will demand letters of credit this coming holiday season. If JCP cannot provide such letters, merchandise will stop being supplied to Ron and his company will collapse.

Disclosure: I am short JCP.