Damn It: Fundamentals Got in the Way Again

ISM numbers were horrendous, so stocks sold off–now everyone is worried about The Fiscal Cliff again. I swear the market wanted to roar this morning, when the futures were +7.

I’m getting lit in VHC and SWHC, but nothing too serious. They both trade weird and have longer term stories to the names, so the short term aberrations need to be taken with a grain of salt. With VHC, I cannot think of a reason why any short seller would want to have exposure to the stock ahead of the court date with Judge Davis and AAPL. Many believe some sort of settlement will be hammered out by then, effectively opening the floodgates to future licensing deals with a wide array of players. If that happens, shorts will regret the day they were born.

SWHC is a play on the 2nd amendment, which many feel could be at risk in two years. Because of that fear, people are stockpiling guns. Go look at the data, it screams of panic-impulse buying. Like any retail stock that has a product that is in heavy demand, SWHC and RGR should reap the rewards through superb quarterly reports.

YELP is ripping again. I kind of regret not buying it at $17. The risk with the stock lies with its valuation, trading 9x sales. It is priced as if someone is going to acquire them, which makes sense for a number of players out there. However, can the company ramp up earnings before that happens, to support this valuation? That is a the billion dollar question.

Lastly, I am long EXK because during the debt ceiling crisis, gold and silver ramped. It’s my belief that the same will happen once we dive off the fiscal cliff.

NOTE: I am still 30% cash.

Both Greek and Spanish bond auctions went better than expected. Don’t even bother trying to think this stuff through. The reason why I have a ‘long only’ mantra is because I am alerted to the fact that central banks want to create a bubble in equity prices. Just like they did with housing, they are doing the same for stocks. Every once in awhile, stocks start to reflect the horrible news and go lower. Then, like magic, some good news gets pulled from a Greek orifice and they trade up.

NEVERTHELESS, it is still my belief that we are going over the fiscal cliff, which should jar markets, until the bozos in Congress hash it out–sending markets roaring again.

For now, I am heavily long VHC, SWHC, EXK and UA.

Interestingly enough, Sam Poser aka “the only analyst who matters in DECK”, just upgraded the fury boots maker with a $65 p/t. Detail will be posted inside The PPT.

For all of you tabbed blogger contestants, I wish you good luck. Elections will be held in the city square this Thursday. The people of iBankCoin will select up to 3 new bloggers, all of whom will be subject to draconian burdens to meet and exceed traffic goals. A new era is here at iBankCoin and it’s an olde one that was once the standard on another orange site, where it all began. Bloggers will be fired with the same careless abandonment as a chain smoker flinging a cigarette butt or an anorexic discards a nightly snack.

If you’re scared to throw your hat in the ring. I understand; most of you are pussies.

NOTE: Just because the market wants to roar, doesn’t mean it will today.

http://www.youtube.com/watch?v=lJqTU2Tj7Wc

Many of you have emailed me about the open position(s) for writers at iBankCoin. Things are about to change here and I will let you know the ‘rules of the game’, as soon as you finish reading this wasteful sentence.

New blogger(s) will be elected by popular decree on Thursday of this week. If you do not post a blog in the Blogger Network, announcing your interest, you will not be put on the ballot. This means that you must make a pitch as to why people should vote for you. If that means shitting on your competitors, so be it. The first stage of becoming a successful blogger is to grab the attention of your peers.

Can you do that and get elected?

Once elected, you will be given all of the tools to become a blogging phenomenon. Your opinions will be read by the world and all posts will be retweeted through iBankCoin’s corporate Twitter account. HOWEVER, that’s where the fun ends. In order to remain a tabbed blogger, you must maintain a 3% share of traffic, which will be monitored, in true authoritarian fashion, every 3 months. No hard feelings, but if you can’t hold 3%, you will be let go.

Those who successfully maintain 3% share over 6 months might be inducted into a permanent role at the site, upon approval from the iBC board.

Let the games begin, fucked faces.

NOTE: If you do not have a blog in the Blogger Network and want an invite, email me at [email protected]

I know I’ve said it before and it loses it luster after so many proclamations; but I am in the market to acquire fresh blood, to be part of the “tabbed blogger” apparatus. If you want to write for iBC and be part of the most distinguished financial site the world has ever known, throw your hat in the ring and let it be known. If you are part of the blogger network, do a post. If you want to be invited to the blogger network, email [email protected] and we will give you an invite. Or, email me directly at [email protected].

Aside from the prestige, there is a monetary benefit from being part of the club.

NOTE: Readers and outside bloggers alike are welcomed to apply.

UPDATE: New bloggers will be decided by popular decree, a web poll vote for the masses.

They’re trying to trap you. The market always does this before taking a shit on your face. It’s run by sick people, designed to make you poor and divorced. The downside might not even be too bad– but from top to bottom, you’ll go broke if you play it the wrong way.

All you need is to be 200% leveraged at the top of the market and lose 25% on a stock to lose half of everything you have. Then you will get all desperate and shit, sell at the bottom, miss the run up, then buy into another trappy top–leveraged and down another 25%–for the grande fucking finale down to $00.00.

That’s how this shit happens. You can be the smartest fucker in the world and get wiped the fuck out. We’ve all been there, at least those who are crazy enough to trade in such a manner. Most of my clients keep their long term accounts embedded in boring stocks like IBM, KO and KMB. Since that shit is boring, I never talk about it, opting to discuss the aggrerssive portion of my strategy, because you’re all degenerate OTB guys–otherwise you wouldn’t bother surfing the web for stock tips.

You want a fucking tip, some hot stock advice? Stop listening to assholes on the internet about financial matters. First of all, 99% of the people you read online aren’t professionals. They’re self taught and for the most part winging it fucktards with 10 grand in their online Zeeco accounts. That’s not to say they can’t be great–but it’s rare. Also, can everyone please stop using war as an anecdote for investing? That’s the nerdiest shit in the world. One guy is getting his arm blown off by a grenade, the other just lost $553 in a bad WNR trade–hardly a comparative analogy.

PFFFFFFFFFF.

I don’t adhere to traditional rules. I don’t fucking like them. Stop losses at -10%, why? Sometimes a stock is best picked when down, not running higher. I said it once and I’ll say it again: investing is an art. You have to be creative and find ways to make money, some orthodox, others completely insane and risky.

It’s a crazy goat fucker market and as much as I hate it and want to stab it in the face, I will never stop trading it.

I believe many of you hard left wingers get too defensive when I talk shit about Obama. Clearly I hate all politicians, some more than others of course. I felt Bush was the worst President the world had ever known and now I think Obama is from Kenya. Business as usual at The House of Fly, hating on all politicians since 1976.

But I’m not interested in policies that will help create jobs. I am not concerned about the GDP or anything else that doesn’t affect me. Quite the contrary. I only care about the insolvency of the entire fucking country–because THAT will have a sticking impact on me–forcing me back into a world of grit and murder.

Let’s speak plainly, fucked of the face. If we don’t cut back on the fucking welfare, in 10 years the national debt will be in excess of $25 trillion, not including additional expenditures for our national penchant for wars and bailouts. To service that kind of debt, even with these low rates, we are looking at $500 billion in interest alone. UNSUSTAINABLE.

This is not our problem. I get very upset over financial malfeasance. I have never witnessed retarded incompetence like this and it’s happening in slow motion, BACKED by 47% of you fucking idiots.

In many regards, the country deserves what’s coming. But I figured I might as well voice an opinion on these matters, because it is a life and death crossroad.

Nevertheless, I will not allow my disdain and hatred for my local politician detract from my coin banking ways. Instead of boycotting or shorting stocks, I will bang my cane into the pavement, declaring “tomfoolery” when watching CNBC. December is almost here and I had a very good year. I am exercising discretion because it would be stupid of me to risk too much with so little time left in the year. Also, I am well aware that the national debt is NOT at a tipping point and Ben Bernanke is firmly in charge of the markets, stoned out on 8-balls of blow.

In short, the wall of worry that is “The Fiscal Cliff” will create volatility. We will dive lower by 2,000 points if a bad deal is made, lose 1,000 immediately if no deal is made–and we will rise by 500 upon successful completion of an acceptable can kick. Until this shit is resolved, I will remain defensive.

http://www.youtube.com/watch?v=3FniHgiyaTY

The White House is requesting a (get this) $1.6 Trillion tax hike. AND, to boot, they want $50 billion in stimulus spending.

In summary, the democrats are shitting on the faces of republicans. They want to raise taxes and spend EVEN MOAR. There is NO FUCKING WAY this deal gets done. Zero percent chance, unless of course the GOP sells out.

The deal is dead.

UPDATE: Republicans have called the President’s offer as a “complete break with reality.”

UPDATE II: The fuckheads in govt put out some data, suggesting that by extending long term unemployment benefits the economy will produce an additional 300k jobs next year through spending. In summary, they want to create new jobs by paying some fucktard at home, who will go out and spend $60 at GME for a new video game, so that he can waste away at home–living for free. WTF?
Must listen:

I am 30% cash and +2% for the day. My gains are now 24% for the year and I can’t stop banking coin. It’s attracted to me like stupid to Detroit.

I will condense my advice into a few thoughts for you.

VHC is going higher, because Judge Davis will nail AAPL to the table on 12/14. The squeeze will be vicious, resembling something one might expect from a wildling.

EXK is going higher because the dollar is shit.

SWHC is going higher because the south has a war to fight, with the north and California.

I’m long UA too, but just for a trade.

That’s all I know right now, as I am fixed on doing just a few things with Space Alien Magician pnache (no homo).

http://www.youtube.com/watch?v=qtFBRJFN3p8

I am in a bubble, long stocks that are not tethered to the market. Aside from UA, everything I own is catalyst driven, such as VHC and SWHC. It is not by accident; naturally, it is by design.

Markets are strong based upon hopes that a deal will be struck to avert “The Fiscal Cliff.” I wouldn’t bet on that, if I was you. I’ve been monitoring the hard right and they’re adamant about going over the cliff, causing a crisis, in order to effect real change. They view this showdown as the fucking Alamo, debt ceiling battle revisited, and will not cede to the demands of what the deem to be a malicious President.

You might hear conciliatory messages out of Boehner and other malleable hacks, but not the hard right. Those fuckheads are adamant about driving this ship into the fucking sea floor, AND MORE.

Tread carefully and raise cash.

Sterne Agee is out with a morning note, declaring the coal sector to be oversold. They cite the EPA risks, limiting the prospect of new coal fired plants, as not relevant at the moment, since capacity at existing plants is at around 60-70%. Those are valid points, at least in the near term.

Balance sheets are horrendous, but most coal companies have adequate funding for the foreseeable future. What this comes down to, frankly, is traditional supply/demand metrics and right now natural gas is too cheap to get excited about coal. While it’s true that coal has regained market share at the utilities, every single month since the April lows, it’s also true that 60% capacity is hardly inspiring from an investors viewpoint.

When investing in semiconductors, you want capacity upwards of 90%, in order to reliably predict margin expansion. At 60%, the risk is margin compression.

Here are some one month returns for the coal industry. Keep in mind many of these stocks ran white hot in the month of October.

OXF -51%
JRCC -37%
WLT -20%
ACI -20%
ANR -19.5%
BTU -12%
CNX -9%

Botton Line: I’d avoid buying into this dip. Typically the month of January is a wretched one for coal, whereas February and March are great times to own it–sporting 75% success rates. Be patient and let the blood flow freely. The carnage is far from over. It gets worse before it gets better.

http://www.youtube.com/watch?v=qg48ZZ2wYfM