PREPARE FOR ANOTHER HOUSING BOOM

Every single one of you housing haters have been wrong in 2012. All day, every day, you talk shit about home values, as if they’re supposed to decline 20% year over year. Lo and behold, all housing related stocks have exploded to the upside. I’ve made money on the turn, several times, in a number of housing stocks. But the fun has only just begun–providing this trend continues.

Here are some hard facts, published this morning:

The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, jumped 16.6 percent in the week ended Sept 28.

The index of refinancing applications surged 19.6 percent, hitting the highest level since April 2009.

Here are some other facts, with regards to year to date performance of a “housing resurgence” watchlist that I created a year ago.

Although these stocks are way up and multiples are stretched, they are likely to trade much higher. Picture housing as a giant boat. It’s not easy to turn around, but when it does, it’s directed with conviction. Housing has been dead money for more than 6 years. With super low rates and American’s rich as fuck, it’s only a matter of time before home values explode higher.

Naturally, there are levels of explosion that needs to be acknowledged. The lower to mid-tier homes will enjoy small increases, due to socioeconomic factors. But the higher end is set to spring board higher, in my humble opinion.

I own just one housing related play, KIRK, derived from The PPT algos. However, I am very much interested in buying a number of names, hopefully on a meaningful dip.

Aside from refiners, I have two long term themes in mind:

1. Housing resurgence.

2. Healthy food.

An example of these themes is to be long WSM, BZH, PIR, WFM, BNNY and HAIN.

For the day, I am up another 1%, back near new highs, enjoying the splendour that is the stock exchange with all of its magnificent gifts.

UPDATE: I bought APKT

As you know, I just bought a new house and have been renovating it over the past 3 months. I’ve spent inordinate sums of money bring the house up to my standards, never sparing a nickel to improve my rightful claim to luxury.

ENTER THE BLIND HANDYMAN.

I hired a handyman to build an exclusion barrier around my front porch. It was my idea to put mesh behind the lattice of the front porch, in order to keep out critters. His work, although rudimentary, was sufficient. He then reminded me that he did “work on the side.” It just so happened that I wanted to redo 3 bathrooms. So I gave him the small one downstairs, as a project of sorts, a tester to see if he was up to the task.

ENTER THE BLIND HANDYMAN.

As he was tiling the bathroom, I had a staff of carpenters installing wainscoting, coffered ceiling, crown and base moldings, the works. Their level of professionalism could not be matched because their work was flawless. From time to time, they’d peer in on the Blind Handyman to see how he was doing. I ordered travertine for the job, at $9 per sq ft–a quality tile.

ENTER THE BLIND HANDYMAN.

Dust and smoke billowed throughout my house, covering everything upstairs, even my clothes inside the closets. This bozo was cutting tiles inside of my house, while I was away. My carpenters told him to “do it outside”–because it would cause too much of a mess. One of the carpenters commented “it looked like a fire was ripping through the house, with all the smoke coming from the bathroom.”

I took a peek at the bathroom, to review his work. CATASTROPHE!

All the tiles were uneven and poorly spaced. One of the tiles was cracked and he fucked up so many cuts, there were zero tiles left, even though I provided him with 50% more than he needed. I am not surprised, frankly. He’s an older man, with glasses, and an avid cigarette smoker. With all the dust on his glasses from fucking up my tiles, his vision, apparently, had been impaired.

I hired someone who came without a recommendation or body of work. His price was 50% cheaper than proven tile masters. It’s a parable of sorts, a lesson that has reminded me “you get what you pay for.”

Much to my chagrin, the carpenters are having a good laugh at the bathroom, as I write this blog– saying in thick Russian accents “he do a professional job, custom work, very nice.”

Fucking Borats.

Check this out:

Ranjana Bhandari and her husband knew the natural gas beneath their ranch-style home in Arlington, Texas, could be worth a lot – especially when they got offer after offer from Chesapeake Energy Corp.

Chesapeake wanted to drill there, and the offers could have netted the couple thousands of dollars in a bonus and royalties. But Bhandari says they ultimately declined the deals because they oppose fracking in residential areas. Fracking, slang for hydraulic fracturing, is a controversial method used to extract gas and oil.

Their repeated refusals didn’t stop Chesapeake, the second-largest natural gas producer in the United States. This June, after petitioning a Texas state agency for an exception to a 93-year-old statute, the company effectively secured the ability to drain the gas from beneath the Bhandari property anyway – without having to pay the couple a penny.

In fact, since January 2005, the Texas agency has rejected just five of Chesapeake’s 1,628 requests for such exceptions, a Reuters review of agency data shows. Chesapeake has sought the most exceptions during that time – almost twice the number sought by a subsidiary of giant rival Exxon Mobil, Reuters found.

Chesapeake says it only seeks exceptions to the Texas statute – called Rule 37 – as a last-ditch effort, and often because it cannot locate the land owner. The law, company spokesman Michael Kehs said, “protects the rights of the majority of mineral owners.”

Read Full Article

In other words, the land you own may have oil or natural gas underneath it and may be worth millions of dollars. However, the good people over at CHK can get a judge, who is bought and paid for,  to declare that YOUR PROPERTY can be drilled on (horizontally), extracting all resources for the  direct and explicit benefit of this mighty fine oil and gas company.

What the fuck!

Are we so impotent as a people to just let this sort of stuff continue? Clearly, I am not out there in Texas protesting for landowners rights. But are these subjects ever broached? Do people even give a shit anymore?

In other news, get ready for the Romney-Obama debate, where they will talk about NOTHING of American importance, but stand there calling each other names and driving wedges between the country, all the while–ever so quietly, this type of shit happens.

In light of the “Value Investing Conference” taking place in NYC today, my urinal shadow just gave me a presentation as to why shares of OSG are heading higher. It was rather convincing, and strikingly similar to David Einhorn’s short thesis on CMG, but in reverse.

In summary, he feels “the odder boat companies, see, just plain suck.” He also states that he “spits on the fucking graves of that bitch Diana (DSX) and Drydicks (DRYS).”

Fact of the matter is, the Baltic Dry Bulk Shipping Index (BDI) is down more than 55% for the year, an extreme exaggeration of perverted distortions. Armageddon is priced in and the BDI is poised to bounce.

As you can see, a bounce is underway.

On this bounce, I expect the shippers to catch a bid, whenever the market decides to trade up again. Saddled with a huge short position and the very worst priced in, OSG will see better days ahead.

Last year we went up 10.9% in October, following a tough summer. Over the past several months, the S&P has plodded along, almost methodically, 1-2.5% higher every month without volatility. The theme for 2012, thus far, has been “volatility compression.” Central banks have succeeded in succoring the insecurities of equity investors through grift. Because of the nature of this unbelievable melt up, many are waiting for the hammer to drop, wishcasting for it to be blunt.

On paper, October is the second best trading month of the year, second only to April, sporting a 68% win rate for the S&P. While it’s true, the month of October is most readily known for its flamboyantly gay market crashes and subsequent Louis Rukeyser specials. It’s also fact that the true nature of the market for the month of October is of supreme bullishness.

Based upon seasonality, which happens to be a fond novelty hobby of mine, certain stocks stand out in the month of October, such as FFIV, GPS, MAKO, even ERX. There is a full report inside of The PPT, for those who are interested. We have a working seasonality engine there for your most hedonistic desires.

In short, the market looks and smells like shit. But we have winds behind our sails, courtesy of the Fed, ECB and the seemingly never-ending walk higher–which has devastated purveyors of VXX.

To me, this market is like the city of Detroit: fucking useless, better suited for toxic chemicals–a wasteland.

All of my smarts and know-how have meant nothing over the past two weeks. I drifted higher today, but not due to any ingenious move on my behalf. I was in meetings all day and had to run some personal errands. Had I been at the desk, I would have sold it all, then bought it back, then sold it again.

FUCKING SPASTIC IDIOT.

Through indecision and confusion, I found clarity. My thoughts don’t matter. The outcome has to be the same, like QE1 and exactly like QE2. All I need to do is be patient and willing to lose everything. If I am not willing to lose it all, I should not be invested.

Pussies never get the hot chicks. It’s always the person who is willing to be rejected, almost clamoring it, who is going to capture her (no caveman). The same goes for the stock market. If you have a good enough mind to pick some decent stocks and gain an advantage over your competitors, coupled with the willingness to lose big, you will be successful. I guarantee that.

The problem that most people have, however, is delusions of grandeur. Most men won’t know when they are used up, useless for picking stocks. We all go through peaks and valleys; but some men enter the valley and never come back.

My advice to those who have lost your mojo is simple: stop trading you fucking degenerate pig-bastards.

The market turned on a dime again and all of my stocks are green. I’ve decided, as a matter of principle and clarity, to get my G Bush on and stay the course.

I will never dip below 90% invested again, for as long as I live. The world can blow up inside of a black hole — and yet I’d still buy stocks from my moon base.

I hope all of you shorts get your faces eaten off by
bath salted zombies. I feel a certain energy entering my life force again– something that has been absent for months.

I am back to my pirated lifestyle, black flagging on you fucking homos. Check this out: I am going to make money whether I like it or not–blogging this shit from the absurdity of my iPhone.

I’m staying long during good times, even longer during times of arch fiend duress.

This rally is fucking bullshit. My stocks have all reversed and are sucking dick!! I don’t like this fucking market at all and would sell everything, if not for the fact that I’m stuck someplace with limited bandwidth.

All of the Nasdaq gains are gone. There is nothing redeeming about this market and it will go decidedly lower and soon. I am convinced of that.

To endure this fucking horseshit, seeing the market vomit up a massive morning melt up, is fucking impossible to deal with. I am inflexibly livid.

ChessnWine was as cool as a cucumber during last week’s decline, further proof that he is worthwhile of your attention and investment in his premium products. Apparently, the economy is doing better than expected. As such, stocks are ripping to the upside. Only thanks to my stubbornness to self inflict financial wounds am I benefitting from today’s gorilla run. Had I listened to my urinal shadows, I wouldn’t be +1.6% right now.

Nevertheless, it appears the somber days of last week have ended. Once again, the Cocaine Gorilla Raping Train to Hedonism is running at full speed, fucking everyone in its way!

As for me, I have several meetings today, pertaining to matters of compliance. I intend to hold everything and enjoy the fruits of my lamenting, vis a vie higher equity prices.

If I look at a section of a wall that isn’t painted correctly, or an edge of travertine that wasn’t quite lined up right, I obsess over it until it is corrected. Small things transcend every facet of my life, from portfolio allocation, to wording of an email that must convey a certain message, to this blog– and most intently on The PPT (ask Vincenzo Illuminati), especially the new version in BETA.

I am trying to understand this market, post QE3. We’re not trading healthy and the important QE3 sectors are getting hit the hardest. The only logical deduction is the weak hands are being flushed out–the fucktards who went long AFTER QE3 was announced. Another thing that is beginning to bother me is the middle east. Tensions have never been higher and Israel is running out of time.

In the real world, away from QE and insane budget deficits, things aren’t so peachy. You can wake up one morning to reports of Israeli jets bombing the adobe out of Tehran, with S&P futures down 50. There are significant global risks to stability that cannot be ignored when investing today.

I’ve never had a lot of luck in October. It’s one of those months that tricks me, one way or another. My best months are from January to May, consistently, for more than 15 years in the business.

Plainly, I am going to cut losses on a multitude of my positions and not reinvest the proceeds– should markets continue lower this week. I’ll make it up later, when I have a better grasp on the direction.