4% Day

The hits keep coming. I sold out of my MWW position for a 34% one week return. In addition, my larger FTK position is sprinting, based upon the aura of “The Fly.” I started new positions in PWAV and SNIC. SNIC is interesting because they might be selected by CSTR to stream movies. “Might” is the operative word. Either way, I like the short squeeze aspect to it, going into earnings, based upon the idea that the movie business can do no wrong.

It’s also worth noting, I enjoy cutting loose losers on big up days. Having said that, I closed out my short positions in both AEM and SPG.

Essentially, thanks to recent wins, I have erased the majority of recent VXX losses, but not all. Nevertheless, my gains are now over 30% for the year and I am beautifully positioned to press my rights, going into Turkey Day.

I bought 50,000 PWAV and another 5,000 FORM.

UPDATE: I bought 20,000 SNIC

Disclaimer: Bombs are being found on UPS airplanes and the world is ending.

No matter how deep I dig, no matter how entrenched I become, nature has a way of elevating me to new heights. Designed to win from day one, “The Fly” can’t help but to ascend above his peers, especially when it’s least expected. Intra-day, I am up 2.4%, thanks to the gully move in MWW (up 30% in a week). If you are wondering why the stock is up so much, go listen to the conference call. I used no charts. I didn’t need some sort of trend line to help me figure out MWW was cheap on valuation. Investing is not about short cuts. It’s not good enough to simply say “oh, gee, this stock is breaking out on the chart. Let me buy it.”

That sort of investing is reserved for rookies, no offense to some of you minor leaguers out there.

Going with the valuation theme, I dare say FORM is equally cheap, if not cheaper. When looking at their balance sheet, you will notice next to $8 in net cash. Granted, the company lost a major client and have been bleeding out for the last few quarters. However, the recovery is already underway. How do I know? Why would the company announce a $50 million share buyback last week, if business was crappy? Moreover, their second largest shareholder at 9%, Goldman Sachs, upgraded them to neutral, clearly positioning for the turn.

Finally, I believe the overall fundamentals of corporate America is terrific. As a matter of fact, if I lived in a bubble, I would have zero reasons to bet against this tape. However, there is a divergence between corporate balance sheets and main street America. When will these two immovable objects clash?

Soon.

UPDATE: I covered my shorts in AEM and SPG, a good day to take losses.

Japan’s economy is falling apart, as evidenced by factory orders and its currency. They will need to make drastic tax cuts, in order to keep their corporations from fleeing. Thus far, the market is not pricing that in, or any negative news, due to the shield of QE2. The whole concept of QE2 makes no sense; but it is what it is.

Over the past month, my colleagues and I have been banging our collective canes against the walls, because the partying is too loud. My mood, in layman’s terms, has been extraordinarily dour, which in turn has made me despise clams, hams and trans-ams.

Nevertheless, several weeks ago I began allocating money to the long side, with moderate success. I nailed a few 20% winners and will nail another 15% winner tomorrow, thanks to the robust numbers out of MWW. My whole strategy is now based on defense; but that will change shortly.

Let me remind you all, I am still long term bearish and have vowed to use the language of a Prince, until we touch down on 10,000 again. Now, if that is my philosophy, why in the world would you ask me if I will sell VXX? Don’t do that, kind Sir, else I might need to “correct” you where you live, when asleep.

“The New Fly” is all about peace, harmony and helping others succeed, despite their natural tendencies to fail because of inferior gene pools.

Finally, I want to alert some of you FTK watchers that the company is in reach of a potential windfall, in the form of forced warrant conversion. Back in ’09, the company issued 7-8 million warrants, with a strike of $1.21, that can be “forced” to convert, if the stock trades 150% above said strike for 20 days. Think MVIS, old iBC’ers. In my experience, when carrots like that are within reach, somehow, someway (like magic), it gets done. In this case, that would mean $3+ for FTK, sometime between now and next year.

A great man once said “the stock market is nothing more than a series of fortunate events followed by calamity.” Well, we are certainly fortunate to behold such an enduring bull run. Prior to the bell, seeing the late day magic, I stepped in and bought shares of MWW and FORM. FORM is an interesting story, being 9% owned by Goldman Sachs, with close to $8 in net cash. It’s a turn around story, with a floor, thanks to the cash. My type of play. I will buy more if it dips.

My MWW play is based on unemployment. Should we create more jobs, as sure as I am sitting here, MWW will explode higher.

After the bell, it appears CSTR knocked the cover off the ball. I am rooting for that stock, even though I do not own a share. Once again, companies are reporting solid numbers, with exception to few. I did not like the numbers out of TER yesterday, which is a leading indicator for the semis. Do not be surprised to hear of more weakness coming from the semis. Although it’s tenuous, the recovery continues, exclusively on the balance sheets of companies. Considering the Fed is hell bent on seeing an uptick in employment, I will be shocked if we do not see at least a 1% reduction in the unemployment rate, 12 months out.

Nevertheless, I would prefer to allocate cash at better valuations. The problem isn’t valuation on a macro-level. Overall, the market is not expensive. My issue lies with the hot money, chasing growth to no end. We will have a shake out of the high price to sales names; and when we do, it will allow for a buying opportunity in names that are fairly valued.

I see many of you in the comments section are attempting to ruin my pleasant mood. It must be an unfortunate case of small penis or erectile dysfunction that makes you say such ludicrous things. While your opinion is most certainly welcome, here on iBC (“the financial oasis for cordial commentary”), it is not really needed nor required. In the event that you should continue to misbehave in the comments section, I might need to “correct” you, in the most heinous of ways. Always remember, I know where you live.

On a separate note, a much more pleasant one, the market has reversed lower and now sits in limbo, awaiting its fate. Today is a classic reversal day, which demands ones attention. Any buy orders that I had in kind are now canceled, due to trend reversal. However, this market tends to offer its greatest tricks towards the end of the day. So, keep an eye out for that.

I think VXX is up like 3-4 days in a row now. Watch out, for I am about to have a CHAMPAGNE PARTY, hosted by none other Jason Treu! No, but seriously, champagne parties are not really my style.

Finally, my FLWS is looking alive, while everything else is pretty much flat, sans the horse-cocked run in AEM. It is my opinion that today’s run is artificial due to a Cramer pump. Let’s not forget, Cramer was also recommending SKX @ $35.

Off to seek out a caffeinated beverage.

“The Fly” has decided to turn over a new leaf and usher in an era of positivity onto iBankCoin. Gone are the days when I’d drink black smoke and metal. “The Fly” is no longer interested in killing many of you and will not ban anyone either. From here on forth, iBankCoin will serve as a sanctuary of sorts (very zen-like) for the financial world.

Why the change of heart?

Answer: I’m not entirely sure. I just feel like representing something positive, as opposed to kicking old homeless men into idle sewer pipes.

Going with this new lifestyle of mine, I can tell you today’s jobs numbers were terrific, which should lend to a positive tone in the shares of MWW. The casinos are set to rip; watch LVS, WYNN and MGM. And, RARE EARTH plays are still the go to sector for momo traders. Instead of chasing MCP and REE, I’d rather throw some dice at CDII and CHGS.

It appears my AEM short has turned sour for me, partly thanks to earnings, partly thanks to Cramer and his delightful television show. Nevertheless, I will afford the position some leeway, as it serves a purpose. I have a variety of stocks on my buy list and will look to position into them something during today’s session.

UPDATE: Stop whining about VXX

A great man once said “it’s not paranoia if everyone is really out to get you.” Although at times, I must admit, I get a little carried away with the paranoia. I tend to see things in black or white, no gray. Surprisingly, in my business life, I have few enemies, since I pick and choose my friends carefully. Back in the old days, I had tonnes of enemies. They came a dime a dozen, and went out the same way.

Ever since I started blogging, my “internet hit list” has expanded by leaps and bounds. It’s like the NFLX of hit lists, whereby it just keeps getting bigger and bigger. I truly and honesty do hate many of you, invested with all of my life force. You offer nothing constructive, just fodder for my spam filter.  Going into the 3rd year of iBankCoin, I have very mixed feelings about the site.

For one, the site represents a very small percentage of my income, yet takes up the majority of my time. Secondly, managing the website, with everyone’s egotistical personalities, is a drain, especially since everyone works to a different beat.  My beat is stronger than others, which inherently causes friction in the form of masked jealousy. Sometimes I feel like just leaving the site to die, just to prove a point.

Lastly, I am immensely pleased to meet some really devoted and decent people here, especially my staff. We’ve manged to create some really terrific financial tools that, in turn, have created a very effective and cohesive community of investors that do not waste time talking about day trading in and out of jobs.

Why do I assault my own website?

Answer: because it’s “assaultable.” You midget babies are not worth the skin on my pet lizard, let alone this here blog. Never forget that you stupid bastards, as I am MANDATED to uphold the strictest standards known to mankind, as it is my God given right.

As an aside, here is a list of high growth laggards (past month), for your perusal (symbol, fundamental score, hybrid daily change, mkt cap, qt. rev growth, 1 month return)

Unstoppable market we have here. It ignores Asia, Europe and everything in between. It has gone “Palin” and will not adhere to news, reason or seasonality.

I sold off a few small positions that have been lying in the old portfolio for a year or so, booking long term gains. I added to my FUQI position because it loves me long time. Aside from that, today was uneventful for me, as I do not own stocks trading 30x sales.

Nonetheless, I do have cash and will look to add to some names that have lagged. For the day, I was down 0.15%.

Those of you who are not punk kids and were trading during the dot com bubble should be very familiar with the term “new economy.” Ten years removed from the greatest bubble of all-time, which led to a 75% reduction in the nasdaq, here we are in another bubble. This time the bubble is found, yet again, in technology.

AMZN, NFLX, RVBD, CAVM, FFIV, CRM, OPEN etc. are in fatalistic bubbles. However, they also are saddled with large short positions, which serves as tinder for their respective share prices. I do not get in the way of runaway trains. If I was to explore betting against these names, I’d go with LEAPS, out of the money puts. Allocate a few g’s across a basket and just walk away. Back in the old days, I remember a good friend of mine had a monster winner: EXTR. Back then, EXTR went up everyday, like NFLX, defying all laws of gravity. The stock went up and split, then went up again. He had millions of dollars of gains in EXTR and never sold a share. He thought it would go up forever, since it was so hot for so long. The pitch was perfect and there was nothing that could derail EXTR, until the wheels fell off.

Right now the market wants to go up. There is a lot of hot money chasing a few names, so I seriously doubt we are going to see any significant sell off, barring some news.

Personally, I’ve given up on trying to time the top and will remain long biased until we overheat or breakdown. I like stupid stocks, like CHGS, HEAT and FUQI, let’s not forget MWW.

The point of this post: take profits when you can and never stand in front of runaway trains.