Things Worth Avoiding

These are guidelines, not rules. Over the years, I’ve picked up a few tricks of the trade, which might come in handy for you punk rookie bastards.

Avoid owning stocks who’ve missed earnings within the past 4 quarters. See DDD and CREE for anecdotal evidence.

If the SEC is investigating your company, it’s best to avoid it.

If your stock went up on merger news, sell it. The deal might fall apart later on. See Shire.

If you bought a stock, it went down, then the volume dried up. That might turn into a roach motel. It’s best to avoid and buy something with greater liquidity.

Avoid companies with debt/equity levels over 4, unless coming out of a recession and the underlying industry is turning the corner. If that’s the case, that debt laden company might soar in price, thus naturally lowering said ratio.

Avoid holding stocks with price/sales ratios over 15 for extended periods of time. More often than not these stocks will correct, severely, at some point.

Avoid biotech stocks with phase 1 drugs, burning through cash, years away from a revenue stream. That company will do dilutive financing at some point, in order to fund their research.

Avoid stocks who have large debt payments due. If XYZ’s bonds are coming due and they don’t have the cash, they will either restructure (with bank’s permission) or do a dilutive secondary.

This one sounds simple, but is sometimes ignored. Avoid stocks that go down all the time. The odds of you catching the bottom on a falling knife is low. Wait for the stock to base out and strengthen before buying.

Winners rarely correct–because the business is great. Sometimes it makes sense to chase growth, even if the multiples are high. Great companies will meet and exceed estimates, rarely giving dip buyers a chance to get in.

If you want out of a stock, quit playing retard games with limit orders. I can’t tell you how many idiots end up stuck in bad stocks because their limits don’t get hit. If a stock is $30×30.05 and you want out, put a limit order of $29.90 and get done. Or, if it’s a very liquid stock, do a market order. The same thing applies when buying. While limit orders can save you money, often times, I find them to be time sinks and a pain in the ass.

Avoid owning Chinese burritos that have come under scrutiny from renowned short sellers. More often than not, they are right.

Feel free to add some of your red flags.

Let This Be a Lesson to You

Never panic after a big sell off.

Quit betting on crash scenarios, for they are as rare as intelligent Presidents.

Never, ever, short into the hole and do not dare buy VIX instrument ETNs after a sell off.

There are some things that never change in the the market. The seasons change and so do the players; but the rules remains intact. Ultimately, you and I are simply transferring fear and greed back to one another. One of us will be right, the other miserable. Temper your emotions and know that you know nothing (extra Jon Snow). After coming to grips with the fact that you aren’t God’s special creature placed on this planet for the sole purposes of self-aggrandizement, you will become a better investor.

We just had a very sharp oversold bounce. Euphoria is high and greed is trending. Look to raise cash tomorrow and prepare for the possibility that we might retest the lows. At the very least, we will test the hands of the newly minted geniuses to see if they are up to the task of holding during periods of duress. After the next flush out, I believe we might have a straight shot through Thanksgiving.

Look at what you’ve done. Don’t say I didn’t try to warn you.

SHHHH, IT’S VIX SEASON

Your IRA account is now at zero. That UVXY trade that you kept adding to will now define your headstone.

“HERE LIES THE FUCKHEAD WHO THOUGHT IT WAS A GOOD IDEA TO BUY VIX INSTRUMENT PRODUCTS…INTO THE HOLE.”

For the day, I am up 3.7%. Catch my vapors, son–because you’re never gonna get the chance to touch me again.

Top Picks: TRN, ANET, FMSA, MBLY

Fly Buy: $ANET

I scaled back on some of my CYBR position and started a new one in ANET–devil endorsed.

The Life of a Rail Man Isn’t For Everyone

Yesterday, TRN lost a lawsuit at the hands of a scoundrel whistle blower, some guy with an ax to grind trying to recover damages for the purpose of self-aggrandizement. The judgement went against TRN, after 3:30, and the shares got slammed in very illiquid, panic-confused, trading. In the pre-market, the stock is down a little more.

Why?

Apparently, jackasses about the internet enjoy to spread rumors. Mind you, the DOJ didn’t join in this lawsuit and it will most certainly go to appeal. The so called whistle blower will see $500+ million, just as fast as AAPL will pay VHC a gagillion dollars for stealing all of VHC’s precious patents.

Here are some facts to understand, before throwing the baby out with the bathwater.

TRN has a billion dollars in cash.

TRN makes a billion dollars in pre-tax income, per annum.

TRN is a cash flow generating machine.

TRN will NEVER, EVER, pay $500+ million for guardrails that were already approved by the FHWA.

TRN lost $700 million in market cap yesterday, hardly justifiable considering this is going to appeal and judgment will not affect balance sheet in the interim.

TRN has an insurance liability converge of $500 million, potentially insulating them from any damages.

TRN has a long, rich, history of smashing analyst estimate to pieces.

With earnings scheduled to be reported on 10/29 and the stock severely discounted, if short, ask yourself: Am I feeling lucky, punk?

TRN

I am a buyer at these levels.

EMERGENCY ASSHAT AWARD: COLLIN GILLIS

This man, this reprobate of a human being, had the audacity to speak on the Fast Money today and compare Apple to Blackberry. Yes, gents, he said Apple could very well be going down the path of BBRY, despite not showing any signs of that whatsoever. I suppose Ralph Lauren could become the next Coldwater Creek or Nike could become the next Fila. Anything is possible, right?

ASIDE FROM THE FACT THAT THE APPLE COMPUTER CORPORATION IS THE LARGEST COMPANY TO EVER GRACE EARTH AND HAS UPWARDS OF $150 BILLION IN CASH RESERVES.

Aside from all that, Collin kindly kept his $98 price target intact, which makes this award all the more necessary.

Listen and cringe to this man’s, this beer swilling bedlamite, double speak all the way to Asshatville.

Neutralized into the Bell

Full disclosure here: that fucking judgement and subsequent drop in TRN’s share price, ironically, had me feeling like a UVXY shareholder late this afternoon. Everything was going peachy, up until the point when the guillotine descended upon my anatomy.

I don’t know what else to say, other than “I hate lawyers.”

I am sure there will be an appeal and this sell off had the stench of panic. Let clearer minds chime in on this one first, then make a judgement. Frankly speaking, seeing my intra-day gain of 2% morph before my eyes into a small loss was more than tragic, it was an abomination.

‘Tis the life of a railman.

THE DOGS OF HELL HAVE BEEN RELEASED ON VIX INSTRUMENT PRODUCT OWNERS

This didn’t turn out as you planned, did it mate? The dogs of hell have been released upon you. Markets are trending higher, despite earlier weakness in crude. In a nutshell, you’ve been had and now your face is a chew toy.

I believe this rally will continue till Wednesday, then reverse to retest the lows. Of course I’m just guessing, merely using my reservoir of vast experience to navigate these troubled waters, might I add, with sublime and harmonious precision. Then again, I am sure all of you predicted this would happen back in April, like me, calling for a major rally in TLT. Yes?

I didn’t think so.

As I write this my largest position is careening lower, based off some trial decision. God damn it, I hate the courts.

Nevertheless, the market still has lift in it and those TNA positions should profit over the next few days.

Off to deal with a crisis.

SEE ME

Post IBM, the market was supposed to crash. But it didn’t–boo-hoo.

Oil is lower, which makes me uneasy. For the moment, my FMSA purchase looks like an act of genius, as I am up 21% on the position since I purchased it on Thursday. It reminds me of when I was buying WNR, circa 2011. Do you remember that? I was on vacation in Turks and Caicos and the market cratered. My WNR went from $17 to $11 in a flash. I bought it up down there and before I knew it, I was selling it north of $20. That stock, eventually, went north of $40, where it resides today.

In addition to FMSA, I am up nicely on MBLY, AAPL, GILD, ICPT and SGEN–just to name a few.

My top 5 positions are TRN, FMSA, MBLY, CYBR and CLR. Only TRN is greater than 10% of my assets, so everything is pretty drawn out, diversified over many sectors, and market caps.

I’d like the market to not give back the 275 pieces it gained on Friday. That would be a pleasant start to the week. On Friday, I was up 1.9% for the session and right now I am up 0.9%, down about 1% from my intra-day highs. I’d like to keep these gains too.

There is winship brewing in this market. You just can’t see it yet.

Things Worth Avoiding

These are guidelines, not rules. Over the years, I’ve picked up a few tricks of the trade, which might come in handy for you punk rookie bastards.

Avoid owning stocks who’ve missed earnings within the past 4 quarters. See DDD and CREE for anecdotal evidence.

If the SEC is investigating your company, it’s best to avoid it.

If your stock went up on merger news, sell it. The deal might fall apart later on. See Shire.

If you bought a stock, it went down, then the volume dried up. That might turn into a roach motel. It’s best to avoid and buy something with greater liquidity.

Avoid companies with debt/equity levels over 4, unless coming out of a recession and the underlying industry is turning the corner. If that’s the case, that debt laden company might soar in price, thus naturally lowering said ratio.

Avoid holding stocks with price/sales ratios over 15 for extended periods of time. More often than not these stocks will correct, severely, at some point.

Avoid biotech stocks with phase 1 drugs, burning through cash, years away from a revenue stream. That company will do dilutive financing at some point, in order to fund their research.

Avoid stocks who have large debt payments due. If XYZ’s bonds are coming due and they don’t have the cash, they will either restructure (with bank’s permission) or do a dilutive secondary.

This one sounds simple, but is sometimes ignored. Avoid stocks that go down all the time. The odds of you catching the bottom on a falling knife is low. Wait for the stock to base out and strengthen before buying.

Winners rarely correct–because the business is great. Sometimes it makes sense to chase growth, even if the multiples are high. Great companies will meet and exceed estimates, rarely giving dip buyers a chance to get in.

If you want out of a stock, quit playing retard games with limit orders. I can’t tell you how many idiots end up stuck in bad stocks because their limits don’t get hit. If a stock is $30×30.05 and you want out, put a limit order of $29.90 and get done. Or, if it’s a very liquid stock, do a market order. The same thing applies when buying. While limit orders can save you money, often times, I find them to be time sinks and a pain in the ass.

Avoid owning Chinese burritos that have come under scrutiny from renowned short sellers. More often than not, they are right.

Feel free to add some of your red flags.

Let This Be a Lesson to You

Never panic after a big sell off.

Quit betting on crash scenarios, for they are as rare as intelligent Presidents.

Never, ever, short into the hole and do not dare buy VIX instrument ETNs after a sell off.

There are some things that never change in the the market. The seasons change and so do the players; but the rules remains intact. Ultimately, you and I are simply transferring fear and greed back to one another. One of us will be right, the other miserable. Temper your emotions and know that you know nothing (extra Jon Snow). After coming to grips with the fact that you aren’t God’s special creature placed on this planet for the sole purposes of self-aggrandizement, you will become a better investor.

We just had a very sharp oversold bounce. Euphoria is high and greed is trending. Look to raise cash tomorrow and prepare for the possibility that we might retest the lows. At the very least, we will test the hands of the newly minted geniuses to see if they are up to the task of holding during periods of duress. After the next flush out, I believe we might have a straight shot through Thanksgiving.

Look at what you’ve done. Don’t say I didn’t try to warn you.

SHHHH, IT’S VIX SEASON

Your IRA account is now at zero. That UVXY trade that you kept adding to will now define your headstone.

“HERE LIES THE FUCKHEAD WHO THOUGHT IT WAS A GOOD IDEA TO BUY VIX INSTRUMENT PRODUCTS…INTO THE HOLE.”

For the day, I am up 3.7%. Catch my vapors, son–because you’re never gonna get the chance to touch me again.

Top Picks: TRN, ANET, FMSA, MBLY

Fly Buy: $ANET

I scaled back on some of my CYBR position and started a new one in ANET–devil endorsed.

The Life of a Rail Man Isn’t For Everyone

Yesterday, TRN lost a lawsuit at the hands of a scoundrel whistle blower, some guy with an ax to grind trying to recover damages for the purpose of self-aggrandizement. The judgement went against TRN, after 3:30, and the shares got slammed in very illiquid, panic-confused, trading. In the pre-market, the stock is down a little more.

Why?

Apparently, jackasses about the internet enjoy to spread rumors. Mind you, the DOJ didn’t join in this lawsuit and it will most certainly go to appeal. The so called whistle blower will see $500+ million, just as fast as AAPL will pay VHC a gagillion dollars for stealing all of VHC’s precious patents.

Here are some facts to understand, before throwing the baby out with the bathwater.

TRN has a billion dollars in cash.

TRN makes a billion dollars in pre-tax income, per annum.

TRN is a cash flow generating machine.

TRN will NEVER, EVER, pay $500+ million for guardrails that were already approved by the FHWA.

TRN lost $700 million in market cap yesterday, hardly justifiable considering this is going to appeal and judgment will not affect balance sheet in the interim.

TRN has an insurance liability converge of $500 million, potentially insulating them from any damages.

TRN has a long, rich, history of smashing analyst estimate to pieces.

With earnings scheduled to be reported on 10/29 and the stock severely discounted, if short, ask yourself: Am I feeling lucky, punk?

TRN

I am a buyer at these levels.

EMERGENCY ASSHAT AWARD: COLLIN GILLIS

This man, this reprobate of a human being, had the audacity to speak on the Fast Money today and compare Apple to Blackberry. Yes, gents, he said Apple could very well be going down the path of BBRY, despite not showing any signs of that whatsoever. I suppose Ralph Lauren could become the next Coldwater Creek or Nike could become the next Fila. Anything is possible, right?

ASIDE FROM THE FACT THAT THE APPLE COMPUTER CORPORATION IS THE LARGEST COMPANY TO EVER GRACE EARTH AND HAS UPWARDS OF $150 BILLION IN CASH RESERVES.

Aside from all that, Collin kindly kept his $98 price target intact, which makes this award all the more necessary.

Listen and cringe to this man’s, this beer swilling bedlamite, double speak all the way to Asshatville.

Neutralized into the Bell

Full disclosure here: that fucking judgement and subsequent drop in TRN’s share price, ironically, had me feeling like a UVXY shareholder late this afternoon. Everything was going peachy, up until the point when the guillotine descended upon my anatomy.

I don’t know what else to say, other than “I hate lawyers.”

I am sure there will be an appeal and this sell off had the stench of panic. Let clearer minds chime in on this one first, then make a judgement. Frankly speaking, seeing my intra-day gain of 2% morph before my eyes into a small loss was more than tragic, it was an abomination.

‘Tis the life of a railman.

THE DOGS OF HELL HAVE BEEN RELEASED ON VIX INSTRUMENT PRODUCT OWNERS

This didn’t turn out as you planned, did it mate? The dogs of hell have been released upon you. Markets are trending higher, despite earlier weakness in crude. In a nutshell, you’ve been had and now your face is a chew toy.

I believe this rally will continue till Wednesday, then reverse to retest the lows. Of course I’m just guessing, merely using my reservoir of vast experience to navigate these troubled waters, might I add, with sublime and harmonious precision. Then again, I am sure all of you predicted this would happen back in April, like me, calling for a major rally in TLT. Yes?

I didn’t think so.

As I write this my largest position is careening lower, based off some trial decision. God damn it, I hate the courts.

Nevertheless, the market still has lift in it and those TNA positions should profit over the next few days.

Off to deal with a crisis.

SEE ME

Post IBM, the market was supposed to crash. But it didn’t–boo-hoo.

Oil is lower, which makes me uneasy. For the moment, my FMSA purchase looks like an act of genius, as I am up 21% on the position since I purchased it on Thursday. It reminds me of when I was buying WNR, circa 2011. Do you remember that? I was on vacation in Turks and Caicos and the market cratered. My WNR went from $17 to $11 in a flash. I bought it up down there and before I knew it, I was selling it north of $20. That stock, eventually, went north of $40, where it resides today.

In addition to FMSA, I am up nicely on MBLY, AAPL, GILD, ICPT and SGEN–just to name a few.

My top 5 positions are TRN, FMSA, MBLY, CYBR and CLR. Only TRN is greater than 10% of my assets, so everything is pretty drawn out, diversified over many sectors, and market caps.

I’d like the market to not give back the 275 pieces it gained on Friday. That would be a pleasant start to the week. On Friday, I was up 1.9% for the session and right now I am up 0.9%, down about 1% from my intra-day highs. I’d like to keep these gains too.

There is winship brewing in this market. You just can’t see it yet.

2014 iBankCoin Investors Conference