I haven’t traded all day, other than pairing down stocks doing poorly. Everything I sold was a mistake, as we melt the fuck higher into National Feast. This is the very worst time of year to sell short. This time will not be different. At times, trades might look sketch and we all have PTSD from the crash and pull of the market, yoyo effect, we’ve been entreated to since 1997. Nonetheless, giant turkeys loom, festooned with cranned fucking berries and bags of stuffing — all splayed out across well adorned tables to be consumed by inebriated, although well bathed and dressed, patrons.
I’ve traded like a pussy for months now — always diving in small, little splashes, afraid to drawdown. I have a thesis surrounded by retail oriented names, which is obvious. I also have a penchant for certain sectors, like SAAS. With gains still hovering at +215% YTD, I think it’s time to bust loose again.
Another decent day for large capped stocks and hellish behavior in a sundry of the smalls, little fat fucking turds dumping the fuck out. I closed up 33bps and I hope the Druids reward me for it, with blessings from above.
I ended up fully invested with a rather meaningless double sized TZA hedge. With 90% long, the 10% hedge, even at 3x leverage, won’t do shit if markets dump out tomorrow. I think I hold these hedges as a blanket of safety — makes me feeeeel better, justifies my reckless behavior.
Heathens are crawling at the city gates and they want to see us fail, odious people with a penchant for stock speculation. I do not crave your life Good Sirs, I only endeavor to trade securities and do so successfully. I have no motives other than the specter of greatness, the feeling of achieving something unique. The rotten feeling of failure is something we endeavor to eschew, but we can only do this by trading smart and positioning ourselves in a way that assures moderation. In other words, slimmed down position sizes. Bet on sure things, or close to it. Follow trends best we can and consider counter-trends to be something of an anathema. I have traded in almost every way imaginable and can easily punch out 15% daily gains if concentrated in degenerate stocks. But, at least in my experience, it always evens out and the tortoise rarely loses to the hare. Heed my advice young Fly and don’t think you know more than the all knowing market.
I wish I knew then what I know now — the eternal dilemma and consequence of ignorance, in my case without intention. Always inquisitive and circumspect, I just didn’t see things for what they were. As I grow older, things I viewed as complicated or mysterious as a younger man are very obvious to me — and this has nothing to do with lunar landings and paintings of outerspace.
Over the past month I’ve been binge reading biographies. Thus far, I’ve gotten thru (extra Carnegie) Vanderbilt by Anderson Cooper, Rockefeller, Phil Knight (cunt), Carnegie, Elon Musk, and now House of Morgan. I’ll likely read Mellon and then move back into novels — perhaps another Raymond Chandler, which I rather enjoy during the holidays.
Unlike a good Chandler or Hemingway book, these biographies offer next to zero good prose and are completely bereft of mystery. So why are they so popular? Obviously, we’re all obsessed with death and the purpose of life. My grandparents came and went without leaving a mark — spent the final 20 years of their lives stuck inside a 2br apartment in Brooklyn, living off social security and drifting away via a mostly listless existence highlighted only by their memories of greater days.
We are told when young that we could do anything — become President, Supreme Court Justice, Baseball player — all lies, but benevolent lies told to offer hope. Without aspiration, what’s the point? I suppose with older age we care less because we know more. This knowledge could be a black-pill — but it doesn’t have to be.
As Americans hate each other more and more every day, with issues stemming from immigration to race relations to fucking vaccine status, I can’t help but to think how the absence of God/religion has caused people to attach to these otherwise moronic fanatical positions. I’ve been agnostic for decades so I am the last person to profess religion, but holy shit what has happened to people — beholden to government and now corporations as if those entities ever gave a fuck about the ordinary gentry. None of the divisiveness makes me mad, just disappointed. As is the case with my youngest son who wantonly offers ad hoc statements on the evils of white people, I can only be introspect and feel it is my fault for not instilling a greater pride or fervor in him. This is the result of a culture that is largely American infecting the minds of its youth with poison — a tactic used to demoralize and break people in order to rule them. Growing up in the 80s was a utopia in comparison to today — but I do not feel lucky, only sad because of my children who have to contend with a hatred so toxic it makes them question the very definition of gender.
Most of my blogs these days are redundant missives about my trading, rarely dealing with important topics because what’s the fucking point? I don’t hate democrats or republicans or even people who color their hair purple and blue. I cast no aspersions on people who prejudge others — because that’s part of the human instinct. I am only against cruelty and hurting others out of spite.
When I started this site 14 years ago November 12th, I had grandiose visions of creating a large finance site. We even had hundreds of bloggers in our ranks at the peak. With partners and competing egos, it mostly fell to shit and for the better part of the past 6 years I’ve been a one man band, with the occasional blog from long term confidants RC and Raul. I’ve created three iterations of a market data platform and have attempted to offer cogent ideas and display professional grade trading skills inside The PPT, Exodus and now Stocklabs since 2009. I left the industry as a manager of other people’s money in 2017, after 18 years, because I didn’t want to do it anymore. I often regret that decision, mostly due to the amount of money I left on the table considering the bull market run we’ve been on since then. But here I am still blogging like the wind with over 21,000 blogs in the books, a dedication unrivaled by anyone else in finance, as far as I know.
I am grateful for the people who’ve continued to come here on a daily basis, become members of my service, and permitted me to be a complete asshole for all these years mostly unchecked. The fact I am not banned on Twitter is a testament to the people who follow me not reporting me and I thank you for that. I am genuine when I say I like 90% of you and only hate 5%, with the other 5% mostly undecided.
If I am still blogging 14 years from now — you have my permission to kill me.
If per chance I were to get hit by a train this afternoon, sadly, I would depart this place without effectively communicating what makes a great company. There are lots of good companies, but few great companies. We all look for the next big winners and most of you pretend to know anything at all by looking at lines on a chart, illiterate to the fact that the actual data is in the numbers not the lines on the chart.
Granted, this is a chicken v egg situation because plenty of learned men are looking at the numbers and buying the stocks and causing those lines on the charts to look better and the plebeian mobs on Reddit pick up on that, without ever knowing a single thing about a company.
Ergo, and this goes without saying, the lifeblood of any company is naturally its ability to operate via liquidity. Free cash flow funds operations and most people are keenly aware that negative EPS does not necessarily mean WDAY is a piece of shit — because their cash is reinvested to continue their high growth cycle, viscously whirling upwards and continuing as long liquidity provides.
In my spare time I play around with these numbers for my Quant and can comfortably say gross margins is by far the single most important metric for predicting share price. There is a reason why high margin software companies are valued 10-20x more than industrials. They don’t have the overhead or the expenses of traditional brick and mortar and their margins are often in excess of 70%, the really good ones 90%. Pure profit. If you couple those margins with share buybacks, as is the case with MSFT — well then — you get the most valuable company in the world.
Even online retailer Amazon can attribute its share price ascendency to margin expansion. The stock had done well cannibalizing shopping malls — but only really ramped after their high margin AWS division started spitting out immense profits.
Here is a table of AMZN’s gross margins over the years.
For my Quant I had been using a minimum gross margin metric but recently found returns could’ve been even higher if I employed gross margin growth QOQ higher than 0%.
Investing gets easier once you stop being a fucking moron.
It was dicey early this week and I do not think we’re setting up for massive gains; but I no longer think a panic looms and I can see us drifting higher into Thanksgiving. Following the rout on Wednesday, we recovered nicely. Today we had weakness early in small caps, but that too improved throughout the day and risk was accepted and clamored for into the close.
Mid-day I leveraged up to 150% and then swept it all away after gaining 80bps. I closed the session with 60% cash, with a bullish bias. I am comfortable with gains of 0.5% to 1.5% daily because the more I try to shoot for the 3-5% daily gains the more I end up losing. It makes little sense to risk too much, especially when, in my case, I am 15x in ETH and have turned a sub $100k cash outlay into 7figs. I will make one final purchase of ETH in December and then look to unwind the position in 2022.
Why?
I am not a fanatic. I always stated I was going to buy for two years and the returns I’ve made have exceeded anything I could have ever imagined for and will not take the present tense exuberance as an excuse to revise my original strategy.
If you stepped into today with loser stocks, you’re being treated as such — as you deserve to be treated — a loser. Only losers buy stocks with market caps under $100b. If you want to make money, you buy tera caps. If you need tax losses and prefer to lose money, buy everything else.
The Tera caps are +0.666% while small caps are down 0.69%. This trend has repeated itself over and over and over and over and fucking over since Feb 2021. It’s over and it’s never coming back. Fuck you and your RIDE; only TSLA goes up.
We are all seeing BTC trade down and maxis are getting panicky thinking that’s over too. But it’s not. It’s simply resting lower you insufferable prick. These things take time and we first need to drink large bottles of wine before we worry about something like BTC or ETH. By the way, my final purchase of ETH will occur in December, for those following along.
Bottom line: It’s Friday and the market is being a dick again. Find safety, comfort, and solace inside of the larger caps and eschew the small one’s as shit — because that’s what they are and that’s how they trade.
This is a much better tape than I originally suspected. I removed my hedges and allocated about 40% into some choice stocks chosen by Stocklabs and will now cavort with Mrs Fly amidst the North Carolina landscape. I am +1.7% for the session with little of my money exposed and although I haven’t made back all that I lost yesterday — it is a fine day.
I am not going all in because I am not sure if this is another trap from which is assault me with. You should always assume danger and expect rugs to be pulled, in order to temper your emotions from such eventualities.
We are having a live ZOOM call tomorrow between 12-1pm to discuss the professional features of Stocklabs. I greatly suggest all users and prospective users come. To be invited, please email [email protected]
Nice bounce but I’m not trusting it. I have trust issues with the market dating way back to when I first got my series 7. I’ve been through one market calamity after the next and have seen and done too much to behave like many of you, abject morons diamond handing to zero.
That said, I’m participating, +115bps, and now I have an SQQQ hedge since gains seem to be concentrated in smaller caps. I’ll hold about 50% cash the whole day and will say no to most trades. For example, I really want to buy BBBY, but cannot because it’s up 7% and if the market reverses I’ll get clocked in bbby.
I’m a patient man because life is long and the market is always going to be around.
Relax. You will survive this squall just like you’ve survived all the others. I bought the dip this morning, left for 3 hours, and was entreated to relentless selling and losses — with a drawdown peaking at -4.5%. I then doubled down and tripled down and cut those losses — but it wasn’t enough so I cleaned most out towards the end of the session, hedged with TZA and some NUGT, and left myself with 47% cash.
Why?
I’m still +1.7% for the month and if I rode into tomorrow with the lunatic portfolio I had — I risked losing those gains. Today was a very bad day, but predictable. I should’ve, could’ve done a million things differently — but here I am. I can only deal with tomorrow and my sense is — we are on the precipice of a scare. The market WILL NOT collapse — but a scare.
Look, we’re still 4% MTD for the IWM, more than 1% above the normal gain for the month.
Because of today’s insane 6.2% CPI numbers, rates and gold soared. I am not sure if this is the moment for gold — but the action today was constructive so I positioned into NUGT for tomorrow. If we bounce and all of the finest stocks ramp again, I’ll cut loose my TZA and commence to buy stocks near their highs. However, my sense is we draw down another 1-3% from here, especially in light of the over-performance of stocks like TSLA. Too many people are concentrated into too few places. If we drop another 3%, the IWM will be BELOW the average return, setting us up for a leisurely Xmas/Black Friday rally. Do not expect much of anything for December, a month renowned for fuckery and false starts.
Today’s move in cryptos was disconcerting. Nevertheless, I am long BITO calls for the holiday rampage to $100k and will stick with it no matter what.
NOTE: We are doing a Stocklabs live demo on Friday 12pm-1pm to showcase the pro features. This is open to non subs and subs alike. To be invited, email [email protected]
The CPI came in hot at 6.2% for the month, highest in 30 yrs. What this means is, retards are out buying gold thinking the dollar will collapse. Remarkably, my BITO position was down pre market and shot higher thanks to a hockey stick run in BTC on this inflation news. That’s right, traders are treating BTC as a store of value.
I got caught flat footed at the open in several bad earnings plays. What can I do but hope? Losses were moderate at -40bps and within minutes ballooned to -2%. I have since stabilized, sold off the fuckers and bought some better stuff, and now I wait.
The market has a very funny tone to it and I’d be lying if I didn’t tell you I’m employing hope in my investment equation today. On paper, the gains for November have already been enjoyed. Anything more than this is gravy.
I like BTC for a push above $70k, ETH $5k. Mixed feelings on gold, moderately bullish on stocks.
