18 years in Wall Street, left after finding out it was all horseshit. Founder/ Master and Commander: iBankCoin, finance news and commentary from the future.
Joined Nov 10, 2007
18,359 Blog Posts


I sold this last week for a loss. I just bought it back higher — because of the rumblings of newly minted cannabis laced iced-t, or something to that effect. This isn’t the next NFLX, but a trade, mind you, one forged in hell and spawned out into the public for mass consumption.

I rarely every squash a tax loss, but I think this gaps higher tomorrow. If I’m wrong, I’ll literally cut off my own head in the public square.


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Reminder: Trade Wars Are Good, And Easy to Win

What the fuck are you scared of, losing a little money? Our beloved leader has told us ‘trade wars are good, and easy to win’. Why don’t you believe him and buy more?

After the close, it’s allegedly reported by the FAKE NEWS media that Trump will unleash another broadside into the helm of the Chinese nation. Without the US consumer, China will revert back to the rice paddies to live out the rest of history in irrelevancy. If they do not like it, we can always send our aircraft carriers there to teach them a lesson.

Truth be told, everything about this market is wrong — but we edge higher regardless. The time for panic is now. But the time for buying dips is soon. Be ready for a leg lower, followed by frenzied purchases by once famous hedge fund managers attempting to recapture a former glory.

As sad as it is and as gloomy as the truth stands firm, we cannot repeat the past. The things you did yesterday will forever be catalogued in the annuls of time and the things you’re doing now are forging a path to the future. You can choose to trailblaze ahead, changing with the times, or you can stand there watching others whir by, contemplating the halcyon days when your life was golden, flawless, and without malice.

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Line Up Your Buy Lists Now

If you’re interested in buying dips, you have to make a few assumption, the most important is the market will not change. The market we’ve enjoyed the past 3 months will continue and the dips will be shallow and the shorts weak. If, by change, the shorts gain verve and press the market’s stress points lower than recent history, plenty of dips buys will be castrated. Best way to hedge against this is to respect stops.

For me, NEWR embodies everything I want in a dip. It was running hot, now it’s cool. The algos in Exodus have it at oversold and the track record is splendid. If “this time is different”, NEWR will cascade lower and dips buys will be frayed by the fires. However, if this dip is transient, which we have no reason to believe it isn’t, NEWR is a buy around $100 back up towards $108.

Figure out what you might want to buy now and then execute orders without worrying about the downside. The time to worry about the downside is after you’ve purchased your stocks, not before.

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Eat a Sandwich — Forget About the Present — Focus on the Future

Might I suggest a sandwich recipe?

Very well.

Take two pieces of white bread and place some ham and sliced gruyere on them. In a bowl, whip up an egg and heavy cream. Take a skillet and melt some butter in it, but not too hot unless the butter has been clarified. This will prevent browning. Take sandwich and dip it into the batter on both side and fry until brown.

If you want, take a poached or sunnyside over egg and dollop it on top.

Voila — thank me later.

Stocks are weak and all of the good companies are trading down. This could be the first of many down days, so you might as well sit back and enjoy the show. It seems only pot and dog food stocks are working for me today, with both CGC and PETQ green. I have cash, but it isn’t burning a hole in my hand. I am pleasantly amused by the catastrophe that is QTT and have opted to read some East of Eden while markets figure out what to do next.

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Raising a Little Cash, Trying to Remember Trade Wars Are Fun and Easy to Win

I sold APPN for a 1.2% loss and NTNX for a 6.5% loss. I am feeling better seeing both NIO and QTT getting bludgeoned to death this morning. This is an important lesson for you all — respect those -10% stops. You should never let a loss exceed 10%, ever.

Bear in mind, I haven’t always been this stringent with losses. It’s something I’ve developed in recent years and feel that if I cannot control the amount of money that I lose in a stock, I shouldn’t be trading at all. Might as well do long term stuff only and dollar cost average. But since I like to trash, the swashbuckling adventure of it all, I respect my stops with biblical adherence.

With my 25% cash, I am tempted to hedge, but then I remembered trade wars are fun and easy to win. Seeing that gold and silver are leading, I doubt the market is in much trouble here. Sure, rates are elevated above 3.1% and the world is ending, but it really isn’t.

I’ll control my losses on the way down and keep a close eye on some great SAAS stocks that ran by me; but other than that, I very much doubt I’ll adopt a bearish position, especially since only losers short stocks.

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Here’s My Quant Portfolio — It’s Absolutely Poleaxing the Benchmark

If you’re taking 100% of your investable money and trading it, you’re a god damned idiot. No one can keep hot forever and eventually mood swings and basic human err will cause you to underperform. More importantly, the lifestyle of having to rely upon swing trades during rough tapes is absolutely depressing. You cannot expect to live a long time while trading stocks for a living. I’m sure my life has been greatly curtailed by my time in money management, which is why I’ve chosen to remain out, in spite of leaving a great deal of money in fees to be had.

Below is my Quant fund for September. The idea behind the Quant is to set parameters, based on fundamental analysis and some technicals, to automate a portfolio that will outperform the market. It is not designed to crush the market, although at times it does, but instead perform with the market and a little big better. Truth be told, it’s an experiment in progress and I believe it can be improved, as anything can always be improved, and I encourage all Exodus members to create their own quantitative methods themselves — using the tools I’ve given them and Gods good grace.

The portfolio is higher by 2.5% over the past two weeks, whilst the SPY is barely up. For a diversified portfolio of fundamentally sound companies, this is outrageous outperformance.

For the October portfolio and heading into Q4, I might adjust the Quant. Although I’ve refrained from doing so throughout the year, mainly to be consistent and transparent, I’ve concluded there might be a few tweaks worthy of meddling to increase the rate of return into the best months of the year.

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Wrapping Up a Miserable Week — Looking Forward to Better Times

I can’t tell a lie — my entire weekend was ruined by those fucking Chinese trades gone wrong. To blow off some steam, I went for a real long fucking bicycle ride this afternoon. I waited until the sun was at its peak and I made sure to go without any water. As I cycled and cycled as hard as I could, I only wished the entire trip could be uphill.

I ventured off into the Mercer Meadows park and gandered at the Pole Farm, the birth of modern telecommunications. Then I spit on the ground and cycled some more — thru the trees and into hazardous tall grass and rocks and dead trees — all child’s play for my bicycle. There was hardly anyone there — specifically because the entire park is open to hunters now who run around with their pistols and arrows, in search of game.

On the way back home I went mostly downhill, which meant 3rd gear as fast as I could muster, through the lights and whizzing past the slow people with their dogs. I had a drink of beer to recover and started to cook some food, cod and oven roasted lemon-pepper potatoes.

The beer batter was good — but the temperature of my oil was too low and the fish came out soggy. The potatoes were undercooked and my meal was less than milquetoast.

Now I’m drinking a cafe Americano, trying to get into an optimistic mood before bed, which will be in about 4 hours. I have a lot of reading to do — East of Eden, a western masterpiece of monumental importance.

I can see now this post was a gigantic mistake and a waste of time. I offered little entertainment, zero financial insight, and hardly anything that can help you other than to feel better about yourselves because I’m so miserable.

Futures are lower, but no one believes that’ll stick. I have high hopes for CGC, but nothing else, at least not now.

Cheers to a better tomorrow.

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Here’s How I Identify Rotation Using Exodus

I found a nest of stinger bees in my laundry room, which is ironical unto itself. Having been stung by 2 bees this summer, I was a little hesitant to take this on — but I did so nonetheless. It was sort of like my bike ride last night and the giant warning about entering the park without orange attire, since it is designated for ‘deer management’ — festooned by hunterFAGS prancing around in military attire in search of sport. I thought about it for a moment and then rolled right in with my brown garments and deer antlers nonetheless.

Back to the matter of the bees, I got in there and vacuumed them all up — maybe 50 in total, maybe more. It wasn’t hard, or dangerous. Instead, it was actually quite fun.

Let me show you a tool I’ve been using in Exodus lately, juxtaposing the annual Sharpe scores vs the weekly. Think of these scores as technical indicators stretched over different timeframes. This screen I am about to show you displays annual Sharpe’s that are low and weekly one’s that are strong — perhaps producing stocks in the midst of rotation from out of favor to in.

And here is the tech sector isolated, same screen.

Why is this relevant?

Because advisors who do not produce high Sharpe ratios in their management get whipped and beaten within an inch of their life. Whether they know it or not, they’ll be forced to buy any stock with a high Sharpe, if they intend to keep their clients, who now obsess and demand to know Sharpe scores on a monthly basis.

At the end of the day, we’re all trying to front run one another — jump in front of the line and smack one another in the face with cream pies.

Enjoy your Sunday.

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Heading Into Autumn, Le Fly Endeavors to Be the King of Retail

Last night I had a rueful rest, all due to those Chinese IPO trades gone wrong. I had a dream that I was being chased by dragons, spitting fire at me as I frantically tried to slink down and into a sewer pipe. Just when I thought I had escaped its wrath, peering out of the small tubular sewer drain that I was hiding in — the stupid face of the dragon appeared and incinerated me — and then I woke up.

I’ve been angry about that dream all day — mainly because I try to be brave and true during all moments of my life. The cowardice I exhibited in my dream must be some sort of message to me, perhaps I am mocking myself for cowering in fear by selling QTT. Or perhaps it means nothing at all.

Back to an important subject, such as what to buy during the Autumn — a wonderful and blissful time of year. It is, mind you, my favorite season, the harvest — the moments of the year when orange and brown festoon the countryside with the colors of metamorphosis.

Jeffrey Macke enjoys to discuss retail on Twitter and has since declared himself in charge of all things to do with consumer trends. He fancies himself an expert amongst idiots — traveling to and fro, snapping pictures of display racks and drawing delightful pictures with annotations atop of Yahoo Finance 10q print-outs. I am here to tell you that I will challenge him this fall for leader of retail — as I am a man of extreme style and panache — who has a keen eye for all things to do with high end and retarded end fashion. Having the advantage of cavorting amidst both classes, I consider myself to be a foremost expert in knowing what people want. I am the weathervane of Wall Street and that’s all there is to it.

Courtesy of Exodus, here are some things that have me interested in this trade.

The overbought-oversold oscillator is at the lows, an implication that the apparel stores are in fact stressed to the downside.

Retail stocks have recoiled to the tune of 8% the past two weeks.

From a seasonal perspective, September is a bag of dicks for apparel. This is typically a good time to barrel into high end fashion.

And here are the only high growth companies in the sector. Ignore everything Mr. Jeffrey Macke says and only focus on these merchants of Chinese manufactured textiles.

It’s hard to say, truth be told, if Le Fly will actually transmorph into a retailFAG, eschewing the wonders of SAAS. But in my head, at this moment, it seems like a nice windy narrative to travel down — the type of story you might tell your grandkids 30 years from now — when the Captain of Bloggeries, the best trader alive, decided it was time to pivot away from SAAS and into Apparel and killed it in the process. These stories would normally get lost in time, so make sure to maintain journals and keep them tucked away in the attic for some antiqueFAG to recover 100 years hence. Our stories will live forever.

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I came, I tried, I failed.

I sold the whole position for a loss of 9.6%, triple sized 15% position means I enjoyed a fairly large drawdown for the day. The hurtful thing about this trade, obviously, is that I lost money in a manner unnecessary. I didn’t sell into strength and I bought into weakness. Hence, today I am a gigantic mammoth fucking loser.

I am keeping the QTT position and the NIO cash will stay in a money market.

You don’t understand, this trade just ruined my weekend. I was already in a pretty dour mood — feeling like an odious stock trading gorilla. Now with this loss, I am a confirmed ape tucked away in a dark corner of stupid, somewhere in central NJ — where the people are misfitted and the tree are old and bleak.

Top picks: CGC, UBNT and the opposite of whatever I’m thinking about now.

UPDATE: QTT gapped the fuck lower. Sold it too for an 11% L.


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