I Am Shorting Volatility and Getting Long the Greatest Financial Product Ever Invented

I stepped in and bought XIV a little bit below these levels this morning, as reported in Exodus. So you know, I am buying this for my great, great, grandchildren. They will certainly appreciate today’s purchase when my estate is divvied up and they spend my money recklessly on stupid shit.

We all want risk aversion tactics when stocks are trading lower — but you do not have to be reactionary to the blackness of an opening plunge lower. Do yourselves a favor pal and go stuff your fat face with a meated sandwich. You missed the inflection point — but now the Dow is 400 points lower from two days ago and now you risk being wrong again. Judging by recent history, UVXY will flag overbought today in Exodus and the entire system might move into oversold territory. This could very well be one of those shallow dips that you’ll end up kicking yourself in the head for missing.

Or we might trade lower and die.

What do you think is the most likely scenario?

With my money, I am disappointed that oil is dropping like this, but pleased with gold. I am going to chill out for a bit, listen to some Max Richter, and make myself the blackest coffee the world has ever seen. Then I will revisit the tape and make some judgements and position for late afternoon.

We bounce. You know we fucking bounce. Who are you kidding?

This is pretty big news for the god forsaken healthcare industry, a vacuous and evil industry who thinks they can get away with charging normies $1700 per month for family health insurance. They should, quite seriously, fuck their own faces.

Amazon, Berkshire, and JP Morgan are uniting to form their own healthcare companies, for their employees — which sets a wonderful precedent away from the legacy providers who’ve been fucking stealing from Americans for decades.

CNBC:

Amazon, Berkshire Hathaway, and JPMorgan Chase on Tuesday announced plans to partner on ways to cut health-care costs and improve services for their U.S. employees. The announcement slammed the shares of multiple companies in the health-care sector.

Together, the three companies employ more than 1.1 million workers.

The three massive companies will launch an independent outfit initially targeting technology solutions, with the intention to be an umbrella firm that would be “free from profit-making incentives.”

Details of the new company were sketchy, with principles of each firm noting that the way it will work remains to be seen. They’re hoping that the sheer size of each firm will help bring the necessary scale and resources to tackle the issue.

“The ballooning costs of healthcare act as a hungry tapeworm on the American economy,” Berkshire CEO Warren Buffett said in a statement. “Our group does not come to this problem with answers. But we also do not accept it as inevitable. Rather, we share the belief that putting our collective resources behind the country’s best talent can, in time, check the rise in health costs while concurrently enhancing patient satisfaction and outcomes.”

Three top executives, one from each company, will take the lead on the project: Investment officer Todd Combs at Berkshire, Marvelle Sullivan Berchtold at JPMorgan, and Beth Galetti, a senior vice president at Amazon.

The new company’s goal at first will be to target technology solutions to simplify the health-care system.

“I think it is good news,” Allergan CEO Brent Saunders told CNBC. “The healthcare delivery system is antiquated and in dire need of positive disruption. My hope is these three companies light the spark!”

Adam Fein, president of Pembroke Consulting, said it’s “long past time” for employers like these three to force innovation into the health-care system.

“For better or worse, there are warped incentives baked into every aspect of the U.S. healthcare system, from medical innovation to care delivery to insurance and benefit management,” Fein told CNBC. “Rather than merely bashing the current system, I hope this new organization can help patients and their physicians make more informed and more cost-effective decisions. Technology will be necessary but not sufficient to make positive changes.”

Analysts echoed the sentiment that the health-care system is outdated and ripe for disruption, paving the way for the new endeavor. However, they cautioned it could take time.

“If this winds up being the low cost provider to make insurance more affordable at employer level, could wind up being a real disruptive competitor to an industry that has not seen any new players in years/decades,” Jefferies analyst Jared Holz told CNBC. “Not going to call this black swan event yet because there are few details and would be making too many assumptions but it has potential to be.”

Leerink Partners’ Ana Gupte said the comments suggest the leaders view the endeavor as one that’s “complex, challenging and thorny and that will take time to bear fruit.”

Shares of each company were little changed in premarket trading.

I applaud this effort and hope other corporations follow suit.

Aetna (AET) is down 3.0% in pre-market trading; UnitedHealth (UNH) is down 6.8%; Cigna (CI) is down 5.3%; Anthem (ANTM) is down 7.0%; Humana (HUM) is down 4.9%; CVS Health (CVS) is down 5.8%; Walgreens Boots Alliance (WBA) is down 3.7%; Merck (MRK) is down 1.0%; and Pfizer (PFE) is down 1.6%.

The DAX is off by 0.45% and Dow futures are -196, so this must be the end of the bull market as we know it. Some of the gains we’ve seen during the month of January have been so great, we could recoil by a solid 10% and still show double digit gains in dozens of high profile names. Just a few short weeks ago I refused to accept gains less than 100%, now I’m trying to contain the mayhem.

I’m expecting carnage today, which might force me to raise cash in my tactical account. It sucks to sell at a loss, but it sucks even more to have bullshit stocks during a bad tape. Agreed? Most of my trading stocks are low quality names, stocks that will get absolutely poleaxed in a bad tape. This is the other side of the blade and it cuts deep.

The dollar is -0.3% v the euro, WTI is -1% and gold is flat. Ahead of the state of the union, it looks like we’re going to see a correction. However, I’d love nothing more than a face ripping rally.

Here’s some other shit crossing the wires this morning.

MXIM -9.9% (Renesas (RNECF) spokesperson has denied reports that it is in talks to acquire MXIM)
UCTT -7.3% (commenced an underwritten public offering of approximately $100 mln of its common stock; intends to disclose in connection with the offering former shareholder dispute)
GRUB -3% (downgraded to Underweight from Equal Weight at Barclays)
IMMY +47.6% (Imprimis Pharmaceuticals now making available two glaucoma drugs on FDA’s drug shortage list)
Alphabet target raised to $1350 at Needham ahead of Thursday’s earnings
Amazon target raised to $1500 at Monness Crespi & Hardt — Race to $1 Trillion and Why Amazon May Get There First

I’m not gonna get wordy about what is taking place tonight and instead be as direct as I can. Sell offs like this have not lasted long the past year. Each and every time the bottom dropped out, a magical one appeared and made everything lift again.

Here’s why things might be different this time.

The House just voted to release a top secret memo that, allegedly, will make Americans get off their fat asses and overthrow the government. FBI Director Wray is on the cusp of firing McCabe, Nancy Pelosi is stroking out, and Sean Hannity is having orgasms on live teevee over it.

Watch these videos to get caught up.

People are watching the 10yr bond and making dire predictions about if and when it breaks 3% and how it will crush equities. Whether there is any validity to this frenzy is moot, as long as investor psyche is affected by it.

The US 10yr is at 2.71%, a solid 60bps above the 2 year. People need to calm the fuck down.

On the plus side, this is the first time in a decade all 10 sectors guided up on earnings. Here’s the bottom line: we were overbought. Now we are working it off. Watch the political turmoil unfold and grab a great big barrel of popped corn and hope for the worst.

Dow futures are -177, Nasdaq -39.

Sleep tight.

Aside from playing the one arm bandit during the day with high beta stocks of a vulgar nature, I also research methods to procure safe investments designated for income. What use is it to make a lot of money if you’re just gonna piss it all away?

Everyone should have a large percentage of their discretionary income dedicated towards a conservative strategy, which includes income. Some people, especially those aging the fuck out, prefer to go down the rout of munis or government, others go with corporate, preferred’s, and REITs. Personally, I like a strong stock with great free cash flow that pays a big fat dividend.

Let’s review some of the best dividend payers of 2017. Considering markets crashed today and uncertainty is in the air, this post will play well this evening — subliminally scaring the shit out of some of you to seek refuge.

NOTE: I screened for companies whose market caps were above $5b, just because.

Stock/Dividend yield/Percentage Gain (1yr)

JNJ, 2.3%, 28.6%
XOM, 4.5%, 5.03%
WMT, 2.1%, 69.3%
WFC, 2.7%, 18%
CVX, 3.7%, 15.3%
PFE, 3.6%, 27%
NVS, 2.7%, 32%
VZ, 4.8%, 11.9%
KO, 3.2%, 18%
INTC, 2.6%, 34%
CSCO, 3.1%, 41%
HSBC, 6%, 32%
BA, 2.1%, 107%
ABBV, 2.7%, 108%
COST, 4.8%, 28%
LVS, 4.4%, 52%

The oil pipelines did well too.

REITs performed well, in spite of the lack of risk off mood that traditionally get the sector bought. One thing to remember when buying REITs, they do not enjoy the lower dividend tax rates that ordinary stocks get.

Something came up and I need to be whisked away. Do not worry, I am not under arrest for murder, or anything like that. I am just busy right now and really do not have the time to see if my wager of my head is going to pan out or not.

So, let’s just continue this bet for tomorrow, shall we? I am sure it will make for a great drama, all of my ardent haters hoping and praying for my final demise.

At any rate, markets look truly wonderful now, off by 150 and deepening. There’s nothing in this tape that suggests danger, so feel free to seek out fresh and new ideas for investments.

I’ll see you fuckers later. The executioner, that being me, is going to have to wait another day.

I am so confident of a late day rally, I am wagering my own head in return for nothing at all. To be clear, I will take a guillotine to my own head and cut it clean off my shoulders should the market not close green. If I win, nothing happens.

Sounds reasonable?

I know some of you will try to talk me out of it, fearing a great talent might be lost for something as meaningless as a late day rally. But you need to calm down and have faith that Le Fly knows exactly what he’s doing at all times and cannot lose, as dictated by the laws of nature. Even when I am losing, I am actually winning.

The Dow is currently down by 75 and the dollar gains have been cut in half and the deficit in oil actually the same. There is a certain bleakness casting its gloom over today’s tape, with just 31% of stocks higher for the session.

My quantitative portfolio is down 0.7% today and is scheduled to be updated this Wednesday. All signs point to a weaker close — which is precisely why I am wagering, with my very own head, we will rally, AND MORE, into the bell.

Do you see all of those stock’d market gains in your portfolio? They were all gotten under false pretenses. The every trustworthy Chris Cuomo from CNN corrected the record this morning, highlighting Trump’s brazen hypocrisy on his economic accomplishments, pointing out through facts, how incredibly shitty the economy was during 2017.

While the stock market did just fine in 2017, they might’ve gone higher under false pretenses. If that’s the case, kiss all of your stock market gains goodbye.

Thank you CNN.

I remember when the Keurig device came out; I thought it was the best invention since electricity. Many of you here might recall my obsession with the product and how it was responsible for my obsession with coffee. I recall drinking 6-10 cups of coffee per day with that thing — fucking wired to the hilt. Shares of BBBY were pressing higher, based solely on Keurig machine and K-Cup sales, and it brought a lot of excitement to the retail sector. We hadn’t had a real high tech, consumer friendly, device like the Keurig in years, possibly decades.

Then it all fell to shit.

Personally, I became disgusted by my machine, after finding out the level of mildew buildup inside of it. Plus, I became a true coffee aficionado and began to look down upon those who K-Cup’d. I had moved onto French press and pour over, creating latte art from the confines of my fucking home.

Shortly after, Green Mountain was taken private in shame and I thought I’d never see them again.

WRONG.

Keurig’s private equity dick handlers, JAB, agreed to acquire Dr. Pepper Snapple, who by the way just acquired a local company near me called Bai, in a deal that will set them on course to compete with the likes of KO and PEP.

Even better, they’re gonna leave a tracking stock under the ticker KDP. Essentially, Keurig is coming pubic again, in the most grandiose way possible.

David Faber and the gang discuss the deal and how Keurig progressed during its time private.