As much fun as the occasional weekend pipe dream is, jam packed with physics and wacky ideas, from time to time, Monday brings with it a serious responibility to engage in actual thinking that produces real gains.

I see the weekday pipe dreamers are out and about now, writing mock up papers for major publications detailing how the hyperloop will create displacement by causing passengers to ride an acoustic wave, knocking my own crazy nonsense off the top. I suppose I’ll leave the making of unsubstantiated and ridiculous guessing to the professionals.

Back to things that actually matter; I’m watching RGR closely and have made the probably bad choice to hold through earnings. I am betting that gun ownership in this country will continue to expand at a higher pace that old normals, even after the initial fear buying craze has subsided. It’s difficult as RGR just announced some plant trouble, and background checks are down. Do not be surprised if RGR takes a spill lower. Whether or not I re-up my stake at that point will depend.

AEC is making to recover from the earnings miss. I am betting it will make new highs within the year.

BAS remains in a correction, and if my feeling for the stock is on, I’m betting that puts it around $11. Or rather, I’d buy around $11, if it can get there.

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Mentally, I must ready myself to see RGR miss on earnings and crater back towards $40. Statewide background checks are way down, save for the most liberal, anti-gun cities, where terrified freedom lovers accumulate weapons at an alarming rate.

Most of the energy to buy weapons was exhausted in the first three months of the year. You can only buy so many firearms.

However, I am not prepared to sell my position, exclusively because of the minute details of my personal trading and positioning.

I already made a boat load of money in RGR, first last November when I hit a rally then sold before December. Then, I repurchased around $40. And since then I’ve been buying and selling the ranges, always profitably. I’m currently sitting on just half the position size I started with (sold north of $50 I do believe), and at least a 20% unrealized profit baked into those shares…not counting all the realized gains and dividends.

So no, it doesn’t make sense for me to sell out.

RGR’s value depends a lot on where things go from here. At latest sales, RGR is cheap – but are they maintaining those levels with background checks slowing down? At 2012 levels, the stock is a little hot, but not too bad. And if sales settle somewhere in between, I’d say we’re just fine.

But if sales start going below 2012 levels, things get interesting. I’m counting on first time gun buyers getting the itch; you never stop at just one.

Still, I’m not going to be taking any form of wash on this; I’ve come way too far. I’ll sell if it gets to $44, lock in the last smattering of shares up +10%, and walk away up big on one of the most profitable 6 month runs in a single name I’ve had since APC.

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Welcome, and I hope I find you well.

I’m coming into the afternoon with strong rallying across my portfolio. AEC and CLP are both up over 100 points. CCJ, RGR, and BAS are all pushing 200. The euro cracked this morning, and EUO is now up 150. Silver is enjoying a relief rally, but it’s down so much inside of this year, it seems stupid to talk about.

The only place I’m losing money today are the TSLA puts. And since they’re puts at 2-3% of the account, I really don’t care.

I’m actually looking to add to the Tesla put position, this time targeting the 2015 expiries. A $70 strike price should do nice – maybe as low as $50.

I believe TSLA is the new NFLX; sans the recovery.

All in all, I’m still up over a percent so far, with a 30% cash position to boot. But if I were to be honest, I would say I still expect the summer to end dreadfully.

Have a great day.

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Every now and again, I like to look back over where I’ve been to see what I should have done. Sometimes I find I was exactly right. Sometimes I see the errors (hopefully not relevant). And sometime, much to my frustration, I see I was exactly where I should have been but then decided to wander off just before the party got started.

Utilities more or less sum up those frustrations.

I called the utility move about 2 years ago. My reasoning was essentially that a utility is equivalent to a publicly insured bond (a company with a legal monopoly and appropriate guarantees), and that since these bonds have (had) a nice yield, they would become the de facto target if bonds held low prices. But even if bonds somehow fell, they were good enough value to warrant the buy at the time.

Then I picked through and found my favorite utility – AWK (water).

I bought AWK in the low $20’s, road it up to $30, and then…I just sort of wandered off.

So much money got left on the table. Did I leave the utility play because I thought the move was done? No, I mostly left because I thought we were going to sell off and wanted to trade both ways. So I raised cash.

I cannot tell you how many times I’ve overplayed my hand like this, trying to nail the inflection like an ace. And what I’ve witnessed, in hindsight, is that I’m a much better stock picker than I am a market timer.

Which brings us to oil.

I just sacrificed some more money on the alter of oil. But this time, instead of shorting more like a beast, obsessed with “being right”, I’m taking my drubbings and walking off. I’ve been almost perfectly hedged the past few months (excluding silver, which I treat as almost an off balance sheet position at times). And I refuse to let the SCO “hedge” (read, loser) sink my year, which has been very profitable. EUO is doing well, I have a healthy cash position, and BAS, CCJ, AEC, CLP, and RGR will all prove winners. Of this I am confident. The only other thing is the TSLA puts, which are low single digits of assets and will cause as much fluctuation in my portfolio as the month of June, should they burn out.

Or they make my year.

The message here is flexibility. Learn to have it – don’t waste away your hard labors on the rash emotions of the moment.

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Have a quick look at the graph on this site. I haven’t audited any of the numbers, but if the author has done his homework, it fortells fairly clearly what oil longs have to expect.

For the moment, all of my short exposure is being pesteringly resilient; most probably because I am counting on those positions to even out my account. So of course, oil is holding up here, the euro is trying to push higher, and TSLA recovered a $3 move.

There’s no reason for any of those things other than that they hurt Cain Hammond Thaler. The market is trying to harm me, because that is the only consolation anyone in these positions will ultimately have…if they can shake me out.

But I have the patience of sheet rock. You will not win.

Current positions by size (greatest to least)

Cash – 27%
CCJ – 18%
CLP – 8%
AEC – 8%
SCO – 8%
EUO – 8%
Silver – 8%
BAS – 7%
RGR – 7%
January 2014 TSLA 35 Puts – 1-2%

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I let go of the RGR shares I bought for $45.95 on Thursday for $48.73.

Other than that, I am waiting patiently. If a reversal is to happen, I think it materializes shortly. I’m looking for something small at first; a 7-8% retracement. Nothing spectacular. Then I want to look deep into the end of the year and get a glimpse of 2014.

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