After swearing I would cease and desist from all margin “cokey” related behavior, I made myself a liar once again today by running into single digit margin territory after buying a stake in WNR (PPT and Twitter time stamped).

I’ve liked the idea of capitalizing on the refinery spread since the Fly brought it up, but I just couldn’t bring myself to follow along at the time, for whatever reason.  I figured I’d just sit it out and watch you all run to grand profits without me.  But, fate was far kinder to me than that, and so I purchased my position at an average cost of $16.68.  Hopefully now I can partake in only the enjoyable sensations of owning the company.  I haven’t envied you holders of the name up until now; no not one bit.

Meanwhile, silver rebounded significantly higher today, as short sellers got their balls crushed between two ingots of the metal; agreeably, as they rightfully deserve.  Another 60 cents to the price of SLV (2%) and I break even.  I make an additional 10% for every move of roughly $3.50 per ounce equivalent of SLV.  I hope certain National Health Systems are paying attention.

For the day, I was up 3%, thanks to magnificent decision making and prudent selection of stocks and sectors.

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Saying Carlos Slim is short silver is like saying Exxon Mobile is short gasoline, because sometimes they lock in superior pricing.

I must say with the utmost sincerity, that if you are one of the people spreading this nonsense, then you are an ignoramus of the highest caliber, and deserve to be euthanized, promptly.  Indeed, the egregiousness of such a suggestion is nearly beyond parallel.

In addition, how is it that with a straight face you can claim the collapse in silver is completely justified, to the extent that silver should now continue to retrace back to a price of single digits.

May I remind you, buying silver as it were a fad for the regular “common Joe” was only begun the winter past.  Before that, the popularity of the silver trade was still very much muted and limited to the dedicated few.  As such, a retracement of much below $30 is completely unwarranted, given that some of silvers upside between then and now (a time of QE II) was vindicated.

While I myself am warming to the dollar trade (a truth recognizable by the cash position I had on my books until just yesterday), to sit here with a straight face a say that a 30% crash in three days in such an entity as the commodity markets is called for and not the product of external manipulation; especially in the presence of just such observable and obvious manipulation as raising the margin requirements such a gargantuan amount; is hokum.

It is blatantly obvious that such a drop in price is the cause of a massive sell out, and here we have an obvious culprit in the form of forced margin sales, and so you, the ever vigilant detective, are out digging through trash cans looking for the murder weapon. 

Surely, it must be those dastardly mom and pop types who got in over their heads!  It was them all along!  Now silver to $0!!

The weapon is still smoking in the hand of the shooter.  Quite being dumb and stop shorting the silver market on “the new normal.”

While I will concede to you that $50 an ounce in such a short order was perhaps extreme, if you think the price right now is fair, then I would beckon you to recall:

The price of silver was only about $3 lower than where it is now when I made my own major sales back in December.  And that was how many billions of dollars of Fed pumping ago?

But no!  I’m sure you know what you’re doing.  Silver is just the most useless most absolutely necessary metal in the world today.

I will eat your liver by Friday of next week…

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The entire silver space is being routed as new regulations flush out hapless traders like well trained hounds.

On the back of this sell off, I’ve decided to deploy my entire cash position, buying up SLV for $38.97 a share. In my estimation, such a rarity as a forced liquidation of an entire sector is a moderately rare thing. The new margin requirement rules that got this sell off started have done marvels, forcing the price of silver temporarily down by almost 20% inside of three days.

The initial wave of selling (professionals who were using margin to capitalize on higher silver prices) has now been exacerbated by the second wave of selling (the weak kneed, soft handed, followers and casual side traders) as they all overlook the fact that this sell off is basically being mandated. I’m sure the people who were forced to sell initially would have rather held onto their positions than be required to sell them regardless of the presence of sufficient buyers.

So now is probably the time to start deploying cash, as it is definitely a buyer’s market. Quite literally, no offer will be refused, until the artificial excess capacity is all absorbed and we can get back to silver over $40 an ounce.

Now is not the time to press a blade to the silver market’s necks. Please, stop being silly, by getting in the way of such a beast as the silver bull. If you’ve nailed this trade, congratulations: take your cash and be happy.

Now is rather the time to hunt down the small, scared animals that have been chased out of the bush.

Using up my cash, as I have, and in lieu of other disturbing scents and sights this week, I’ve decided to raise more cash in short order. Another 5-10% should do it, just fine. I also will attempt to take easy profits on the SLV trade, rather than chasing it back up to $50. That should leave me with a nice 15-20% cash position in my accounts, while still holding full, if slightly diminished, positions in MGM, AEC, CLP, AWK, BG, and CCJ (not counting my holdings of physical silver of course), if all goes well.

Happy hunting to you, from the 9th floor.

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MGM Resorts International is up over 7% this morning, as certain Credit Suisse analysts get taken to task for trying to corner wounded animals.

That’s a massive run on the back of a less than expected loss.

That’s where things have come to. MGM has been so thoroughly discounted out of the fight that their share price can push up almost double digits in a single trading day while they’re losing money.

I have said before, do not underestimate the power of survival in the face of certain demise. If MGM lives while continuing to pay off debt, the mere fact of its continuation will facilitate exponential stock market gains that thoroughly put to shame its competitors over the next years; just like the stock performance of MGM’s competitors have put MGM to shame up to now.

Silly Swiss bankers will not sway that reality.

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I am glad the market reversed lower yesterday. I was preparing to unleash a ravenous rant on why buying equities because one aging terrorist got shot in the face was all around a bad policy. However, I didn’t need to take the time, since plenty of other’s were more than happy to hit all the key points themselves.

Yesterday was a decent up day for me. While my stocks themselves were mixed, CCJ was up something like 3-4%, and MGM also rallied hard. Of course, my silver holdings got (are getting) clipped. But sometimes shit happens.

As for silver, it is already significantly higher than where I scaled back at the end of last year. I had imagined something like what is happening now occurring back when silver was tipping around $30. I was utterly wrong, but since I retained a decent size legacy position, I was willing to go with it like I was right. No significant damage was done. Psychologically, I can’t fret over a massive downward move in silver, since it’s still over $40 an ounce. That’s still a good 30-50% higher than where I first scaled back, depending on what day it is you’re looking from.

Watch intensely friends, as my various strategies are starting to take off here. My water utility investment in AWK is steadily pulling higher; it’s nice and consistent. My REITs are breaking out; CLP and AEC will touch through $30 this year, each. Write that down. And BG is busy making a year’s worth of money in the first two quarters.

Unfortunately, my internet access at home is still being fickle. Hopefully, I’ll be returned nighttime privileges just as soon as various modem issues are resolved. For the meantime, though, I’ll be left to slipping in commentary at work.

If you were nearby me, you’d hear me sigh happily. It’s nice being back in an office setting. I was going to rip my eyes out, if I stayed at home much longer.

Now good day to you, friends. Happy stock hunting.

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Yesterday, in acceptance with reason and reality, Bunge Limited reported first quarter net profit more than tripled, thanks to global crop prices spiraling out of control. With a Q1 net income of $232 million, it absolutely trounced this same time last year, when BG made only $63 million.

That’s a buck-forty nine a share, coming off a year ago when they pulled sixty three cents.

Meanwhile, their full revenues increased by about 20%.

And, of course, in response to this, BG fell $1.16, because…because. Today, however, sense seems to have triumphed the day, and BG is presently trading back around $75 a share.

Listen to my words, as sure as I am resting here in my leather scented office; BG is going higher.

There doesn’t seem to be any realistic case against BG. What I am hearing snippets of is that somehow, since BG also has lines of business that need to take in grain, it all evens out, because they need to pay more, for instance, to operate their oil segment.

Horse shit.

For starters, when you’re growing the grain you’re using to produce the oil you’re selling, you aren’t concerned about profit margins. Even barring some fucked up foreign or domestic laws aimed to avoid that sort of behavior, I have the fullest of confidence in the ability of intelligent executives to get themselves their own resources at cost.

For another, there is this fancy term the kids are using called “mothballing.” If production gets too hard, I trust that this company has to be smart enough to simply slow down their unprofitable segments, which means full steam ahead for the agri-grain line of business. They aren’t obligated to make grain products, you fools. They can, in fact, just sell the grain out right for absurd profit margins.

And it looks like that is exactly what they are doing. The only criticism of BG I would have accepted was Analyst Bomber’s: that they somehow hedged themselves into oblivion, effectively fucking up victory-handed-on-a-silver-platter by over trading away all their profits.

But based on these results, I don’t think anyone can argue that’s what’s happening.

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