No Time To Eat or Think

I’m so busy right now, I barely have the time to sip my afternoon tea (lemon) in between keystrokes. Sorry, but that’s the way things are for the moment.

This late day run is massive, but I don’t think the market has the energy needed to take the indexes green. It is time for a failed breakout, and I want the bears to throw the bulls over a balcony into a lit pit of petroleum.

The run in MGM has been amusing, in the way only losing lots of money can be. There’s no good news coming out of that company, yet they are getting pumped hard by certain nameless individuals.

Table gaming revenue plummeted on the strip, and while I accept that MGM’s recovery has largely been driven by conferences, it’s also true that the company has zero leeway for less revenue.

The tiniest faltering of income puts the company in end-game territory.

Now ladies and gentlemen, good audience of my stage:

I’m really, really busy, so piss off and get the hell out of my office.

I took today off to escort Mrs. Thaler to an appointment. We got back a short while ago and I just finished making some lunch.

Looking at the market then, my mood is sour. This run up is mostly unwarranted. Do you have any idea how much energy it will take to nationalize the entire European banking system?

I am mostly tired of every jack off pricing the rest of the world ahead of America on every issue. “Well, China is superior because they’re communist and won’t let their economy fail.”. “It is my opinion that the more Socialist countries of Europe can support their banking system far better than us here.” “The emerging markets are far better situated to weather this storm.”

You people have no national pride. You surrender your country to foreign nationals, declaring their superiority at the drop of a hat, and without any evidence at all.

Why would China be free to face a housing collapse without injury, when we could not? You would put your faith in a nation of bureaucrats with no respect for it’s citizens rights over our own home?

This is appalling to me.

Well watch yourselves carefully fools. Faith placed in such a way is faith misplaced. At the first sign of trouble, what do you think the “infallible” Chinese will do to an outsider?

Your investment will be the first loss. The Chinese nation’s ignorant and minority groups will be the second. The People’s Republic of China goes third.

I’ve been absolutely swamped all morning, and have only had the last fifteen minutes or so to catch up.

Here’s a jumbled list of thoughts I’ve had:

(1) Why is this market higher?
(2) LOL MGM is up 3.5% right now because they’ve announced they’re expanding in Macau. Meanwhile gambling revenue is stagnating in Vegas (a.k.a. 80% of their operations). Where the fuck do they think they’re going to get the money to build new hotels? Come to think of it, where are they going to get the money to pay off their bondholders?
(3) Brazilian sugar production is fucking soaring. BG is so undervalued right now, it’s disgusting.
(4) REIT investors are functionally illiterate.
(5) If Slovakia of all places crushes the Greek bailout, I may just piss myself laughing.
(6) Earnings season is going to be absolutely crazy. I may cover UCO for a loss in a hurry, if things turn up unexpectedly. But for now, I’m just not thinking it’s going to be a great outcome.
(7) Betting against the dollar here, while Europe crumbles and fiscal policy is deadlocked in the U.S., is probably not a healthy strategy.

Alright, back to work for me.

I’m packing up the desk of the 9th floor and putting the finishing touches on a few last documents laying in front of me. In a few minutes, I will get up with brass key in hand and lock the door. I will take the winding steps down and out of my building. And I will be off.

I’m going to play a round of golf; the fall has been excellent so far, extra warm and rather dry. I’d like to catch the last few good days before I’m totally isolated indoors.

My last ounce of attention directed to the market, I’m betting this run higher is about done. My line in the sand is drawn, but unfortunately it’s a ways off behind me. I need some retracement to get my hedges feeling more “comfortable.”

Look out for pit falls while I’m away.

I lost a nauseating amount of money at the end of last week, thanks and praise to the REIT space which decided to totally crimp itself. Couple that with my steadily increasing a UCO short into a crude oil melt up and I am not what you might call “happy.”

Last week, my accounts lost over 7% of their value. That’s a huge three day drop and puts me temporarily back in the range of losses for the year. That’s the sort of action you get when you’re hanging out in two polar kinds of positions; long key equities (some with midsize market caps) while short extremely volatile commodities.

You get a bi-polar account.

It is a great mental act of force to ignore the numbers and remember what’s really important; the stuff. My position sizes have steadily increased into one of the most massive selloffs of our lifetimes, while my net account value has not changed nearly as much, in the big scheme of things.

I am pleased where I’m at, despite the losses. However, in the back of my mind I also know that this is not going to cut it outside of the realm of private investors. I have a great luxury in being solo. I can ignore losses, opting instead for longer term growth strategies.

But a loss is still a loss and I fully understand if you’re a first time reader and a little skeptical. Just keep your eye on the ball.

This rally pains me; I want to see it roll over so that my oil short will turn profitable. If this happens in the right way, then I will be back to break even for the year (which given the year, is more than enough to please me).

I’ve mentioned my strategy in terms of what I’m buying and shorting on numerous occasions. But I’ve decided to refine my strategy a little further.

In addition to owning all the companies which I currently do (AEC, CLP, AWK, BG, CCJ), my other key goal is to see all my ownership positions double without impacting my net value.

Let’s say I have X shares of AEC right now, at a value of Y and an account value of Z. Near the bottom, I want to be in the position of having 2X shares of AEC still worth Y and an account value that’s still worth Z. Now repeat for all my longs.

This way, all my position allocations will remain about 1:1:1..:1. In order to make this happen, my shorts need to perform remarkably well, and lots of other random variables need to fall into place.

It’s a tall order, but I think it can generally be pulled off. Obviously, knowing when to hit the after burner (margin) is going to make all the difference.

Looking through screens of companies, the general view I’m getting for today is decidedly mixed. However, most of what I own is being crushed. We have REITs continuing to plunge, there’s big losses being taken in consumption goods, and not much life elsewhere.

The only real pattern seems to be blue chips, which are going higher. HD, XOM, etc (no banks) are pushing up. Most else looks like it’s dropping down.

Oil is following the DOW which is making my day rather unpleasant; I had figured a red market meant red oil.

Actually, come to think of it, this is the perfect end to a real dick week. I should have expected no less.

I’m calling it an afternoon. See you all Monday.