Unacceptable – RGR Is Down?

You’ve got to be kidding me!? RGR didn’t just demolish earnings estimates. They vaporized them. They crushed all the analysts so badly, I don’t think the analysts have managed to figure out by how much yet. Was it 50%, or a whopping 77%?

So the stock is down a percent??

Look, do not lull yourself into thinking the earnings game is over for RGR. I flip on my television and see a multi-million dollar marketing campaign equivalent for RGR on C-SPAN this morning, as Feinstein and a half dozen brain dead Senators let a man so inundated by grief he can hardly stand steer their response to weapons in the USA.

These gun control measures are dead on arrival. They will not impact RGR or SWHC in the slightest. They are, however, FREE ADVERTISEMENT and the single greatest argument for a gun purchase the gun manufacturers could ever hope to make.

“Wait, assault weapons will be banished, but if you have one already it doesn’t count? So buy one now.”

Why does RGR even have a marketing division? I’d zero budget them immediately, on the grounds that their job is being done for them, at no cost to the company – the US Senate is that kind

The market is resting from yesterdays’ mighty run. We are not reversing lower, as far as I can tell. EU yields with respect to the problem children continue to subside.

South American countries are feeling the heat this morning, as their debt gets the Argentina treatment. But their economies are too small to matter. And, really, that’s what you deserve for investing in South America.

I bought BXG today for $9.78. This is a full sized 10% position, bringing down my cash position to ~0%.

This cannot stand, and sales of something(s) will simply have to follow.

I will pen a piece detailing the purchase later – perhaps tomorrow. There is much to say.

RGR is reporting its first crop of earnings since the Sandyhook tragedy and the major push for gun control got underway. I’m looking around the room, and I’m seeing earnings getting lifted by 10% from the last round. And after that? Some analysts are even showing EPS dropping within the year. Look, let me ask you something, point blank.

Are you people out of your fucking minds?

You need to understand, Mr. Bloomberg analyst; I hate your guts.

It’s not that I have anything against your business don’t like you disrespect you…okay you know what, I’ve tried starting this sentence three times, so I’m just gonna call it quits here.

The problem is that you are a gigantic pussy. God it feels good to finally say that! Enough of this PC bullshit.

You are a gigantic bitch. You little New York dwellers hang out on your tiny little island with your thirty five thousand armed guards and no sense of how the rest of the country operates. You get all caught up in ten thousand fake Twitter handles that #DemandChangeNOW and miss, subsequently, what is staring you right in the face.

And why do you let this happen to yourselves? So that one day, maybe, Mike Bloomberg will say “hmm” to you while you shuffle breathlessly out of his way to the bathroom.

Now let me show you why your estimates are complete garbage

This is a real gun store, unlike the imaginary ones you’ve never set foot in

Now, do you notice how I can almost count on two hands how many guns they have left in this case?

You are busy lifting earnings estimates for gun manufacturers by a paltry 10% and meanwhile, gun inventories have been sacked by >80%. In this particular store, this was one case. They had another five that looked exactly like this. I can count on one hand how many Ruger handguns were left for sale. And meanwhile, you can only bring yourself to lifting EPS estimates by 10%, while viciously penning that “Bloomberg employee loyalist” piece hyping the ‘dangers’ to gun stocks that will just absolutely materialize from legislation and judiciary action. And of course reminding everyone that these sales levels cannot continue indefinitely.

DO YOU THINK I CARE IF THEY EXTEND INDEFINITELY!?

The company just sold a years’ worth of firearms in a fucking month. And, I revel in revealing this to you, but you’ve got two years until the midterm elections, and at the moment Republicans are looking vulnerable. That’s two years during which gun enthusiasts can panic and buy as many weapons as their budgets can handle. Two years, before you have any chance of stemming the flood, too…

RGR is backlogged with demand. They have so much F-ing demand, they need to expand their borrowing capacity just to try and keep up with it. Why, just Thursday they signed an agreement with Bank of America to expand one of their lines of credit by $15 million. You can expect more of that sort of thing, I can assure you. That’s at least 30,000 more weapons being made, all on sales that are being satisfied, really, before manufacturing or wholesale.

Think about that in shame the next time you think of writing up one of these moralizing trash pieces.

So far, taking a check at the state of affairs, I still think we can turn back around. Look at the sheer price run and know that we are only now approaching what could be called “top of the range”. I cannot become concerned by bond prices, as they remain at all-time lows and, thanks to central banks, are not allowed to sell off significantly anyway. Why shouldn’t bonds go up? (I know, that logic cannot hold, but for the moment it’s a sticky sort of rule of thumb). Bonds selling off hard are a cause for concern. Bonds being bought are a given.

But I am most assuredly fixed on the yields of France, Italy, Spain and Greece. Yesterday, Italy managed to eradicate three months of goodwill for themselves and their neighbors in what amounts to sheer idiocy. Italians obviously don’t understand the concept of a Catch 22 – in this case, they can pick between austerity or being left for dead (a compelling choice, I know).

Italian 10 years are now approaching the 5% level; effectively lifting ~1% in a matter of two days. While that is certainly a warning sign, I wish to see if that price can hold.

Also, remember that France is intricately tied up in all of this. If we were getting ready for a true panic, I would expect France yields to be getting murdered here.

I’m also not sure what I think of the EURUSD. It’s sitting at around 1.3, which has really been a sort of center for the currency swap during the last 2-3 years. Any time there’s trouble or rebound, it seems like we make the decision around 1.3.

If we were ready to crater, part of me thinks we’d be seeing a bigger initial euro rally, as European financials stock up on emergency stores of euros. Yet, we certainly have had a large resurgence of the EURUSD off the lows, and perhaps that was driven by European financials as much as anything, gathering that very same I have just described.

Also, even though I suspect demand for currency would create a spike before any major selloff, ultimately the euro is destined to go lower, either through devaluation necessary to hold the EU together, or its abstract worthlessness when the EU begins to come apart.

In any major event I expect the euro to move sharply and with conviction. The sashaying it’s undergoing at the moment makes me think this selloff will pass with time.

Until I’m more confident of that though, I’ll be keeping a wary eye on bonds and currencies.

I apologize for not piping in on the sell off. I was driving down from northern Michigan and only had the intense joy of watching “Revenge of Silvio Berlusconi” on Twitter, as opposed to the full blown Blue Ray.

My cash position only stands just north of 10%. Not even a few days ago it was almost 30%. Thus I have egg all over my face.

But I have hope. Hope for higher prices. This winter was so excellent, it’s difficult for me to believe I could possibly walk away down from the amount I’ve made. So I have some breathing room. Also, I have EUO as a hedge; and that is just running here.

Thus I will be watching closely what happens.

I dropped my RGR purchase from yesterday, as it rallied more than 6% in under 48 hours. Still holding my core position. Cash stands back above 10%.