Listen up.  If we are indeed range bound in the indices this summer the opportunity to swing your bat will be on social stocks.  I will hammer this message again and again, because you need to understand the importance of these stocks ripping higher.  They are America.  They are our latest innovation.  Remember everyone talking about our shift away from manufacturing and into service?  Well this is the shift’s first major biproduct.  A slew of social companies held together by the FB LNKD Twitter ecosystem.

It’s so major we have live coverage trumping the perils of Europe and the other backward hell holes of the world.  All eyes on our bell of the ball, dressed to impress.  Of course the action in the social space is relatively stronger than the rest of the market.  Where else can one speculate on new innovation occurring rapidly?  These companies are working.  Companies like TRIP, Z, YELP, LNKD, and ZNGA.

Do you think the migration away from computers isn’t a tectonic shift with massive implications?  If yes I no longer value your thoughts.  Be gone.  “$P a broken business model.” That sits like a Christmas fruitcake in my stomach mid-May.  Makes me sick you would spit such vile speak.  70% of their traffic is mobile.  I say no more.

Watch these indices.  They may not give us much more downside.  Is FB ripping for a month straight baked into price?  The company and its ancillaries are Wallstreet’s chance to cordially invite cash flows back into the game.  They’ll pitch the story until they’re pink in their fat crumb spewing faces.  Is FB defying gravity all summer cooked into the price of GSVC and SVVC?  No.  Remember both hold Twitter, a site superior FB.

Should we trade lower, and believe me it could happen: buy the blood.  But please, have a plan.  Have some risk management Mr. Hero.  My chips say long, I retain about 30% cash to employ on weakness, and may raise cash into the weekend.  All of this sentiment and more could change literally on a dime, so you know.  It’s choppy out there sure, but we could be range low.

PS:  FIO is now shitting the bed.  Don’t extrapolate this out to the entire space, that chart was getting way ahead of itself to the upside.

http://www.youtube.com/watch?v=CFcADO4h9Mg&feature=email

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Sometimes I get phone calls from friends like, “Brah it’s 11:30 when are you getting your ass over here?” to which I reply, “Ga’head, I’m caught up, eating lamb shanks and sipping my favorite cab.”  I know I can sashay over to the club late night, have a few cocks and get my social fill (no homo).  I approach going out in such a manner for three reasons; I bore easily, I don’t enjoy nightclub drinking marathons, and the action is most interesting late night.  Perhaps I miss some early fun, but my vision is clear.

Now imagine owning some of these social stocks whose prices have gone to shit over the last quarter.  Imagine holding through that mess.  Puke.  These proverbial bag holders are so underwater they may not be thinking clear.  They may have the beer goggles on, eyeballing Mark Zuck and getting all Travolta gay in their heads.  All I’m trying to emphasize here is DON’T FORGET TO SCALE SOME PROFITS INTO THIS WEEKS HYPE.  If you’re Johnny-come-lately like the well timed traders residing in the godly halls of iBankCoin (GHiBC) and you’ve been reading my twits and shits, you likely have more clear vision.  You may tip your hat to Mr. Zuck, complement his hoodie, and enjoy the bottle service he’s sent your way.

Is this move in socials a one week hysteria?  NO.  But you can be skinned in more ways than one.  The move stocks like Z YELP TRIP LNKD and P will make over the next few years will be impressive, some stocks better than others.  But I promise you there will be bumps along the way.  Keep being smooth, take what the market gives you.  Build a day, build a month, build a quarter.  And if you want my advice on being smooth, follow me ova @twosmuth.

Finally, ZNGA is currently the largest cash flow stream for Facebook.  Are their games as cool as Wolfenstein 3D?  If you’re 30 and live in your parent’s basement, no.  To your mom and 12 year old girls, they’re leaps ahead in awesomeness.  Look for this stock to make a higher low.

Speaking of smooth:

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The social stocks continue to behave well in light of macro fires and index/currency choppiness.  It was enjoyable to see P finally getting its bounce off oversold levels today, even though I was bummed to see Sr. VP @RaginCajun cash out.  He trades well and I applaud his victory.  I however want to see this company through a few quarters.  Contrary to the haters, the company is not a dead model and has sheet tonnes of mobile users, which I like to see.

It would be prudent to scale off some shares as we near what I perceive to be a massive overhead supply around $10.00, but abandoning the name entirely seems uncivil.  There are only my humble opinions of course, and mean no disrespect to RC.  I will consider taking such action tomorrow barring some new driven dump in the name before we open.  If we see such action, my only choice will be to pick an area TO BUY MOOORE!

On to other issues, shall we?  AMZN and APPL are going to fucking price war in the tablet market.  I see this as very positive for Amazon.  Price behaved well today, bouncing as could be expected after the post earnings profit takers had their selling fill.  TRIP traded suprizingly well considering PCLN is finalliy becoming “anti-momentum” as I hear declared on StockTwits.  Chess also highlighted the interesting megaphone morphing into a diamond chart pattern which I find to be a most interesting formation indeed.  He finds this setup and I find his vision to be quite astute.  I will be getting a bit itchy on the trigger with TRIP and unless it starts doing the “robotic auto engage climbing the wall of worry” look over the next few sessions. I may lighten up a bit.  I won’t completely sell out, I don’t think, because crazy shit like the $50.00 roll can happen without any notice.

It’s nice to see these stocks trading as individual companies on their own merits and price action.  In my opinion, this is a healthy sector of the market to participate in free from excessive correlation to indices and such.

Trade ‘em well friends,

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After eating a claw full of almonds for breakfast, like a bird, I felt skittish and paranoid, like a bird.  Then talking to all the other birds on twitter, I felt like a fucking eagle owl from the high skies was watching us gaggle around planning to pick us off one by one.  Not to eat us, but for sport.  Territorial bird bastards…

I’ve backed off several of my conviction buys over the last two days.  I still love the names TRIP, LNKD, ZNGA, YELP, VHC, ADS, RAX, Z, P, and AMZN.  They’re good names.  And sexy!  Several of these names are extended though, and near the top range of where I expect them to trade over the next five to ten trading days.

My thesis is one of long term.  But as we enter the low volume choppiness of summer markets, I want to be nimble.  My cash position is north of 45% and I added some funds into AWK aka cash.  My current holdings in the web/social space by weight, are as follows:

TRIP, LNKD, P, AMZN, RAX, GSVC.  I still own UPS also and plan to be grandpa on the porch patient with adding exposure to the name.  However, I foresee opportunity to buy the name lower.

I took the 5% gainer I had from yesterday morning’s VHC purchase as a gift horse, and didn’t look twice, sold that shit.  Zillow is the first company I want to buy back into.  It was just behaving a bit Travolta today, and I don’t feel like having the pleasure of a reverse massage handie next week.

I’m quite enjoying the resilience of TRIP to the downdraft in PCLN.  I expected to see some pin action scaring speculators out of the name.  The relative strength keeps me confident the stock will trade higher.

I will begin sizing back into the names I watch on constructive looking pullbacks.  As always, you will be the first to know by keeping @twosmuth on your stream.

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Perhaps the big speculators had too much red meat for lunch, but they came to their turrets aggressive this afternoon.

I knew the morning would be challenging to navigate after disappointing earnings yesterday from RAX.  The company is a quintessential component of the social universe.  Just as electricity is generated hundreds of miles away and delivered to us in a nearly invisible fashion, so will server storage space.  The technology must become more invisible and less intrusive into our lives in order to progress into the realm of utility.  Consider RAX centers in the same manner.  RAX trades higher.  Today was an overreaction and will be looked back upon as a bargain buying opportunity.  This isn’t some novelty fucking coffee pot people.  Stop overreacting and selling the stock to shit you small brained parquet!

The morning indeed was challenging as bears pressed their muddy paws on my neck in names like PCLN and NFLX.  I really had no business being in either and found decent areas to bail out.  I then realized after reading five scary stories about the Facebook IPO that my mind was angry, slanted.  I scanned craigslist for any reverse massage listings but instead opted for a swim.  Feeling refreshed and emboldened, shit looked on sale.  A buying spree ensued as speculators apparently came to their senses and realized, “Wow, these social stocks operate in a bullish microcosm.  They do honey badger like shit.”

The energy that built throughout this afternoon was not immaterial.  The bears are on their heels going into the close.  And I get to sleep much better tonight.  Instead of waking up and pacing the mahogany lined halls of my abode all, “WTF RAX made shitte tonnes of money.  These aftermarket doucebags are dick suckers.” I will count sheep.  AND ALSO, being short LNKD…that is the kind of position that causes heart palpitations.  This ugly ass reversal candle will be seen inside the eyelids of shorts on every blink.

I got my AMZN position finally.  The stock is still grotesquely levitated after earnings, but I like my chances here.  I took a RAX teaser long home with me into the close.

Zillow, ironically enough, is punching shorts in the face and saying, “Fuck your house, now it’s a short sale.  Cheapest house on the block.”

Pandora continues to be a “broken business model” but is trading up finally.  I see more upside.

In summary, it’s nearly summertime so BEWARE and play your best setups.  Don’t be surprised if you get chopped out of some names.  However, the social/internet space continues to be a pocket of strength and the space is separating winners from losers in a rather draconian manner as we make our way through earnings.  It’s how the stocks close that is important.  Press the winners, this shit isn’t over.

Trade ‘em well gents! Ride with me too ladies (h/t sooz), just know this is how we roll:

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These notes are part of my risk management and my assessment of price action.  This analysis is huge in my opinion and significant even if you are trading a larger thesis.  My main thesis continues to focus on companies whose product integrates well with Facebook and Twitter and promotes the new social fabric.  If you find this type of information boring or useless I understand, but it fits my trading situation.  However, I will trim and prune the positions using the following parameters:

LNKD broke out of a month long consolidation on killer earnings.  Today’s selloff certainly seems overdone.  I expect to see buyers continue their campaign in the name tomorrow.  The past resistance near $110.00 could certainly behave as support now and I’m eager to buy any strength down here.  However, I dread a reentry into the previous range and consider ~$107.50 where I lose interest and sell the name, short term.

TRIP was a buy into the close today and is of interest to me on any strength tomorrow.  The stock could receive some pin action from the PCLN earnings due out later this week.  I consider $38.33 significant and expect the area to behave as support.

P is catatonic and attempting to bore all speculators to death.  Beware.  The stock was oversold, but is yet to see any significant snap back action and is instead frustratingly flat.  Many traders want to see it trade into the $10.00 region and I consider ~$10.14 where I will take my first scale should we see upward price movement.  I’m willing to stay long the name as cheap as $7.54.  Beyond that price it could become an even bigger bargain, but I will watch from the sidelines.

YELP is range bound with s slightly bearish bias.  It’s bracketed between $23.50 to the upside and $20.50 below.  Watch the markets behavior at these goalposts for insight into future direction.  I love the product and name.  But I would consider getting lighter in the name around $24 if the upward momentum continues to wane and would certainly take profits at a second visit to ~$30.

NFLX needs a higher low badly.  Not quite as oversold as it was back on 05/02 and still demonstrating bearish tendencies.  I’m not trying to get cute on this one and will cut it below $71.15.

Z looks great.  Not adding at the levels but watching for continued strength.  Price may hang out between 41 and 37 for a bit but exhibiting excellent strength.

PCLN started looking bearish after a strong morning.  I’ll cut below $733.

ZNGA oversold, churning.  Seems to be attracting buyers anytime it breaches $8.  Could go either way.

GSVC needs to hold $18.25 otherwise we could see it trade down to high $16’s again.

UPS looks bearish with a series of lower high lower lows.  Be very patient building into this name.  Not interested in any more purchases unless strength seen below $76.75

I know these thoughts are fragmented, but they will keep me on track this week.  Happy trading gents!

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Did you see how I did that?

There is a reason I am frank when iterating this message.  I’ve seen this play out before.  The changing of the guards if you will.  A movement away from laptops and computers is happening on a global scale.  Yes, you and I will always have our workstations with five boss Rick Ross oversized Sammy’s staring back at us.  But we’re freaks, exceptions to the masses, and data synthesizers.  But our children will never have to own a computer.  They only need devices.  And even our current devices will be short lived.

The fabric of human interaction is changing and it’s no longer some “Physics of the Future” dreaming by some college student who legged too deep into an LSD position. Humans are no longer chained to wires and heavy machines.  The pads have become light and elegant.  With the changing of the hardware comes a changing in the software.  Remember getting your software in a fucking box, from BBY?  How about getting an AOL disk mailed to you every week?  I had hundreds of those.  Yep that’s a dead model.  Everything is on the interwebs.  Now imagine all that storage space from disks and local drives going away.  Where does it go?  I’m not sure but RAX seems to have a pretty good handle on big data.  If anyone’s going to innovate up to some space age storage shit I’ll wager it’s them.

Believe me, I know you’re all smart people and much of what I’m writing is old news, but it boils down to the core element driving my conviction.  Put simply, the fabric is changing.  Walls are tumbling down.  Experts and their opinions are waning in importance.  You’re only as good as your last communication, if you will.  THIS IS FUCKING DISRUPTIVE.  This is what ushers in the new millionaires and sends the stubborn to their final commode to shit away their final earth existence.  Those who collaborate and improvise most effectively will prevail.  Those words aren’t mine.  They’re Darwin’s.

So what does it all mean?  It means forget about getting on Stocktwits and talking (read bitching) about valuations and companies not making money and instead focus your attention on the disruption.  Corporate pump and dump?  Give me a fucking break.  I’m the expert now, get it?  And until it’s proven otherwise, until I start making lots of stupid investments and losing shit tons of coin here in the GODLY HALLS OF iBC (GHiBC) and on Twitter, I’m just as important a resource as Mike Moe running GSVC.  The same goes for YELPaholics or addicted day TRIPpers.  These normal, unsuspecting people drive traffic to businesses.

I’ll be the first to admit when I’m wrong.  Like how I top ticked NFLX today, my worse trade of the week.  Everything else has been tier one over @twosmuth.  I look forward to the ride.  Ride with me gents.

Social and tech I’m long, by weight: LNKD, GSVC, P, YELP, NFLX, Z, TRIP, UPS, ZNGA

I have 40% cash on hand because I got light into several earning calls.  See how small that ZNGA position is?  I want more, until I don’t.  I also want more TRIP, Z, & P.  I’ll be watching PCLN too.  I’ll be adding to LNKD on dips. Fuck I want more Yelp too pal!  However, I’ve gotten burned by not being all ferret like with my trades, so I must constantly prune and trim, prune and trim.

Rest well this weekend.  Talk with people face-to-face.  Plant an arborvitae.  Pet a dog.  These interactions are important and keep us human.

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I came into this week with a full docket. Many of the names I’ve been accumulating had earnings this week. My thesis was and continues to be, if it has Facebook/Twitter integration and works decent on the iPhone or if the company in general promotes a social online experience YOU BUY THAT SHIT. Period. Thus I came into the week long a whole slew of names including reporters TRIP, Z, YELP, LNKD. DDMG had some circus sideshow also. Seeing as I dictate most of my purchases and sales on general supply and demand as seen in price action, I picked my spots to get light the names pre earnings. However, I like the thesis and wanted to see the names through earnings in a way I could manage risk.

For those keeping score at home, I went 3 and 1. LNKD. just. crushed. You want to know a nasty little secret? I don’t use nor like LNKD. It reeks of boring corporate monkey talk (no racism). But I made an account, like four years ago. And I get an email about once a week which I immediately discard.

Regardless, these equities are the key to making fortunes. I’m simply sure of it. Facebook IPO will mark nothing. This week marks everything. These companies are turning your clicks, your interactions, your fucking thoughts and muses into money. Lots of it.

The conference calls are filled with laughter and panache, and tech is going on a buying spree. Zuck’s going to make a BILLI in one day. The monies out there gents, are you man enough to take it?

How apropos, my 50th post comes on the advent of the new layout. Cheers Senior Tropicana, and thank you for the best stock pickers site on the interwebs.

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I listened in on the 1pm conference call from DDMG this afternoon. Below are the notes I consider significant:

John Textor and Ed Ulbrich on the call.

Regarding Coachella:

90k people getting their minds blown all at once

Two months to create digital recreation of 2pac

2pac album sales increased 500% after show

1500% gain in Hail Mary CD sales

2pac website traffic increased 500%

Take stage as new form of entertainment.

Want gross ticket and vendor ownership, consider this revenue scalable

Regarding future business prospects:

See opportunity in Vegas

Unique and efficient model, don’t need to build lavish sets, projected environments can be 3D

Bring live and virtual performers together.  Concerts and Broadway theaters as huge opportunities

On the past:

80 films, 8 academy awards only 100M in revenues

Holy Grail of artistry is digital human animation, pioneered breakthrough with Curious Case of Benjamin Button – protagonist is computer from the neck up during first half of film

Then perfected on TRON with young Jeff Bridges standing next to The Dude (old Jeff Beezee)

Lots of irons in the fire:

Soliciting military contracting to build simulations

Medical simulation development

Building a school in Abu Dhabi to train low cost Indian labor (to then work for them?)

“backlog” of co-production, entertainment ideas

Opened a Pixar like studio in Florida

Company talent:

Hired Ray DuBois as Sr. VP to handle the Pentagonal bureaucracy of landing military contract work

My Summary:

Overall I think the company is exciting, and it’s nice to get some additional transparency via today’s non-earnings conference call. Whether or not it was an attempt to pump stock price I don’t know, the stock is selling off this afternoon and I took half my profits home above $9.00 mid call. However, if they stick to their long-term goal, the company will find its way into many of the future’s newest technologies. As Ed stated, “…just focus on making human beings.” and the business will grow. Apparently rending human hair is one of the most time consuming efforts, but they alluded to a possible Jimi Hendrix performance.  2pac was easy, bald.  Hendrix had plenty of hair, but they could have an easy time rendering the ‘fro:

http://www.youtube.com/watch?v=UVfoDO05xWM&feature=youtube_gdata_player

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It pays to not try too hard on consolidation days like today.  Many traders on the stream this morning called for a trend day lower.  Instead of seeing further distribution since the morning gap lower the indices have been chopping around.  My portfolio, titled “AppLand3000”, saw a mixed bag today with most stocks lower.  Relative strength standouts were YELP and TRIP.

The TNA I added during the late Friday trade is causing some pain, but the underlying thesis stands.  I will continue holding the position and will only consider stopping out if TNA closes down in the low $58’s aka back in the April range.  The only other pruning today consisted of selling some PCLN and using said proceeds to add to YELP.  I really want to see YELP regain the $23.50 level to consider the price action constructive.

P, ZNGA, UPS, & RAX aren’t cheap enough yet, but I want more.

Before tomorrow’s AMC earnings in TRIP I intend to lighten my position a bit.  I will hopefully be doing the same with YELP and LNKD later this week.  However, the names I’ve laid out during my past two posts will continue to demand my attention and speculative dollars.

In the meantime, DDMG is trading in its own world.  Call it trader space camp.

 

 

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