iBankCoin
18 years in Wall Street, left after finding out it was all horseshit. Founder/ Master and Commander: iBankCoin, finance news and commentary from the future.
Joined Nov 10, 2007
21,316 Blog Posts

What’s Good For Oil is Good For Oil

Oil stocks are fucking ripping today, with monster gains in [[HOC]], [[DRQ]], [[VLO]], [[TSO]], [[OXY]], [[WNR]], [[FTO]] and [[DK]]. Within oil, refinery stocks are up the most, due to nice gains in gasoline. In my opinion, it’s still too early to load up on the refiners. I’d rather wait until mid March, at the beginning of the “driving season.”

Farm related stocks have gone parabolic, with outrageous moves in [[CF]], [[POT]], [[MOS]], [[AGU]], [[LNN]] and [[MON]].

Without doubt, there is a looming shortage of food. I’ve outlined my food commodity bull case numerous times. However, I believe too much cash is chasing too few stocks, effectively inflating the commodity related names to unsustainable levels. Thus far, buying [[SMN]] has been a fucking loser, thanks to the gains in MON. Nonetheless, I will continue to average in, in order to take advantage of when the fucking wind comes out of the sector. Trust me, at some point, they will break lower.

With regards to the general market tone:

Brokerage stocks are weak, with losses in [[BSC]], [[GS]], [[CS]] and [[LEH]]. In addition, retail related names are weakening, as the morons who manage your money realize that higher commodity prices, at a time when people are “jailhouse poor,” is a worst case scenario.

Don’t get me wrong, I do not wish death and destruction to all stocks, just the ones I am short.

Right now, [[REW]] seems like a low risk short side play, with [[MSFT]] being the largest holding. Keep in mind, MSFT is breaking the bank for a 3rd rate internet company ([[YHOO]]). With all the arb players leaning on Softee’s stock, I think buying REW is a no brainer and a good bet against big tech.

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21 comments

  1. zephler

    You have been bearish on RIMM for a while – is it because you see money managers selling it to free up cash? They have piled into it for years…

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  2. The Fly

    I am still long RIMM too. Essentially, I am both long and short, a rather odd market position.

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  3. kd

    Fly,
    Any updates on MVIS from Roth Conf.? Do you know why AT pulled out from the presentation and send Jeff “I sold my shares” wilson?
    thanks.
    kd

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  4. The Fly

    KD:

    I am long a whole 5,000 shares of MVIS. I no longer keep my ear to the ground.

    Sorry.

    I’ll make a few calls later. Just for you.

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  5. kd

    thanks. much appreciated

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  6. Big Mike

    Man…is it just me, or does anybody feel like shorting oil at $100ish?

    No fuckin way, Ben is cutting when commodities are booming like this.

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  7. CubsRock

    Good post, DUG and SMN look good.

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  8. Shorticus, Demigod of Financia
    Shorticus, Demigod of Financia

    Why speak ye not of the lustrous metals, particularly gold and silver, young mortal?

    Do not get me started upon the wonderous opportunities in the burgeouning frankincense markets as well!

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  9. Brother Lehman

    Challie!!

    Chaaaallllieeeeeeee!!!!

    Dey cut off my ‘tumbs Chalie! That fuckin’ Eddie da Bedbug cut off my tumbs!!

    Chaaaaallliiieeeeeeeeeeeeee!!!

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  10. Brother Lehman

    Eric Robert’s last (and only) great role:

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  11. Brother Lehman

    I misremembered… it was only one of his ‘tumbs.

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  12. calvino

    Steve, we need to talk. Pick your little balls up off the floor before you leave, and clean up the fucking blood.

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  13. Eddie the Bedbug

    Too late, I ate the fuckers.

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  14. The Fly

    Fly wins again. Multiple wins recorded in today’s fuckfest.

    Developing…

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  15. Dirty Bill

    Hey you goat fuckers and I mean it literally. There is no way this Bull(shit) Market can last with increasing raw material/input costs. Unfuckingbelievable.

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  16. calvino

    That may be. But how many shares did you short on bsc friday, when I expressly said I was selling three?

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  17. BOOMER

    This was emailed to me:

    http://finance.yahoo.com/tech-ticker/article/2565/Google-Filing-Warns-on-Near-Revenue-Growth

    Thought you stock traders might find it interesting.

    Back to my previously scheduled observance of Lent…

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  18. Steve

    Calvino, what are you babbling on about?

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  19. Juice

    fm minyanville – pay heed

    A potentiall very taxing situation develops.

    The Auction Rate Securities market has certainly taken center stage. As well it should. There are hundreds of billions of dollars of ‘cash equivalents’ that may just have become long term bonds.

    Let’s say that you bought ARS with intent of rolling them until April 15th to make your tax payment to Uncle Sam. April 15th rolls around and you still can’t get your principal. What do you do?

    You sell something else. Like other bonds. Or stocks. This is a real-life, really big problem.

    If you are stuck in these securities, be prepared to be in them for a while. The ones with 10-20% yields are attracting buyers, but the lower rated ones could take a very very long time to ‘clear the market’. And it still brings into question the values of the munis in the open and closed end funds, not to mention ordinary brokerage accounts as I alluded to the other day.

    I can see a large markdown coming soon. And this one will hurt.

    I just received today’s results of Auction Rate Securities. It’s interesting how the market is already becoming bifurcated. Every single retail deal failed. The reason is that the maximum rate on most of these deals that back closed end funds caps out in the 4.5-5.5% market. So if you want money from those, I wouldn’t hold my breath.

    The auctions that are getting done are mostly hospitals and schools with rates averaging 10%. So they are not a technical failure, but there are plenty of sad Treasurers around the land. This problem is bigger than one might think.

    Imagine you’re the issuer and you budgeted for 3% funding, not 10% funding. Profit margins and profits shrink, increasing the debt deflation.

    I continue to think this problem won’t go away anytime soon and that it is far more dangerous to the economy than many think. With Treasuries getting smashed, watch for municipals to follow suit.

    Possibly dramatically.

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  20. alphadawgg

    Juice,

    CEF managers will be forced to sell munis at distressed prices to unwind the ARS issues.

    Every single one of those investment banks that refused to backstop the ARS auctions should be shot and their stocks taken down….with extreme prejudice.

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  21. nncoco

    10-20% bonds? That can’t all be junk. Sounds to me like some good investments may be getting thrown out with the bath water. This could a huge buying opportunity.

    I do recall my father buying 10-12% bonds in the late 70’s only to find out decades later that they had been recalled. He had to sue to get his money. Not sure if he won or lost.

    He is a lawyer and tends to get cash settlements where normal blokes like you and me would get the shaft.

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