60% Cash

I changed my mind. I went to a full cash position, selling out of a variety of names, including Corning Incorporated [[GLW]] , IAC/InterActiveCorp [[IACI]] and Chipotle Mexican Grill, Inc. [[CMG]] , amongst several others. This is as cautious as I can get, without going short.

In the meantime, I will sit here and THROW, mind you, hot slices of pizza at my trader/servant, while praying to the stock Gods for a SEVERE, and entirely unexpected, decline.

On Thursday, iBankCoin will celebrate its 2nd birthday—much to the chagrin of my detractors. The gates and walls of iBankCoin are tall and the enemy is not afforded siege weaponry, no towers whatsoever. So, you over there in the pink sweater, don’t even think of testing my high spirited demeanor, for I will knock your eyebrows clean off your stupid mug.

The market is going lower today. Therefore, you are better off playing with idle sticks of dynamite today, than messing around with your watchlists. How do I know this?

Answer: Because I do.

Always remember, “The Fly” wins all the time, even when Flotek Industries, Inc. [[FTK]] is trading below $2.

Today’s advice is simple: go eat a sandwich. Seriously, get the hell out of here and order something Italian.

I’ll be back later. I am very, very busy.

I am noticing a theme, in recent weeks. Big oil is not spending money, despite $80 oil. I know, many of you millionaires out there will chastise me, saying “that’s because the economy sucks.” Wrong stupid.

Historically, big oil is known to commit blunder after blunder, until they find themselves in receivership.

Fluor Corporation (NEW) [[FLR]] announced bad numbers last night, blaming it on weakness in oil and gas. A few weeks ago, National-Oilwell Varco, Inc. [[NOV]] said business sucked, for lack of a better word. If you have some time, go through the earnings reports of some oil/gas parts makers; they are terrible. It’s almost as if these morons were operating in a $10 crude environment. In all fairness, I suppose they were simply flabbergasted by last year’s $140 to $30 oil slope to hell. Now, these paranoid 10 gallon hat wearing hillbillies are hoarding cash.

Also, small cap tech is really coming up short this earnings season. From [[RAX]] to TriQuint Semiconductor [[TQNT]] to TeleCommunication Systems, Inc. [[TSYS]] —buyer beware.

The one leg of my thesis that I feel most confident with, at the present, is foreign stocks. They have been kicking Uncle Sam in the nuts for some time now. God willing, they will continue to do so, AND MORE.

On a pullback, I like POSCO (ADR) [[PKX]] , Ctrip.com International, Ltd. (ADR) [[CTRP]] and Aixtron AG (ADR) [[AIXG]] . I’ve been waiting to buy the LED parts maker, Aixtron AG (ADR) [[AIXG]] , for awhile now; but it just won’t go down.

Bottom line: be careful with small cap oil into earnings, for big cap oil is really stupid and cheap. And, as always, pray for the market to dip again, so we can get some pristine entry points. As you know, I am 40%+ cash, at the moment.

Never question my market hand again. Ever.

Into today’s victory, I took profits. My cash position is north of 40%. My year to date gains are back to highs, about +85%.

Two stocks on my “must buy list,” providing they dip, are : U.S. Global Investors, Inc. [[GROW]] and Green Mountain Coffee Roasters Inc. [[GMCR]] .

In a word: WHEREISMYROOTBEER ?

You think you are making a fortune? Try taking your winnings to Italy for a 5 course meal, then tell me how awesome your winnings are. The declining dollar is robbing you of gains, a percent here a percent there. It adds up. Unlike us, foreign countries are enjoying robust currency action, as well as stock market.

A few weeks ago, during the decline, I launched a Foreign Index, for PPT users. During the recent revival of the bull run, my foreign related holdings, such as Ctrip.com International, Ltd. (ADR) [[CTRP]] , POSCO (ADR) [[PKX]] , ICICI Bank Limited (ADR) [[IBN]] , Mechel OAO (ADR) [[MTL]] , Vimpel-Communications (ADR) [[VIP]] , Aracruz Celulose SA (ADR) [[ARA]] , Sociedad Quimica y Minera (ADR) [[SQM]] and CGG Veritas (ADR) [[CGV]] have crrrrrushed my American stocks, reducing them into little yankee doodle cupcakes.

The point: quit thinking the Russians are going to nuke your schoolyard and start looking abroad, since that’s where the growth is. Follow the growth and prepare for volatility.

The Overall Hybrid Scores, under 2.30 and 3.00+, since inception, and how they nail the trading ranges.

Hat tip: RC

If you can look at that chart above, then look at me in the face, via looking at the screen, and say “you’re not a space-alien magician,” then I am wasting my time here. If you are still losing money and/or not participating in this rally, do yourself a favor and go shoot yourself in the face with an idle howitzer; because you are wasting my time, pal. You are definitely better off reading the wordy crap, on some of the permabear aka “idiot blogs” than here.

Let me remind you, I don’t care what our government is doing or what wrongdoings the Godly folks from Goldman Sachs Group, Inc. [[GS]] commit. Like Goldman Sachs Group, Inc. [[GS]] , iBankCoin is doing God’s work, by helping you, the internet moron, make some money in the market. Essentially, we try to even out the playing field, sort of how a life-preserver works wonders for people trying to swim, without the luxury of arms.

As an aside, there is an old saying in the newspaper business: “if it can’t be said in 7 words or less, it should not be said at all,” pertaining to headlines. I strongly advise many of you “third tier players”  adhere to such words of wisdom, for you are looking like regular jackasses.

At any rate, if I may, I sold a variety of stocks. For the record,  I sold half of Mechel OAO (ADR) [[MTL]] @ $21, all but 1,000 shares of POSCO (ADR) [[PKX]] north of $116.90,  75% of my Jarden Corporation [[JAH]] position north of  $27.35, half of Ctrip.com International, Ltd. (ADR) [[CTRP]] @ $63.30, half of Equinix, Inc. [[EQIX]] a touch under $96 and all of my TEKELEC [[TKLC]] because it simply is not working.

My cash position is now about 40%.

Current positions worth noting are: Flotek Industries, Inc. [[FTK]] , ICICI Bank Limited (ADR) [[IBN]] , Ciena Corporation [[CIEN]] , Equinix, Inc. [[EQIX]] , [[ENTR]] , Corning Incorporated [[GLW]] , [[MWW]] , IAC/InterActiveCorp [[IACI]] , Aracruz Celulose SA (ADR) [[ARA]] , Vimpel-Communications (ADR) [[VIP]] , CGG Veritas (ADR) [[CGV]] and Chipotle Mexican Grill, Inc. [[CMG]] .

In short, I did the heavy lifting last week, by buying stocks when it was unpopular. Today is easy, rewarding myself through profit taking. I will reevaluate my positions/thesis and prepare for another round of market mastery.

More on this later.

NOTE: The Overall PPT score is….(Oh, that’s for subscribers only, pal. So sorry).

UPDATE: I sold out of DryShips Inc. [[DRYS]] @ $6.27

I’m as serious as a three piece suit this morning, so don’t mess with me.

When the market was collapsing, I was shorting Legg Mason, Inc. [[LM]] , Pzena Investment Management, Inc. [[PZN]] and Calamos Asset Management, Inc [[CLMS]] , mainly because they were idiots of the first order, victims to all things sinister. However, the inverse is true today, with the market 60% off its lows. Buying good asset management firms, instead of the actual mutual funds, has proven to be a better strategy, mainly because the asset managers know how to use glossy brochures to lure new investors into their “investment vehicles,” which in turn leads to greater earnings.

Big firms like BlackRock, Inc. [[BLK]] , Ameriprise Financial, Inc. [[AMP]] , Janus Capital Group Inc. [[JNS]] , Franklin Resources, Inc. [[BEN]] and Invesco Ltd. [[IVZ]] have been killing it this year; and it shows in their stock price performance.

Sometimes I like to get niche, so here goes. Take a look at U.S. Global Investors, Inc. [[GROW]] —small asset management firm out of  Texas, specializing in commodities—specifically gold. They are not a big firm, which is why I like them. Their biggest fund (PSPFX) has $681 million under management and is up 54% year to date. They have three other funds worth noting (USREX, UNWPX, EUROX), with year to date gains of 33%, 64% and 63% respectively.

Some of their top holdings include: PetroChina Company Limited (ADR) [[PTR]] , Petroleo Brasileiro SA (ADR) [[PBR]] , PartnerRe Ltd. [[PRE]] , Freeport-McMoRan Copper & Gold Inc. [[FCX]] , Rio Tinto plc (ADR) [[RTP]] , [[GOLD]] , [[JAG]] , Royal Gold, Inc. [[RGLD]] , Agnico-Eagle Mines Limited (USA) [[AEM]] , AngloGold Ashanti Limited (ADR) [[AU]] , Gold Fields Limited (ADR) [[GFI]] , Goldcorp Inc. (USA) [[GG]] and Silver Wheaton Corp. (USA) [[SLW]] .

The stock, U.S. Global Investors, Inc. [[GROW]] , has been an underperformer, due to some investment mishaps in the past. However, looking at their roster of holdings, coupled with their impressive, albeit non-space alien magician like, returns, the stock may continue its upward path, providing the market remains healthy.

For a small capper, it’s not a bad investment.

In other news, the market is melting up again and I have some trades to do.

Some people scoff at anecdotal evidence; I embrace it. If you paid close attention to grocery store trends, you would have caught Hansen Natural Corporation [[HANS]] before the monster move up—pun intended. Over the years, there have been countless winners in the food/beverage category, most of which have been acquired by food/beverage giants, like PepsiCo, Inc. [[PEP]] , The Coca-Cola Company [[KO]] or Kraft Foods Inc. [[KFT]] already. I am kicking myself for not paying attention to the coffee isle at the grocery store. I blame my ignorance on Mrs. Fly’s insistence on shopping “organic” at Whole Foods Market, Inc. [[WFMI]] . In order to stay in tune with the proletariat, it’s essential to eat their food, even if it shaves years off your life expectancy and gives you cancer.

What do I speak of?

The K-Cup.

Many of you are familiar with “The K-Cup,” made by Keurig, which is a wholly owned subsidiary of Green Mountain Coffee Roasters Inc. [[GMCR]] . However, what you don’t realize is how popular this thing is becoming. They are selling the K-Cup everywhere, from [[LOW]] to Wal-Mart Stores, Inc. [[WMT]] to your local grocery store. And, many of the big coffee vendors are producing single cup servings, that can only be used in the Keurig. Do you follow me?

Green Mountain Coffee Roasters Inc. [[GMCR]] has created a monster brand, not only owning the hardware, but they also sell Tully’s coffee an their own brand Green Mountain Coffee too (both supply K-Cup lovers with great coffee).Mark my words, soon enough, Starbucks Corporation [[SBUX]] and Dunkin’ Donuts will produce single cup coffee (for the Keurig). Other publicly traded companies that make single cup coffee are [[DDRX]] and [[CBOU]] . Other non-K-Cup producers worth watching, in the event they get smart, are [[FARM]] , The J.M. Smucker Company [[SJM]] (Folgers) and of course [[SBUX]].

As you know, [[PEET]] just acquired [[DDRX]] (K-Cup producer) . As a result, it is likely that [[PEET]] will enter the single cup coffee market in a big way, being the biggest retailer of coffee on the west coast, with 32% market share.

For every K-Cup sold, Green Mountain Coffee Roasters Inc. [[GMCR]] makes .06. However, for every in-house  cup (Green Mountain and Tully brands) sold, they make .12. The company is enjoying upwards of 60% revenue and 120% in net earnings growth; and the stock is not expensive, based upon 2011 estimates of $2.30—which is a low estimate. In early 2010, the company will embark on a number of licensing initiatives, with Cuisinart and Jarden Corporation [[JAH]] (Mr. Coffee) to sell single cup coffee markers, using the patented Keurig technology. This market is going to explode.

As an aside, The Hain Celestial Group, Inc. [[HAIN]] is the only company producing single cup tea for the Keurig.

At the present, the company does not have strong west coast capacity. However, it is believed that the acquisition of [[DDRX]] by [[PEET]] will pave the way for K-Cups in most of the 8,500 grocery stores [[PEET]] sells coffee in.

GMCR’s coffee maker market share shot up to 17% from just 7% last year; and it will continue to rise, as other coffee makers surrender to the Keurig and enter the K-Cup market. Additionally, in 2010, a whole new wave of single cup coffee maker brands will emerge, all licensing the technology from Green Mountain Coffee Roasters Inc. [[GMCR]] .

If Starbucks Corporation [[SBUX]] was smart, they’d buy Green Mountain Coffee Roasters Inc. [[GMCR]] for $85 tomorrow; but, unfortunately for SBUX shareholders, they are not.

Clarification: Someone mentioned a competitor of the K-Cup, named Tassimo, in the comments section. [[KFT]] owns the “t-disc” and has been getting shellacked trying to compete with the K-Cup. They have lost 100’s of millions trying to sell the device, to no avail. [[KFT]] is the distributor of [[SBUX]] single cup coffee for the Tassimo and other SBUX related products (the crap you buy in the grocery stores). So, the likelihood of SBUX making a K-Cup, over the short term, is somewhat limited. However, it is my belief, the K-Cup will drive the “T-Disc” out of business, effectively allowing SBUX to make K-Cups. There I said it.

Savage said it best. Enjoy you crazy-brained liberals.

Going with O’bama-logic, over my career, managing money for affluent people running businesses, I’ve saved jobs. There is no way to quantify how many jobs I saved. However, I will tell you, being up more 140%, over the past two years, “The Fly” is a robust instrument of economic stimulus.

In an effort to switch things up a little, I offer the following advice: play the $100 rolls. Play them like the wind and sand, with no less than 100 grand.

Top roll candidates are:

Precision Castparts Corp. [[PCP]] , Apache Corporation [[APA]] , Mettler-Toledo International Inc. [[MTD]] , Bio-Rad Laboratories, Inc. [[BIO]] , W.W. Grainger, Inc. [[GWW]] and Equinix, Inc. [[EQIX]] .

Also, fall in love with fat crazy burritos again, via Chipotle Mexican Grill, Inc. [[CMG]] .

When in doubt, bet on Korean steel, via POSCO (ADR) [[PKX]] . I can go on and on.

The message is: this is a long only market, until things change. We are on a very predictable path; don’t try to be a rocket scientist—betting against the herd because it’s cool. It’s not cool to be flat broke, without a house—-jackass.