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
23,445 Blog Posts

The Problem With Shorting

You can’t depend on anyone to do anything right. So, with that in mind, don’t rely on people to sell stocks, despite the low [[vxx]] levels. The problem with shorting is people are fucking insane. They will keep bidding stocks up, no matter what, until they die. Believe me, coming from a guy who successfully traded the dot com bubble, until its sweet end, shit can get very irrational, before you can start to look smart again.

Thanks to the melt-up, risk is back on the table, which means [[TLT]] will give back. However, I want you to keep note of the fact that my “big set-back” is merely 1%. That’s what you call a “low-beta” trade—one that does not rape you either way.

I’m still making coin today, just not as much as folks like Henry Fool, at least percentage wise.

My current positions include: Flotek Industries, Inc. [[FTK]] , U.S. Global Investors, Inc. [[GROW]] , Brocade Communications Systems, Inc. [[BRCD]] , Citigroup Inc. [[C]] , [[CBD]] , Equinix, Inc. [[EQIX]] , GlaxoSmithKline plc (ADR) [[GSK]] , ICICI Bank Limited (ADR) [[IBN]] , Jarden Corporation [[JAH]] , POSCO (ADR) [[PKX]] , SandRidge Energy Inc. [[SD]] , Sociedad Quimica y Minera (ADR) [[SQM]] , Silicon Storage Technology, Inc. [[SSTI]] , [[TAN]] , Teva Pharmaceutical Industries Ltd (ADR) [[TEVA]] , [[TLT]] and Visa Inc. [[V]] .

With my sidelined, pussified cash, I will just—sort of—wait this market out. You know, it’s important to note, if this was 5 years ago, I’d be buying stocks with the fervor of a gorilla in a banana tree. With age comes discipline. In a way, I have more respect for money, especially after the credit crisis.

Anyway, try not to fuck yourselves, stepping in those murderholes. I know many of you are killing it with spec trades, great fucking job. When you little fuckers become billionaires and the apocalypse hits (2012), don’t forget to buy Le Fly a seat on one of those arcs. I’d be very much interested in a 1,000 square foot room, with incandescent lighting; fuck that LED shit—FYI.

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60 comments

  1. Fig

    Fly… How was 10,500 an acceptable level last year (your own forecast) but now its fucking crazy?

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  2. Cash Is King

    April fas puts looking good right now.

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  3. Rand

    And god asked noah, “how long can you tread water?”. I’ll take an a seat on the inside please. I hope the boat has peanuts, so many boats do not have the civilized pleasantries. But we will not have to worry about alcohol on this trip though.

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  4. Itchy & Scratchy
    Itchy & Scratchy

    Agreed. I never did like the idea of LED lights on the ark.

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    • JakeGint

      Maybe he wants “arc (sic) lighting?”

      LED’s are necessary on the ark, unless you have a plutonium reactor fueling that sucker.

      CREE is flat today, interestingly enough.

      _______

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  5. J

    When you little fuckers become billionaires and the apocalypse hits (2012), don’t forget to buy Le Fly a seat on one of those arcs.

    Flymeister:

    This is so 1994. The one huge concern I have is the federal debt level. I know you don’t like politics and think the parties are the same. However I think the GOP has learned some serious political manners here and will do what it can to save the country from ruinous debt. Come the mid terms they will put a lock of spending. Add a compliant Fed and we see the same monster rally we had in the latter part of the decade.

    This time they’re ALL playing the monetary game even harder. The Japs the Eurotrash and the US.

    Recall your 20,000 Dow and $100 tomato scenario? We’ll also have a 100 Euro and whatever Yen tomato.

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    • Honey the Alchemist
      Honey the Alchemist

      The GOP is not going to do anything worthy, except sell Tchotchkes to donors of the whale species. These purveyors of ball point pens and key chains (embossed with the American flag, of course and a nice quote from Tobe Keith, naturally) will drive the last nail into our collective coffin. They will spend us into oblivian just like the people who worship the donkey. They will just do this of course without all of the bull horns and purple buses and acorns that accompany those who believe in uniting shoulder to shoulder in fields of fluffy white rice. They will also be better dressed and smile more. And we will feel good about it as we huddle around the fireplace and listen to women on the radio who ride caribous and hunt bears, that are married to snowmobile mechanics, telling us tales of old men from Arizona who brought you our first Kenyan president.. These noble things you speak of will never happen. Yea, sure, raising rates and pulling back the zimbabwe bucks are all great ideas of the fucking highest order, but we will have none of this! We are Americans and we need healtcare (and, cocaine)!

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      • mrkcbill

        HTA +1

        I prefer to experience Armageddon in a black tux!

        I think politics is going to rally the shit out of things…..damn if they do and damn if they don’t….Obama is going to goose this thing one mo time. Tea Baggers will keep things in gridlock….were going up!

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      • J

        In the first 4 years they will and then they will go nuts. However there’s a really fucking interesting thing going on. The libertarian strain is hitting the GOP and offering them a life line they may just take up. This movement is 15% of the US electorate. They are committed budget deficit busters.

        The move to the GOP in the north east is hugely impressive. When they stop talking about abortion and school prayer but instead focusing on spending they can win in the north and the types that look like gaining ascendancy are the spending cutters and small government believers. They will simply freeze spending.

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        • Honey the Alchemist
          Honey the Alchemist

          Wrong! The GOP will do nothing other than start a new war with Iran over where the Jews can open a new trailer park in Palestine and give prescription drug benefits to English Pointers and Poodles by telephone from their ranches in Waco, Texas. They will also figure a way to ship what remains of our manufacturing sector to those in India who wear headsets and offer good, but hard to understand computer advice.

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          • mrkcbill

            HTA……start postin in PG….! funny

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          • J

            Yea?

            They have opposed every single spending policy the Demolition party have put up to a man.

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          • Honey the Alchemist
            Honey the Alchemist

            I am sorry J. You are incorrect, sir. You are allowed to have your own opinion, but not your own facts. In other words, you can own burlap plated goggles, but you are not allowed to wear them. Senator Bunning from KY said last night on TEE VEE that not one GOP Senator truly supported him. Yep, there was some specious saber rattling, but overall they (GOP) are nothing but earmarkers of the most egregious kind and we need a change in personnel. Here’s the link. Watch and learn. http://www.youtube.com/watch?v=hbFj5zs8bbA

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          • J

            So what. That’s all smokes and mirrors. One senator can stop the spending train so you don’t need the entire party up there to hold it back. I think that’s a pretty smart move.

            Every GOP congressman is supporting Bunning on the QT.

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          • Honey the Alchemist
            Honey the Alchemist

            Ok, then, let’s talk about or “Oprah Couch” what needs to happen, J:
            1. We need Velocity! Or, as those from the CNBC Hollywood Square boxes (they are up to eight, now. Amazing! Eight guests talking all at once about nothing important whatsoever) say “we need the banks to lend”;
            2. We need Immigration Reform. Its impossible to negotiate with the Latin version of Edward Scissorhands to go any lower than the cost of gasoline for a lawn manicure, so this extra unwanted competition needs to take their lawn equipment go back across the border. AND, take your pool cleaning equipment with you too, by gosh!;
            3. We need the manufacturing jobs to return. See #2. In other words, we need to make and sell something other than salt, sugar, hog fat, financial advice and/or pornography;
            4. We need true tax reform in the form of national sales tax. We will disguise it and make it wear GOP Elephant ears and waive the American, calling it a VAT tax, but it will be a regressive tax sales tax nonetheless. Afterall, a poor man never gave me a job and if we put more money in the pockets of the rich, jobs will manifest. Seriously; and
            5. We need to take the blade off of Ben’s helicopter and pull back all of the cash, necessitating a rise in interest rates.

            OK, J. Which of the five do think the GOP can get done? Anyone? Name one. According to you, the GOP will write policy that will turn this bitch around and make us all wealthy in the process. Pssst, J. It ain’t gonna happen! The GOP is addicted to low rates, cheap labor, and NO taxes….

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          • JakeGint

            “No taxes?”

            Another black hat conspiracist. This site attracts them like black flies on a Minnesota lake.

            _________

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          • Honey the Alchemist
            Honey the Alchemist

            C’mon, Jake! That’s too easy! No black here (ok, I once woke up on lawn with a black cowboy hat, but that is another story). My point is simple. The GOP wants to spend and not tax, whereas the Donkeys want to tax and spend. I have been watching this site for years, Jake. You way too smart for such nonsense.

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  6. The Fly

    How will locking down spending cause inflation?

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    • J

      “Inflation always is a monetary phenomena” , a great great man once said. Fiscal spending unless accompanied with money printing financed by borrowing is not inflationary. In fact Barro, an academic economist has presented a very persuasive argument that fiscal stimulus etc. has a less than 1 effect to the GDP.

      When the Congress and Clinton agreed on a budget compromise and hold back spending the Fed was very compliant in its monetary stance.

      Take a looksee at the indices…. the market took off on the day the GOP was signed in, in 1994.

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      • Yogi & Boo Boo

        J – You may have it right on the big picture. In case you missed it on CNBS this AM one of the economists (I can’t remember who, Zandi, Barberra, or Malpass) commented on the relative efficiency of fiscal vs. monetary policy. Basically, fiscal stimulus dosen’t account for much since it’s basically a wash (borrow to spend) but the real heavy lifting would come from monetary policy, which the Fed will keep very loose for the foreseeable future.

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    • J

      And you’re going to probably laugh at this, Le Fly, but here goes.

      The last time the US ever ran with a do nothing policy in dealing with recession was in 1920/21. The Harding administration took an ax to spending to balance the budget while leaving every else alone to adjust. Industrial production fell 42% in that recession, but 18 months later the economy was well on the mend and the economy began to grow at a fast clip.

      The point I’m highlighting is that spending restraint- something the market doesn’t believe will happen anytime soon- will be a huge positive shock. Add in a easy fed and it would be rocket fuel.

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  7. TA

    While betting against the time machine has worked out well lately, morning gap ups suck and we are on our 6th day of gains if it holds.

    It wouldn’t be a bad day to take a few profits.

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  8. Juiceyfruit

    Sir Fly, you are trading with the abandon of a member of AARP.

    I respect that in a yute.

    The Fly works in mysterious ways. 😮

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  9. finclyde

    Fly, are you looking at any uranium plays here?

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  10. SmallFry

    SRS at $7 — FUCK ME

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  11. The Fly

    Stop buying inverse ETF’s you fucking morons.

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  12. SmallFry

    Why? They work.

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    • The Fly

      THEY DO NOT WORK.

      They are fucking tool of the devil, used only for gambling.

      If you want to short stocks, do it outright, without the use of asshole products.

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      • TraderCaddy

        They do work.
        Just can’t hold them for more than an hour or two or three (NEVER overnight) and trade with the intraday trend.
        But then again this takes discipline which is the real holy grail of daytrading.

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  13. BernieCornfeld

    You are still @ 50ish % cash boss?

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  14. TraderCaddy

    Out VXX 24.35 with a little more than a 1% loss.
    My Mama told me not to gamble and she was right.
    Offset a bit by a small gain in SMH although I am eyeing SSG as some of the major chips I follow are just blowing in the wind.

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    • mrkcbill

      Way faster than Eliot Spitzer….

      Have you seen Jimmy Johnson pitching Extense ….better dick pills….hilarious?

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      • TraderCaddy

        What is Jimmy Johnson’s problem?
        I have seen him on television pitching infomercials for foreign exchange trading courses.
        He must be in deep financial do do with real estate in Florida or something.
        I can’t even watch him giving football analysis without laughing.

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        • Teahouse On The Tracks
          Teahouse On The Tracks

          That’s nothing ….. catch him late night doing ExTenze where he claims ” I use it and it works!” ….

          Yeah, the SOB must be going through a nasty divorce or some shit, eh?

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          • JakeGint

            Thought the same thing when I saw him on that Xtenz thing… amazing how credibility works, though, if only for a second…. I actually thought “wtf? Is this actually a REAL product?”

            I mean, how much trouble would one have to be in to pitch a product that makes the Slap-chop looking like a classy piece from Winston Jewelers?

            _______

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          • Yogi & Boo Boo

            Remember, he never said what he uses it for…

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          • Teahouse On The Tracks
            Teahouse On The Tracks

            True, but got me to thinking, “if Jimmy isn’t embarrassed to use it, why shouldn’t I try it” as the discount broker ad says, “for the fun!” …… never hurts to be bigger unless you’re the recipient of anal via the angry bear.

            http://www.screencast.com/users/PedroMM/folders/Default/media/7bb8010e-7917-48f2-8e39-3a52f5626b21

            Ah, so that’s what Jimmy does with it … slipping mickeys “for the fun!”

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  15. SmallFry

    Trading DXD all year. Today is my first miss in awhile, and I’ll probably just buy more.

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    • Yogi & Boo Boo

      Small fry my son – Trade with the major trend and become a big fish. Trade with the counter trend and stay small fry forever.

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  16. OldA

    This market is going to tank this afternoon…overbought, no real jobs improvement, low volume…look out below.

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  17. little2rich4u

    Mushroom cloud your PPT it sucks…

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    • J

      Mushroom yourself, fuckhead. The is king.
      ——————–

      Bears… not that i want to press a point here. But we’re back over 10,500. What do we do now fellas? What should we short to make the big bucks down to the previous lows.

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      • Yogi & Boo Boo

        J- Go ahead press it. It’s fun. I speak for the other half of my bear clan. I say my bear compadre’s start calling for new lows. 666 by June 6. I on the other hand will be sipping a tropical drink by the sea.

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  18. Tradermark

    unauthorized photos of Le Fly’s home office trading setup… shhh! 40 monitors means he is just better than you. Accept it.

    http://www.fundmymutualfund.com/2010/03/his-is-way-bigger-than-yours-one-day.html

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  19. TheArtist

    great picture, is that an iBankCoin Burlap Fashions Boutique store?
    selling the latest in Burlap hand bags for the ladies and Burlap “all season” sport jackets for the men?

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  20. Rip Roaring Bull

    Close the markets – let’s wrap for the week – and what a week! Yes, the depression of the early 20s was not handled by government spending and recovery was fast. The 30s depression may have been like the mother who deliberately harms her child so that she can have the experience of saving the child. Government intervenes and takes over the economy for your sake – just trying to help you, that’s all.

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  21. Frank White

    If we start getting good news i would expect this market to double. Engine room more ZANE and SCOK!

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  22. TMoe

    The problem with shorting is covering
    Them problem with shorting is that most don’t know when to cover or have this problem saying they were wrong and do the smart thing and cut their losses. They hold their short until they are in the Kill zone and go fucking insane. Think Livermore.
    Now the good short sellers are the ones that can see the rotten trees in the forest. They attack with an axe. try to chop it down with a few good swings then if they hit a hard green spot they stop swinging the axe, wait to see if it can heal it self from the chops. It it starts to grow back and completely heal they COVER and look for the next rotten tree, I am not saying rotten only in the context or moral character of the management, but also rotten fundamentals, techinicals, and the human behavioral assepects too. Companies, countries, sectors, currencies, commodities, shit there are rotten looking trees everywhere.
    I have tendencies to go into the kill zone every now and then. I cover to late and take losses. sometimes I will cover at the right time and take gains. But, there are a lot of rotten trees out there that need to be pruned.

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    • Yogi & Boo Boo

      TMoe – There’s a more fundamental problem with shorting that the noobs don’t take into account. When a long position moves against you it becomes a smaller and smaller part of your portfolio. So even an inexperienced person, can withstand being seriously wrong and making major mistakes, as long as they are not risking too much on a trade. If they go “deer in the headlights” no big deal.

      When these same folks short, their problem gets bigger and bigger as their loss becomes a larger percentage of their portfolio. They go to “deer in the headlight” to margin clerk road kill very quickly. The long /short stuff is just not symmetrical.

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  23. Teahouse On The Tracks
    Teahouse On The Tracks

    I’m killing it today …

    PUDA
    SUN
    SMP
    USG
    FRG
    BANR
    RAME

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    • Teahouse On The Tracks
      Teahouse On The Tracks

      FYI: Last nights’ OEW summary – current SPX = 1134+

      “We continue to see the OEW 1133 pivot as an important barometer of what’s next for this market. A breakout above this pivot would suggest new highs from the Mar 09 low. A break down below the OEW 1107 pivot would generate some downside momentum.”

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  24. TMoe

    Not covering GE, LVS, TOL, LUFK, UPL, BAC

    Long ISLN, INFA doing well

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  25. Frank White

    CNBC reports NAS back to 9/2008 levels. Well done. If you just held on you are even. If you bought the dips well, go for a ride in the Bentley vert.

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