Putting a Plan into Action

Futures are pointing to yet another lower open. Shares in China are getting hit on a daily basis and European stocks are at 3 week lows. Basic material stocks are vastly underperforming the S&P and risk appetite seems to be waning. Having said that, I don’t give a shit. Stocks are going to trade up, by hook or crook. The only question is: what sectors can I find the best return?

I see people are buying tanker stocks because of dry bulk shipping rates. Well, frankly, that’s retarded. The only reason why the shippers are doing “okay” is because record amounts of tankers are being scrapped for its metal. On top of that, coal volume is down sharply. Until the steel industry comes back, spurring a boom in the met coal stocks, I want no part of the shippers. They’re all connected.

I still like high end retail, due to its unique position away from the lower class. I own BID and JWN–and will add more on dips. As a matter of fact, being fully invested, I have but two choices with regards to my positions: add to them or buy more.

Generally speaking I cut losses at -10%. However, if I really like the idea, I will double down at -10%. In many ways, that is the crossroad for me. Other times, I will sell out of a stock when it is just 5% below my basis, specifically for names that I have little confidence in. At the moment, I am up significantly in YELP, but down slightly in MAS and GLW and flat in TDC, JWN and BID. I am down 18% in CPST– but continue to hold for superficial reasons.

At the top of my buy list is RAX, BID, ADTN, ULTA, KKD and TRIP. Also, should the market become OVERSOLD, gold and silver will jump to the top of my buy list, due to the high correlation between market bottoms and the miners. Within the space, I like AG and EXK.

Social media stocks are great, especially with Facebook set to ipo within 60 days. Understand something, that will be the grande finale of this run. It’s very possible that the market will top out with the FB ipo, which means social media stocks should be sold into the Facebook ipo. Nonetheless, I believe there is more upside in the space before they top. My favorites are YELP, TRIP, BV, BCOV and YNDX. OPEN, TZOO, CTRP and OSTK are also interesting, if only from a short squeeze point of view.

During the course of today’s trading, I am going to research some new names, perusing over the April seasonality list inside of The PPT, plainly ignoring the temporary weakness that has the ursine crowd circle jerking again.