If you are reading this post late at night, you are looking for answers, clues if you will, regarding the stock exchange. Mysteriously, AAPL has transformed from an autobot to portfolio decepticon, ripping through pension funds across the planet in a BIG CAP way. At the same time, earnings have become something to be shunned, because of the onerous nature of the misses. If you do well, TRIP is your fate. If by chance the quarter is less than stellar, you might find yourself OPEN to some capital losses.
I don’t want to talk about my oversized position in YELP because it wasn’t supposed to play out like this. I was overweight and the stock spring-boarded higher by 50% in 3 days. For whatever reason, I never took profits and bought more as it went lower. The biggest fuck up about this strategy is the share volume seized up, effectively shutting the door for me to make an honorable exit. If I were to pare my position, it would certainly hit the stock.
On top of that, I now find myself in the untenable position of having close to 30% of my assets in a single name that is about to report earnings for the first time as a publicly traded entity.
I hope you appreciate the gravity of the situation that I find myself in.
Although I love YELP, as a product, I have no way to gauge it as a business, just yet. My favorite social media companies are TRIP and YELP. TRIP reported a stellar number this evening, let’s hope YELP does the same. Again, I have no edge going into this report, totally exposed from the superfluities of their fucking CEO, Jeremy Stoppelman, who reminds me of a nerdier Einhorn- if at all possible.
My options are limited: delve into the options market and buy illiquid put contracts, pare down my position tomorrow or ride and/or die.
This is why I opted to bulk up on old man stocks, paying big dividends, in order to offset the insanity of my YELP position. Just so you know, the month of May is a particularly onerous one for the markets, one that favours the stability of conservative/defensive stocks. In The PPT, I just posted the seasonality report for May. Go check it out.
One way or another, the market is set to make a big move in May.
Just in case you were wondering, in the month of April, the S&P traded down 0.64% (the first down month of 2012), while the nasdaq traded down more than 1%. In 2011, the nasdaq traded down 1.2% in May and in 2010 -7.5%.
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I am here because I am so fucking brain dead from my day job. Question is do I want the blue pill or the red pill.
May is a very strong month seasonally, conventional wisdom on this is complete hogwash.
http://quantifiableedges.blogspot.ca/
It is a marginal month. S&P avg gain is just 0.98%
Here is raw seasonal data for SPY
May 0.989 19 11 (57.89%) 8 (42.11%
Avg return is 0.98%, win rate is just 57%
go with God homes – said before on twitter “this is the only recent social media company that has an actual takeover value” – it’s an ideal bolt-on, and for what the unitards at AOL paid for huffpo i like your odds at $1.3B –
Is YELP reporting before market opens or after it closes?
after
Thanks. Gonna be an interesting day. Good luck to all.
The day I ever dared offered advice to Senior Fly would indeud mark the first days of the Apocalypse. Therefore, I have none. That said, I will focus both my brain cells on “willing” YELP higher tomorrow. God speed, good sir.
Sell 1/2 your position size in OTM calls right at the close. Just an idea but that’s not Le Fly like. Brass nuts
The last time I rode into earnings pedal to the metal middle fingers in the air, WNR missed on a 4% down day…and they followed it up with one of the most monotone, lackluster conference calls I’ve heard.
I remember in a fit of rage trying to figure out the odds of such events happening. A man’s math shouldn’t be trusted when he’s seconds away from hurling his monitor across the room, but I remember the odds were not good. Less than once every 70 years or so.
But you have to live and die by your convictions, or you’ll pussy foot through life never accomplishing anything.
but who am I to talk. You know all that better than I probably ever will.
I’m afraid YELP is going to move double digits on report. I’m also afraid that since there will be no profits to report, no matter how good it is, the stock will trade lower.
One never knows what will happen for sure. At the earnings report time, they could announce that FB or GOOG is buying them, for all we know. If they did buy them, that would be smart of them, since the service is so popular.
Buy put spread. Less worrying
I don’t know much about the customer base of YELP, but I did find it odd that during the walk-through of the sales floor during the techcrunch youtube video (8:30 mark) that there was no writing underneath NYC and Boston but the California area and Chicago columns were replete with words.
Funny, I over analyzed that vid too.
I AM HERE TO SCOURGE THE SINNERS WATCHING INTERWEBS PORN AND CNBC HARLOTS WHILE SUBSISTING ON OBAMACON CHEESE HANDOUTS.
OMFG Dude that youtube video was so funny lolllllol
I once did a series of vids. Look them up on iBankCoin’s youtube acct.
Fly, those vids where the best. PLEASE continue the series. I work with a guy who is a dead ringer for Samsonite. Yes, really.
Ride or die.
http://www.youtube.com/watch?v=RBU1cT0FY7M
First earnings report from a new IPO is always good – that’s how the game is played — but the market’s reaction? even with a great report, Yelp could be down. I wouldn’t count on that though – I say Yelp rallies after positive earnings.
Just as it gets interesting you say: “FOR WHATEVER REASON, I never took profits and bought more as it went lower.”
Whatever reason????
Why rehash?
PBS HD is running Frontline program on Wall Street Banks, and how sick they are, and how they (it) can be saved, only if the world economy doesn’t crash first.
The hedgies and brokers are all saying how everyone knows how sick the system is.
But they overlook it, for sheer greed.
I going to remove my stops tomorrow and hold. Even if it takes a dump, I can’t help but believe someone will either buy it or make it work sooner or later. We use it all the time.
chequemate young boy…..chequemate
How did you know I am reading this blog late at night? Always like to see what you are thinking. Europe PMI’s suck.
lookin at yelps business model, im still not sure how it works. do you pay to get good reviews? or do they filter out bad reviews if you pay more?
I must say it was incredibly fucking reckless of you not to sell the stock when it tearing higher shortly after the IPO. I really hope for your sake earnings kick ass tonight. Good luck Petey.
PWER up 12.79% in premarket but they don’t report until May 3 after close. I can’t find any news that would explain why they are up! Anyone?
I can’t believe that there are people that would place an order in premarket at market price. The thin trading volume is the only thing that could explain why someone would bid up PWER over 12% on no news!
YELP will beat their numbers…i don’t think their lock up period is over, and in any case certainly all the insiders haven’t dumped yet. So you should do well…
Le Fly,
We need another Fly Cartoon. They change the world. Please.