Twisting in Knots

The insidious CHUCK BENNETT sold some VHC today because he’s afraid. Afraid of what the judge might say. Afraid of what Apple might say. Truth be told, VHC is a man’s stock, one that embodies cigar smoke and single malt liquor. It’s not for the faint of heart and those who have weak hands and knees.

It’s for closers, only.

Stocks dove today, but had little effect on my stocks. I’ve concluded it to be in my best interest to avoid US stocks, unless they’re from the coal industry. “The Fly” has decided to become the Emperor of Japan, fanatical bull on any and all exporters.

Nevertheless, we’ve come to the end of the road here, as the time in 2012 is almost up. The direction of the market will ebb and flow with the caprices of speculators. Just yesterday, The PPT flagged an OB signal–but it shouldn’t be feared to any large degree. I don’t believe we’re going much lower, at least not yet. We will trade the range and then jump off a cliff in 2013.

Sounds exciting.

If we go up in 2013, Japanese equities are my favored picks, thanks in part to the newly elected government’s plan to stimulate by 10-15 trillion yen. Aside from manipulating the yen lower, the LDP isn’t fucking around with China and intends to bulk up on defense spending, as well as domestic infrastructure spending. They’ve ordered the Bank of Japan to ‘bend the knee’, laying the ground work for a renaissance in Japanese equities.

Exporters should do best, as the rise of foreign currencies boosts earnings. You can short the yen via YCS.

My top pick is HMC, followed by TM. Those are the lay ups.

Some others stocks on my radar include KUB, NMR, MTU, CAJ and SNE. Truth be told, there aren’t any expensive Japanese stocks that are traded in the US. All of them trade under 2x sales.

If individual equities isn’t your thing, consider ETFs NKY, JOF or EWJ.

I’ll be advantageously bulking up on HMC until it is my largest position.

Reduces Herb Greenberg to stuttering, starting 2:20

Shuts down some fucktard Professor (starts at 2:00)

The Fiscal Cliff

‘GO AHEAD, RAISE MY TAXES‘ “Get the little guys off the table”

I’m trying to mellow out after booking a 7 figure loss in SWHC.  It wasn’t working before Sandybrook. It was going to be my top idea for 2013, poised to crrrush earnings estimates from here until 2014. Instead, I had to sell it. You might think I am upset over having to sell it–but I’m not.

Stocks are like women when you’re a teenager, interchangeable. I don’t need to hold XYZ when ABC is looking damn good.

After taking SWHC off the books, my EXK position took on water, as silver and gold got hit. I warned you about owning gold and silver into a mature rally. People sell them to buy high growth stocks, like VMW and RAX. Gold and silver should be bought at the depths of a sell off into the initial reflation move higher. I’m in EXK for longer than a month, so dealing with the volatility is part of the waiting game.

Everything else went straight up, spearheaded by my BZH, killer bees putting bears into emergency rooms. My largest position, VHC, lifted, as well as CROX, FB, NAK and ADTN.

I started positions in HMC, RS and AAPL today, opinionated with strong emotions that Japan is going to lead all world indices higher in 2013.

One last thing, SAFM smashed earnings last night. Look for BIG Q1, 2013 numbers out of protein plays PPC and SFD.

I literally had a mini client revolt this morning, with my larger share holders demanding immediate sale of SWHC. What could my rebuttal have been? “Wait until this whole thing blows over, SWHC will be hitting new highs in no time at all?”

Shit, I couldn’t muster up the arrogance to explain that SWHC is likely 100% undervalued. It doesn’t matter. They don’t want to make money in the stock. I imagine a lot of people are facing a similar dilemma today and will continue to ponder the meaning of being long a gun maker, post Newtown. Truth be told, I am happy to be done with it, even though it resulted in a massive, stinging, loss of more than 20%.

The only thing left to do is to move on and pick up the pieces.

With the proceeds, I doubled my BZH position and started a new one in HMC, as part of my long Japan thesis. Other Japanese stock of interest are NMR, TM and even SNE.

Bottom line: I fucked up and should’ve sold SWHC on Friday. Frankly, I was in a state of shock and really didn’t feel like addressing the issue. But I’m done with it now and will try my best to regain the losses.

The end of December could be a very frustrating time for investors, as fund managers whip-saw in and out of stocks to dress their windows. They want to appeal to their investors, afraid of redemptions, so they sell losers and buy winners. Often times really good names get sold the fuck down, to the depths of hell, due to this practice. More often than not, oversold names bounce and bounce hard during the month of January, as the facade of window dressing is removed, leaving fund managers naked and without ideas.

Did you know XIV (short volatility) was +199% in 2012? I’m telling you now, buying XIV everyday is a sure way to billions.

So what sectors will be pumped and dumped?

I believe financials and construction plays will be bought, while basic material and richly valued tech sold the fuck down. As always, REITs will be bought and natural gas kicked to the side, like dogs in China.

Just know, if your stupid stocks are behaving badly, for no good reason, they’re being dumped for tax losses, removed from the marketing materials at some fucktard mutual fund.

I’m just a damned finance blogger/manager of other people’s money. I keep getting sucked into political debates because it’s in my nature to voice strong opinions. The truth is, everyone is bugging out over what happened in Newtown. Before this happened, the country was already a mess, reeling from a slow motion economic collapse and methodical compression of the middle to upper middle classes. This country is about to change, veering down a very dark road, and it’ll be decidedly for the worse.

Your government is monitoring every single thing you are communicating, even through private emails. Bots are being used to search out keywords and your exact GPS location. Whenever you utter a string of words in a certain sequence that can be viewed as a “threat”, your home is raided and your property is seized. We the people accept this form of fascism because the people perpetuating these crimes against etiquette are distasteful and we revile them. Freedom of speech can be rather expensive if shopped in the wrong manner.

I am sure that “The Fly” is on a watch list of dissidents, waiting on my every word and syllable.

Truth is, I should learn to keep my opinions to myself, particularly regarding subjects that do not concern me. Do you really think our little debate about gun control is going to make a difference? It’s laughable, really. They will do whatever they want to do and you and I will just sit here, twisting in the wind with our dicks in our hands, watching them make law with their pens. To sit here and drag their fine names through the mud can only hurt us. There is no revenue to be had from being a partisan dissident.

Let the winds of tyranny blow through America, with the same ease and vigor that they were expelled many years ago. From now on, Le Fly (as he is famously known in France) will stay focused on his p n l, which needs a bit of tending to–frankly.

It wasn’t the guns. It wasn’t the mother or the father. It wasn’t the video games. And it wasn’t the drugs.

The disgusting creature who murdered all of those babies was evil. I do not mean the demonic type. Simply stated, some people are born a certain way and others are moulded into personality traits. The old nature versus nurture debate is fairly straight forward here.

Mr. Lanza had a privileged life; but he was fucking nuts. In the past, he wouldn’t be allowed to circulate amongst normal people. They’d lock him up and take his brains out to make him normal again, or sedated.

Stop trying to find a reason as to why this happened and accept the fact that some people aren’t here to contribute to mankind. Some people are destroyers of life, hope, spirit, body, money etc. Whenever you identify these people, cast them out from your lives, even if they’re family or a significant other.

The government is going to pass a bunch of laws to give the impression that they are “fixing the problem.” But the only way this gets fixed, on a macro level, is by you, the parent of a child, taking the time to communicate with them. Make sure they have their p’s and q’s in order and keep sharp and explosive objects out of the house if your kids are fucking lunatics.

Who knows where Apple’s stock will be in one year? Or for that matter, who can say if oil will be higher or lower, or natty or gold? The anointed are shuffled more often than a grade A whore house in Vegas.

Going into 2013, there are only two questions that need to be answered.

1. Will GDP expand by more than 2%?

2. Will the momentum in new homes sales continue upward?

Frankly, I don’t see the economy growing at all without a strong housing market. 2012 was a dead cat bounce year for the housing market, with double digit price increases in a number of cities. Countrywide (no Mozillo), prices rose by almost 5%.

When housing is in bull mode, all sorts of derivative plays benefit, from lumber to paint to siding to plumbing. But why bother fucking around with outlier plays when you can go directly to the source? Over the past 10 years AAPL has been a great stock to own. How about their suppliers?

Had you placed your money in AAPL derivative plays then, you are broke today.

Buy the homebuilders or short them. It’s that simple. They’re either going to double over the next two years or drop by half.

My favorites are BZH, PHM, TOL, SPF and HOV. There are others, some might be less volatile than these. But I’m not looking to make a little bit of money. I’m long BZH in order to have my balls swing low and my fists involuntarily punching people in the fucking face.

The government has narrowed the places to invest down to a limited few. Once dividends become unattractive through higher tax rates, rich folks will give real estate a second glance. You heard it here first and here it again now.

Aside from that, VHC is marching on, as their mediation with AAPL continues, scheduled to end on Thursday.

Back in 2011 my largest holding was WNR. I was a contrarian, as refiners were hated by Wall Street, favoring drillers and exploration companies instead.  Crack spreads were wide for a long, long time; but Wall Street didn’t care. They saw the profits being generated at WNR, HFC, MPC and CVI and said “meh, it’s temporary. Short them.”

They were wrong.

Bank stocks were also hated in 2011. No one wanted to invest in banks. After all, they’re all liars and thieves. Lo and behold, bank stocks have led the market higher in 2012.

Do I even need to discuss the homebuilders? No one wanted to touch them and they ripped heads off in 2012, allowing the true believers to swim, mind you, in profits.

The same goes with biotech. I hate biotech stocks because the barrier to entry, from an intellectual standpoint, is too high. If I wanted to learn the industry and play the FDA game, I could. However, I feel there are easier places to blow up my money. Nevertheless, Wall Street climbed the wall of biotech worry in 2012 and pushed shares through the roof.

Here are some of the larger cap winners of 2012.

Naturally, my next question is the question that everyone in the world is thinking. What’s next to move? What will be the theme for 2013?

I haven’t penned my 2013 predictions yet; but I have a few ideas.

Have a look at the Yen.

I talked about this in The PPT last week. I don’t view the weakness in the Yen as something to be wary of, but to embrace. Kyle Bass is going to eat a bag of dicks, shared with Hugh Hendry, being short Japan. They just elected conservatives who want to stimulate forever, bulk up on defense, fuck up China and rebuild infrastructure.

Japanese exporters stand to benefit, a great deal, from the weakness in the Yen.

Here are all Japanese stocks traded here.

Japanese ETfs include EWJ, JOF, NKY and short Yen via YCS.

From now until the end of the year, I’ll be researching possible winners for 2013. The change in the calendar is something that should not be discounted. It’s a time when everyone starts from 0, the great reset. Anything can happen.