Very, Very Busy: BEING ENTERTAINED

I am listening to this hilarious NQ conference call, while reading Muddy Waters rebuttals on Twitter. Suffice it to say, I am entertained. One of my favorite quotes from the call is “Hold on a second Sir, we are translating into Chinese.”

On a side note, the window cleaners are here and wreak of cigarette smoke and coffee. I literally want to kill them.

Markets look fine; but my stocks look like cancer.

I’m up 0.4% so far.

Oh, one more thing before I go: stop referring to your investment forays as “battles” and “wars”. You’re just a bunch of jackasses with down stocks.

Thanks.

Enough of the creative writing: let’s get down to brass tacks.

Every heap of trash has had its 15 minutes of fame this year, so what’s left? What has Mother Market neglected?

Using The PPT engine, I have 332 stocks to comb through (members only link, pal). The criteria is simple: stocks down 10% or more over the past six month, organized by industry, and a minimum market cap of $100 million.

Rubber shoes and played out hand bags: CROX (-13%), COH (-12%).

An olde Devil stock: CALL (-19%)

Steel and Iron: SIM (-19%), MTL (-12%), ROCK (-18%)

Vitamins: VSI (-11%)

Nail polish and books: SBH (-10%), BKS (-17%)

Silver: MVG (-25%), CDE (-16%), PAAS (-12%)

Semis: UTEK (-22%), IMI (-37%), BRCM (-24%), MLNX (-42%), PSMI (-14%), ADNC (-14%)

Grub: PNRA (-13%), RT (-35%), BJRI (-13%)

Homies: TPH (-16%), MDC (-15%), KBH (-18%)

REIT, Retail: MITT (-25%), CCG (-22%), AGNC (-20%), ACC (-17%)

REIT, Healthcare: UHT (-19%), HCP (-19%)

REIT, Diversified: ARR (-25%), CYS (-23%), JMI (-30%), ANH (-14%)

Refiners: ALDW (-37%), MPC (-15%), DK (-30%), ALJ (-32%)

Oil Men: CAM (-14%), CIE (-16%), HK (-21%), EVEP (-20%), KWK (-14%), IOC (-18%)

Mortgage: DX (-11%), RWT (-18%), NLY (-17%)

Medical Equipment: ISRG (-22%), OFIX (-35%), MDCI (-11%)

Internet cast outs: ANGI (-27%), TZOO (-15%), INAP (-20%)

Miners: PCG (-45%), TRQ (-30%), ACI (-13%)

Gold:  GORO (-47%), BVN (-33%), SAND (-27%), BAA (-29%), ANV (-61%)

Building and Materials: TXI (-11%), OC (-10%), HW (-15%)

Foreign Utilities: SBS (-25%), CIG (-14%), EOC -13%

Utilities: SO (-10%), FE (-17%), ELP (-21%)

Biotech: AMRN (-67%), DVAX (-53%), ARNA -22%), AGN (-16%), ARIA (-81%), DNDN (-46%), GTXI (-63%), VICL (-60%), ACHN (-63%), AVEO (-72%), SQNM (-39%), OGXI (-21%)

Retail: JCP (-56%), SHOS (-32%), BONT (-18%),

Beaten Down Tech: BBRY (-44%), EBIX (-38%), VCLK (-33%), RLOC (-19%)

Software: MODN (-52%), UPIP (-15%), SWI (-24%), NUAN (-27%)

Apparel: CBK (-14%), ARO (-31%), ANF (-21%), AEO (-23%), FRAN (-35%)

Ag: UAN (-19%), MOS (-23%), POT (-20%), RNF (-16%), IPI (-17%), SQM (-43%)

Beer and Soda: CCU (-17%), FMX (-20%), KOF (-26%), COT (-25%)

So far, I am positioned wrong for the rally. Between my boat and refinery exposure, I’ve managed to trade my way out of a fine rally today. If it wasn’t for JAZZ, AMBC and HK, I’d be down today.

All of the money is racing back towards housing. Stocks like MHO and USG are on fire. With rates coming in again, I expect the REITs will start heading back to previous highs. The whole taper scare business is behind us. All we have to fear is fear itself, which is voided null by the good folks at The Federal Reserve.

I will give my boat and refinery plays some more rope, hopefully not to hang me with. My other low brow stocks are disgraceful. I’ve fixed myself with a ridiculous portfolio. Only in a treu Costanza world will I make money, as presently constituted, into Halloween.

I know they do great work and have an eye for fraud. But what is your opinion of that firm, the way they destroy shareholder value with a singular blog post? To be fair, I suppose it’s no different from an analyst research note at Goldman or Morgan. However, not all short only research houses are created equally.

Due to the success of Muddy Waters, many copy cats have sprung up, especially on vagrant, low brow, website: Seeking Alpha. The perverts at SA don’t have a clue about stocks. I really believe many of them are rookie investors, trying to make a name for themselves by besmirching publicly traded corporations.

To be a successful contrarian is to be a genius. When markets are going lower, if you are able to muddle through it and make money on the long side: you’re a genius.

The same can be said about successful short sellers in run away bull markets. Those guys are insanely smart.

But the question I want answered is this: who is getting Muddy Waters’ research before it is published? Is it sold to selected hedge funds? Judging by the sudden drop in NQ today, I’d guess that answer to be NO. If the report was leaked in advance, the stock would’ve careened lower before the news.

Either way, this adds a very unwelcomed element to trading. It’s the equivalent to skipping through a minefield in a banana suit, while gorillas try to peel your skin off.

I recall doing a lot of research on CWEI. I even highlighted some of my early work, here on the site. The stock has nearly doubled since then.

I was also short JCP from $19. I covered my short in the teens, after making some money, even though I felt the stock would trade to zero.

I was also big into NFLX at $60, before Icahn got in. I kicked it out for a minor profit. After Icahn got into HLF, I bought some of that. And, like NFLX, I sold it too early.

Let’s not forget FTK. I did an immense amount of work on that one, having bought a few million shares in the $1’s. I sold it around 4ish. Now it’s $20+. Had I held it, my life would’ve changed.

Other missed opportunities include TRIP, Z, GSVC, ICEL, PPC, SVU, ULTA, MU, BX, SNE, SOL, YGE, FSLR, NAV, CTRP, DECK, NXPI, CXO, CLR, GWW, CIEN, TEX and FLS.

I am sure I missed a few.

Am I mad at these “missed opportunities?”

Absolutely not.

I know that doesn’t make much sense, especially since some of these gains are outright astronomical. The fact remains, I am incredibly capable of finding winners. I am not talking ordinary 10-20% returns. I’ve been able to swing and miss at multiple 100-500% gainers, over the past ten years. All the while, I’ve been banking coin, steady returns of 20-90% since 2003.

On the upside, I am still young, getting better every day, and we’re in a rip roaring bull market. I am confident that, one of these days, I will have the internal fortitude to see one of these ideas through.

Until then, the “struggle” will continue.

I have a few Comcast guys running about my house, fixing the appalling service they’ve been selling me for the last 6 months. Apparently, my internet connection is barely existent, according to them. My son has been complaining about it for months, as he droned on about the television playing shooter games. I’ve instructed them to “upgrade” my service to the very fastest speeds possible. Naturally, it won’t be as fast as some of our favorite HFT firms, connected directly into the trunklines of some of our favourite exchanges. But it will suffice.

I know Capesize shipping rates have been dropping, on a daily basis. But I need you to understand something about BALT. The majority of their tonnage is in Handysize and Supramax vessels. They own 9 of them, just two Capes.

Have a look at rates, over the past week,

As you can see, there is a divergence.

I’m not comfortable with my holdings, truth be told. I feel as if the market is about to take a vampire-esque bite from my neck. The only two stocks that are measuring up for me are JAZZ and AMBC. My thesis with AMBC is two fold. I like bankrupted companies. Secondly, with rates dropping again, housing related stocks are free to run rampant again.

I know the market has been good and the vast majority of you are elated to see your stupid account statements at new all-time highs. But this is too easy. It almost feels like a trap. Then again, I’ve been known to suffer from the angst of paranoia. Just today I was convinced that my IT guy, VINCENZO ILLUMINATI, purposely took iBC down because he felt “the people didn’t deserve it.”

Who would ever think such crazy thoughts?

Have you ever been so tired that you put your hand into a steaming stream of black coffee, just to see how hot it felt? Between working out at the gym, building muscles for offensive purposes, betwixt with the responsibilities of being a top notch manager of capital, fatigue has reared its hideous face at The House of Fly. To combat such demons, I’ve been drinking excessive quantities of coffee, extra black and without sugar.

Earlier on today, fatigue attacked me when I least expected it, so I placed my hand under the Keurig coffee device and let her coffee stream upon my naked hand as if it was a glass of water. After doing so, I drank the coffee and played a game of chess.

After the close, ANGI got poleaxed into the dirt on an earnings miss. I would not chase her down into the grave just yet. Give it a day or two before contemplating the bounce.

I still believe, rather emphatically, I will make Liberace type gains in BALT, MODN, NSTG and ALJ. Although I am fully aware of the fact that all companies, with exception to BALT, might disappoint this quarter during earnings. Nevertheless, “The Fly” aka MR. CAPRICORN, King of the Sea-Goats, marches on–with hands of clay and muscles saturated with creatine.

Lots of momo stocks surged ahead today. Even though I shed 1%, I am encouraged by the overall action. I am looking to reposition into YELP, YY, TRLA and GOGO, but lack the funds to do so.

“The Fly” is leveraged to the hilt, at the very pinnacle of the market, begging for a beatdown.

But it’s not going to happen just yet.

In order to buy the stocks on my wish list, I will need to take profits on some or all of my current holdings. I own very obscure names, low brow even. None of my positions are “main stream” and cry out “do your worst mother market, you’re a whore” at very loud decibels.

My new positions in ALJ, JAZZ and AMBC performed well today, while BALT, NSTG, HK and MODN wallowed like fat men in a pool of lard.

As I write this composition, ALJ was my largest position.

Be patient with your buy orders. The market isn’t going to crater; but you never know. It’s the fear of “you never know” that allows stocks to drop, precipitously, without net.

I am very interested in buying back YELP, TRLA and GOGO. However, I’m afraid the risk is too great down here, heading into earnings. I have to make a conscious decision: do I risk a lot here, in speculative names, with +58% gains for the year?

The answer is, as always, YES. But not in the social media space.

Instead, I favour the refiners, low brow biotech stocks and the blackest oil the earth can produce. I’m still long ridiculous amount of BALT, which is more of a play on smaller boats, than big. Let it be noted, the rates for Handysize and Supramax ships haven’t gone down like Capesize in recent weeks. Because of this, shares of BALT have held their own and should continue to do so, as long as rates remain elevated.

By the way, MTH reported very strong numbers. I like MHO and AMBC, as plays for housing.

In short, I am fully invested, leveraged to the hilt, down 1% for the session. Ultimately,  I believe the market will trade up from here. But, I am fully prepared to ride it lower first.

WTI is down $1.70 to 96.58, while Brent is barely off at $109.72.

This is extremely bullish for refinery stocks, particularly those who refine crude ‘mid-continent’. Crude derived from W. Texas do not have the luxury of pipeline infrastructure to transport around the country. Instead, it is trucked around, circa 1900. Because of this annoyance, crude from W. Texas sells at a discount, even to WTI prices. Expanding on that point, gasoline or refined products are priced in Brent, making the WTI-Brent spread a supreme factor in determining profit margins for refinery companies.

The spread has widened from $3 to $13 since September, but down from $20 achieved in March.

Since March, many refinery stocks have traded down because of the tightening spread, spearheaded by analyst downgrades.

Look for said analysts to eat crow. The sector is back in play again.

Top picks: ALJ, ALDW, WNR, HFC and DK