Trump is Working With China to Get ZTE Back to Work — Fucking Fast

About a month ago, the US slapped the shit out of ZTE for making illegal shipments to both N. Korea and Iran. Since then, Trump has become besties with N. Korea and he sent a delegation to China to negotiate terms for a new trade deal. The subsequent result of this action caused ZTE to shut the fuck down in America for lack of parts. Since they’re too stupid to create their own tech, if they’re not stealing ours — life sucks at ZTE.

Communication equipment players in America, such as ACIA, LITE, and OCLR got crushed due to the ban — especially ACIA, who derives 30% of their business from them.

“President Xi of China, and I, are working together to give massive Chinese phone company, ZTE, a way to get back into business, fast,” Trump tweeted. “Too many jobs in China lost. Commerce Department has been instructed to get it done!”

When news of the ban hit, lots of optical stocks got hit — but many of them for the wrong reasons. People threw babies out with the bath water without knowing who was going to be impacted by the ban. Since then, the shroud of uncertainty was lifted and we know who has the most exposure to ZTE.

This from DA Davidson will help.

DA Davidson notes the US Commerce Department is banning American firms from selling components to ZTE for seven years due to ZTE having violated terms in a sanctions violation case. The two cos they cover with the most exposure to this customer are Acacia (ACIA) and Oclaro (OCLR). ACIA derives 30% of its revenue from ZTE, while OCLR derives around 18%. Should Lumentum (LITE) close its deal to acquire OCLR later this year, around 10% of combined revenue will be derived from ZTE. All other optical cos have limited exposure to this customer.

They would stress that this ban is not related to other recent trade concerns with China, but to a history of illicit activity by ZTE. So far, damage is limited to just ZTE and its customers (primarily ACIA and OCLR in their space). Given the significant impact the sanction will have on ZTE, they expect The Company will work to resolve this issue with the US government per the settlement agreement worked out in 2017 (The US government claims ZTE has not fulfilled all of the obligations it agreed to).

One stock that might surprise to the upside if the ban is lifted is the beleaguered MXL, whose business sucks anyway and the lift could help buoy their pathetic excuse for what the deem a business.

This from the last Needham cut.

Needham cuts gtgt to $27 from $30 after MaxLinear reported light 1Q18 revenue while NG EPS beat by $0.02. However, 2Q18 revenue guidance came in much lower than their forecast reflecting headwinds in optical, legacy terrestrial tuners, MoCA and satellite solutions as well as a negative impact from the recent ZTE ban. Though they remain encouraged by the growth in MXL’s wireless infrastructure segment and the strong pipeline of new Infrastructure products, they lower their EPS estimates for 2018 and 2019 in an effort to provide a conservative model.

Net net, it appears Trump is on the verge of sucking some major Chinese dick. Look for stocks to swing higher again, given his proclivity to ‘make deals’ and his incessant desire for adoration from his beloved fans.

I got to sleep late last night, but was still entreated to a 7:30am teeth showing growl in my face by my pet coyote. She doesn’t concern herself with my schedule and couldn’t care less about my hangovers or disparate sleeping habits. At 7:30am, every day, rain or shine, I am awoken by the angriest animal in the world, growling ferociously, with gnarling teeth and a constant chattering of teeth, until I cede to her and go for a nice long fucking walk.

During this walk, she attacks everyone she sees, including inanimate objects, such as parked cars and stop signs.

When I got home I made myself some coffee, had some oatmeal, and entertained myself by reading a book. I do not read motivational books, or shitty finance books. I only read classics and I never read papered back. If and when I am reading, they are old, leather-bound, antique classics — written by the greats.

Shortly thereafter, I hopped in the car and drove an hour and half to visit my Mother and sister for lunch. It was a dimly lit second rate Italian eatery in Bay Ridge with unseasoned meatballs and greasy calamari. Instead of ordering a dish, I opted for a few appetizers, a glass of Cabernet Sauvignon, and proceeded to enter scavenger-predator mode — feeding off the slops of others. Since I am on a diet, currently cutting down to 12% body fat, I was quite judicious with my lunch.

While in Brooklyn, I took advantage and stopped by the legendary Villabate Alba bakery, located just blocks away from my old apartment in Bensonhurt. I lived there from 13-18 years old. While growing up, I never thought of this bakery as legendary, but after all of the Italians moved out and were replaced by Chinese — its lore and status has increased, especially since the quality of their goods have stood the test of time, and also because all of the Italians from Brooklyn are either dead, in jail, or in Staten Island.

I bought $60 worth of sweets for the kids and then quickly peeled the fuck off in my car, dodging some faggot who tried to panhandle me for heroin money.

At around 7pm, I went to pick up my in-laws in Manhattan. Since they are currently in between cars, they had no mode of transport to my house, other than the filthy trains. I arrived at 8pm and got home at 10:30pm, an arduous day of driving and listening to rap music at very high decibels, much to the chagrin of Mrs. Fly.

Just a short while ago, I made a large jug of coffee, ate a half cannoli, and walked the fucking dogs in my backyard. I can’t walk them in the streets this time of night without my neighbors thinking I’m insane or a burglar.

All week I’ve been thinking about my recently departed friend. I can’t seem to shake the finality of his suicide and the tragic turn of events that had transpired since he chose to become addicted to drugs. His family is in ruins and I’m not sure there’s much anyone can do. There was no funeral, no service, just a cremation, two Facebook posts by his brother, two from his friends, and poof — he’s gone. People mourned him for a day and are now back to posting pics of their disgusting food and exercise routines at the gym. Forty one years of life and over 700 friends on Facebook, and all he got for it was 4 Facebook tributes and instruction by his brother to light a candle and donate to an animal shelter — because his brother liked fucking dogs.

Happy Mother’s Day to the 3 women who read my blog. As for the rest of you, be sure to treat your wives and your mothers well this weekend. Quit being a dick; go grab your own beers this Sunday and try not to ask her to ‘whip you up something’ for dinner. Take her out to eat, you absolute faggot.

Stocks melted up into the bell. The SPY is up ~2% over the past week. My quant portfolio was up 2.1% and my active strategies are in a world of stupidity, buried in SOXS and DUST positions. At least I got some of it back today. I look forward to another fun filled week of extreme nothingness next week, only interrupted by the occasional snooze fest.

It’s Friday and the weather is glorious. I’ll be spending the balance of my day at the gym, in shopping malls, driving to and fro, avoiding the riff- raff at all expenses.

In case you’re out of gift ideas for Mom, I highly recommend getting her my books; they’re real crowd pleasers and the ladies love Le Fly prose. It’s both worldly and magnificent, tales of Wall Street thru the eyes of a true space alien magician (SAM), not one of those frauds who write in fucked up run-on sentences.

At any rate, it’s hard to not be pleased with life — as there are so many things to explore and enjoy. You don’t need to be rich, might I remind you, to enjoy a dozen briny oysters with a cold bottle of white wine, or read a great book, or listen to some great music, or see an interesting movie, or paint a picture, or go on a long hike, or see something new — experience human creativity and ingenuity. I mean this sincerely, depression is debilitating and can lead to ruin. Often times people get depressed due to repetition in lifestyle, stuck in a routine that is unfulfilling. Do something about you it faggots — you’ll feel better in the morning. Trust me, I am a Dr.

Any old traders remember back in 99-2000 when brick and mortar stocks were getting poleaxed because of the dot com, ‘new economy’, rippers? Well, it’s happening again. Look no further than PG, GE and CPB. I compiled a list of these names in Exodus and was flabbergasted to see steady revenues and earnings, yet a contraction in valuation.

Perhaps this is tied in with rising rates? With higher rates, the divvies for these names are less attractive, plus they need to pay higher borrowing costs on debt, which reduces earnings?

I’d like your two cents if you have some. It’s also worth noting that these stocks would serve as a great hedge against the end of this tech driven bull run, should it over occur.

Here’s $1.6t in mega cap stocks in a bear market for the past year.

Cramer dubs the CEO of NVDA ‘the Einstein of our era’. That’s some disingenuous bullshit right there. Nevertheless, the stock has been on an unbelievable tear the past 3 years, up more than 1,100% off the backs of an explosion in AI, cryptos, and gaming.

Even still, the fucking stock is trading 15x sales, a number that is absurd as much as it is moronic. The irony here is the very company that fueled the crypto mining craze is in fact in a bubble of its own right, and no one else is seeing it that way. We’re in a new paradigm. Nvidia is the future. Its CEO is Einstein. They cannot lose.

Fuck you. I’ve heard that before.

Here’s Cramer nearly ejaculating over NVDA this morning, wrangled by those damned ‘chowder head’ analysts who don’t get NVDA, then later admitting the stock had run up too much and needed a break.

Here's Cramer mad at 'chowder head' analysts for publishing negative things about $NVDA pic.twitter.com/Hp8w1X6ZdV

— The_Real_Fly (@The_Real_Fly) May 11, 2018

And now here's Cramer again saying the stock had run up a little too fast and needed a pullback. $NVDA pic.twitter.com/uoB9FqWJK4

— The_Real_Fly (@The_Real_Fly) May 11, 2018

The stock is off by 2% early going. In order to get my underwater SOXS trade back in the green, I really would appreciate a staggering drop here in NVDA. Thanks.

Blockchain week begins today in NYC, lasting until the 17th, the first of its kind to hit the big apple, where celebrities from the tech space and music will opine on the great SHITCOIN experiment that has so many people ditching their checking accounts in favor of a digital currency. Why, a Mr. Snoop Dog is scheduled to perform for the good folks at Ripple next week. I hear it’ll be quite the wild party. Crack open your cold storage units and bring your flash drives out to the event and show off your portfolios to all of the pretty AI women.

Meanwhile, a gentleman named ‘Sam Doctor’ from an organization named Fundstrat, said he believes the ‘raw power’ of bitcoin will propel the crypto currency to $36,000 by the end of 2019, with a totally normal range of $20,000-64,000.

Meanwhile, the crypto space is crashing this morning, fire engorging itself from each and every crevice of the sector, with mountainous losses found in BTC, ETH, XRP and many others. There was a rally, recently, and now it all went splat. See for yourselves.

Futures are flat, and gold is edge lording higher, likely due to the rapid descent of the crypto world — a wanton slap in the face to all of the nerds attending blockchain week in NYC.

Happy Friday everyone — try not to trip, slip, and fall into any murderholes today.

This is a good example of the very rich being very naive and also retarded. Tim Draper has made so much money in his numerous VC dealings, his ego refuses to acknowledge the undebatable fact that Elizabeth Holmes from Theranos was in fact a giant scam and she’s a criminal.

Investors have been zeroed out.

Tim Draper, defender of frauds, retard edition part 1 pic.twitter.com/gM8Z1076BB

— The_Real_Fly (@The_Real_Fly) May 10, 2018

Tim Draper, defender of frauds, retard edition part 2 pic.twitter.com/ehd0ffFaI5

— The_Real_Fly (@The_Real_Fly) May 10, 2018

You can data mine all you want and you will never find a more highly valued semi in the large cap space than NVDA. I get it, MUH gaming and crypto and the company is growing fast — but what in the actual fuck are you people thinking holding this shit at 15x sales?

Do you even know where this shit is coming from? Talk about multiple expansion — if you own this stock in your fund now — you do not deserve to manage money — you fucking idiot.

NVDA reported after the bell and of course crushed.

NVIDIA beats by $0.39, beats on revs; guides Q2 revs above consensus (260.13 +4.35) Reports Q1 (Apr) earnings of $2.05 per share, excluding non-recurring items, $0.39 better than the Capital IQ Consensus of $1.66; revenues rose 65.6% year/year to $3.21 bln vs the $2.88 bln Capital IQ Consensus. Non-GAAP Gross Margins were 64.7% vs. 59.6% a year ago For fiscal 2019, NVIDIA intends to return $1.25 billion to shareholders through ongoing quarterly cash dividends and share repurchases. Co issues upside guidance for Q2, sees Q2 revs of $3.04-3.16 bln ($3.1 bln +/- 2%) vs. $2.95 bln Capital IQ Consensus Estimate; GAAP and non-GAAP gross margins are expected to be 63.3 percent and 63.5 percent, respectively, plus or minus 50 basis points.

At present values, NVDA is trading +516% above its historical p/s median. Their p/s is up from 4x to 15x over the past three years. In comparison to NVDA, highly valued stocks like AVGO, TXN, and NXPI are dirt cheap at 4-6x sales. If forced to choose just one short and hold it for 2 years, it would be NVDA.

The comments section of this blog is teeming with faggots. There was once a time, not too long ago, when laughter was prescribed and readily accepted here. Those were simpler days, before all of this Twitter nonsense, and I was happy to have been here, living thru it. Now, the discourse on blogs is more or less shit posting by escaped mental patients. I can hear their dogs barking as I read their missives.

The top sector for the day is utilities, an industry as retarded as the people who depend on them most. But there is some potential upside here, especially when the markets crack against the coral reef and the ship begins to take on water and sink. Then the Utes will be glorious, spectacular investments for those seeking safe haven.

According to the Exodus OB/OS oscillator, it is at the bottom of its range, angling sideways and out for a move to the upside.

Inside of this moribund sector of nothingness and emptiness lies zero secrets or anything remotely interesting, just power generating robber barons getting rich off coal.

Look at that there sexy chart, better than any naked model you might find in your neighborhood disco-diner. Might I add that the entire lot of stocks in that sector is too boring to invest into; you’re better off barreling into it with some verve by way of XLU, the designated ETF for this sector.

I bought some today.

Other happenings: I just had some smoked salmon, avocado and a singular slice of tuscan bread, larger than fuck jug of black coffee, and a small piece of black chocolate. My caloric intake is less than 2k per day, of which ~150g comes in the form of protein — 5gs worth of creatine. I am still a numale weakling, in comparison to my previous highs in athleticism, but I’m feeling better and look forward to winding down this cut cycle in about 6 weeks to be replaced by a bulk that will result in shattered jaws and faces, along the eastern seaboard this summer.

If I see you looking at me sideways this summer while in Newport, I’ll make sure to punch your ears off.

There are a lot of things to like about Dan Loeb. For one, he was once an anonymous poster on the Yahoo message boards dubbed Mr_Pink_esq. Truth of the matter is, that poster was largely influential for my writing style and passion about expressing thoughts online. I used to stumble across Mr. Pink’s posts and was captivating by the energy in them, the fuck you style of the prose, and I sought them out all the time. At the time I was short some stock and so was Mr. Pink, so I always looked forward to his rants about how XYZ was barreling towards zero as Mr. Pink and Mrs. Pink sipped on some fine bubbly off the coast of Monaco.

Then there’s this epic piece by Vanity Fair, which I believe marked the beginning of Bill Ackman’s troubles. In it, Dan Loeb poleaxed Ackman in an ‘ill fated’ bike ride to Montauk. Fucking hilarious. “His mind wrote a check that is body couldn’t cash.”

And George Clooney can’t stand him because Loeb had the balls to go after Sony.

Then there’s the decades of outperformance of Third Point, one of the few large funds still relevant in today’s lexicon of market talk. Like many old legacy funds, his recent struggles with the market have been duly noted and derided by all of the debt laden thousanaires on Twitter.

But maybe Mr. Pink has another trick up his sleeve?

Loeb is increasing his bets against stocks, citing chicanery. But it should be noted, he isn’t net short like Dalio — he’s merely increasing some hedges, which is what hedge fund managers should be doing.

“Investors have become increasingly concerned about multiples, particularly since after many years of low rates, there finally was an alternative to equities in the form of relatively riskless two-year money,” he added.

Indeed, the quarter marked a number of changes, with rising bond yields being one of the biggest market movers.

In the years since the financial crisis, the search for yield had forced most investors into higher than normal stock allocations, fueling a nine-year bull market run that had seen few interruptions. However, major indexes have seen multiple dips into correction territory so far in 2018, and allocations to bonds have been rising as government yields have hit multiyear highs.

However, he said an equity short allocation returned 2.4 percent, “and we intend to further increase short exposure to fundamental single names and quantitative-derived baskets in 2018, and less on market hedges to dampen volatility and reduce net exposure.”

Stock pickers such as Loeb generally like periods of market volatility as it presents pricing opportunities.

“Looking ahead, we still see S&P growth in the U.S. supported by fiscal stimulus in 2018,” he said. “We remain focused on maintaining a portfolio that can deliver compelling risk-adjusted returns across market cycles and will opportunistically adjust the portfolio across expected further waves of volatility.”

Loeb said the firm also is watching the economy “to see if a recession, which we don’t think is close, might be getting closer.”