The Night Before Madness

I am going to go ape tomorrow morning. Just know.

About a week ago my largest position was SAVE. I was up 6% into earnings and got clown-raped shortly thereafter. On this evening, my 3rd largest position is WFM. Those shares are being GRAPED due to some obsequious nonsense pertaining to not being able to properly fleece the bearded hipsters who frequent their denizens of organic fuckery.

On top of that, I had a minor position in FRSH, maker of raw pizzas (LOLz); and that too is being dismantled on an earnings miss.

There isn’t a moral to the story– you fucking jackasses. Jokers like me have been taking buckshot to the face since the beginning of time– off stock market chicanery. My saving grace is the decision that I made many moons ago to broadly diversify my holdings over numerous asset classes, with varying degrees of risk. I will be needing several offsetting factors to work in my favour tomorrow, otherwise The Fly will be sad-mad and will likely burn his fucking neighborhood down to the ground.

To.the.fucking.ground.

https://www.youtube.com/watch?v=400V7McERA0

We had a perfectly fine melt up this morning, up until the time when our new Federal Reserve chief had to spew her opinions all over the media, like vomit enriched with plague. The result was a down elevator type of day, with the exception to biotech and banks, thanks to the GEVA deal and steepening yield curve.

It appears that great bond bubble is deflating, finally. There will be mass casualties along the way, as this idiot trade unwinds. After all, who lends money for NEGATIVE interest rates?

This disgusting world of ours is perverse, wretched and also idle. You fuckers have had it too good for too long. The opulence within the elite is so absurd, so ridiculous, one could only hope for starvation to run rampant amidst the streets of Beverly Hills.

I do not care for green eggs and ham. I also do not care for stock market declines. I do not dislike losing money. As a matter of fact, I rather enjoy. It’s just that, I like making money moar. As such, I will now commence ancient rituals that will call upon spirits and demons alike to curse this Janet Yellen and re-pave the walkway towards paradise, also known as new motherfucking highs.

Top holdings: AGIO, N, WFM

The bitch, Janet Yellen, tried to stick me for my paper (extra biggie) this morning, by making idiotic comments regarding equity market valuations. Despite her unsavory opinions, Le Fly is forging ahead this fine afternoon, buoyed by 6 of his top 7 positions being higher for the day.

The big story is the yield curve and the fact that TLT is getting the business, once again. Listen to me: if you’re not gonna take the advice of a Space Alien Magician (SAM), then you’re in the wrong business. All of the shit that you think you know to be true, toss it into your respective flaming barrels of garbage and listen, god damn it, to what I am about to say.

Buy banks.

This is so easy, even an idiot cad can do it.

SBNY and BOFI are my favorites. A good friend of mine likes FRC. The point here is to position yourself for future success.

Markets are weak; but biotech and banks still work here.

It’s important that you know when to delegate shit to other people, in business and investing. If you’re a shitty investor and can’t get to an emotional equilibrium to allow yourself some success, hire someone else to do it. Or, and this is definitely some self-promotion, join services like Exodus, 12631 or After Hours with Option Addict to help get you there.

For me, investing in biotech is hard, because I don’t understand the industry as well as I’d like to. I delegate my biotech research to qualified experts, persons who are able to make better decisions in this field than me. For those of you without the benefit of a high powered rolodex, you can jimmy rig the system by doing some research into what hedge funds crush it in biotech. In my opinion, no one does it better than Baker Brothers.

Coming off their PCYC sale, they just executed a sale of one of their biggest positions this morning, one that will net them well over $1 billion in profits–selling GEVA to ALXN for $230 per share. WOW!

In Exodus, we have some pretty cool institutional tools available and I am going to post the Baker Brothers screen in the Exodus blog today. It’s important to note that GEVA is going out for over $7billion and had zero revenues. This is just an amazing deal that should really light a fire under a wide swath of interesting and innovative biotech names.

I’m gonna talk my book here. I like AGIO, ICPT, JAZZ and ANAC here.

Don’t look now, the dollar has been trending lower for a few months now. Interestingly enough, the gains in the dollar coincided with the bottoming out in oil. The interest rate complex has shifted, as yields race higher and the curve widens. It’s the polar opposite of what we’ve seen in the market for the past 6 months. Hardly anyone I know believes it will last. But what if it does?

Is there anyone out there suggesting oil is back and the dollar is heading straight to the sewer pipes?

How about copper bulls? Anyone?

Iron and steel players? No?

Or, how about gold and silver bugs? I know some of you doom and gloomers are still stockpiling that shit in your bloomers. But, for the most part, the investment community has given up on the trade.

I am tossing a lot of questions out there, addressing an idiot reader class. I apologize for inserting additional pressures into your daily monotony. It’s bad enough you need to figure out how to boil a cup of soup, or melt cheese atop your elbow’d macaronis.

I am going to play The Devil here tonight and put together a basket of commodity related stocks for you, names that may benefit from the drop in the dollar and a return to sweet glorious 1970’s American styled inflation.

Copper: FCX
Gold: ABX
Oil: PDCE
Industrial Metals: TCK
Oil Exploration: CLR
Oil Equipment: NOV
Chemicals: WLK
Steel/Iron: VALE
Machinery: JOY

Those stocks, for the most part, are the best of the best in their respective industries. When buying distressed sectors, you really want to stick to the bigger names, otherwise if you’re wrong you’ll get clown raped on a downturn. The above stocks might not make you 100% like some small capped lotto tickets; but they’ll get you started in the right direction–providing the dollar continues to get fucked and people delude themselves into believing China is back in play.

CRM is halted off news that MSFT might empty its coffers to buy it. Any deal to buy CRM is going to send shocks through the software industry. It will place MSFT at the pinnacle of the heap, yet again, firmly placing Lawrence Ellison in the ‘fag box‘ for eternity.

Benioff, CEO and founder of CRM, started at ORCL and is good friends with Larry. This will not go unsettled. I do not believe MSFT will be able to consummate a deal without Ellison driving his yatch to Washington to unleash a barrage of attacks on the Redmond office.

Another software company to play close attention to is Netsuite, ticker. N. Ellison owns a piece and has mentioned an interest in acquiring this company in the past. If Ellison cannot get CRM, he might just roll up N and call it a day.

It just so happens that N is my 2nd largest position, putting yours truly in a position of dominance over you. I outperform all of you because I have a vast knowledge of the market, not seen since the days of Jay Gould.

This market will not stay down forever, ladies. A deal of this size will move markets higher. Wait for it or get ahead of it.

Black smoke and plumes of poisonous gases are making its way around Wall Street today, killing off hundreds of leveraged traders. Over 70 NASDAQS have been stolen from the national treasury and all appears to be lost.

Do not flee, lads. Let’s negotiate terms first (extra weak guy from Braveheart).

Exodus will lead the way, do not fret. Grab a chair and put it near your fire. Throw things into it to watch them burn. I always like to do that. It gives me a certain satisfaction to know that all things, even us, succumb to fire.

This wretched market, built upon the defunct mortgages of millions of disheveled Americans, will prevail. Some of you might view me as a caitiff, a person whose sole purpose on this planet is to profit, even at the expense of others. While all of that might be true, what you don’t realize is your ability to swim alongside me in the bloody waters, killing and maiming for fun and profit.

Biotech and tech are very weak. Strength can be found in basic materials and banks. The lower TLT goes; the higher my SBNY will rise. The medicine man shall rise again and seek out new highs. One must exhibit a modicum of patience when positioning into pinless biotech hand grenades.

Remember, as yields go higher, utilities become less attractive. Also, the dollar should weaken and commodities will rise. This all goes hand in hand, part of an old playbook. But it’s a dangerous game to play. I’d rather own the banks instead, profiting from the yield curve steepening.

Bottom line: I am not concerned with a one day drop. I will pay closer attention to this drop if we close near the lows. I will begin to worry should this tone carry into tomorrow. I invite you to be patient, eat a few sandwiches and wait for Exodus to do its magic. Quit being such a fucking zebra.

Futures are weak, and for the most part, Europe is trading lower. A great wind comes from the east and it will take all of your belongings away, leaving you naked in the street in a vast sequestered remoteness.

After all, with these gains in the general indices, up to the tune of 3% for the year, one mustn’t be greedy and wait for more. Could you imagine the SPY being up 4, 5 or maybe even 6% for the year? It would be the bubble of all bubbles that would destroy the very fabric of this low-brow society that we live in today. A place where the Met Gala stands for crass perversion, a denizen of whorish immorality, is a place that Le Fly doesn’t spit on when aflame.

You’ve had it good for a long time, six years running and gunning–padding your bank accounts and vaults with treasure. The time has come for a great reversal to the mean, a precipitous drop of moronic design.

Will I be selling?

Of course not. Le Fly welcomes hardship like a Vampire stumbling across a blood bank. Being up 20% for the year without heart pounding draw-downs feels unnatural to me. I want to feel the pangs of misery and indecision now, in order to fully appreciate the position that I am in. While many of you are sticks in the mud, ordinary readers from ordinary backgrounds, I still have faith in your mediocrity to wade through the storm that is about to come.

Or, the market might just erect a full middle finger, take out a 45 revolver, and shoot the last bear standing in the face.

Either scenario is perfectly acceptable with me.

I hope you faded the rally and bought bonds.

By the way, the best time, historically, to buy TLT is in August. The worst time to own it is now. This is getting pretty redundant but there are still some of you bears left. It is my job to hunt you down, capture you, then skin you alive until you learn your lesson. “The Fly” does this from the kindness of his blackened heart.

I hope you pussies enjoyed the nice seasonal weather, eh? You fuckers really seem to catch hard-ons for warmer climes, wasting away in a sea of beer. Perhaps if you’d spend 1/4th as much time focusing on productivity than cirrhosis of the liver, you’d be in a better position to make purchases? Then again, what the fuck do I know, some space alien magician who swam out from the sewers who now has fucking laser beams pointing at your dumb heads from outer space.

For the day, I made 0.94%–up 20% for the year.

You better pay attention to these fucking yield curves–because they’re steepening. TLT is getting the business and banks are going to mint coin on this move.

Very simply: there is an inverse relationship between the yield curve and equity performance in bank stocks. Now that yields are rising, and fast, expect your local money manager to awake from his slobbish slumber and get long super regionals.

I have two favorites: SBNY and BOFI, both high growth/quality super regionals.

I added to SBNY on this move here today.