Setting Up For 2015

I seem to be alternating between greatness and mediocrity, every other year. Coming off a +80% 2013, I will end up losing about 20% in 2014. Although I didn’t lose money in 2012, I certainly underperformed. I had stellar 2007, 2008, 2009, 2010 and 2011’s. So what the fuck is going on?

That my friends is developing.

All that I can do now is focus on the future. I am setting up for 2015 outperformance. One of the things I used to do, when building positions, is buy in small increments. I ignored that in 2014 and it cost me dearly. In the past I’d assume my initial entry point would be wrong and I’d buy it in two or three tranches, sort of what I am doing with HABT. This methodical manner gave me time for my ideas to work out. If you’ve been following me a long time, you know I have great ideas, but sometimes get flushed out early. That is due to position sizing and stress points.

Case in point: GPRO.

In 2015, I intend to focus on winning industries, avoid bottom picking and leave that to the degenerate out there in the woods. I will re-establish my dominance in macro-market calls by positioning in stocks that correlate well with the indices and avoid smaller capped names. A certain percentage of assets will be set aside for high stakes poker. But for the most part, my methods will be fairly strict and structured.

Desire is man’s greatest vice. It is what drives us to greatness and then ruins us. The manner by which we set out to achieve desired goals is what separates the winners from the losers. In 2014, my desire for outlandish returns resulted in my person being placed into a ‘fag-box’. But that’s okay, since I still have plenty of powder left and the skill-set to make it right.

Off to see about a 2 1/2 inch rib eye.

In light of JUNO going apeshit, I stepped into BLCM, sub $21.

People often make the mistake of chasing down stocks, like hunched back trolls, into the fucking murderhole. Right now gold and silver stocks are being bought by the homeless cadre of the market. These lads are overjoyed to own gold again and have visions of clean apartments and shampoo running around in their alcohol infested brains. I forget where I read the study that I am about to mention, but it made a lot of sense. It said if you simply avoided losing sectors, each and every year, your market returns would be substantially higher.

Think about it.

Where did buying gold/coal and other bullshit stocks get you this year? Where did buying dot coms in 2000, 2001 or 2002 get you in those years?

Here are some stocks that are down big in 2014, that many of you will chase down into the sewers. Once down there, an alligator will eat you.

DDD -66%
CREE -48%
YOKU -41%
S -59%
VALE -42%
SLCA -20% (that’s wild isn’t it? SLCA is only down 20% ytd)
PBR -42%

You get the gist and I am guilty of the aforementioned too. We all want to be Carl Icahn, sans the flabby physique and old man head, and catch the next NLFX. Truth be told, our lives would be easier and better if we simply stuck to the sectors that are performing.

Such as:

Biotech
Trucking
Footware
Semis
Software
Restaurants
REITs
Airlines

Each and every year, REITs pay out 3-6% in dividends and return another 15-30% in share price performance, yet most people ignore them. If you’re building a wish list for 2015, take my word for it and cast aside the losers; stick to what’s working.

Futures are higher; but does it really matter? The year is done and I’ve been holding my tongue for quite some time. There is an overwhelming urge inside of me to explode with unchecked rage, unleashed upon those who I don’t hold dear. It is only my desire to remain stoic that keeps me idle.

iBankCoin is not just a financial website where onlookers come to shovel shit and shoot the breeze. This is an institution, built upon the hardest granite, the very strongest foundation, that cannot be swayed by pellet guns. I fully intend to see this website flourish for the next 10,000 years, with the crown of Le Fly passed on throughout the generations, not so much different from the pope–sans the homosexual rapes.

Naturally there is money to be made and people to destroy. But what else is there? There is life, is there not? The fabric of society hinges upon the dedication of man to comport himself within the boundaries of decency and law. The Fly is an ardent advocate of such beliefs and likes to believe the criminal element of his readership is fleeting and reserved to the thousands of comments held in the growing moderation file.

The world is a barbarian and I am its club. I shall bring forth the rains of vengeance upon all of those who seek to displace me and will never cease, not even for a second, to utilize my everlasting energy to bring woe upon thee, for you’re deserving of it.

These are the days of regret and missed opportunities. Loss is the ultimate elixir of vanity and hubris. However important a lesson it may be, I feel as if I’ve had my share and would like to carry on the good work of building a fortune and utilizing the genetic talents that have been bestowed upon me, not only for the betterment of my own self aggrandizement, but for the good of the people–the very law abiding citizens of this great nation who are reading this missive and wondering what it’s all about.

My grandfather was the proudest man I’ve ever known. He was comfortable with who he was, wore his Italian culture on his sleeve, and voiced his opinions often in his classically loud baritone way. A small business owner, dealing with furniture, a stand up comedian during World War 2, and a fantastic story teller in his later years: that was my grandfather.

Christmas in our quaint two bedroom apartment in Brooklyn started immediately after Thanksgiving. He’d plaster his cheesy, one dimensional, paper decorations all over the apartment, in every room, even the bathroom. The front door was covered with Santa Claus’ greetings and the 6th story window was framed with large colored bulbs. He made a small chimney out of cardboard and wrapped it in faux brick paper, for the effect of course. Then he’d stick an oversized blow up doll of Santa Claus in it and declared the Christmas season had begun.

These were magical times for me. The whole idea of Santa Claus traveling to my house to deliver gifts was beyond amazing. He’d tell me stories of the time he actually saw Santa Claus, live and in person, when my mother was a child. This only fueled my imagination with endless possibilities.

In his spare time, he was either painting in his closet or baking. Italians express themselves through food. My grandmother was the traditional Italian cook. She never did anything differently, always the same, reliable, Italian fare. My grandfather, being the artist he was born to be, would make fantastic messes in my grandmother’s kitchen, which would lead to dramatic flare ups and eventual evictions for Grandpa Fly from the kitchen.

But every Christmas he did it right. He’d take out his Mother’s 19th century, hand written, recipe of struffolis out from his little tin box and get to work. For those who aren’t familiar, they are small balls of dough, infused with anisette, and deep fried in glorious oil. After they were fried, he’d lather them with honey and candied sprinkles. Sometimes he’d sneak me a shot of anisette when my grandmother wasn’t looking.

He’s also made us zeppoles, which is essentially deep fried dough with tonnes of powdered sugar on them. For a kid who loved sweets, this was my favorite time of year.

We’d buy a real tree down the block, lug it home on foot; and then he’d saw off the end and stick it in a tree stand. He always said the trunk of the tree needed to be cut so that it’d last longer. I have no idea whether this was true or not. All I do remember was the force he’d administer to saw that damned trunk apart. The decorations were something out of the 1920’s. My grandmother would literally string popcorn together and wrap it around the tree. Throughout the month of December, Christmas music would be playing, from real vinyl records, never from the radio. Sinatra was never played in his house, since he hated him. I think he knew one of Sinatra’s cousins and had a personal beef against him. Back then, Italians in the tri-state area all seemed to know one another. If you were in politics or owned a business, you vacationed in the same places and went to the same nightclubs.

Christmas eve was for the kids. My grandparents would wake at 5:30 am to a boiling pot of black coffee. He’d start his “gravy” with braciole, sausages and meatballs. The spread was kid-friendly: sweets, home made anti-pasta, linguini with sauce and meats, baked macaroni with cheese, lots of bread, roasted sausages, peppers, onions with potatoes, and of course lasagna. My sister and I would run around like wild animals, playing hide and seek, then open our presents at night. When we woke up the next day, like magic, Santa Claus’ presents had arrived and we were smitten with joy.

Christmas day was a traditional Italian holiday, one that pushed the annoying kids aside and celebrated the birth of Christ. Coincidentally, my Grandmother’s birthday was Christmas Day too (Happy birthday Grandma!), so it was a really big deal in my house.

Seafood of all kinds was made. He favored mussels, clams and shrimp. I hated all of that stuff, so I usually ate leftovers from the night prior. But I remember how happy they all were, dancing and celebrating over plates of their favorite food and glasses brimming with wine.

You only realize how special things are when they’re gone.

Cheers to the past and to making new memories.

Merry Christmas.

NOTE: My grandparents would play this song every Christmas and every Christmas remind me that my Uncle would always cry when he heard it. To this day, I have no idea why he’d cry.

I just read an unbelievably thorough report about cheap oil and who stands to benefit or lose. This blog will not be structured to entertain your fat fucking faces. Instead, it is an invitation for you to consume some information.

Energy drop benefits middle to lower income families most
Headline inflation should be pressured downward.

Morgan believes oil will bottom in Q2 of 2015 and suggests to overweight oil. Their extensive studies over 7 previous cycles suggest the energy sector bottoms one quarter before earnings bottom and markedly outperforms the market. They cite energy prices are at trough levels on a p/b basis.

Airlines should benefit across the board. However, several of them are hedged at $100+ oil, except two: AAL and ALGT have ZERO oil hedges and will participate 100%.

44% of ALGT expenses are fuel.

The plebeian sub $50,000 income benefit most, especially idiots who buy $150 sneaker. FL, FINL and BWS are foot ware favs and PLCE for bratty kids.

Asset Managers: KKR, APO, OAK and BX benefit most, due to lack of energy exposure and tonnes of cash.
Conversely, CF and AB are fucked.

Sell automakers.

Fuel efficiency standard play: BWA

Lower fuel might lead people to add items to their cars. Bullish on MGA, LEA, DLPH, ALV, HAR, TEN, DAN, AXL

TSLA is fucked.

SYF has zero loans to energy space.

COF and FITB also have little to no energy exposure.

HBHC, BOKF,CFR and ZION are leveraged to oil, as much as 15% of loans. Ergo, they’re fucked.

Get long domestic beverage stocks: MNST, STZ.

CHD and CLX have 80% exposure to domestic sales, NWL 68%.

Chem plays with large oil inputs include: PPG, RPM, SHW, VAL.

Challenged: DOW, LYB, EMN

Less rail traffic from Bakken is net positive for coal, who’ve been hampered with those fucking rail cars filled with frac sand.

They also benefit from lower diesel expenses. ACI is 83% hedged with call options (idiots). ANR is 40% hedged for 2015. BTU is 65% hedged. Every $10 move in crude equals $12 mill in cost savings. CLD takes in $7 mill for every $10 move down to $70, then $5 mill below $70.

X may be fucked due to diminished demand for oil country tubular goods.

Financials who benefit from lower fuel: ALLY, AXP, DFS, SC.

Reduced shipping costs help AMZN.

LII, IR, WSO and SWK benefit from boost in discretionary spending, while DOV and ROK are fucked because 20% of their revenue comes from men with big hats who live in oil fields.

Bullish on refiners: MPC, VLO, TSO and WNR. They hate Canadian oil sands and do not like XOM, CRC and HK.

They are bullish on items sold at gas stations and trade ups at grocery: WWAV, HSY, MO, LO band RAI. Might I add, IMKTA, CASY, CST and COST have gas station exposure too. PTRY was another gas station play, but was recently acquired.

Healthcare: CVS, WAG, DGX, LH, ABC, MCK, CAH all benefit from poor people with more change jangling around in their pockets.

VAR has russian, middle east and latin american exposure.

PCAR, CMI, WBC, NAV, ALSN benefit from big ass truck demand, while CAT, URI, MTW and TEX suffer due to oil and gas exposure.

Lower oil means cheaper expenses for aluminum makers: AA, CENX, NOR.

FCX and TCK have exposure.

They like insurance names with little exposure to Houston, such as DRE, LPT and PLD. They hate EGP, MAA and ARPI for exactly that.

Again with the low end theme, Morgan favors restaurants who feed homeless people: TXRH, EAT, DRI, SONC and JACK.

Retail names that tend to do best: TSCO and WSM.

Specialty Retail: ARO, BURL, ROST and TJX.

Have at it.

Thanks to the ABBV-ESRX deal, shares of hedge fund hotel GILD have been swooning lower. All of the biotech gurus I’ve read are declaring this to be a ‘seminal moment” in biotech land, whereby a pricing war is just around the corner. Whether this is factual or simply conjecture remains to be seen.

Nonetheless, what can be seen is GILD with an 8 handle and a sector down 3% for the day. These stocks have been on gorilla raping runs, so there is significant downside.

Let’s summarize 2014 by looking at the leadership sectors.

Oil and Gas: broken

Biotech: in the process of breaking

Social Media: broken

Technology: doing okay

Maybe 2015 will feature a new set of leaders, such as homebuilders, apparel stores, auto dealerships and names attached to a wealthy consumer. One thing is for certain, 2014 would’ve been a lot easier, and gentler, had I just bought DIA, QQQ and SPY. The art of stock picking has never been harder, which beckons one to seriously pay attention to asset allocation.

Now is a good time to go over your holdings, cut loose the chaff and structure to win in 2015.

Having said that, I sold out of YY for AN today.

NOTE: For Xmas eve, iBC will be featuring two more former bloggers. Stay tuned.

I feel like a gluttonous hog, even though I managed to lose money in a 150+ tape. How’d I do that? GILD contributed to half of my 1% loss. Never mind that nonsense, for we have even more gains to be had tomorrow.

Steer clear of oil. I just read some OPEC asshole suggest oil could trade down to $20, like it was no sweat off his turban. What are these chaps up to, really?

Moving on, North Korea’s internet has exploded, their privileges revoked. Internet security stocks will be the stocks to own in 2015. I own plenty of PANW and FEYE. You can simplify matters by owning the ETF called HACK.

This week of pagan holidays shall be hosted by former bloggers of iBC. Tomorrow we will feature Danny and The Chart Addict, maybe a little Henry Fool. Who knows? We have a full roster of the former bloggers lined up to share their ideas. Very soon, Jeremy will put up an Old School Bloggers column, so that you can easily, and readily, peruse their profane messages of stock market plights.

As for me, I will be practicing Haitian Voodoo with my Voodoo Physician this week, in order to lock in gains for 2015. “The Fly” has many enemies, most of whom attempt, and fail, to strike back at the empire in effortless girl swings. My conflicts make the people around me very nervous. Collateral damage is always something to consider. Just know, and understand, I am not a very rational human being and will go to great lengths, utilizing the vast resources that are available to me, to completely and utterly destroy you.

Don’t lose your life. Don’t bet against me.

Sincerely,

HORATIO CLAWHAMMER

Go read about it. I’m not going to provide you with links, you lazy fuckers. Just know, there is a reason why VLCC rates are nearing $100,000 per day. These oil tankers are being used to store crude, thanks to the super-contango scenario the oil markets now find themselves in.

Longer term, should oil continue lower, US production will be stymied and oil from abroad will come flooding back to our shores, further strengthening VLCC and Suzemax day rates.

Long FRO.

Here were my predictions for 2014.

Doing these predictions is always tricky, because we tend to think in the now, a time when people are sucking on candied canes and spending money like drunken idiots. Nevertheless, Santa Fly will grant you prophecy and will foretell the events that have yet to transpire for the year 2015.

Gold and silver will continue to be viewed as “the idiot trade”, finally sending the yellow metal under $1,000.

Oil will trade in a range of $45 to $60 throughout the year, breaking out in December of 2015–setting up for a banana run to the upside in oil related names.

OPEC will cut production quotas.

US rig count will fall by 25%.

US GDP will grow by 3.2%.

Tech stocks will lead the market in 2015.

The S&P will rise by 11.5%, Dow Jones by 15.5%, Nasdaq by 23.7%.

European markets will outperform US markets and China will outperform all, rising by 55%.

Software companies will undergo consolidation.

Social media stocks will rebound sharply.

YELP will be acquired for $85.

FB will trade north of $100.

BABA will trade above $150.

TWTR will be rangebound, between $35-50. The stock will break out once Dick C gets fired.

Treasuries will weaken in the first half of 2015, then firm up in the summer. For the most part, TLT will be a non-event.

Housing stocks will return to greatness, leading the industrial sector higher.

2015 will be the year of the US Consumer. With an improving jobs and fuel expense landscape, popular stores and restaurants will enjoy record profits.

Amazon will finally turn on the profit spigot, sending shares over $500.

NFLX will double in price, to over $700 per share.

TSLA will trade down by 30%.

AAPL will hit $140 and hint at making a television.

JUNO will be one of the best biotech investments in 2015.

HABT will trade north of $65.

Shake Shack will file to IPO and become “The Fly’s” largest position ever.

Private equity will have a banner year, fueled by oil and gas debt restructuring. BX will trade north of $50.

iBankCoin’s long awaited release of the second iteration of The PPT will be realized, sending the financial website into a renaissance of extreme winship, both shared and appreciated by her millions of readers.