Not Enjoying the Rotation

In case you’re wondering where I’ve been: it’s none of your business. “The Fly” is busy–all the time– and slices out tiny morsels of his day to speak to you. Please don’t tell me you think these blogs consume a lot of my time. I can write like you can throw away opportunity. Plus anyway, don’t let the markets fool you, there is a weak underbelly, a dark side, to this tape. Most of you will finish in the red and stay there because of an old seahag who felt it was incumbant upon herself to ruin it for the rest of us.

I am not saying she is wrong, per se. All I am saying is that this business is hard enough as it is than have to worry about the fucking Federal Reserve Chairman taking shots at my holdings. That’s all. She might as well pen a hit piece on Seeking Alpha and make it official.

I am having a mixed day, with most of my speculative holdings in the red. My conservative holdings are doing fine which suggests a rotation of sorts is underway.

UPDATE: It appears Janet has started her own blog on Seeking Alpha.

Ok, I held back this afternoon, with regard to my true feelings towards Janet Yellen.

But now it is time to let this geriatric woman, this misanthropic hog, know exactly how I feel.

It’s bad enough that this bastard of a stock market is manipulated from the top down. All of the traditional correlations, based upon LOGIC, have been distorted by the perverts at the Fed. I’ve grown to accept them and even embrace them, interpreting their words and actions as a ‘green signal’ to speculate, open up personal harems, and behave in gluttonous ways–at all times. Now this lady, this Brooklyn troll, tells me that ‘social media and small capped biotech stocks’ are no good?!

WHAT THE FUCK!

Are you serious? Since when is it the Fed’s business to tell me what sectors of the market to avoid? Say for example, I listened to Ms. Yellen and sold short YELP, based upon her analysis. Let’s say, for example, I sold short a small capped biotech stock named Seattle Genetics, SGEN, thinking the Fed knows all.

What if YAHOO took some of their ‘fuck you’ Alibaba money and made a hostile bid for YELP at $100 and on the very same day Pfizer acquired SGEN for $98 per share, backed by the Baker Brothers? Would I be entitled to file a lawsuit against the Fed, or are they protected by the ‘newsletter act’? Any attorneys out there?

If the good Dr. Benjamin Bernanke were still at the helm, none of this would be happening. He’s not a stupid man, unlike Janet. She is a very stupid man, indeud.

https://www.youtube.com/watch?v=RW3Y4OuTPHQ

Rocky Dennis, Superstar Inflation Analyst

That’s my raw commodity index, year to date. That doesn’t look inflationary anymore, does it? Take that, coupled with the fact that bonds are gapping higher daily, the dry bulk index is at new lows, sub 800, and one could make the argument that we are headed, rather decidedly, into the deflationary vortex of magnified death. You don’t need to take my word for it. Have a look at some three month returns for some of your favorite commodities.

Wheat -23%

Corn -23%

Coffee -21%

Cotton -20%

Uranium -11%

Natural Gas -11%

Death to the farmer. Long live the grocer!

Going against her better judgement, I disobeyed Grandma Yellen and averaged down in shares of RUBI. Its been an awful performer and I really shouldn’t be buying more of this offal. However, it’s down 9 consecutive days and this whole sell off due to Janet Yellen suggesting valuations are stretched in social media and biotech has me sick to my stomach.

The manipulator in Chief doesn’t like the market to be manipulated. How ironic.

Oh no, all of the bubble basket stocks are sinking again. I think it’s abundantly clear to me, as it was for the banks from 2007-2009 and the dot coms from 1997-2003, that whatever sell off afflicts this market it is going to be led lower by “the bubble stocks.” You didn’t think the internet sector first started going down in 2000 did you? Please. Those bastard stocks knifed lower from 1997, even before that–as AOL and Compuware jockeyed for dominance.

Whenever an industry is innovative and/or widely owned, like banks in 2007, the valleys are onerous to investors. They make you feel terrible when they’re sinking, joyous when they’re rising to new heights. Most people can’t stomach them and sell out at the bottom, after buying at the top. It all ends badly, as you know. However, how long will this movie last? That’s another question.

Today is a classic reverse from the top and punish everyone who has arms and legs sort of day, especially those buying the anointed sectors. Either we recover our losses and the market continues to streak higher. Or, the NASDAQ drops by a percent or two and you regret ever buying into the market.

Get your popcorn ready.

NOTE: In case you didn’t know, Janet Yellen “the meddler” took off her Fed hat and wore a stock analyst hat this morning, taking aim at social media and biotech stocks.

“…Valuation metrics in some sectors do appear substantially stretched—particularly those for smaller firms in the social media and biotechnology industries, despite a notable downturn in equity prices for such firms early in the year.”

Unreal.

Whole Foods is probably my no brainer trade of the year, heading into Turkey day. Their earnings misses have been nothing, compared to the carnage dealt out to shareholders–with shares off by 32% since last year.

Pick a metric, any metric: this stock is trading between a 15-35% discount based on historical norms.

The thesis play is two fold:

This is a premier brand tarnished and dragged through the mud as if they were selling cocaine on the side.

Pricing and margins will recover, especially with corn barreling lower, off by 12% in two weeks.

In summary, this is a prime target for activist shareholders, private equity guys who clamor to snatch brands like Whole Foods. I haven’t initiated a position yet, because the time isn’t ideal. However, if I was stuck holding just one depressed stock, a fallen angel of sorts, I wouldn’t lose a minutes rest owning WFM at 21x 2015 numbers.

I work with retards.

Aside from talking with an old client, I spent the lionshare of my day ignoring my investments, dealing with retards. My time is very valuable, yet I chose to waste it. Now, I am going to head on over to the gym and finish my body off for good, as I am already working through wrist, elbow and knee injuries. None of that matters frankly, as I am intent on going into that building and lifting heavy items. Sure, I might get injured in the process and my body might feel pain later on. But my mind is operating in ‘lunatic-phase’ and I am much better off lifting a bunch of metal than punching someone’s chest hairs off outside.

Having said that, my portfolio was about flat for the day, marginal gains–really stupid stuff.

I’m not having a great day. It’s sort of ordinary. I felt I deserved a ‘gluttonous, joyous, stock market day,’ but apparently the stock Gods felt otherwise. I am up around 0.8%, held back by the likes of RUBI and AG. Most of my positions are higher; but it doesn’t feel sustainable. The summer malaise is kicking in. I have to say, this isn’t the ideal trading scenario for me–but I will try to make the best of it.

I really, really wanted to buy PEIX. I missed it.

I wanted to buy LEJU and TEDU back. Those went higher today too.

As of right now, my #1 high conviction trade is TSL. Do you know why? Of course you don’t, otherwise you would’t be reading this.

The Obama administration is wrong for wanting to levy duties against Chinese solar companies. The WTO just ruled against us and said it was illegal. Obama is a servant to the international court and will obey. That’s my play. Plus anyway, starting a trade war with China is ridiculous and the stock is dirt cheap.

That being said, I have a problem holding onto stocks for more than a month, so I’ll likely be out at the first sign of greed. But this stock should continue to work all year ’round. Other chinese solar plays, like YGE, look good too.

That’s what I’m doing pal. What are you doing?

Back in the old days, I used to “milk the farmer” in a different way, by tapping into his profit stream, via seed and fertilizer plays. However, as of right now, I am looking to vanquish him, profit from his demise.

The price of corn has been spiraling lower and this presents a unique opportunity for companies with high corn input costs. Naturally, this isn’t a new trade and the stocks I am about to mention have already moved higher. But that doesn’t mean they are done. I am talking about beef, chicken, ethanol and possibly whiskey.

As you know, in this retarded nation, we feed our cows corn, for reasons unbeknownst to me. Perhaps we enjoy afflicting our citizenry with ecoli. Nevertheless, with corn lower, this means protein plays like HRL, TSN, PPC and SAFM pay less to feed their animals. On the restaurant side, stocks like RUTH, BLMN and DFRG might do better. Let’s not forget about the major chicken plays too, like CMG, YUM and BWLD.

On the ethanols side, PEIX, GPRE and BIOF might benefit.

Lastly, MGPI provides food grade alcohol to most of the bourbon manufacturers in this steakified nation of ours, also another play off of corns demise.

Interestingly enough, this reduction in corn hasn’t resulted in higher margins at the grocery chains, yet. Stocks like FWM, NGVC, TFM and WFM have been in the penalty box the whole time. Which leads me to my next conclusion: perhaps it’s time to look the other way. I am not buying the inflation trade and Americans are a gluttonous people. I don’t like chasing stocks like PPC, which I was buying below $5 a few years ago. However, I do like the idea that the grocery chains might soon see an uptick in margins, thanks to commodity prices coming back down.

It’s a contrarian play and you might have to wait a few quarters for them to work. Come thanksgiving, something tells me you’ll rejoice buying WFM, TFM and NGVC when no one else wanted to.

Gold and silver are weak. However, the rest of the market participants will be popping champagne corks in each other’s faces in about an hour. The reason for the melt up: an acute desire for gluttonous gains.

DEVELOPING…