Priced for Perfection

High beta stocks fuel speculation. It’s what keeps you coming to the market place day in and day out. However, from time to time, the caprices of speculators gets them tangled in a web of lies and deceit, leading to grandiose losses–as is the case with DMND this morning.

I’m a big fan of high growth, high multiple stocks, as they tend to make it worth my while when investing. For good or for worse, they offer excitement and vigor. But sometimes they make me want to slap the shit out of people with hot slices of pizza. The following list, stolen from the archives of The PPT, are names with extraordinarily high PE’s and excessive year to date returns aka “priced for perfection.”

On a good earnings miss, anyone of those stocks could fall 20% in a minute and no one would bat an eyelash in surprise over it. They’d be discarded like weak babies in ancient Spartan times. People on the StockTwits would make fun of longs, lending to the fervor and ultimate demise of the shareholder base, leading to even greater losses. In many respects, the entirety of America is in this position.

We have lots of debt and a great deal of gusto. Hell, we fight wars in perpetuity and promise to fight more, even bigger ones, in order to stop others from acquiring science. Our tanks move fast and our airplanes drop heavy munitions on backward people. But our treasury is depleted and our government is stupid. Everything is going to be all right, however, because Clint Eastwood said so. He is a great cowboy of a man and doesn’t like to compromise, especially with bad guys.

Over in Europe, they have bombastic plans to bail themselves out, even though from a mathematical viewpoint, it makes no sense whatsoever. But, as a whole, we’ve forgotten about the short comings over in Greece, Portugal, Ireland and Italy–because it is so 2011. The debt doesn’t have to be paid and the banks don’t have to honor CDS contracts and they don’t even need to recognize their losses. We can just make believe none of this ever happened, whilst watching cartoons and sloppily eating cereal with excessive quantities of milk.

As for me, a mere spectator of the market, servant to the readers of top shelf financial commentary, I humbly wait in the balance for an opportunity to buy margin liquidations.

That is all.

Shares of DMND are getting eviscerated, following the revelation that there really is a walnut mafia and the company is wholly criminal. Having said that, I am happy to report that I sold said shares in the mid-30’s a few weeks ago–all happily and merrily reported here at the time of trade. GRPN and EA are getting clocked too, while AKAM springboards higher.

If you are new to the market and playing the earnings guillotine game, just know you are gambling, not investing in anyway whatsoever. After such a huge run up, shares of companies who disappoint will be annihilated. If I were you, thank heavens I am not, I would avoid all earnings plays, unless the position is so small it is immaterial to your position, similar to my CPST position.

Of course I did not like to see CPST down today; but it’s been up over the past few days, hasn’t it? Ahead of earnings, weak hands will sell; but that has nothing to do with inside knowledge of what to expect from CPST. If the stock went straight to zero tomorrow, I would lose 5% of my assets under management, entirely immaterial to my position.

As you scurry about looking for a roulette table to gamble your small fortunes on, “The Fly” waits in the tall grass, moonstruck by the meal ahead.

http://www.youtube.com/watch?v=57FG5vBLKvc

I woke up to the sound of my alarm, playing Bach. Immediately, I threw my music device across the room, onto a chair, in preparation for the afternoon ahead.

As I prepared to sit down, with plunger of Earl grey tea besides me, honey and milk, never any sugar, Mrs. Fly rudely interrupted me with news of immediate departure.

To make a long story short, I am drivin Miss Daisy now, unable to complete God’s will, having me at the computer, banking coin like a criminal with a sawed off shotgun inside a Citibank vault.

Okay, that was a bad analogy.

Regrettably, I am writing today off as “day non grata” and will pursue my efforts tomorrow with renewed determination and zeal.

By the looks of it, the market isn’t interested in trading lower. Quite bizarre.

I’ve been up since 6am reading reports, conjuring up wild ideas, arranging meetings for both my business and personal life. As you know, I am trying to find a new home. But now it’s time to go to sleep, as I have nothing to do or say here, for the indefinite future.

By no means will I sit here for you, slaving over a computer, flinging out stock picks like bean pies. I am a mere observer, fan of the markets, owner of nothing but CPST. My cash is held in money market funds, focused on US treasuries, with zero exposure to European sovereign debt. I make it a point to clarify this distinction.

After a hearty breakfast and a good chuckle or two at the people on the teevee, Le Fly will take a “power nap”, whereby rejuvenating himself for the arduous day ahead.

As you punch cards and deal with the monotony of being a line factory worker or municipal hack, find solace in knowing “The Fly” is resting on his 1,500 thread count Egyptian cotton sheets. If you are unfamiliar with thread counts and how it pertains to comfortability, you are a rancid rube, undeserving of quality.

See you in the afternoon!

“Yes, hear the sounds of flawless glory, you small tailed rodent from hades!”

Just in case you’ve neglected to keep track, “The Fly” hasn’t lost money in 2012, not even on a solitary trade (well maybe just one, a rather small one at that). While it’s true, the market’s frenzied power-fuck higher has helped a great deal, that doesn’t mean jack shit.

What I am about to tell you will shock and ground many of you fuckers into dust. I can literally take your skeletons, if I wanted to, and drop them with my hand into my high-end Blendtec blender and drink you. That’s right, your skeleton would crumble into a fucking smoothie at Le Casa del Fly. You are all cordially invited.

At any rate, pardon my violent distraction; I truly meant no harm by it and do not intend to participate in outright cannibalism. I am fixed on this market like no man on Earth. I apologize to all of you who enjoy my trading loss stories, as they tend to illuminate a great deal about my person and how to deal with adversity. But, I do not intend to lose money, at all, in 2012–so the lessons of adversity will need to be learned elsewhere, Sir.

What the fuck is this person talking about, you ponder?

In the boldest stentorian tone you’ve ever heard, one that rattles the foundation of your bullshit trailer home, I am declaring that I will not lose money on a single trade in 2012.

How am I doing thus far?

14 for 15. My only loss was in the bastard of a stock, MWW (but that doesn’t count– because I wasn’t ready).

May the fires of hell take me into its wrath if I lose money on another trade in this glorious year of 2012, the year when the world is scheduled to end aka “The Year of The Fly.”

I’ve been taking advantage of my new unspoiled condition, inhaling the aromas of conquest, practically floating about the office, dressed in a Roman robe (all white like a senator), clad in wooden sandals (like a fucking warrior). The incense is burning with ridiculous intensity, much to the chagrin, if I might use such a word, to the indomitable Mrs. Fly.

She tells my person, with direct firmness “hey you, put out that smoke, it is causing me to die of suffocation.”

As always, I retort “woman, thou shalt not talk about the holiest of smokes with such a tenor. Go bake me bread, unleavened if you will, seasoned with rosemary and sage, doused with the oils of olive and rose, pal.”

The answer to any of your questions or criticisms is the same: “I’m up nearly 20%, year to date, bitch. Thanks, now go shoot yourself out of a cannon, off of a bridge, pal.”

But you will soon.

There is extreme complacency in this tape, the type of laziness that gets people dropped into hidden water wells or eaten alive by demented sharks, whilst sun bathing on a fucking raft. NFLX is trading north of $130 and the world is chockfull of cash, even though it is heavily burdened with debt.

We’ve become believers in the idea that Ben Bernanke controls the market with his beard. When he trims it, the Dow goes lower. When he lets it grow, the NASDAQ screams to the upside. So you know, that fucker is looking like Merlin right now.

The term “long in the tooth” comes to mind, while observing this tape. As such, I’ve taken profits on the entirety of my SODA position today, leaving me with just CPST. I will be holding through earnings, scheduled for 2/9.

Today’s tape is mixed; but I see more weakness than hardiness. As a matter of fact, if I was a betting man, I’d bet on a late day sell off, graping all of those who haphazardly tossed life savings into the market today.

I am about 95% cash, keen on acquiring the opportunity to buy your future margin liquidation, as bored as a vending machine inside of a blockbuster.

NOTE: We have more than 100 slots left in the March Madness contest, where I am gifting $1,000 to the winner. For some reason, members are being lazy and haven’t bombarded the comments section inside of The PPT. Contest submissions will most likely be closed by tonight.

“Mr. Tulkinghorn, sitting in the twilight by the open window, enjoys his wine. As if it whispered to him of its fifty years of silence and seclusion, it shuts him up the closer. More impenetrable than ever, he sits, and drinks, and mellows as it were in secrecy, pondering at that twilight hour on all the mysteries he knows.”

“I will die here where I have walked. And I will walk here, though I am in my grave. I will walk here until the pride of this house is humbled.”

“Around and around the house the leaves fall thick, but never fast, for they come circling down with a dead lightness that is sombre and slow.”

In case you didn’t know, today is the 200th birthday of the father of modern day english, Charles Dickens. The vast majority of you opt for ESPN highlights before bed, instead of reading timeless masterpieces by Dickens, perfectly demonstrated by some of his sterling work from Bleak House above. The truth of the matter is, no matter how rich you get, you’ll always be a scoundrel, dominated by perversions and vices instead of intellectual vigor.

For example, you come to iBankCoin on a daily basis, totally devoid and unappreciative of the skill it takes to outperform the markets year in and year out, leaving malicious comments, hoping to be publicly chastised and humiliated by yours truly. I am inured by your careless vulgarities and feel empathy for your offsprings.

When keeping society with people of superior intellect, you should make it a point to shroud your tousled and deranged opinions, and instead, immerse yourself in the effulgence of those destined for greatness.

If you are interested in seeing what true mastery of music is, watch the clip below. Naturally, some of you will default to dishonorable interpretations, esteeming the looks of the violinist instead of her achievements. But do not feel ashamed by your baseness, my dear creature of depravity, it is your nature.

Some of you wonder why I am buying small cap stock CPST. As you know, I am 85% cash, long just SODA and CPST. For the most part, CPST is a diceroll. They are enjoying a renaissance and business is growing again, despite headwinds. They have a $100 million+ backlog, they’re expanding in the shale gas markets in Russia, and the tide seems to be turning in their favor. But the real reason why I am buying it is because of management. I want you to listen to the final comments by the CEO of Capstone, during last quarters conference call and ask yourself: “does this sound like a man in charge of a company on the decline or ascendancy?”

What do you think?

UPDATE: I sold out of SODA.

The wholesome folks over at iBC are preparing the grounds for war, reintroducing the annual March Madness contest. Ragin Cajun will tell you all about it sometime this week. The winner gets $1,000 and the first place loser gets to choose between select “iBC gear” or a set of steak knives (I will literally go out and buy them for you). The 2nd place loser is banned from the site.

Any questions?

As many of you know, “The Fly” kicked off this contest, many years ago, by defeating all of you miscreants with a godly short Washington Mutual trade (fuck WAMU).

The only catch: you need to be a subscriber to The PPT in order to qualify for the contest. Frankly, if I am going to be giving anything of value away, in this case $1,000, I will only bequeath it to a gentleman of my choosing. Having more than 1,000 members inside of our illustrious club of exclusivity and pomp, there will be more than enough people to fill the ranks.

Details will be forthcoming.

I was up more than 1% today despite having 75%+ of my assets in cash, thanks to “coke addled gorillas with erect penises” runs in both CPST and SODA (my only positions). This is the sort of shit that cannot be told, it must be experienced.

As I encroach on +20% YTD returns, clouds of dark smoke and bustling metal cloud the horizon. Greek statues of gay men with hairy testicles stand in the way of the Wall St bull. In many respects, it is a battle for the ages. The fate of a generation, or two, is about to be decided.

I sold out half of my SODA position because it was gigantic and felt like my crystal ball was unclouded, brilliance on a level understood only by the telekinetic. I am making up for last year’s paltry returns through excess. Clientele deserve the very best and I am exactly that.

Good day to you.