A GIANT Catastrophe

The Giants acted like the Mets/Jets and Knicks combined today, getting lit up by “The Dog Killer”, in an epic 4th quarter catastrophe. Just in case you didn’t know, their season is effectively over.

It is the will of The Stock Gods to punish the team of Jakegint for his transgressions against Le Fly.

Good day.

A splendid end to a wonderful week. I just swapped out AKS for MGM in my personal accounts and now find myself leveraged 200%, going into “merger Monday.” For clients, I am decidedly bullish, with 90% long, 10% cash. My positions range from silver to tech to oil/gas to video games. Essentially,  I am long high beta into what I deem to be a “window of opportunity,” from now until New Year’s.

Santa’s sleigh is ready and he will murder you, if you get in his way. There is nothing smart about betting against holiday joy or New Year’s bonanzas. Failure to adhere to my words of wisdom will lead to a swift “zero-hedging” of your accounts (I mean that in the most heinous of ways).

Just to reiterate, U.S. corporations have the most cash on hand, as a percentage, since 1959. The money needs to be invested and I believe 2011 will represent nirvana for the investment banking community, as companies shuffle the chairs on top of their cruise-liners.  As you know, I don’t fucking lose, so do yourself a favor and get with the program.

UPDATE: I bought 30,000 EK

I bought 10,000 MGM.

Pardon my tardiness, as I’ve been scurrying about in preparation of Mrs. Fly’s birthday.

My year to date gains are being stretched, like Plastic Man, thanks to AKS, TTWO, CCJ, BBRG etc. Like I said before, nothing can stop this market. It has the swagger of a pimp with 10 diamond rings and the ethos of a gentleman wearing two tuxedos, three top hats and 4 canes.

Yes, it’s true, the holidays will be set on a grande stage this year, at Le Casa del Fly. There  is a large inventory of shrimp cocktail and high end champagne to go around. Money will be tossed around as if it was counterfeit and laughter will be contagious, especially when that ridiculous ball drops on New Year’s eve. While it’s true, many in this country are suffering, through job loss and/or retarded money management mishaps. None of those things afflict me, so I am not to be bothered with “suchness.”

TTWO is a $15 stock. Just like MWW sprinted higher and I erroneously sold it near $20; TTWO will continue to charge higher in the coming days, weeks and months to come. If you want a model of how a business should operate, TTWO is that model.

Oh, by the way, the idiots who are short AKS are getting “black flag” treatment today, rightfully so. I am heavily long AKS in my personal aggressive accounts, lending to personal winship on a level that books are made from.

Keep your eye on the metals. They are making a late year move. For the most part, they have no participated in the 2010 rally. It is widely believed U.S. gdp will grow at a 4% clip in 2011. Surely, we will not build with sugar and cotton. Position ahead of the herd.

Top picks: AKS, CENX

NOTE: ORCL smashed earnings.

NOTE II: TTWO blew away numbers. You’re welcome.

Earlier today I suggested purchase of bond funds, specifically for the month of January. Correct me if I am wrong, but we’re still in December, no? I pardon your transgressions and forgive you of trespasses. Now is not the time for bond funds, small pleb. Instead, it is time to delve, mind you, into commodity related stocks. I am pleased with the action of my metal positions: AKS and CENX. For the most part, aluminum has been one of the few disappointments of 2010, due to excess supply in China. However, as growth commences, so will demand. CENX is a leveraged play on aluminum. Should prices spike, so will CENX.

I’m liking gold and silver on this dip. My favorite is EKX, of course. Additionally, I am a HUGE fan of REXX, at these levels, or anything under $15.

Essentially, “The Fly” is all about winning, irrespective of monetary gain. Oh, in case you were wondering, yes, I am riding my TTWO position into earnings this evening.

A great man once said, “No balls, no babies.”

NOTE: I trimmed my FTK position down to 100k.

Looking over seasonal data for the month of January, one thing is for certain: it is the month of bond funds. I am not talking marginal outperformance. Some muni bond funds have been up 20 straight years, without a downer. Looking over some funds, like EIM, this trade looks very, very tempting.

Municipal bonds are the proverbial canary in the coal mine, for America. Meaning: should the credit of the United States come into question, it will first be expressed in the muni market. I do not think that is the case right now. I believe there is a massive asset allocation switch taking place, year end bullshit.

With regards to S&P versus bond divergence, it is wide as fuck right now; but it never lasts. The two will meet somewhere in the middle, eventually. That means stocks will trade down and bonds will trade up. I expect this trade to be on full blast, starting January.

What’s the trade?

I have a variety of bond funds on my watchlist, all listed inside The PPT‘s Risk Appetite Index. The seasonal factors are too tempting to ignore, especially after such large declines. Plus, Bill Gross just stepped up and dropped $17 mill of his personal fortune into a variety of bond funds. That has to count for something, no?

This bond fund trade is equal to TLT in August or Q in December: flawless.

Over the next two weeks, I will be wrapping up my year and reflecting on what went right and wrong, for me, during 2010. There are many lessons to be learned, some will repeat over and over again, in a loop, because I am stubborn. However, there are some distinct methods that I have picked up this year, all to do with trusting Clams, especially the ones who have beards. Nevertheless, before I delve into my successes and failures, let’s have a look at the overall market and what worked/failed.

Biggest winners, under $1 billion market cap:

Biggest losers, under $1 billion market cap:

Biggest winners, YTD, with min market cap of $1 billion:

Biggest losers, with min market cap of $1 billion:

ETF’s only

Biggest Winners:

Biggest losers

The passage of the tax bill, albeit reckless, is sure to help buoy equity prices in the near-intermediate term. It is HUGE. However, the bigger story is the ongoing COLLAPSE taking place in the bond market. PPT subs, take a look at The Risk Appetite Index. We are approaching “Flash Crash” levels of panic and equities have no budged. Why?

Answer: the money is finding a home in stocks. That is the only logical reason for the vast disconnect. Granted, borrowing costs are going up; but they are hardly punitive. Do not discount the carnage in the bond market as nothing, for it is the apocalypse for fixed income players. Remember, they have nowhere to go, due to the Fed’s zero rate policy. Moreover, corporations need to think about alternatives to Treasuries, such as other companies that are publicly traded. Perhaps this is the intend of the Fed? Who knows.

All I know is what I see. And I see dead people in bonds, while young fuckers pop champagne bottle long stocks. You must admit, the transaction is taking place in a very orderly fashion.

In short: buy stocks, get drunk, and do something special.

Top picks: REXX, EXK

There is nothing to talk about. There is nothing to analyze. There are more sellers than buyers today, in most stocks, with exception to the psychopath shareholders bases of AMZN and OPEN. Needless to say, I am not paying much attention to today’s action. If I did, I’d drive myself fucking insane.

Dollar up, commodities down, treasuries down equals people getting nervous and shit. If you are short term oriented, prepare for a pullback and be ready for it. Today’s tepid reaction is nothing, by the way. When the market really “consolidates”, it will trade down 5-10% inside of two weeks.

Bottom line: I am not buying dips, nor am I selling.