Fly Buys: PWAV, CHNG

Based upon the will of Tengri, I bought PWAV and CHNG.

Disclaimer: Trading ahead of elections may lead to quick decapitation.

Like gluttons in a room filled with decadent desserts, we want it all. Two years removed from such a “tragic and debilitating” recession, the markets are ripping to the upside. The market surge in 2009 was understandable, coming off the lows. However, what we are witnessing today is simply hedonism, stemming from a deep rooted sense of entitlement as a people. I say this without the taste of sour grapes, 75% long going into today’s trade.

We wanted our internet in 2000, until it crashed the economy. Then we didn’t like the internet. So, being the fickle little pickles that we are, we opted to put our money into real estate, fueled by cheap money and zero standards. When that gig was up, we walked away from our investments, without a care in the world. Hey, it wasn’t our problem. Blame those bastard bankers. But the bankers didn’t want to pay either. They said “we are too big to fail and it’s not our fault. Blame the politicians.” The politicians ate it up, partly thanks to all of the money they were getting from the banks, and bailed them out.

Everyone’s happy, right?

Not exactly.

Now everyone wants credit again, since the banks are flush with cash again. Hell, the politicians allowed them to hide their losses and they are getting free money from the Federal Reserve. We want free money too! But the bankers don’t want to lend us anymore money, since they have an easier gig: front running the Fed and buying treasuries with the money that the Fed gives them.

The people of America are outraged by this relationship and the politicians eat it up. They form “Tea Parties” and promise to return American back to its former glory. The people love that idea, especially because the current group of politicians are indolent jackasses. It’s a no-brainer.

But the people are still mad, watching their IRA’s and 401k’s go down. Miraculously, the market ignores all bad news and trades up big, spawning a new form of investor who is unafraid of risk. After all, if the Federal Reserve is handing out next to free money and China is growing at the scientific rate of 9.5% every quarter, hell, nothing can derail stocks.

Like the upright walking pigs that they are, asset managers pile into equities, without fear. They have no fear because it’s not their money at stake, just a bunch of blue collar retards from Dumbville, USA. The folks over at Dumbville are elated with their monthly account statements and begin to open up discount brokerage accounts to get a piece of the action, using discretionary income. They buy all sorts of stocks, like NFLX, AMZN, CRM, or whatever Cramer from CNBC is promoting on a given day. It doesn’t matter that the upright walking pigs, the politicians and the Fed got it wrong during the dot com era and during the collapse of the housing market; because “it’s different this time.”

And the circle of destruction continues…

We keep it classic here at iBankCoin. Try to avoid getting yourselves killed out there.

Coming soon to The PPT, we will be upping the ante with our new trading room 12631. Basically, in a nut shell, I took my best swing traders (Chess, RC) on iBC and appointed them to The PPT, as Chief of Operations, with regards to guiding in and out of ideas. As much as I would like to do it, I simply do not have the time. Plus anyway, my style is not conducive to some of you five figure Zeeco types. Trust me when I tell you, the service will be value added, to the extreme, for a ludicrously low price point. Unfortunately, this service will be closed to non PPT members for two reasons.

1. We already have a large community inside The PPT, with over 1,500 subscriptions to date.

2. 12631 will be using The PPT‘s algos to find ideas and help users maximize its power.

As for today’s tape:

Nothing can stop this bull run, not even nationwide terrorist dry runs. It simply is not stronger than the beast, better known as QE2. Following 20% gains in JST/HRBN/FTK (recent buys), I nailed a 34% winner with MWW. Trust me when I tell you, I got a lotta more for you.

Many of you are like living idioms of stupidity, on top of crass ill mannered excuses of human life. Don’t make me get my Pelican after you, for he will swallow you whole.

Bottom line: If you are in my way, inevitably, you will be piled into the back of my stretched/pimp’d out, hurst limousine. Just because I slowed down my windy fire for 5 weeks doesn’t mean that I can’t burn you to a cinder now. Always remember that when placing bets against me.

The hits keep coming. I sold out of my MWW position for a 34% one week return. In addition, my larger FTK position is sprinting, based upon the aura of “The Fly.” I started new positions in PWAV and SNIC. SNIC is interesting because they might be selected by CSTR to stream movies. “Might” is the operative word. Either way, I like the short squeeze aspect to it, going into earnings, based upon the idea that the movie business can do no wrong.

It’s also worth noting, I enjoy cutting loose losers on big up days. Having said that, I closed out my short positions in both AEM and SPG.

Essentially, thanks to recent wins, I have erased the majority of recent VXX losses, but not all. Nevertheless, my gains are now over 30% for the year and I am beautifully positioned to press my rights, going into Turkey Day.

I bought 50,000 PWAV and another 5,000 FORM.

UPDATE: I bought 20,000 SNIC

Disclaimer: Bombs are being found on UPS airplanes and the world is ending.

No matter how deep I dig, no matter how entrenched I become, nature has a way of elevating me to new heights. Designed to win from day one, “The Fly” can’t help but to ascend above his peers, especially when it’s least expected. Intra-day, I am up 2.4%, thanks to the gully move in MWW (up 30% in a week). If you are wondering why the stock is up so much, go listen to the conference call. I used no charts. I didn’t need some sort of trend line to help me figure out MWW was cheap on valuation. Investing is not about short cuts. It’s not good enough to simply say “oh, gee, this stock is breaking out on the chart. Let me buy it.”

That sort of investing is reserved for rookies, no offense to some of you minor leaguers out there.

Going with the valuation theme, I dare say FORM is equally cheap, if not cheaper. When looking at their balance sheet, you will notice next to $8 in net cash. Granted, the company lost a major client and have been bleeding out for the last few quarters. However, the recovery is already underway. How do I know? Why would the company announce a $50 million share buyback last week, if business was crappy? Moreover, their second largest shareholder at 9%, Goldman Sachs, upgraded them to neutral, clearly positioning for the turn.

Finally, I believe the overall fundamentals of corporate America is terrific. As a matter of fact, if I lived in a bubble, I would have zero reasons to bet against this tape. However, there is a divergence between corporate balance sheets and main street America. When will these two immovable objects clash?

Soon.

UPDATE: I covered my shorts in AEM and SPG, a good day to take losses.

Japan’s economy is falling apart, as evidenced by factory orders and its currency. They will need to make drastic tax cuts, in order to keep their corporations from fleeing. Thus far, the market is not pricing that in, or any negative news, due to the shield of QE2. The whole concept of QE2 makes no sense; but it is what it is.

Over the past month, my colleagues and I have been banging our collective canes against the walls, because the partying is too loud. My mood, in layman’s terms, has been extraordinarily dour, which in turn has made me despise clams, hams and trans-ams.

Nevertheless, several weeks ago I began allocating money to the long side, with moderate success. I nailed a few 20% winners and will nail another 15% winner tomorrow, thanks to the robust numbers out of MWW. My whole strategy is now based on defense; but that will change shortly.

Let me remind you all, I am still long term bearish and have vowed to use the language of a Prince, until we touch down on 10,000 again. Now, if that is my philosophy, why in the world would you ask me if I will sell VXX? Don’t do that, kind Sir, else I might need to “correct” you where you live, when asleep.

“The New Fly” is all about peace, harmony and helping others succeed, despite their natural tendencies to fail because of inferior gene pools.

Finally, I want to alert some of you FTK watchers that the company is in reach of a potential windfall, in the form of forced warrant conversion. Back in ’09, the company issued 7-8 million warrants, with a strike of $1.21, that can be “forced” to convert, if the stock trades 150% above said strike for 20 days. Think MVIS, old iBC’ers. In my experience, when carrots like that are within reach, somehow, someway (like magic), it gets done. In this case, that would mean $3+ for FTK, sometime between now and next year.

A great man once said “the stock market is nothing more than a series of fortunate events followed by calamity.” Well, we are certainly fortunate to behold such an enduring bull run. Prior to the bell, seeing the late day magic, I stepped in and bought shares of MWW and FORM. FORM is an interesting story, being 9% owned by Goldman Sachs, with close to $8 in net cash. It’s a turn around story, with a floor, thanks to the cash. My type of play. I will buy more if it dips.

My MWW play is based on unemployment. Should we create more jobs, as sure as I am sitting here, MWW will explode higher.

After the bell, it appears CSTR knocked the cover off the ball. I am rooting for that stock, even though I do not own a share. Once again, companies are reporting solid numbers, with exception to few. I did not like the numbers out of TER yesterday, which is a leading indicator for the semis. Do not be surprised to hear of more weakness coming from the semis. Although it’s tenuous, the recovery continues, exclusively on the balance sheets of companies. Considering the Fed is hell bent on seeing an uptick in employment, I will be shocked if we do not see at least a 1% reduction in the unemployment rate, 12 months out.

Nevertheless, I would prefer to allocate cash at better valuations. The problem isn’t valuation on a macro-level. Overall, the market is not expensive. My issue lies with the hot money, chasing growth to no end. We will have a shake out of the high price to sales names; and when we do, it will allow for a buying opportunity in names that are fairly valued.

I see many of you in the comments section are attempting to ruin my pleasant mood. It must be an unfortunate case of small penis or erectile dysfunction that makes you say such ludicrous things. While your opinion is most certainly welcome, here on iBC (“the financial oasis for cordial commentary”), it is not really needed nor required. In the event that you should continue to misbehave in the comments section, I might need to “correct” you, in the most heinous of ways. Always remember, I know where you live.

On a separate note, a much more pleasant one, the market has reversed lower and now sits in limbo, awaiting its fate. Today is a classic reversal day, which demands ones attention. Any buy orders that I had in kind are now canceled, due to trend reversal. However, this market tends to offer its greatest tricks towards the end of the day. So, keep an eye out for that.

I think VXX is up like 3-4 days in a row now. Watch out, for I am about to have a CHAMPAGNE PARTY, hosted by none other Jason Treu! No, but seriously, champagne parties are not really my style.

Finally, my FLWS is looking alive, while everything else is pretty much flat, sans the horse-cocked run in AEM. It is my opinion that today’s run is artificial due to a Cramer pump. Let’s not forget, Cramer was also recommending SKX @ $35.

Off to seek out a caffeinated beverage.