Get Ready to Lose Again

Just like fake moon landings, the bears are delusional in thinking their prospects for making money are increasing, with time, as we head into the “fuck you, you’re dead” part of the year (October). So you know, “The Fly” bought more stock today, into weakness, effectively reducing his cash position to about 30%.

There isn’t much to say, other than, I will win again.

My game plan is simple:

Be patient. Buy small, even on spikes. I will tip toe through October and ROAR into November with my fucking guns cocked, aiming for asshole “turkey bears.”

Off to dinner.

Furiously chopping carrots, with my balls in the mix.

I bought 1,000 POSCO (ADR) [[PKX]] @ $99.99, 1,000 General Cable Corporation [[BGC]] @ $36.65, 5,000 Corning Incorporated [[GLW]] @ $14.65, 5,000 TerreStar Corporation [[TSTR]] @ $2.05, 5,000 ADTRAN, Inc. [[ADTN]] @ $23.60, 5,000 [[MWW]] @ $16.10 and 5,000 IAC/InterActiveCorp [[IACI]] @ $19.28.

Disclaimer: Follow me at your own peril.

I’m not saying a reversal is necessary; but it would be nice. A little buy action, on a Friday afternoon, would brighten up the day, for Larry Kudlow, Dennis Kneale and yours truly. I know all of the employment data is a bit disheartening and the men with burlap shirts (bears) are very boisterous, on this day of our Lord. However, something tells me, through messages delivered via the air, that we are due for a bounce.

On this dip, I will continue what I started yesterday. Today, I will buy [[MWW]] , IAC/InterActiveCorp [[IACI]] , Corning Incorporated [[GLW]] and General Cable Corporation [[BGC]]

Men with hunched backs, smoking crooked cigars, declared victory today, by way of sucking the capitalization out of the market. Despite being wrong for 200 consecutive days, today is their day. Let them bask in the glory of dominion, over the hapless bulls and their stupid ideas of progress.

They declare: “In order to correct this superfluous economy, we must bring it to its knees.” Such brave men, from their PC trenches, hit sell buttons, while twittering about their excursions into “enemy” territory. “It is the Government that sucks dick,” they shout from shingled rooftops.

With large signs and fat bellies, they partake in “Tea Parties,” mainly to reacquire their country from the current assemblage of Stalinist yardbirds at the White House, in exchange for George Washington himself.

They will resurrect him from the dead, through diligent hocus-pocus, sufficiently saving this great nation from the horrors of Chinese prison factories.

Nevertheless, despite all of this, “Senor Tropicana” stepped in today. He did not step in too small or too big, but just right. He stepped into shit, then wiped his $450 Bruno Magli shoes all over your rugs. Today’s buys represented faith, not much more. I do believe there is another 1-2% of further downside. However, according to The PPT and recent history, today was a day to buy, not sell.

Testing The PPT and its bottom calling ability, I bought the following:

I bought 10,000 Corning Incorporated [[GLW]] @ $15, 2,000 POSCO (ADR) [[PKX]] @ $100.55, 20,000 TriQuint Semiconductor [[TQNT]] @ $7.05 and 5,000 Guess?, Inc. [[GES]] @ $35.99.

When analyzing risk, it’s important to think about the worst case scenario. A 20% decline in a portfolio is doable, especially when buying at the top of a range and/or not being broadly diversified.

As I am positioned now, I am prepared to endure a 20% dip.

Let me paint a vivid picture for you, by way of rudimentary math.

If Joey Bag O’ Losses has $1mill in the market, with $400,000 of the millsky in a money market, how much will Joey lose on a 20% decline?

Answer: $120,000

In a nut shell, I am prepared to see my positions down 20% from current levels, due to my 40% cash position. Because of it, my losses are minimized, as well as gains. However, I am looking for a minor correction in the market. Therefore, I am exercising my large brain, represented by my 155 IQ, in order to make a market call.

If the market fucks me to the tune of 20%, my year to date gains will be shaved down to a paltry 63% (give or take a point).

Now ask yourself: Are you prepared to endure a 20% drop from current levels? If so, do you have a buyback strategy, by way of a well stocked watch list? Now is not the time to gawk at the screen, praying for someone to help you. You must act now, before your dick is stuck in the proverbial “cock-cutting escalator.”

If not, soon enough, you’re going to be shining my shoes.

Back in the old days, when I was young and delusional, I tried to time all tops and bottoms. Being gifted with the ability to pick winners, I felt invincible, as if I could do no wrong. Much to my chagrin, I learned, via staggering capital losses, that no matter how smart I was, the market would rape me—every once in awhile. Believe me, it took a long time for me to understand— and accept— the fact that the market does not dance to my jungle drums. As a point in fact, the market is King Kong and the rest of us are just bananas.

It’s liberating, it truly is. Give into the fact that you are a peanut and Goldman Ballsacks is an elephant.

So, whenever I start to feel cocky, whenever I start roaming my office dressed in a white robe and sandals, burning incense for the Gods, I do the opposite of what I really want to do. For example: for the past 2 weeks, while the market climbed, I felt as if my positions were all going through the roof and into the ever so ominous VAN ALLEN BELT aka a place where NO HUMAN has ever traveled. Instead of buying more, I sold and raised cash. Praise the snake God for that.

I digress.

Here is the lesson, if I might be so bold:

After this leg down is complete, I will begin allocating my 40% cash position.

Top pick: [[ENTR]]

[youtube:http://www.youtube.com/watch?v=ROwQOHJ8P5M 616 500]

The quarter ended with all sorts of weird fuckery. My gut tells me, it is a warning shot of volatility to come.

At any rate, I held my powder today, not giving into early day optimism. Instead, I’ve been busy raising new money and selling off bullshit underperformers, like Spartech Corporation [[SEH]] .

All in all, the quarter was fantastic. Luckily, I was blessed with the internal fortitude and stubbornness to capitalize on the rally. In all honesty, I do not chide anyone who lost money, over the past 3 months. The logical trade was to bet on Armageddon—it just didn’t happen. That’s why, and this is a fact, scholars make shitty investment managers (think LTCM).

My investment success has more to do with experience, coupled with balls, than anything else. I can burn the midnight oil all I want, analyzing the balance sheets of ABC to XYZ. But if I didn’t have the gumption to risk my capital and go against the crowd, I’d be eating fish sticks for dinner and not 2 1/2 inch rib eyes.

For those of you who nailed the rally: congrats. We are coming down the home stretch now and the market will not be as easy, due to the fact that earnings matter. While it’s true, year over year comparisons will help Wall Street’s dumbest firms; it’s also true, if employment does not pick up ASAP, CIO’s may put investment projects on the back burner, effectively raping all new longs—at current levels.

Nonetheless, “The Fly” has faith in the friendly philanderers at Goldman. When sitting down for dinner this evening, during grace, just prior to digging into that heavily salted (lightly peppered) rib eye, be sure to mention the Godly citizens at Goldman in your prayers—for they did the work of God (or space alien magicians), saving this ridiculous nation from assured peril, by way of clever robotic stock buying machines.

Indeud.

Amen.

That was fast. I go out for an incognito run to Dunkin’ Donuts, disguised with fake mustache and ivy hat, and the market gets gobbled up like brains in a town filled with zombies.

Much to my displeasure, I have not been able to buy in cheap. I want to own Aixtron AG (ADR) [[AIXG]] and Veeco Instruments Inc. [[VECO]] , based upon the expansion of LED technology into the television and lamp fixture market. At the present, LED’s make up 2% of the lamp fixture market. That number is expected to increase to 50% by 2015 and 90% by 2020, according to Phillips electronics.

My point: the LED market is not to be ignored. Embrace it, like a French whore in Papua New Guinea.

Other LED related names include Cree, Inc. [[CREE]] , Honeywell International Inc. [[HON]] , Ultratech, Inc. [[UTEK]] , LSI Industries, Inc. [[LYTS]] and Universal Display Corporation [[PANL]] .

In short, the technology revolution is around us; it’s everywhere. Are you man enough to play it? Are you smart enough to mint coin from it?

Aside from that, my General Cable Corporation [[BGC]] , Flotek Industries, Inc. [[FTK]] , [[ENTR]] , Corning Incorporated [[GLW]] , Barnes & Noble, Inc. [[BKS]] and ADTRAN, Inc. [[ADTN]] positions look great.