You’re getting excited, aren’t you? FIT is +3 since my morning post and markets look grande again. The Federal Reserve meeting is scheduled for tomorrow and nothing can go wrong, apparently. Reflecting on my personal struggles in the market, over the past two years, I am not excited, whatsoever, about current price action. Even if 100% of stocks were up and all of the bears laid dead, strewn out across Wall, I’d still compose myself with a stoic oddness, often seen in department store mannequins.
Let me rephrase how I feel, so that you really understand where my head is at.
My third largest position is BIDU, currently up 9 dollars. If BIDU were to go up 90 points today, effectively making me a rich-er man, I wouldn’t stop reading the book that I’ve been reading all day long. I do not care about short term squeezes or “potential breakouts” anymore. It’s all shit. Fool me once: shame on you. Fool me twice: fuck, I’m an idiot. Fool me for two years straight: I’m a god damned piker who deserves to lose money.
Quit being a piker. Don’t believe anything they tell you. It’s all lies.
You have no excuse for owning 2nd rate stocks now, following a correction in the market. Now is not the time to buy dog-shit money losers, when all of the good companies are on sale.
For me, FIT is one of those good companies, trading at a discount. I know what you’re thinking: FIT is another GPRO. Well, there is a discernable difference between the two. Case in point: today they just cut a deal with TGT to grace all 335,000 employees with their little illuminati friendly tracking device.
The skeptic in you says “big deal.” That’s because you lack motivation and are accustomed to eating bags of cheesed doodles about the couch. To me, this deal speaks volumes about management. It seems the folks at FIT have their shit together, more than what I can say about the clowns at TWTR and YELP.
FDX missed earnings. They always do this ahead of the holiday quarter. This is your chance to step in before the pagan holidays.
Lastly, I am still obsessing over who GILD is going to buy, following their $10 bill convertible bond raise. I spoke with the good Dr and he believes they will target NASH, cystic fibrosis or oncology plays: a pretty wide field.
Some names that came up are ICPT, Gentif, VRTX and QURE. If any of you good folks have some cystic fibrosis biotechs with good pipelines, I am all ears.
One of the things I insisted on having in Exodus is a wide array of fundamental analysis tools, catering to those like me who sometimes eschew technical analysis like the Black Death.
Since the market has pulled in a little bit, I thought we’d take a journey into the bowels of the tech sector’s valuation. Shall we?
Weighting wise, tech now comprises more than 21% of the overall market’s capitalization. That’s a high number, because every other sector, aside from healthcare, sucks.
Median p/e ratios are historically high, especially when compared to the median p/e of the overall market.
Price to sales ratios are somewhat on the low end of valuations, since 2005. More importantly, the tech sector is now trading at a discount to the market, for the first time in over a decade. My suspicions lie in the vast amount of biotech IPOs that have come public over the past year, inflating the median p/s ratios of the overall market. As you can see, the average p/s of the overall market is way above trend, twice as high as 2011.
As much as I’d like to say tech is cheap; it just isn’t that cheap. There are other parts of the market, specifically basic materials and consumer discretionary, that are pricing in armageddon. I suspect will continue to frustrate people, offering outsized gains and losses to the trader class.
So far selling CYBR and ONCE proved to be a smart move. But now comes the part when the markets are rising and I have a boatload of cash and nowhere to allocate it.
Today’s market gain is nice, but it feels tepid. Lots of good stocks are down and others are marginally higher. The rally lacks resolve and could reverse by late afternoon. Plus anyway, none of this counts until after Thursday’s Fed decision.
I am fairly certain that if the Fed raises interest rates, it will spell doom for equity prices. Maybe the initial reaction will be bullish and maybe shorts will cover no matter what they do. But after the dust settles, I think investors will come to realize how fucking delusional a person this Grandma Yellen is.
Aside from that, I have to be somewhere Thursday and will not be able to trade. So, the best course of action, for me, is to sit tight and make the best of a small book, one with AMCX as my largest equity position.
What are you clowns buying? Tell me what your largest position is and maybe I’ll join you.
This business makes an old man out of a young one quickly. From the moment I entered the business its been wrought with drama and collapse, perfidy and mania. There is nothing unique about my tenure in the market. As a matter of fact, I am reading a book written by Henry Clews, 28 Years in Wall Street, circa 1885, and the same stuff was occurring back then. Fred Wilson was alive back then, doing deals just like he is now, only under a different name. Like vampires, the same characters stay with the market, swindling others who aren’t paying attention, not because they need to, but because they can.
Here are some excerpts from this gem.
I rarely recommend investment books here. But if you can get your hands on a copy, you will be doing yourself a great favor. It puts a lot of things into perspective, makes you understand that nothing is fucked up or special about our times in the market. Wall Street always has been and always will be 1.0, the same characters pick pocketing one another, running scams, playing the game.
Many have made and lost fortunes. I can tell you first hand of fortunes that I’ve made and squandered, some are embarrassing to talk about in an age where the internet stock market coach reigns supreme. The truth is, we’re all subject to bad days, weeks, months, even years. I’ve been able to last this long because I’ve been able to adapt. But I haven’t been adapting quick enough the past two years. I’m pretty sure the Fed put has messed with my way of thinking. In the past, if a market looked bad, I took action to hedge or get defensive. But ever since the Fed has intervened in markets, I’ve adopted a perma-bullish position, one that has paid off handsomely since the lows of 2009.
Right now I am undergoing a project to document my missives from 2007-2009, to consolidate my real time posts into book form. I am not doing this to boast about my trading, but to document the anxiety and conditions that existed back then. The unique thing about blogging, as opposed to writing a book, is the fact that it is done in real time. Back then I went through a metamorphosis from bullish to bearish. I had to adjust to the times, else get eliminated from the game. I think my work from 2007-2009 is probably the most important thing that I’ve done since starting the site. That period was somewhat unique and future generations of traders could learn a great deal from what I had to do to survive, despite my prose being somewhat juvenile and abrasive.
Going over my work, I can clearly see that I’ve matured a great deal since then. If you think I’m bad now, you should read the crap I was talking about in 2008.
I’ll keep you fine gents updated on how my project progresses.
I am trading miserably. I took a look at my positions, asked myself if given fresh cash today would I buy these stocks, and then I made wholesale changes.
I sold ONCE (scared of the FDA), CYBR (what a dog!), partial YELP, HABT (SHAK is better) and all of EGO (what was I thinking?). With those sales, I’ve added to an already large cash position. I haven’t made any real money since June. This back and forth is tedious and I am wasting time and energy with these high beta names. Something is clearly wrong with the tape and until the tone improves, I am probably better off doing nothing.
I am sure as soon as the market starts going higher, I will be tempted to move back into stocks. Truth is, my timing has been off and my stock selection has been poor.
Trending stocks have been scarce and oversold bounces have lasted all but a few days. I will try to formulate a course of action soon. But for now, I am a man without a plan, in the wilderness, surrounded by savages.
I am 100% certain the market will be fun to trade again, one day. But this isn’t fun. As a bull, this is demoralizing and leads me to question whether or not I should bother holding onto losing positions.
A lot of people will hide these insecurities with a critical public. But I’ve been doing this shit for too long to worry about the opinions of others, having navigated some of the most fucked up tapes to have ever existed.
The bears are always talking gloom and doom, so I discount what most say as bias. But look at the price action here in many high beta names: dreadful. Perhaps the collapse in crude is a prelude of something awful to come. I recall in 2008, people thought lower crude meant good news for retailers, until the global economy collapsed and they were nearly bankrupted.
It’s very choppy and all eyes are on the Fed, once again. Will they raise rates into a chinese meltdown, at a time when deflation is clearly the problem and their own internal inflation targets aren’t being achieved?
Consensus opinion says yes.
Short term, this is all noise. The longer term will be steered by growth in China, plain and simple. Like 2008 was all about banks, 2015 is about China. If they are truly losing a handle and slowing in a significant manner, all markets will trade down, in a big way.
I feel like I’m in a version of hell, especially designed for me. Each and every day I am offered a new task in the stock market. After I figure it out, I end up exactly where I was when I started. This is a circle jerk of extreme magnitude. And I’m not talking about the past three months. No.
For the past two fucking years the stock market has been one giant mind fuck, a vast mine field of false starts and asset class implosions, designed to ruin the speculator who exhibits avarice in his trading.
Last year I was almost ruined, something I am not proud to say. This year I was offered a second chance and I seized upon it and made it interesting for a while. But for the past three months, the insidious design of hell has reemerged and kicked this market into full fucktard mode, ruining and bankrupting aggressive speculators with industrial efficiency.
It seems the best course of action is to sit tight and hope for the best. To be oversized an asset class or position now is equal to deep frying a giant turkey dressed in a suit drenched in gasoline.
There have been reports from the centre of the city square, right outside the Tontine Coffee shoppe, of an ancient wooden device being rolled into its centre. Eyewitnesses are said to have soiled themselves upon seeing it and most women fainted, straight away.
One worker at the site spoke to an iBankCoin reporter and had this to say: “this thing they have us building is the oddest thing I’ve ever seen. It has a small hole in its centre and the largest and sharpest blade you’ve ever seen. It’s like a giant fucking carrot chopper (audible laughter).”
Residents near Tontine Coffee shoppe have vacated the streets and are holed up tight inside their homes.
Outside of a few far fetched rumors, our reporters on the scene have no idea, whatsoever, whatever the fuck is going on at the square. Officers from the Federal Reserve have ordered all non-employees to vacate the premises until morning.
Leo DiCaprio is hands down one of the best leading male actors of our time. He’s always ignored during Oscar time, most likely due to the fact that he doesn’t partake in hollywood homosexual galas and isn’t into punching 8 balls of blow into his face. Nevertheless, the people know he’s good, which is why his movies sell a fuckload of tickets.
The Departed is one of his best movies, which also stars Jack Nicholson, in one of his best performances, starring as a maniacal gangster from the streets of Boston.
This is a classic cop vs bad guys movie, done in a superb way–a timeless classic.
