LET’S TALK ABOUT SOMETHING IMPORTANT

Now that we’re all making money again, happy like fat, gluttonous, pigs, let’s discuss the shit you called a ‘portfolio.’

Most of you are rabbit skinners and gamblers. You are rank amateurs, masquerading about town, comporting yourselves in the most undignified ways imaginable. I can tell, just by reading your comments, that you, Sir, are setting up for complete failure.

Let’s avoid that, shall we?

Run along and fetch your account statements. Now, I want you to tell me how your investments are weighted, across asset classes. Before you do, I will share my weighting.

Basic Materials: 14%

Consumer Discretionary: 11.5%

Staples: 8.2%

Tech: 23%

Healthcare: 16.5%

Finance: 10%

Industrials: 12.5%

Utilities: 0%

Cash: 5%

Amongst my holdings, almost 2/3rds of them are of a larger cap nature. Within the ranks, I’ve dedicated X amount of dollars for short term ideas, most of which you see me here on there blog, sashaying (no homo) in and out with space alien magician precision.

Critiquing my own holdings, I realize my basic material and tech weightings are too high and need to be reduced. I also understand that healthcare is a bit out of control too. At some point, I intend to tweak it and reallocate into staples and finance. But healthcare and tech is where the money is flowing now and I want to be there for the turn in oil, whenever that does occur.

In short, you’ve been fortunate to be a part of such a forgiving market, one that V-shapes off of every downtick. But remember that pain and the agony you felt just a few short weeks ago, when you were ‘fag-boxed‘ into what seemed like an untenable position.

See to your affairs when times are good, so that you can relish in the pain and agony of others when the worm turns.

I started a small position in TRIP.

I heard a stat that said for every penny decline in gasoline, the US consumer will save $1.1 billion dollars. With oil careening through the floor boards, ask yourselves, where will this money go? I had this same conversation with Jeff Macke, who will also be in attendance for the 1st Annual iBankCoin Investors conference, and he agrees that retail should enjoy a tailwind here–especially casual dining. If you didn’t know, Jeff’s father used to head up Target back in the day.

The problem with retail is that it’s filled with retailers. All of these stores are undercutting one another, making it hard to realize eps growth. Only a select few know how to sell product, like JWN, M and TJX. WSM is also a decent play. In casual dining, PNRA, CMG and ZOES look good. We can only pray to the Gods for a Shake Shack ipo, sooner rather than later.

Look, GPRO is where it’s at. I know you haven’t come to grips with it yet and you despise the stock because it goes up so much. But, heading into our beloved pagan holidays, there are only a handful of items that will make it onto Santa Claus’ wish list.

1. Apple products

2. GoPro cameras

3. Video games

So, my question to you is this: how are you preparing for the holiday shopping season, now that October is out of the way and The Turkey Gods beckon?

Gents, this isn’t going to be drawn out. It’s too late for a long post.

When you die, the details of your demise will be unimportant. All that will matter is that you perished on so and so date and what you left behind, in terms of legacy.

This is pointed directly at the bears, no one else.

It is my life’s mission to destroy you. I am the Bear Killer. I got Big Magic.

Tomorrow you will die and the details of your extermination will be nothing more than a footnote in the history of Wall Street.

Sleep tight. I’ll see all of you in the AM.

Oh, by the way, Godzilla has emerged from the Sea of Japan to stomp out speculators who went short the NIKKEI. She’s up nearly 800 points, or 5%.

GPRO is a top 3 position of mine, so I want it to trade up. In the event I am gifted with a sell off tomorrow, I will double my position. Let me tell you why.

The company just guided way up for Q4, to $550-$590 million from $500 million. They are looking at eps of around .65-.69–again significantly above estimates. But the big kicker is gross margins of 44.3%, up from a consensus of 42%. Last year margins were 33%.

This speaks to pricing power, efficiency and feverish demand. Mind you, they have barely any international exposure.

Going into earnings, this was the most hated stock I’ve ever seen. 99% of the gurus on Stocktwits were ejaculating all over each other, discussing how much they were going to make on their short positions. In the end, everyone gets what they deserve and they get NOTHING.

Good day to you, Sir.

But they weren’t the only clowns who were bearish. The majority of the analyst community missed this call.

Why?

Because they are not in tune with the US consumer, who is fixed on high quality electronics. Do you want to know where that excess gas savings will go this holiday season?

iPhones and GoPros.

Look for the following analysts to eat crow and upgrade GPRO tomorrow.

Barclays

Jp Morgan

Stifel

Baird

Oppenheimer

With earnings out of the way and the Turkey Gods just around the corner, look for GPRO to hit new all-time highs, AND MORE.

The oil sector was liquidated today. It was surreal to watch all of the ancillary names get hit too. The rails (ARII, GBX) were pummeled and the frac sand plays (EMES, SLCA, FMSA, HCLP) were eliminated from the league of nations.

Across the board, oil stocks were down 5%+ for the day. Maybe it had something to do with COP’s earnings and cuts in spending, due to cheap crude.

Or, maybe, just maybe, we are pricing in the soon-to-be untimely demise of the Red Menace, General Vladimir Putin–ravaged by a school of sharks or a pack of wild cougars–no doubt.

I’m a buyer of the blood.

Where’d I put my kerosene lamp?

I know this stock is spiraling into the ground, emulating an oil rig. But I had to buy it down $9 from the open.

This is a minor position of mine, less than 5% of overall assets. I will continue to buy it as it gets liquidated.

Plainly and simply, biotech is where the money is flowing.

Why?

Because in a slow growth environment, high growth can always be had in the business of death. Look at the oil barrel sector: getting lit up in the face of a flamboyantly proud rally. We are seeing a divergence between crazed faced oil stocks and everything else. The energy trade, for now, is in the ‘fag box‘. Look at SLCA, EMES, FMSA and HCLP; they’re trading as if it was the end of the world. Surely there is opportunity to be had in this wanton liquidation, no? I’d love to muster the courage to triple my SLCA position here. But I already have big positions in both TRN and CLR.

No, I am convinced the path to prosperity is through drugs. The only issue with the drug stocks is valuation. So many of them are up 20-50% in recent months. One that I am long, which is still reasonably prized, is JAZZ. People are sleeping on this one (pun intended).

In summary, oil focused hedge funds are being dismantled and tossed into the meat grinder. Everything else seems A-okay–for now.

Something tells me today is a pivotal day in the history of mankind. Does this admission, deserving of God given gifts of homosexuality, beckon lower or higher prices? Quite frankly, I do not know.

The market was looking awfully dreamy this morning. But now, now it looks like a bedraggled booze hound being ripped to shreds by hell hounds. Most of my important positions are lower. SLCA just reversed fantastic gains into drek. The world, as we know it, is on the precipice of something significant. I can smell it.

Utilities are higher and they haven’t rested for a single day since I sold them.

Tis’ October, a month designed by devils for devils. The Turkey Gods can’t come fast enough (no Cook).

Why did they take QE away from me? Surely they can find it in their hearts to give me just a little more QE, right? I swear, after this round of QE, that’s it–I am done. Christmas is around the corner and the kids need presents. Please, give me that shit…man. I only want it for like 5 minutes, then you can have it back. Why the fuck did you take it away? I didn’t do anything to you.

Come on…man, just one more hit.

Futures are sharply lower and oil is hysterical to the downside, Saudi camel style, sticking pins into the head of Vladimir Putin.

In other news, HAR smashed earnings. I am long. The auto sector has been ravaged in recent weeks, almost as bad as the oils–which makes no sense. But they’re coming back strong now. We just had solid numbers out of CMI (I am long) the other day and now this. I think it’s fair to say the economy is plodding along just fine.

GPRO reports earnings tonight and many people are betting against them. Frankly, I have never, ever, seen a stock so hated. I don’t think anyone, but me, is going to hold into earnings. Here is how I look at it.

This is a super young company, with a product that is in high demand. There are a select few electronics companies worth investing in. This is one of them. With fuel expenses dropping, nationally, I like GPRO’s chances at a blockbuster X-mas. The problem is, I cannot simply wait to buy GPRO AFTER a blow out quarter. If they smash tonight, the stock will be on a bee-line to $100. But if they miss and the stock drops 20%, I will gladly double down, betting on that blow out X-mas.

In case you’re looking for precedent, a time when an electronics manufacturer traded at a similar multiple to GPRO, go take a look at GRMN back in the early days of navigation systems. The stock traded above 10x sales for awhile, then grew into their multiple. I am not making the case for valuation here. GPRO is momentum and they need to show a big number tonight, in order to properly set fire to the faces to the savage swine who remain short the stock–into the hole.