A Word For You to Learn in 2015: SUPER-CONTANGO

Go read about it. I’m not going to provide you with links, you lazy fuckers. Just know, there is a reason why VLCC rates are nearing $100,000 per day. These oil tankers are being used to store crude, thanks to the super-contango scenario the oil markets now find themselves in.

Longer term, should oil continue lower, US production will be stymied and oil from abroad will come flooding back to our shores, further strengthening VLCC and Suzemax day rates.

Long FRO.

Here were my predictions for 2014.

Doing these predictions is always tricky, because we tend to think in the now, a time when people are sucking on candied canes and spending money like drunken idiots. Nevertheless, Santa Fly will grant you prophecy and will foretell the events that have yet to transpire for the year 2015.

Gold and silver will continue to be viewed as “the idiot trade”, finally sending the yellow metal under $1,000.

Oil will trade in a range of $45 to $60 throughout the year, breaking out in December of 2015–setting up for a banana run to the upside in oil related names.

OPEC will cut production quotas.

US rig count will fall by 25%.

US GDP will grow by 3.2%.

Tech stocks will lead the market in 2015.

The S&P will rise by 11.5%, Dow Jones by 15.5%, Nasdaq by 23.7%.

European markets will outperform US markets and China will outperform all, rising by 55%.

Software companies will undergo consolidation.

Social media stocks will rebound sharply.

YELP will be acquired for $85.

FB will trade north of $100.

BABA will trade above $150.

TWTR will be rangebound, between $35-50. The stock will break out once Dick C gets fired.

Treasuries will weaken in the first half of 2015, then firm up in the summer. For the most part, TLT will be a non-event.

Housing stocks will return to greatness, leading the industrial sector higher.

2015 will be the year of the US Consumer. With an improving jobs and fuel expense landscape, popular stores and restaurants will enjoy record profits.

Amazon will finally turn on the profit spigot, sending shares over $500.

NFLX will double in price, to over $700 per share.

TSLA will trade down by 30%.

AAPL will hit $140 and hint at making a television.

JUNO will be one of the best biotech investments in 2015.

HABT will trade north of $65.

Shake Shack will file to IPO and become “The Fly’s” largest position ever.

Private equity will have a banner year, fueled by oil and gas debt restructuring. BX will trade north of $50.

iBankCoin’s long awaited release of the second iteration of The PPT will be realized, sending the financial website into a renaissance of extreme winship, both shared and appreciated by her millions of readers.

Let this be a lesson to all of you doom and gloomers.

Nice “recovery”. Have a great weekend.

I doubled my ECR position, turned off the computer, and walked away.

Well, actually, I am still on the computer, as evidenced by you reading this. However, I will be shutting it soon.

3, 2, 1– bye.

There are some huge movers in the oil patch again today. I don’t want to get caught up in the hype–because capex budgets are coming down and people will look at these names A LOT differently after they report earnings. My favorite way to play a possible relation in the industry is SLCA. The frac sand companies are call options on shale. If oil gets to $65 again, SLCA will double from current prices.

My other oil investments include DVN (best in class, super hedged), WRES (my lotto play), FMSA (call option on shale) and ECR (small trade off bottom). It’s very tempting to go hog-wild here, buying up PDCE, EOX, SYRG, MTDR, WLL, BAS and others. As a matter of fact, those might be the single best places to put money over the next 6 months. However, after seeing the violent pullback in crude, one must comport oneself and fend off the temptation for wanton gambling.

My best hedge against crude is FRO, which is benefitting from producers desire to store refined and non-refined product in oil tankers.

The market looks good, even though my YY trade is down a quick $2. Fucking chinese burritos.

For now, FEYE, SLCA and GILD are helping put me ahead by 0.8% today.

I added to YY, super-sizing my position in the process.

I also added to ICPT.

I bought a little more HABT today, just a nibble. I’ve also taken liberties to start a new position in Chinese internet company YY. A new era has begun in this stocked market. All of the naysayers have been ushered into the city square for expeditious peni removal. The market, in all of its vainglorious swagger, continues to torture its participants, both long and short.

Oil seems to have a small bid here, but many oil stocks are taking the day off, in favor of tech stocks. If you knew what was good for you, you’d buy some.

Shares of FEYE are edging higher this morning, a stock that served as a personal torture chamber for me earlier this year. But it is written that “The Fly” shall seek out and destroy all of his enemies before the year is out. Ergo, I am long FEYE and it is now my largest position.

The misery is palpable. 200 NASDAQS in so many days. You thought the market was going to simply drift away. But, in fact, it was revving up to run over your fat, fucking, faces (extra Stuntman Mike).

I made wholesale changes to the portfolio today–all for the better. My sales were executed in a timely order, at least intra-day. And my purchases are all up 2%+ from my basis.

The Gods have smited you and tossed you back in the trash heap of man. Your puts and shorts have been annihilated and the Dow Jones Industrial Average just ran, mind you, 700 motherfucking points over the past two days.

The Santa Claus rally is here. You’ve been discredited. The world is back on its axis.

Here is an article on VLCC rates from late November.

But with the Brent oil price now 40 percent lower than July, there could be more VLCC fixtures as refiners bought oil for storage, the Singapore broker said.

VLCC rates for the benchmark route from the Middle East to Japan climbed to almost W64.50 on Thursday, up from just under W51 a week ago, the highest since Feb. 18. Rates are the equivalent of nearly $60,500 per day.

Day rates were about $60,000 then.

Now they’re at 5 year highs, over $81,500 per day.

Why is this happening?

Supply is tight, real tight, as is always the case in December. As the Dry Bulk Index implodes, the oil tanker rates explode. Perhaps it has something to do with plunging Brent prices are producers storing crude in these tankers. Longer term, if US production is coming down, due to high cost producers in the shale, it makes 100% perfect sense to believe that we will, once again, begin to import crude from overseas.

Saudi Arabia wins. Yes?

Here are 3 mo charts of the Dirty Tanker Index (unrefined crude) and the Clean Tanker Index (refined product)

The reason why FRO has struggled in recent years is two fold.

1. Debt burden.
2. Lack of volume due to the surge in US oil production.

Well, they just restructured more than $20 million in debt and I don’t think we need to worry about domestic oil production any longer. With oil coming in again, I sold out of BALT for a staggering 27% loss and rolled half the proceeds into FRO. I will deploy the rest of those proceeds on a dip.

In other words, for the New Year to come, I am discarding the losers and starting with fresh ideas.

I closed out of the rest of my GPRO position, squandering a 25% gain and turning it into a 15% loss–a cardinal sin in trading.

In light of the Sony scandal and my desire for revenge trading, I moved those assets over to FEYE. This is the same stock that fucking destroyed me and left me in a tub filled with ice with a kidney missing, back in May. I had sold in the high $40’s and now I am back in, as the p/s ratio is now a reasonable 12x.