HAIL MARYS

All of the stories you’ve ever read about in the journal of men who’ve made fortunes in the market revolve around a singular trend: buying stuff no one else wants for pennies on the dollar, then selling it later on when everyone wants it for absurd premiums.

Using the powerful screening tools of The PPT, I put together a list of under performers that might offer outsized gains. Or, they might wash away with the sands of time. It’s high risk/high reward, son.

NOTE: Debt/equity levels above 4 suggests the company is in dire straights, financially. It’s not the entire picture. But, generally speaking, companies with high debt/eq ratios and dead stock prices are heading towards $00.00.

(Stock, 3 yr return, debt/equity ratio)

WLT, -97%, 20x
MCP, -96%, 4.6x
ANV, -94%, 2.5X
AVEO, -94%, 0.28X
SWSH, -94%, 0.09X
ANR, -91%, 7X
DNDN, -91%, 3.6X
WAVX, -89%, 0X
IAG, -89%, 0.7X
TRGT, -87%, 0.01X
ONE, -86%, 0.9X
CLF, -82%, 2.4X
CETV, -81%, 2.6X
WPRT, -80%, 0.2X
ARO, -78%, 0.6X
JCP, -77%, 2.3X
BTU, -76%, 2.1X
KEG, -76%, 1.4X
FRO, -74%, 7X
ARCO, -71%, 0.9X
PWE, -69%, 0.9X
EXK, -67%, 0.08X
PRGN, -67%, 2.3X

Let me know if you have a preference. For members, the full list is here.

I post a lot here, mostly for entertainment, in order to get a few laughs out of the plebeian hordes. Every so often, I will post something that should be saved, not because I wrote it and I am awesome and amazing (extra Mrs. Fly). I am merely a cog in the giant wheel of speculation. I am not the best investor, or the worst. However, I am keenly aware of my surroundings and have enjoyed a modicum of success, greater than most market mavens.

I wrote this on October 10th, into the teeth of the recent sell off. It will always be relevant.

Bear in mind, the day to day operations of this market are hard to wade through. Nevertheless, if you’d simply avoid the classic pitfalls that have ruined men for the past 200 years, investing can be very rewarding.

Here are a few.

1. Invest in companies with market caps greater than 2 billion. And, if you’re gonna invest in small caps, make it a minor portion of your portfolio.
2. Diversify amongst all principle industries and do not concentrate in any one sector, no matter how hot it is.
3. Avoid leverage.
4. Separate your trading money from investing money.

The last one is probably the most important. Get your foundation right and you can build a strong house that will last for decades.

With the proceeds from TNA and MBLY, I bought GPRO.

It isn’t nearly as expensive as some of you fire hydrant lickers like to say. Ahead of ski season, I like it.

With oil dropping and Americans saving $100 billion from lower gas bills, I reckon it will be a splendid holiday season for premium electronic manufacturers, like GPRO and AAPL.

I bought this on 10/2 during The PPT oversold period at $62.21. It ended up being correct, as always.

UPDATE: I sold out of MBLY too.

Yesterday, the good man from the television, Dennis Gartman, informed our good persons that Fusion energy is here and that “the oil (barrel) would go the way of the whale oil, completely extinct” from the public landscape. He furthered “oil should trade down DEMONSTRABLY over the course of the next few years,” meandering about the cemetery of antiquity at around $10 or much, much less.

All of your cars, homes, and airplanes will be powered by Fusion technology. I am sure some of you outlier types were unaware of this circumstance. You should thank Mr. Gartman for informing you of suchness and offer him to eat at your summer cottage, for what will surely be wild eyed entertainment–emanating from this flair for the obscene.

With oil already whistling past the graveyard, one must contemplate how this fusion technology can be used by persons, such as ourselves. I imagine the Dominos Pizza Organization will be delivering their tomato pies via space aged vehicles. And, moreover, GM and F, as well as all of the traditional auto makers, will need to take wrecking balls to their factories, in order to retool for this new technology and engines that run on it.

Kiss your local Wawa goodbye. Gas stations are no longer required.

And, the next time the fuel truck stops by the house to provide you with oil for the winter, tell him to “fuck off, I have fusion technology.”

As the Bakken, slowly but surely falls into the vortex of despair and agony, thanks to our friends the Saudis, the same chaps who demolished our antiquated World Trade Tower–FREE OF CHARGE; other companies profit from this sea-change event.

What are we talking about here, you ponder? What the fuck is going on?

I will tell you.

Gone are the days of energy independence, the dream of having oil barrels in our backyards as the kids run about the fields slapping each other in the faces with hydraulic pumps. For a moment there, the Saudis really had us going. We ramped up production, excluded ourselves from the cartel of OPEC, and advertised our manifest destiny on Fox News, exclaiming “NO MORE RELIANCE ON MIDDLE EASTERN CRUDE.” After all, those people are head-choppers and airplane crashers. Civilized society doesn’t have a place for them.

We sent our brightest engineers to the Permian Basin and the Bakken to extract this oil. We bought the land from the people who owned it for billions and began to build an empire built upon the very minerals in the earth. The only problem with this business plan of ours was the cost. We needed oil to remain upward of $80 per barrel in order to sustain the sort of gung-ho, America rocks, attitude in these hard to drill areas. What good is oil independence if it means it must be expensive forever? A riddle wrapped inside of a puzzle, inside of a fag-box, no doubt.

We got lured in real good, a giant snare was set, and the dreamers took the bait.

Now the rug is being pulled. The lower crude goes, the faster our oil production will decrease, the wider the smiles on the faces of our friends, the Saudis.

If oil trades to $50, rest assured, 70% of the oil stocks you see on your screen will be trading down more than 50% from today’s current prices, if not more. We will firmly be placed into the prison cells with the camels, for eternity, and our economy will reel from the investment losses realized from the bust once known as “The Bakken Shale.”

The city of Destin will become a ghost town and we will never talk about it again.

I write this to you, on this very night, not to scare you. Instead, I write this to tell you what our true destiny is and how to profit from it.

Your sons and daughters will all be employed by this company and you will rely upon them for sustenance and comfort.

BEHOLD the next great boom in the American story: THE DOMINOS PIZZA CORPORATION. May their delivery men live long and prosper, ushered to and fro their destinations at exceedingly cheap rates.

The Goldman Ballsachs downgrade of the entire oil sector really took its toll on today’s sentiment. I fully expected the market to be rough-housed, to the tune of -150 or so. However, after coming back from my journey, I see the market is almost unchanged.

Surely, you didn’t think the oil and gas sector would rebound in the face of their abhorrent commentary, did you? You’re gonna have to wait for tomorrow to see that. In the meantime, the market can lend itself a hand here by simply defecating onto the heads of those who bet against it. It should behave like a lion and bite the heads off the zebra who brays, spilling its cheap blood on the land so that crops can grow.

I am deeply saddened, as well as chagrined, to see my CLR position getting manhandled in real time. Alas, this is the price we pay, lads, for speculation. There will be good times and then there’s now–the days when you wonder why you got into this tomfoolery in the first place. Sure, a person of my intellect, a man amongst apes, could’ve done anything short of testing roller coasters (I do not like heights). But I remain here, in the parlour of Satan fighting the good fight, punishing those who try to destroy America.

In summary, the Goldman Ballsachs corporation had merely tossed a broken chair in the way of my speeding calash. I will have my horses kick said chair to the side of the road and eventually eat it. My final destination is the cemetery, where I fully intend to dig up and dance on the skulls of my many enemies.

https://www.youtube.com/watch?v=3DkDpbuRc78

The boys over at Goldman took it upon themselves this morning to kindly ask that you liquidate your oil and gas stocks, citing hard times for oil men. Just two weeks ago, they circle jerked around the idea that EMES was heading to $153. Today, they believe that very same company is merely worth $103.

Here is their whole list of haggardly oil and gas names.

PTEN

Downgrade

$153 » $103

PES

Downgrade

$20.50 » $12.50

EMES

Downgrade

$153 » $103

BAS

Downgrade

$33 » $12

DO

Downgrade

$36 » $26.50

DPM

Downgrade

MEP

Downgrade

NDRO

Downgrade

CLR

Downgrade

APC

Downgrade

EPE

Downgrade

LPI

Downgrade

PE

Downgrade

They don’t like oil anymore and feel that it is heading to $75 per barrel. Bear in mind, however,  that the Goldman Ballsachs company works in a very duplicitous manner. Sometimes, on occasion, up is up and down is down. But, the modus operandi revolves around methods of misdirection, where up is in fact down and down is sometimes sideways, but also up. Plus, it all depends on their investment banking calendar and/or relationships with targeted companies.

The analyst department works very diligently behind their chinese wall. They are very busy little bees.

Ultimately, and this is true on an empirical level, whatever the analysts have to say is moot–absolutely meaningless. Stocks will trade up and down on emotion, gyrating between ranges dictated by public opinion. However, their ultimate destination lies in the numbers, the earnings, for they, unlike the Goldman Ballsachs corporation, never lie.

First, let me preface this blog with a little history. Oil and gas stocks, generally, underperform this time of year and don’t get going until the beginning of the driving season, which happens in March. Having said that, this is the time of year to start building positions in excellent companies, who’ve demonstrated an ability to perform during all sort of market environments.

Using a new tool inside of The PPT that evaluates are ‘fair price target’, using earnings growth for the previous 8 quarters and assigning an ‘fair PE’ multiple to it, the following oil and gas stocks are the cheapest.

(stock, % from fair value, here is PPT screen for members)

PACD -68%

EMES -64%

BTE -61%

PDS -57%

WFT -56%

BHI -52%

FANG -49%

PE -49%

SLCA -43%

HCLP -41%

RES -41%

HAL -39%

I can go on. You get the gist. The market is pricing in cataclysm for the oil and gas industry. While deep drillers may have structural issues to fend off, traditional drillers should bounce back sharply, once prices stabilize.

The world run on oil. Never forget it.

I’d love to write a longer blog, but I am seething with pent up anger due to non-business concerns. Let me add that the comments section is beginning to take on the characteristics of an 8th grade classroom.

The problem with being a person who consumes information on an industrial scale is the more you know and evolve as a person, the dumber everyone else is around you. This can lead to irrevocable differences, a split that cannot be rectified. I strongly advise you, the American beer swilling catamite, to read some books, other than the horseshit sports section in your local newspapers. You’ve become, all of you have become, first rate wagnerians of a very homosexual nature.

I’m off now, gone to handle my fucking chores.

By the way, thanks to the Ebola outbreak, there is still room left for some of you ingrates at our Vegas conference. I am 1,000% sure I am never, ever, doing this again.

https://www.youtube.com/watch?v=_-CXdhBfvro