Happy to be Speculating Again

The term speculation gets such a bad rap from snooty value investors, older men clad in burlap frocks who wait 5 years to realize the upside in their investments. They like to deride speculators as gamblers, people who carelessly toss money into the wind whilst drinking large vats of red bull. I do not harbor any bad feelings towards the blackguardly peasants who meander in and out of my equities, for they provide me with liquidity. All of you value investors are now sucking from the end of a boot now, as high beta biotech names defy reason.

From the perspective of money management, speculation is a cardinal sin. Regulators are quick to label it as “churning” and compliance officers are fast to judge portfolio allocation models. If you are trying to raise capital for a hedge fund, it will be exceedingly difficult to accomplish if your investment style is susceptible to large draw downs. Everyone loves the value guy, cleverly making 10-20% per annum, never rocking the boat, always making himself a fortune.

I believe there is room for both value investing and speculation, with a portion of assets dedicated towards longer term thinking and a smaller swath of cash directed towards price discovery.

I’m up nearly 20% in TEDU and the trade hasn’t settled yet. I made 35% in XON and the stock is still running higher. I’m up 10% in DRNA and I bought it yesterday. I did all of this through speculating wisely. I wasn’t guessing when I bought them. I had an idea about where money flow was heading and I got in front of buyers–plain and simple.

Now this round of speculation might be coming to an end soon and many of my positions, like ANGI, SGEN, TEDU, DRNA, AEGR and GIMO might come under some selling pressure, placing yours truly back into the penalty box. Over the past month or so, I’ve managed to reduce my year-to-date losses from -37% to now -22.5%, following today’s showing. But these are the risks one takes in order to attempt to achieve greatness. Had I left my portfolio stuck in PG, KMT and WCC, I’d still be down 32% now, punching holes into the sheetrock for missing this run.

The market is the sum total of a sundry of investment strategies displayed in real time. Just because some people choose to rip in and out of stocks based upon non-traditional Graham-Dodd investment methods, that doesn’t mean they’re road slobs–booze hounding about Wall Street fixing to blow up his savings account.

I am happy to be speculating again and doing it with the panache and decorum befitting of a top hatted, sword swinging, gentlemen of the 33rd degree.

TEDU ripping tits to the upside.

Indeud.

Which is why futures are sharply lower this morning.

In light of Virginia ousting the republican “leader”, Eric Cantor, with someone who’d like to convert America into a theocracy, smart people are betting that this is bad news for the GOP. See, there are two types of GOPers. There’s the guy with the American flag, ignorant as hell, shotgun in tow, screaming about illegal Mexicans, terrorists, and how the fucking Christmas tree should be considered a holy symbol. Then there’s the guy at the golf course, checkered pants, cigar in tow, interested in tax cuts, loose regulations and a strong military.

The problem with the GOP is that both of these guys hate each other. The party should split, one could name themselves “The Confederate Tea Party” and the other keep the name “Republican.” Either way, a two party system is certainly better than a one party system, which is what we’re heading for soon–should the GOP continue the path they’re on.

In other news, ANGI caught an upgrade this morning, as well as AAPL and AMZN. A slew of biotech stocks are up and SYNA is doing it big.

Bottom line: Our corporate tax rate is an absolute disgrace. It’s too high and just about everyone I know, both GOP and democrat, agree that it should be competitive with other first world nations. The loss of Cantor in a primary spells doom for the GOPers, as they shift right and away from winning national elections. While many backwater confederate states might want a theocracy, electing men who romanticize over WW2 and bygone eras, the majority of the country just wants to work and live happily ever after. The economy desperately needs some checkered pants republicans to seize control of the party and get these tax rates down. However, as of now, it looks like you’ll be hearing a lot more about Christmas trees and gay marriages instead.

Using an insider transaction tool in The PPT, I am able to screen for biotech’s that have been undergoing insider buying. I never put much credence into insider sales; but I always pay attention to when they’re buying.

ACAD: 3/5/14- Baker Brothers, 526,000 shares @ $28.50

ALQA: 4/14/14- Celgene, 714,000 shares @ $7
5/13/14–Brian Posner, CFO, 3,000 shares @ $6.92

AEGR: 5/20-6/3/14- Mark Beer, CEO, 66,400 sharesbetween $30.53-35.31

GEVA: 4/23/14- Baker Brothers, 56,000 shares @ $65.10

NNVC: 2/18-2/20/14- Dr. Anil Diwan, Chairman, 50,000 shares between $3.30-3.80

INO: 4/2-4/15/14- Dr. Joseph Kim, CEO, 28,750 shares between $2-9
11/13/13-Morton Collins, director, 63,625 shares @ $7.28

NVAX: 3/25/14- Stanley Erick, CEO, 10,000 shares @ $4.27
3/25/14-Richard Douglas, director, 50,000 shares @ $4.33
3/25/15- Barclay Phillips, CFO, 4,000 shares @ $4.25
3/25/14- James Young, director, 25,000 shares @ $4.47

VSTM: 5/13/14- John Green, director, 1,000 shares @ $7.74
5/13/14- John Pachter, director, 1,000 shares @ $7.62
5/13/14- Robert Forrester, CEO, 1,000 shares @ $7.62
5/14/14- Dr. Westpahl, Chairman, 2,000 shares @ $7.56
5/15/14- Dan Patterson, CBO, 1,000 shares @ $7.47
5/20/14- Richard Aldrich, Founder, 1,000 shares @ $8.37
5/30/14- Tim Barberich, director, 1,000 shares @ $9.90

CPRX: 2/5-5/19/14- Charles O’keefe, director, 25,000 shares between $1.81-2.02
2/7-5/21/14- Patrick Mcenanny, Chairman, 50,000 shares between $1.82-1.89
6/4/14- Dr. Steve Miller, COO, 100,000 shares @ $2.17

CORT: 5/9/14: David Maloney, director, 100,000 shares @ $1.85
5/9-5/12/14: Daniel Bradbury, director, 138,925 shares between $1.79-1.83
5/9/14- Leonard Baker, director, 100,000 shares @ $1.84
5/9-5/13/14- Joseph Cook, director, 200,000 shares between $1.79-1.84

CYTX: 6/5/14- David Rickey, director, 30,000 shares between $2.32-2.35

FCSC- 6/4/14- Randal J. “fucking” Kirk, 400,000 shares @ $2.90
6/4/14- Kevin Moore, director, 4,557 shares @ $2.99
6/4/14- Marc Mazur, director, 5,000 shares @ $2.90
6/5/14- David Pernock, director, 12,500 shares @ $2.95
6/5/14- Chistine St. Clare, director, 10,000 shares @ $3

SGEN: 5/14-6/9/14, Baker Brothers, 1,068,826 shares between $34.10-38.96

OPK: 1/2/14-6/6/14, Dr. Phillip Frost, Founder and CEO, an immense amount of shares and often, from the $7’s to the $9’s

SNTA: 4/11/14- Bruce Kovner, director, 1,250,000 shares @ $4.02

It’s still a bit jerky out there, with only 40% of stocks higher today. But of that 40%, there was a wide array of winners, indicative of speculation.

This is good news for the markets. If you were injured during the recent downtick in homosexual stocks, like FEYE and SPLK, clear your heads and get with the program. There is money in these here hills. You just need the balls to go look for it.

For the day, I made back another 0.5%.

Large capped biotech are selling off, as well as the oils–paving way for a huge wave of unchecked degeneracy in beaten down tech and small cap biotech. Across the board, small cap biotechs are screaming higher. My sales of JAZZ and SLCA could not have been timed better.

Aside from DRNA, AEGR and SGEN, I really like OSUR, HALO, SGMO, KIN, ACHN and CLDX, to name a few.

The going is good. Make sure to get some.

I added DRNA to my biotech basket. I am now fully invested.

Target: $24

You probably think I am permanently stuck in a state of stubborn bullishness; but you’d be wrong. My natural tendencies are pessimistic. Each and every day, I drive myself to the point of delirium to believe in the optimistic base case scenario. I’ve witnessed the phantasm  and great things of splendour take place in these markets over the past 5 years. On numerous occasions, I’ve attempted to short it, only to regret it shortly thereafter. During the flash crash, by  sheer chance, I had 30% of my book long volatility, which ended up being a longer term negative–as that 100% move in VXX-tits only fueled my appetite for that bastard ETF, eventually leading to heinous losses.

Enough chit-chat.

The recent decline in tech/biotech mirrors the tech bubble of 2000, without question. For this exercise, I will use an old school tech favorite SCMR as an example.

When the bubble popped in March of 2000, SCMR traded north of $30. By early May, the stock traded to a low of $11, a treacherous drop of 65%. Sound familiar?

After the bottom was in place, the shares rose until the end of August, climbing as high as $28.

As a person who was managing money back then, I can tell you that we all felt the worst was behind us. I recall attending this grande partners dinner, hosted by my employer at the time. It was a get together for the largest producers of that firm. We had a lot of laughs and everyone was making money. Little did we know, shortly after that display of grotesque hedonism, the markets were going to collapse and punch the faces in of most of the two-bit salesmen in attendance, myself included. After all, back then, my best trait was sales. I always took a liking to stocks and always knew how to pick winners; but at the end of the day, raising money is a full time job when you’re working at a brokerage firm. You don’t have much time to analyze and mull over investment strategies.

By Thanksgiving of 2000, SCMR hit $7, crushing the helmets and the skulls of everyone who believed in the hype. That was the beginning of the end, a death that lasted until 2003 when the zombies were revived for another go, thanks to George Bush’s tax cuts and his wars.

Bottom line: I do believe there was a bubble in tech and it popped. I also believe we are enjoying a respite that will last through the summer. And, I also believe the markets will be incredibly trying this fall, in others words heading lower in broken elevator fashion. Keep your stops on a tight leash and don’t believe the hype. You can take advantage of it, but never believe it.

By the time this year is through, I fully intend to be in a position to torture and perform mayhem upon the vast hordes of catamites who’ve tried to kick me while I was down. Very soon, I will have a very big win–one that will astound, amaze and cripple those who’ve followed in my wake–hoping to derail me.

This comeback shall be one of the greatest ever performed on a live blog, in front of millions of people. This comeback that I speak of is ongoing, it’s alive, and is destined to make you all look incredibly stupid.

We’re going chinese lotto and biotech madness this week, long TEDU to the gills, alongside SGEN and AEGR.

I have several other names worth buying, but can only do so after I book profits in one of the names mentioned above.

I am very sorry that I do not have stories for you fribble minded people to enjoy. “The Fly” is far too busy partaking in elephantine comebacks,  finding new winners, things of that nature.

https://www.youtube.com/watch?v=4qAAPRbRSc0

I made another 0.7% today, lowering my deficit to almost 24%. I’d like to write a grande article, discussing my philosophies and how biotech investing is being done, almost scientifically, by certain investment professionals (Baker Bros, Randal J. Kirk, Baupost). However, I came across the end of this movie, titled “Tales from the Hood”, and I couldn’t help but to see the current plight of Rick Santelli and his fellow bear travelers in his glorious motion picture. Be sure to watch it to the very end!

https://www.youtube.com/watch?v=D33B6Y7JaKk

Ciao