Hoarding Trash Can Be Profitable

I’m up a cool 2% this morning, even though I am positioned conservatively, long at 110% of capital.

Today’s winners are a mixed bag of nuts, with solar and gold leading the way. Don’t ask me how gold/silver have resurrected themselves, but they have. Some of you were correct about gold and I was wrong. I still hate the yellow metal–but regret letting my emotions get in the way of making money.

It seems that every single sector that gets obliterated comes back with a vengeance, rewarding bottom pickers for their bravery.

Look over the recent winners: solar, homebuilders, oil, tech, alt energy, airlines, refiners and healthcare. At one point they were all in the dog house, orphans of wall st. Look at them now.

The only real dogs that left can be found in the natural gas, nuclear, precious metals, steel, coal and shipping industries. Judging by recent trends, this is likely only the beginning for the run in FRO and GNK. If natty is going to come back, KWK, UPL, and CWEI will surge to the upside.

Being that I am up more than 40% for the year and own plenty of momentum names, I’ve decided to try my hand at some undervalued turnaround plays, maybe just one to start.

My good friend and blogging mate, THE WOODSHEDDER, has semi-retired from the office of ‘blogger’ at iBankCoin.  Although the title of this post is meant to jest, I am saddened by this development, as it was Woodshedder, alongside his caped sidekick, Danny, who started the site with my back in 2007.

As all new things in life, we were quite optimistic about our prospects and wanted to spread the good word. Time has a way of dulling the once sharp knife of ingenuity, as the novelty of ‘new’ wears thin often. I can’t blame him  for prioritizing his life, tossing iBC into the urinal for an expeditious flush. Plain and simple, this is public service and at times can be monotonous. I’ve never contemplated leaving because I truly enjoying writing and sharing ideas. Then again, I do this for a living, managing money on behalf of some of the wealthiest and fattest people on this earth.

That being said, Wood is a good guy. I’ve had the pleasure of meeting him twice in NYC, during our annual meetings. He’s one of the guys that you instantly take a liking to. You can tell his heart is in the right place and would never lie or betray your trust. I am sure we haven’t seen the end of Woodshedder, as the south has a curious way of rising again.

On a related note, I’ve officially failed at becoming an alcoholic. God knows I’ve tried my hardest to accomplish this goal, coming home and living out the cliche of pouring myself a glass of scotch, neat, after a long day’s work . On the weekend’s, I’ve partaken in one form of debauchery after the next, all resulting in adamant displeasure.

I don’t want anything, none of it is for me. I am perfectly content with a beer or two, and the occasional bottle of Bordeaux from time to time; but the hard drinking is definitely out. Gone are the days when I’d drink a bottle of tequilla on my own, and still have my senses about me. These days, if I can get through a six pack without feeling tired, I am lucky.

Getting old certainly has its drawbacks.

Tributes to Wood.

I no longer consider myself to be a person associated with coal mines. Effective immediately, “The Fly” is an oil man–always has been and will be an oil man.

I’ve taken it upon myself, naturally enough, to partake in the ownership in the shares of CXO. Bearing witness to the extreme inconvenience at the pump, I must profit from it, even if it means leaving my friends and family at their retarded coal mines.

I intend to ride CXO up to $104, then ditch it like a prostitute–shortly thereafter.

We hired a Mexican scientist to work on our redesign, but he quit halfway through the project. I like the design. It’s clean, simple and is without clutter. Like all things in life, a concentrated effort is always preferred. I hope to keep this look for the next 100 years.

Some of you might believe I am distraught with agony because IMMR is down. But you are wrong.

I welcome clarity and boldness. The ambiguity that kills me, not the loss. The stock is getting smashed today and I am pleased to see people get flushed out. I will not buy the dip, since I am fully invested in the name. However, I will tell you, for your own education, that The PPT is flagging OVERSOLD on the name, with stellar results.

NOTE: As I write this, Obama (Senor Africanus) is delivering a racially charged speech, in order to fuel some weekend riots. Way to go Mr. President. I like your style.

To outperform the indices, I have to think outside of the box, gain an edge on the brainless dogs called my competition. Sometimes it’s important to go with the flow, be a trend follower and other times I like to go against the tide. In this case, I am simply removing the leverage from my holdings, now sitting at 100% invested, after taking profits in HLF and selling a little FWM.

This isn’t exactly a conservative position. However, for me, it’s a step in the right direction, a tapering of the risk if you will.

For the month of August, without a doubt, I will go long TLT. Bonds always outperform in August and I must be long, if only for the novelty of it all.

WDAY, WIT, USG and EMKR are holding up well, and IMMR, FLSR and SCTY suck. All in all, I am barely down 0.6%, patiently waiting for this bastard of a stock, IMMR, to give me some love.

I stopped punching Bill Ackman in the face, taking profits in HLF in the process.

This is part of my lightening up plan.

Is anyone else excited to see oil at $109 for no god damned reason at all? We have plenty of the stuff, but can’t seem to bear witness to a price decline, ever. It used to go up because of China, then inflation, now it just goes because it can. You’d think oil stocks would outperform too. But they’re mired in their own feces, unable to enjoy any sustainable run higher.

Judging by this satanic weather, I’ll bet dollars to donuts oil will keep going higher, especially if we get some of those awesome hurricanes again.

I haven’t an investable name off this debauchery, only to suggest you should beware of inputs and how the price of crude might start to scare people from living leisurely. Maybe the refiners make a profit or perhaps solar continues to win, as “anything but oil” appeals to Wall Street, except coal of course.

Watch the prices ever so closely, for oil is on a collision course with our GDP.

If forced to choose, I’d say CLR will do the “hundy” roll here and press higher until $115.

The city of Detroit filed for bankruptcy protection today, burdened with $20 billion in debt, thanks to democrats and unions. This is your future, American–prepare for MOAR.

The S&P 500 is +4.7% for the month of July, so far. Looking for precedent, there have been bigger gains for the month in the past. During the years of 1997, 2009 and 2010, the market soared more than 6% in July. But in two out of three times, the market fell sharply in August.

Either way, I think it’s time to take the foot off the pedal and reduce exposure to risk. We’ve been running red hot for weeks, with hardly any pullback. Yet, I feel somewhat stunted, almost cheated, by some of my positions sitting idle amidst an orgy of buyers.

In the past, whenever this happened, a correction was just around the corner.

Earnings are about to start rolling in and I think a near term top is anywhere from 1-2% away.

Oh yeah, I had a shrimp ceviche for dinner.

I box watched all day long, hardly any breaks–nothing. I’m here thinking to myself: all of my friends are on vacation, getting fat and stupid, and I am here, literally in my basement–watching the box. To boot, it’s not even interesting.

Watching IMMR makes me want to take a blade and cut myself, just to make sure I’m still alive.

Do you know what I am going to do now?

I am going to the backyard to big dig a big (I am so mad, I can’t even write right), giant, stupid hole–and plant a tree in it. The mexicans are not the only one’s who can take shovel to dirt. Might I add, I used to tend to the garden, until I realized only slaves do that. I am a slave to no one, especially you little trollops.

I made a little bit of money today; but that doesn’t interest me–at all. I am pissed off. Today was one of those days that etched curse words into my black soul. It made me feel like I am wasting time, hamster wheeling in the basement like a troll.

Let me just say this and I mean it: if my stocks don’t go buckwild to the upside tomorrow, I am planning a vacation straight away. I haven’t gone on vacation for two years. Now I have this stupid dog to look after and the local kennel charges human being hotel rates. I hate them on principle.

And that is reality.

Like I said yesterday, stocks aren’t trading up because they’re awesome. This is a liquidity driven rally that begets momentum and vice versa. This ends when earnings come in worse than expected. So the big risk to your portfolio now isn’t the Fed tapering or a broad market pullback, but the earnings that drive these companies itself.

Due to the extent of the rally, the pullbacks on a bad downside surprise will be brutal, rapish. To avoid jailhouse accommodations, you should avoid names that might disappoint this earnings season. By the way, that entails almost every single small cap stock that is publicly traded. I have many reservations about holding my positions into showtime. I view these dates as deadlines that offer the specter of heinous, animalistic, attacks upon my physical structure.

That being said, I just nailed the RKUS trade, but was a little late to the game. Many members of The PPT bought in at $13 the other day when it flagged oversold. Ask about it.