iBankCoin

All Buys on Hold

I am 80% long. But, I’ve taken a 50% reduction to my equity exposure this week. I don’t want to get too greedy, like Hansel in a chocolate factory.

I will tell you what I want to buy, because you’re not a threat to me, small pikers swimming in an ocean of sharks.

I want to own OWW, MHO and RBCN. I’m hearing the new iPhone will have a sapphire home button and camera. Therefore, this is extremely bullish for RBCN and GTAT.

OWW is down because its largest shareholder has been selling, hardly a reason for a 30% sell off.

And, lastly, I want to own housing into weakness. The market is on and off with the housing sector. I am thinking the sell off is almost done. Once rates normalize, people will come back to the housing sector and these names will be hitting 52 week highs again.

I also have my eyes on Ag chems, like MOS and IPI. But I think it’s a bit early for them.

As of now, I am exactly flat for the day.

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The Republicans Are Coming

Remember the debt ceiling debate? Well, the republicans are mad and they’re not gonna take it anymore. They view the Obama administration as disdainful to the office of the President and are fixin’ to shut this government the hell down, in order to prevent the damned Chinese from lending us anymore of their dirty money.

Gods, guns and grits: that’s what we’re looking forward to in the weeks and months ahead. Mix in a little gold standard request, and we might have ourselves a good olde fashioned government shut down.

Today’s action is decidedly negative and anti-climatic. Like I said yesterday, dark clouds are massing in the not-so-distant future. There are men, behind every corner, trying to castrate you. Do not let them grab a hold you, for you will regret it for as long as you live.

Raise a little cash.

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Social Media, Yet Again

The buzz word is “Twitter” and Wall Street wants to get this IPO right, following the Facebook disaster. These stocks are trading at very rich valuations because, it’s widely believed, this is where the growth is going to be, for the foreseeable future.

To play Twitter ahead of the IPO, GSVC and SVVC are your plays.

Based on price to sales, which is how social media stocks are being assessed, here is the run down.

YELP 23x

LNKD 23x

Z 23x

FB 18x

TRLA 16.5x

YY 13x

BIDU 12x

TRIP 12x

YNDX 10x

YOKU 10x

SINA 10x

OPEN 10x

SALE 10x

CTRP 8x

AWAY 8x

PCLN 8x

P 7x

ANGI 6x

GOOG 5x

GRPN 3x

ZNGA 2x

 

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BREAKING: TWITTER FILES FOR IPO

This is a surprise.

The only way to play the IPO, before it comes public, is via GSVC. GSV’s VC fund owns Twitter and it comprises 15% of their holdings.

However, the CEO of GSV, Michael Moe, HATES his shareholders– literally.  Each and every time the stock goes up, the company files for a secondary, so that greedy bastard can raise more capital and pay himself exorbitant fees. It’s a crime what he is doing. I will NEVER buy GSV again.

Having said that, GSVC might spike off this news. But, I expect it will be sold 100 different ways but loose, upon the pricing of Twitter.

 

#TwitterIPO

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Downside Reversal Coming

I was up 3.5% earlier in the day. It had the feeling of excess. I knew it was a good time to go to cash, but I’m invested, emotionally, into a belief system. You know what happens when you invest with your heart? You get a heart attack.

I’m barely up now, just +0.2%, as GOGO limps into the bell.

That’s life. I started with a box chevy, so this is nothing.

We’re going higher, but we’re probably going down first.

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$GOGO is the Best Airline Play Ever

I don’t think there has ever been a stock, aside from Skymall, that was tethered to the airlines and enjoyed high growth. Airlines are great businesses, if it wasn’t for the damned employees and fuels costs. A customer that is literally a prisoner for at least 2 hours, with nothing to do but surf the web, is a dream come true for an internet service provider, like GOGO.

Wait until they let you text from airplanes. Can you imagine the type of growth his company will undergo?

The only question is, considering it’s a new company and we don’t know much about management: what is it worth?

Typically, in these circumstances, it’s best to compare to peers.

Will GOGO ramp up growth and become a coveted “social media” stock, like YELP, LNKD or TRLA?

If so, the stock needs to trade at about 15X sales or $45 per share.

What if GOGO turns out to be a loser, like GRPN or ZNGA? Well if that’s thew case, the most severe valuation tags GOGO at around $8 per share?

Sounds like a gamble, no?

However, internet service providers, historically, have predictable revenue streams, unlike online coupon and gaming schemes.  In my estimation, based upon the information available to me now, considering new products launches and expansion into international flights, GOGO should be trading 10x sales, or $31 per share. With the stock at $14 and change, you’re laughing at me now. But, mark my words, if GOGO exceeds earnings next quarter, the stock will get there in a heartbeat.

Having said that, this was a bad IPO. It broke syndicate, like FB, on the first day and plenty of people want to sell. Look for some resistance at around $16-17. When it clears $17.50 or so, in my opinion, it’s a straight show for $20.

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The Good Fortune is Bound to Run Out

I’m a big believer in “peaks and valleys” and how people ebb and flow through them. Adversity is dealing with the valleys. How one responds to some hard times defines who that person is, not the bad habits picked up during periods of excess.

We are bound to make mistakes at the top of any tape, because things feel so good. It’s hard being a contrarian all the time. Eventually, we all want to “fit in” and conform to what’s working now. I truly respect those who stick to their disciplines, especially when said disciplines force you to miss out on epic rallies.

Value investors must be dying now, watching people like me bank coin in cartoonish fashion. I am sure they justify their style as being able to “last the test of time.” They assume guys like me “come and go” and will “blow up” on the next down cycle. Maybe if I was an ideologue, that would be true. But I am not. I am malleable, mistrusting, and generally belligerent towards traveling with the herd.

Even though I am banking a criminal amount of coin in GOGO, it was a contrarian play. No one was buying it when I took down a position. Now it’s the hot stock to watch. The same goes with IMMR. Who is buying it? No one–but they will soon.

Who was buying YELP when I bought it? How about my other core position, POWI? Most people haven’t even heard of that stock.

I like to profile stocks and anticipate when they will get hot, in advance of the crowd. That is where I make the bulk of my returns, guessing correctly. Aside from that, I utilize the tools that are available to me to properly screen for these ideas. This is an ongoing process and I don’t want to preach to you now, obnoxiously, just because I am on a bit of a run here. We all know I will eventually blow up, in spectacular fashion, forcing me to fight hard to get back what I lost.

 

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Yes, Still Buying $GOGO

I added to my GOGO position above $14. Am I crazy?

Perhaps.

But I believe the stock is worth more than its current price. Therefore,  my old adage applies here: the best time to buy a winner is anytime.

Due to the run up, GOGO is almost my largest position.

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No Urge to Lighten Up

Conventional wisdom says “lighten up here” following a fantastic run. However, at least for me, this time is different. My gains are not just outsized, but pornographic. Right out the gates, I am up another 1% this morning and already missing my leverage.

We are overdue a pullback, but so what?

My IMMR has 7 points of upside from current levels and GOGO is going to its IPO price of $17, minimum, over the next 3 months–if not sooner. I have some solid ideas and, thanks to recent gains, can afford to be patient and absorb losses.

I am sure many of you are in the same wagon, as bull markets makes geniuses of us all.

For the record, The PPT has NOT flagged an overbought signal, since calling the bottom, to the exact day, on 8/27/13.

Momentum is here and the sellers are gone. This is not the time to sell. Instead, it’s time evaluate ideas that haven’t run yet.

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An Open Letter to America, From Vladimir

This is surreal.

funny-hat-pics-165

MOSCOW — RECENT events surrounding Syria have prompted me to speak directly to the American people and their political leaders. It is important to do so at a time of insufficient communication between our societies.

Relations between us have passed through different stages. We stood against each other during the cold war. But we were also allies once, and defeated the Nazis together. The universal international organization — the United Nations — was then established to prevent such devastation from ever happening again.

The United Nations’ founders understood that decisions affecting war and peace should happen only by consensus, and with America’s consent the veto by Security Council permanent members was enshrined in the United Nations Charter. The profound wisdom of this has underpinned the stability of international relations for decades.

No one wants the United Nations to suffer the fate of the League of Nations, which collapsed because it lacked real leverage. This is possible if influential countries bypass the United Nations and take military action without Security Council authorization.

The potential strike by the United States against Syria, despite strong opposition from many countries and major political and religious leaders, including the pope, will result in more innocent victims and escalation, potentially spreading the conflict far beyond Syria’s borders. A strike would increase violence and unleash a new wave of terrorism. It could undermine multilateral efforts to resolve the Iranian nuclear problem and the Israeli-Palestinian conflict and further destabilize the Middle East and North Africa. It could throw the entire system of international law and order out of balance.

Syria is not witnessing a battle for democracy, but an armed conflict between government and opposition in a multireligious country. There are few champions of democracy inSyria. But there are more than enough Qaeda fighters and extremists of all stripes battling the government. The United States State Department has designated Al Nusra Front and the Islamic State of Iraq and the Levant, fighting with the opposition, as terrorist organizations. This internal conflict, fueled by foreign weapons supplied to the opposition, is one of the bloodiest in the world.

Mercenaries from Arab countries fighting there, and hundreds of militants from Western countries and even Russia, are an issue of our deep concern. Might they not return to our countries with experience acquired in Syria? After all, after fighting in Libya, extremists moved on to Mali. This threatens us all.

From the outset, Russia has advocated peaceful dialogue enabling Syrians to develop a compromise plan for their own future. We are not protecting the Syrian government, but international law. We need to use the United Nations Security Council and believe that preserving law and order in today’s complex and turbulent world is one of the few ways to keep international relations from sliding into chaos. The law is still the law, and we must follow it whether we like it or not. Under current international law, force is permitted only in self-defense or by the decision of the Security Council. Anything else is unacceptable under the United Nations Charter and would constitute an act of aggression.

No one doubts that poison gas was used in Syria. But there is every reason to believe it was used not by the Syrian Army, but by opposition forces, to provoke intervention by their powerful foreign patrons, who would be siding with the fundamentalists. Reports that militants are preparing another attack — this time against Israel — cannot be ignored.

It is alarming that military intervention in internal conflicts in foreign countries has become commonplace for the United States. Is it in America’s long-term interest? I doubt it. Millions around the world increasingly see America not as a model of democracy but as relying solely on brute force, cobbling coalitions together under the slogan “you’re either with us or against us.”

But force has proved ineffective and pointless. Afghanistan is reeling, and no one can say what will happen after international forces withdraw. Libya is divided into tribes and clans. In Iraq the civil war continues, with dozens killed each day. In the United States, many draw an analogy between Iraq and Syria, and ask why their government would want to repeat recent mistakes.

No matter how targeted the strikes or how sophisticated the weapons, civilian casualties are inevitable, including the elderly and children, whom the strikes are meant to protect.

The world reacts by asking: if you cannot count on international law, then you must find other ways to ensure your security. Thus a growing number of countries seek to acquire weapons of mass destruction. This is logical: if you have the bomb, no one will touch you. We are left with talk of the need to strengthen nonproliferation, when in reality this is being eroded.

We must stop using the language of force and return to the path of civilized diplomatic and political settlement.

A new opportunity to avoid military action has emerged in the past few days. The United States, Russia and all members of the international community must take advantage of the Syrian government’s willingness to place its chemical arsenal under international control for subsequent destruction. Judging by the statements of President Obama, the United States sees this as an alternative to military action.

I welcome the president’s interest in continuing the dialogue with Russia on Syria. We must work together to keep this hope alive, as we agreed to at the Group of 8 meeting in Lough Erne in Northern Ireland in June, and steer the discussion back toward negotiations.

If we can avoid force against Syria, this will improve the atmosphere in international affairs and strengthen mutual trust. It will be our shared success and open the door to cooperation on other critical issues.

My working and personal relationship with President Obama is marked by growing trust. I appreciate this. I carefully studied his address to the nation on Tuesday. And I would rather disagree with a case he made on American exceptionalism, stating that the United States’ policy is “what makes America different. It’s what makes us exceptional.” It is extremely dangerous to encourage people to see themselves as exceptional, whatever the motivation. There are big countries and small countries, rich and poor, those with long democratic traditions and those still finding their way to democracy. Their policies differ, too. We are all different, but when we ask for the Lord’s blessings, we must not forget that God created us equal.

Vladimir V. Putin is the president of Russia.

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