Riding the Bull Has Its Drawbacks

War is always a black swan event, one that serves as a monkey wrench in the wall street cog. I can’t say I’m surprised about August difficulties. It is wall street tradition to struggle through the months of August through October.

These are the months that try investors temperament and staying power. Before you know it, Christmas season will be here and we’ll all be popping champagne corks again.

For now, there are several cross currents we need to watch. The first being the most important: interest rates. With the Syria news, rates have gone lower, a good thing! The other problem is Syria, which if you think about it is a non-event. We’ll launch 500 cruise missiles, send over a few bombers and call it a day. I doubt there will be any ground combat to worry about.

People are finding reasons to sell. If you are smart, you will keep a wish list of stocks nearby and watch them carefully. Free up some cash in non-core names, trades gone awry, and buy your wish list, as they come in.

As traders/investors, that’s all we can do now. We can either hedge and risk missing out on a huge bounce, or bide our time and position for the next 3-6 months.

Go eat a sandwich.

NOTE: Today we launched After Hours with The Option Addict. Being that the market is in flux, I cannot think of a better time to showcase Jeff’s incredible skills. Be sure to sign up for our two day free trial to see if it meshes with your style. Just know, the first 100 sign ups will receive a significant discount.

From sewer hole to penthouse inside of one month is the story of the once famed ‘Cement Head. (CH)’

Just one month ago, the good Senator was living inside of a box, outside of a sewer hole. Now, following a 20-50% run in his vast gold and silver holdings, The Cement Headed One is living high off the hog, rich beyond comprehension. I suspect his blogging activities were stymied due to his local SBUX restricting him from loitering around for free internet. But things have changed recently and the precious is back.

With that, very soon, it is possible that his internet service will be restored. God can only pray for these things to occur.

With war, and other such niceties, gold and silver are attractive. Attractive for hard currency lovers of course, not so much for me and people of my ilk.

One thing to focus on is the Brent/WTI spread. Should war occur, on a largess scale, I will buy the refiners, ad hoc, without even looking at their stock prices.

The Syrian civil war is the messiest middle eastern conflict in centuries. Therefore, as a war-like people, we must dip out beaks into it. This reminds me of the movie, The Outsiders, when Matt Dillon came running onto the field of battle screaming ‘no one starts a rumble without me.’

I don’t know when America became the world police. And I find it sort of ironic that it happened under the leadership of a noble peace prize winner. One thing is for certain, it’s bullish for stocks; bearish for the life expectancy for the people in Syria.

Shippers, gold and silver are the play off this conflict. As much as I hate gold and silver, it’s back with a vengeance. As for the shippers, I don’t see how a Syrian war affects the oil trade. Nonetheless, GNK, FRO, SBLK and VLCCF are pressing higher.

AMBA and YELP are higher. Generally speaking, I am not having a terrible day.

Brace yourselves for more volatility and stress test your margins.

This just out. Morgan Stanley cites Seeking Alpha article induced panic sell off as buying opportunity, maintains $18 price target.

This will be my favorite asshat award ever.

When you sit down and concoct an investment plan, everything seems so perfect, until you actually put said plan into action. Such is the case with my current predicament, regarding AMBA.

I’ve concluded that I was going to ‘try’ to hold 3 core positions for  “awhile”, financed through my depravity of short term trading opportunities. In other words, I planned to own 12 stocks, trading around just 3–that would remain, no matter what. This way, price fluctuations for my core would be rendered immaterial, as I’d be building up my asset base through timely trades. As of late, I’ve closed out multiple winning trades. Just today I booked a very large gain by selling half of my DDD position. It was, in fact, my 2nd largest position this morning. With some of my proceeds, I started a position in TRLA and averaged down in AMBA.

Here is my conundrum.

I’ve been averaging down in AMBA since $16.66 (god damn omen) and the price is following the path of another large position of mine, IMMR. Both have grossly underperformed. My asset performance has been buoyed by YELP, gains in ONVO, DDD, CXO, OPEN and WIT. And, I also sold 30% of my IMMR position north of $14.30, which helped.

But here I am, chasing down a non-core position down the drain into earnings. Am I mad, or onto something big?

There hasn’t been any news, just rumours and innuendo. Of course one must be mindful of the old saying “where there’s smoke, there’s fire.” However, aside from the Seeking Alpha drivel, every analyst covering the stock, namely the guy from Deutsch Bank (Ross Seymore), who happens to be a very good analyst, loves the stock and feels it’s worth $20. I’ve made up my mind, have you, and I am riding this sucker through earnings, like an olde fashioned automobile made from dynamite sticks heading for the sun.

The curious case of IMMR is equally vexing, if not infuriating. I’ve determined that I am going to stick with certain names, come hell or high water, regardless of imminent peril and financial hazard. The audible here, of course, is AMBA, an unplanned 4th core position, which was thrusted upon me like the north thrusted themselves upon the peace loving confederates.

My year to date gains still stand in the high 30% range, and I didn’t just humiliate myself by selling out of 39 million shares of JCP at the lows.

So, life isn’t that bad. I’ll manage through it.

I was taken down a notch today, thanks to the compression in the shares of AMBA. Also, following John Kerry’s war against Syria speech, stocks declined, further depressing my intra-day profit and loss statement.

No worries. Today was the lightest volume day of the year and Seeking Alpha is an online magazine run by social misfits.

If it weren’t for my huge DDD win, I would’ve been scalped today.

I am going to end up down a little less than 1%, vexed like a bull being teased by a clown dressed in a red mini-skirt.

The good news is, however, war is on the horizon, yet again.

Top picks: IMMR, POWI, YELP

Today’s Seeking Alpha hit piece was time perfectly. AMBA is in a quiet period and cannot refute the bullet points given in the article. The author, ELAD ASBAHI, knew this before posting his drivel this morning.

As far as I know, this is the second credible company he’s gone after, the first being AVG on 1/31/13.

Here’s what he said about AVG then:

• AVG Technologies’ (AVG) Platform business (i.e. the internet search product), including its browser toolbar, has been its most successful program to monetize its user base and has been AVG’s primary growth engine, having grown from 8% of sales in 2008 to 45% of sales in 2012. We believe this revenue stream is in jeopardy.
• Google (GOOG), AVG’s primary search partner and currently the source of substantially all of AVG’s Platform-derived revenue, is on the verge of announcing an update to its toolbar policy, something that has not been widely followed or discussed by market participants. Furthermore, few, if any, analysts on the street appear to be aware of the upcoming changes; if they are, they have decided not to publish or update their models accordingly. We believe that current consensus revenue and profit projections for AVG are severely inflated.
• Imminent changes to Google’s policies could dramatically lower the rate at which users install the AVG toolbar and consent to its default search option, at least slowing, but more likely severely reversing growth in AVG’s Platform business.
• The market appears to have misunderstood the significance of AVG’s recent partnership with Yahoo (YHOO), with the stock rallying close to 50% on the news. We believe this partnership was formed in desperation and anticipation of imminent Google toolbar policy updates. While AVG has added Yahoo as a backup monetization partner, Yahoo’s ability to generate revenue for its partners is far below Google’s, and if the day comes that it has to flex its reliance on Yahoo search, AVG’s revenue will likely contract in a major way.

We believe the equity is highly overvalued at current levels, with an intrinsic value of $8.50-$10/share, 30-40% below current trading levels.

 

How’d that work out for him?

The stock went straight up, now almost 60% higher from his last report.

In short, AMBA can’t defend itself today and the shareholder base is weak, which is leading to an Exodus in the shares. Is this bozo right about a potential earnings miss? Only time will tell. His only solid report was regarding ABAT, which turned out to be a chinese fraud stock, instead of a real company. Please, throw a dart at a wall filled with chinese stocks and odds are it is a fraud.

I like to buy into the blood, especially when the ‘news’ event is based upon conjecture and rumors–pumped out by the very worst financial website online, Seeking Alpha.

Earnings are scheduled for 9/5/13. For Elad’s sake, they better miss.

This is going to be a very quick post, targeted towards the suckers out there, mucking up their net worth.

Stop making predictions. Anyone worth his salt knows predictions are for fortune tellers and Bill Ackman.

Stop asking me for opinions on your stocks and why XYZ is down today and what that might mean.

Who cares?

Your time frame is short term because your pockets are shallow.

My advice to you is very simple: focus on your portfolio less and work more. Earn more money, so that you can afford to be patient.

With that being said, the markets are going higher, because that’s what they do, generally speaking. Any opinions to the contrary are not based on facts, but hyperbole.

Get back to work!

I don’t believe the Seeking Alpha hit piece on AMBA. The companies HQ isn’t even open yet and people are selling the stock like they missed earnings. I’ve made too much money betting against the clowns at SA than to sell here and realize a loss.

I added to AMBA under $14.20.

I started a position in TRLA.