Be Original

Original thinkers do not care what other people think. They have a plan, with goals affixed, and try to accomplish them. They aren’t swayed by public opinion and they don’t do something just to be original.

Sometimes being original means to do what the herd is doing, other times the opposite. That’s the point of being an independent thinker.

Are you buying/selling XYZ only because a famous hedge fund manager is buying or shorting it?

Are you shorting XYZ because it’s the fashionable thing to do?

Do you find yourself selling too quickly, because you lack conviction?

Conviction is a hard thing to manage. It’s not as easy as some people think. Most people believe being stubborn or ignorant is conviction; but that’s simply not the case. To have conviction in a name, one must be fully educated about the facts supporting the reason to be long or short. When a person is stubborn/ignorant, he’s simply being lazy, leaving fate to be decided by time and luck.

It’s burdensome to be original because it means being responsible for actions, words and thoughts. Going throughout life emulating people is a short cut, preferred by many, practiced by most. There’s nothing worse than an unoriginal moron. It’s boring and tedious to watch.

That being said, I’m not here to lecture you. I swear on a stack of King James bibles that wasn’t my intention when I started to write this blog. I don’t plan these posts; they just flow as I am typing. Like now, I can literally talk about anything, since this is non-scripted. Would you like to discuss NASA’s statement about “never putting a man on the moon in our lifetime again” and how the Russians are planning to put a robot on the moon, 44 years after America put men on it?

Doesn’t seem odd to you that we’ve never been there since? Moreover, doesn’t seem odd that we’ve never sent men outside the Van Allen belt since the early 1970’s?

Perhaps it’s because Stanley Kubrick directed the lunar landing in Hollywood. Or, perhaps we got bored of the moon because it was unoriginal, boring, moribund to its last stupid moon-rock.

There aren’t any legs to be swept here. As fate would have it, the guy who is calling the market top is getting lured back into the market, slowly but surely, at the degenerate level. Instead of buying mega-cap safe havens, I’ve opted for two companies that should be floating around in a giant homeless man’s pickle jar, instead of my portfolio.

It’s the momentum, the perversion of greed and envy, that will crush you like a mandolin in the hands of a mad ape– every single time.

It’s time for Le Fly to refrain from late inning grand slams, in favour of beer runs and midnight earl gray sessions (honey and a splash of milk). I’ve been here before, many times, over 1,000 years, and it never ends well. I end up having yo clean up my own mess for a solid 6 months, toiling amongst the working class during the hottest of days, sweating like a beast in the jungle, trying to make back what was rightfully mines.

I spit on the stock exchange and shall not waiver in my belief that most of you are going to suffer from outrageous, firm breaking, margin calls.

Good day.

GTAT is now a 20% position of mine. I am pressing the envelope on this one for several reasons.

1. FSLR’s numbers were so good, I feel the stock is worth $80. If FSLR is going to $80, this is the 4th inning of the solar melt up.

2. GTAT has exposure to Sapphire, which is a lotto ticket on the smartphone craze.

3. The Gods smile upon me, especially the old ones.

4. My cash position is 45%, which allows me the flexibility to trade like a lunatic, given my 22% returns.

Wow. Massive melt up is underway, thanks to huge guidance offered by FSLR. Needless to say, solar is back.

First Solar isses upside FY13 EPS and rev guidance; sees FY14 EPS in line; sees FY14 revs above consensus; sees FY15 EPS above consensus; sees FY15 revs above consensus

• Co issues upside guidance for FY13 (Dec), sees EPS of $4.00-4.50 vs. $3.60 Capital IQ Consensus Estimate; sees FY13 (Dec) revs of $3.8-4.0 bln vs. $3.21 bln Capital IQ Consensus Estimate.
• Co issues guidance for FY14 (Dec), sees EPS of $2.50-4.00 vs. $3.26 Capital IQ Consensus Estimate; sees FY14 (Dec) revs of $3.5-4.0 bln vs. $3.42 bln Capital IQ Consensus Estimate.
• Co issues guidance for FY15; sees EPS of $4.00-6.00 versus $3.61 Capital IQ cosnensus; sees revs of $4.2-4.8 bln versus $3.66 bln consensus
• Co sees FY14 Module Shipments between 1.8-2.2 GW; Co sees FY15 Module Shipments of 2.3 to 2.7GW
• For 2013, First Solar expects total module shipments to be between 1.6GW and 1.8GW and net sales of $3.8 and $4.0 billion, including approximately $3.6 billion in net sales from systems sales. Consolidated gross margin is expected to be between 20 and 22 percent. Excluding up to $10 million in restructuring expense as previously announced, diluted EPS is expected to be between $4.00 and $4.50, and consolidated operating income is expected to be between $430 and $460 million. The Company expects to generate $0.8 to $1.0 billion of operating cash flow and plans for approximately $350 to $400 million in capital expenditures in 2013.

The move triggered circuit breakers, halting shares of FSLR, +38% for the day.

Conveniently, I am long GTAT at the time of this event.

#TIMEMACHINE

I’m not participating in today’s rally, down about 0.01% thanks to HDGE and GTAT. But I dodged much bigger losses with yesterday’s closing out of my short book. One notable mover is AG, which was an 11% short position–booked for an 8% gain.

In the past, I’d get pissed off for missing days like this, lament over the peecee like a drunken pervert. Today I swung on the hammock in my backyard, back and forth like my balls. So, don’t worry about Senor Tropicana. I got this.

As I write this, GTAT just went positive and HLF tanked a bit. I have no skin in the HLF game, but only hope and pray–to the new Gods and the old– that it will become Bill Ackman’s Stalingrad.

My prediction is very straight forward: this is the grande finale of the run. We’ve exhausted all options, leading up to tax collection day. Just like every dog has its day, every banker needs a break.

Don’t expect miracles this summer. That, my friends, is reserved for colder climes.

The stock opened down 40 cents.

Whoever kept the stock halted for almost 3 hours should be decapitated. Seriously, how material is the news when it reopens unchanged?

Watch JCP. I suspect the higher HLF goes, the lower JCP will sink.

LIVE BY THE ACKMAN : DIE BY THE ACKMAN.

-BEAS, 2014

Several months ago, Bill’s short thesis on HLF was accepted by Wall Street and the media as “visionary”,  immediately sending the shares sharply lower. However, shortly thereafter, Dan Loeb and Carl Icahn bet against Ackman and went long HLF, which split the media and Wall Street elite between the two parties, Ackman v Everyone else.

Carl, always the skeptic, questioned the timing of Bill’s HLF bear raid and said so in a very public manner.

Carl got really mad at Bill, which was fueled by a prior engagement in which Bill sued and defeated Carl in court for monetary damages. His anger caused him to go on the television and deride Bill for his very public short position in HLF, calling it manipulative and stupid. Bill challenged Carl and told him to “make a bid for the company” if he liked it so much.

Carl was not amused.

Bill insisted HLF was going to zero and promised the FTC would act and shut them down.

Shortly after their public debate on HLF, Carl announced he was taking a very large position in HLF, as much as 25% and wanted seats on the board. Bill was chagrined by this news, as the shares skyrocketed higher.

Several months later, things at JCP went really bad to biblically wrong, led by former Apple exec, Ron Johnson. Mr. Johnson was supported by Bill Ackman and gutted the old retailer for a “new vision”, one that would make Bill “15-20 times” his investment. But that didn’t work out for Bill either, as the strategy failed. Ron Johnson was fired, leaving  the company in shambles and shareholders in ruin.

On the same day Ron left JCP, HLF announced their auditor was committing crimes, by trading on insider information. As a result, the auditor, KPMG, resigned from HLF. However, the drama thickened as the companies stock  remained halted for an undetermined amount of time, even after the KPMG news was released. Speculation ran rampant, as bull and bears debated the timing of the news.

Could Carl be making a bid for the company to destroy Bill?

Or, maybe the FTC decided to act upon Bill’s urging to finally shut HLF down?

The drama, as always, continues.

Stay tuned.

“Montauk Bill” Ackman is on record saying JCP was going to be a 15-20 bagger for his investors.  Instead, it went down more than 50%, the CEO was fired and the company is on a path towards bankruptcy. Well played, Sir.

With $10 billion under management, Bill will survive this JCP disgraceful debacle. However, he will do so losing more than $600 million for his sad faced partners.

What can go wrong for “Bicycle Bill” next? Perhaps his investment in BKW or maybe his short in HLF? Frankly, his investments aren’t that risky, with CP and PG being his largest holdings.

I don’t know why hedge fund managers think they could run retail stores (cue Eddie Lampert). Theoretically, I think I know what people want to buy and how they want to buy it. But I have no experience in the field and know enough that I know nothing.

The problem with Ackman is he doesn’t know that he knows nothing. And for that, regrettably, he’s an asshat.

NOTE: Should HLF work for Icahn and turn out to be another loser for Ackman, his fund will be Paulson’d.

This material is just the sort of thing that could separate one smartphone maker from the next. If manufacturers are worried about the expense, passing it onto the consumer, I’m afraid they don’t know their customers very well.

Sapphire, a crystalline form of aluminum oxide, probably won’t ever be as cheap as Gorilla Glass, the durable material from Corning that’s used to make screens on iPhones and other smartphones. A Gorilla Glass display costs less than $3, while a sapphire display would cost about $30. But that could fall below $20 in a couple of years thanks to increased competition and improving technology, says Eric Virey, an analyst for the market research firm Yole Développement. And since sapphire performs better than glass, that price could make it cheap enough to compete, he says.

Sapphire is harder than any other natural material except diamond; by some measures, it’s three times stronger than Gorilla Glass, and it is also about three times more scratch resistant. That’s why Apple uses it now to protect the camera on its iPhone 5. Virey says that all major mobile-phone makers are considering using sapphire to replace glass. “I’m convinced that some will start testing the water and release some high-end smartphones using sapphire in 2013,” he says.

An alternative to using pure sapphire is to laminate an ultrathin layer of sapphire with another, cheaper transparent material, maintaining much of the performance advantage of sapphire at a cost comparable to that of the glass typical in mobile-phone displays.

For this purpose, GT Advanced Technologies, based in Nashua, New Hampshire, is developing a method for making sapphire sheets thinner than a human hair—much thinner than the nearly millimeter-thick glass used now on mobile phones. (The technology, originally developed for making very thin solar cells, was acquired from Twin Creeks Technologies. See “Startup Aims to Cut the Cost of Solar Cells in Half.”)

GT is also cutting the cost of sapphire manufacturing by following the strategy that it used over the last several years to reduce the cost of making crystalline silicon for solar cells.

To make the sapphire, aluminum oxide is melted down in a specialized furnace and then allowed to slowly cool to form a large crystal. That crystal is then cut with a diamond-coated wire saw. GT designs its furnaces so that they can be cheaply upgraded to make ever larger crystals as the technology improves, allowing customers to increase production without buying new equipment.

GT is more optimistic about prices than Virey, estimating that sapphire displays might cost only three to four times as much as those made from Gorilla Glass. People at the company say prices will fall further as GT improves its furnaces, and as the manufacturers that buy those furnaces streamline their operations.

Several other companies with proprietary technologies are also lowering the cost of sapphire, including Rubicon Technologies in the United States, Monocrystal in Russia, and Sapphire Technology in South Korea. If costs can get low enough, these manufacturers may have a large market waiting for them. But they’ll have to continue to contend with the incumbent technologies—Gorilla Glass and similar materials offered by other manufacturers. This year Corning introduced a new version of the material that it says is about twice as resistant to scratches. It could be in products later this year.

Source

The reason why the stock spiked after the news hit that Ron Johnson had been ousted as CEO is because the immediate perception was that Johnson’s policies were so detrimental to JCP, anyone but him would be an upgrade. However, as the news was digested, the shares slid and are now down 7%.

Why?

Firstly, it means that the largest holder of the stock, Bill Ackman, should divest from the company, since his entire thesis was “revolution by Johnson”, turning JCP into a frappacino, ipad loving, place of chic high end retail–a gathering corridor for gay males to converse about fashion and technology. The only problem with that idea is the fact that JCP has been the home base for old ladies with coupons in their purses for the past 50 years.

Johnson’s retail strategy was a good one, just not for JCP.

Secondly, now that Johnson is out, does that mean Joe Fresh is out? JCP has already converted more than 10% of its stores and has spent billions on revamping their strategy. Surely the new CEO will have to revert to the JCP of old, which might lead to a massive write down.

Thirdly, their debt covenants will be called into question soon. The company doesn’t have enough cash to survive until 2014. Therefore, they need to raise capital. A new CEO isn’t going to travel the ruinous path of Johnson. Therefore, he is likely to raise capital immediately.

This needed to be done now, so that the company could be on firm footing for the holiday shopping season. There was a chance that suppliers would withhold merchandise–fearing a JCP bankruptcy.

My best guess, this is going to be a make or break X-mas for JCP. However, the stock is going to be a buy AFTER they raise capital.

Fly 1 – Ackman 1