Fly Buy: $CLIR

I started a small position in CLIR.

Disclaimer: If you buy this stock because of this post, The Devil will claim your soul. And, you may lose money.

In case you didn’t get the memo, this Friday Ron Johnson, alongside his team of fashion experts, will launch Joe Fresh in their stores. The Joe Fresh brand is what Ron has been telling us we need all along. He convinced Bill Ackman to wear the attire to Pershing Square board meetings and now he’s going to dress America.

Starting Friday, the future of JCP shall be revealed, from the visionary himself RONALD “BUSINESS MAN” JOHNSON. The entire company, the employment of thousands and supply of cheap wares for millions of misers across the country depend, hinge even, on this one sweater.

BEHOLD:

The company has $685 million in debt maturing by 2017, with a burn rate of $1 billion per annum and $800 million in the bank.

Everyone has sources, some are good–others are great. I have numerous sources of information, one of which is from someone we call “The Devil.” I’ve highlighted his calls here before, from VHC to IOC to KRO.

His last successful call was PAMT, highlighted inside The PPT @ $8.70. At first, I did not buy because of the thin volume. After some cajoling, I finally gave in and bought @$10.74.

Here are the time stamps on his PAMT calls.

His newest pick is CALL- The MagicJack. The stock trades by appointment and is surrounded by controversy. Nonetheless, the company consistently smashes earnings expectations, which are slated to be released on the 16th.

Past results does not mean future returns are assured. Nonetheless, I am a small buyer of CALL– a 5% position.

By executive decree, I am adding Zenhunter aka “Tradingmytwocents” (insanely stupid name) as interim blogger to iBankCoin, joining the illustrious ranks of, umm, Rhino. Very soon, Vincenzo Illuminati will add him to the front page and you will begin to curse him out in the comments section, almost immediately.

As I watch CNBC, they’re playing rap music again. Can someone please tell me who these morons are appealing to? Perhaps the urban investor class is somehow supporting TD Waterhouse ads?

The main problem with people is they try to be cool, as if it mattered. What do you want to be cool for? You want people to like you, or think that you’re somehow dangerous or appealing? You are a jackass, nothing more or less.

The rally will continue. The core thesis revolves around housing. We will see high single digit appreciation in housing this year, lending to new home builds. Again, my top housing picks are USG, BZH and by extension BX (they are the biggest corporate owners of residential homes in America.)

However, I am only playing this game of thrones until early to mid-April. Every market is subject to pullbacks, some very severe, enough to ruin one’s year. I am targeting year to date gains of 25% by next month, at which time I will “dial it down” and fall back into a large cash position. But now is not the time for “cowardice cash.” Now is the time for glory, the time for sacrifice and honor, throwing metal spears through the faces of stupid short sellers with animalistic fervor.

Now is the time for winship.

First off, Bill Ackman is hurting JCP more than helping.

But it wasn’t long before trial-watchers discovered that Martha was wooed into a separate and seemingly parallel deal with JCPenney with the help of Bill Ackman, the always confident and controversial hedge-fund manager who has a huge stake in the ailing retailer.

“Great work, Bill. You get a huge assist here,” crowed Johnson in an e-mail after Martha signed on. “We put Terry in the corner.” Court-ordered arbitration will determine whether that boast is true.

Martha had an exclusive deal with Macy’s and was lured to JCP and now people need to pay. On top of everything else afflicting Ron Johnson at JCP, he may soon see his stores without products on the shelves, depleted of the Martha Stewart brand, all thanks to “Montauk Bill” Ackman.

But what else is JCP up to, aside from the once legendary god of retail, Ron Johnson, crashing the company balance sheet into cinderblocks made from dynamite?

Their sales down 31%, that’s what.

The company now has less than $1 billion in cash and has been delaying accounts payable to preserve cash. Last quarter, they’ve stopped paying people for their products for a new high of 48 days (up from 34), in order to “save” $214 million in cash.

Ron is trying to convert JCP from a coupon clipping discount retailer to high end. It’s laughable, really. Only a true narcissist, devoid of basic common sense, like Bill Ackman, could believe in such a strategy. Legacy store sales for “everyday prices” declined 36% YOY and 33% in Q3.

After Ron crashed the JCP balance sheet into cinderblocks of dynamite he announced that they’re gonna bring back coupons, since people like them. Johnson to date, they’ve only converted 11% of stores to his moronic vision. It will cost JCP, on average, $1 billion per year to convert to the new–higher end stores.

Bond holders say no, with paper trading anywhere from 10-30% below par. On top of that, JC Penney CDS are now above 1,000, a level seen by all of the winners of bankruptcy, just prior to their demise.

Two things are going to happen if JCP is to survive.

1. Ron Johnson will be fired.
2. JCP will issue a massively dilutive secondary to shore up the balance sheet, at a big discount to current prices. They need to raise $1 billion, right away.
When this happens, Ackman’s thesis for owning the stock will be destroyed, forcing him to eat crow and sell the stock.

If Johnson stays and the company continues the current path to doom, the company will be bankrupted by 2015, maybe sooner. There is a distinct possibility, considering the current trend of accounts payable, that suppliers will demand letters of credit this coming holiday season. If JCP cannot provide such letters, merchandise will stop being supplied to Ron and his company will collapse.

Disclosure: I am short JCP.

@The_Real_Fly

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I am up more than 2.3% now, stretching year to date gains to 18%. I am hitting new highs thanks to BX, USG, BZH, HLF and WNC–all massive positions in my book. My shorts are fairing okay, with CCL lower thanks to rampant disease aboard an RCL cruise. Both JCP and AG are little changed.

I guess my KWK idea caught on. It was truly a lay up trade, considering where the bonds were trading. Sometimes you get to act on great ideas, other times you miss them.

I positioned into CALL, not for a quick pop. It’s based on a catalyst event, so I will need to sit tight and be patient. The company always beats earnings estimates. I expect them to do the same on 3/18. By the way, this is a Devil pick and he’s been on fire. He’s also short GS–which was conveyed inside The PPT the other day.

CMG is lower, after an analyst note came out and said sales were soft. I knew about this rumor two days ago. The same rumors and information are floated by the same people. They just get in or out before you do. I hope you pay attention to some of the things I write here, as I try to convey messages without making a fuss.

Information is everything.

But we’re in a bull market and we’re all geniuses now. I do not pretend to be unique with my winning picks. We’re all doing well, as it should be, since it is our birthright to do so.

Spend a little money this weekend. Help the economy and drink yourself stupid–for we will make it all back, AND MORE, starting monday of next week.

Ciao (the most annoying form of goodbye).

He’s a buyer of CALL aka “MagicJack” and so am I.

I initiated a new position today, selling a little BX and all of DSS to raise assets.

Metals have reversed and gone higher, gobbled up by gremlins who await the reintroduction of the gold standard. Despite what my opinions are, the move to the upside is impressive, causing me to wait to short more AG–sometime later down the road. When I speak of short positions, remember that I am 110% leveraged net long.

AG becomes interesting to me, as a short, north of $17. When the metals catch respite, they tend to run for a few days, before embarrassing themselves once again, bankrupting their loyal shareholders with reckless abandon.

I’ve been doing some homework on KWK and want to buy it–but it’s too risky for me, especially since I’m fully invested.

In a nutshell, here’s what’s going on.

They have $2.1 billion in debt, $438 mill due in 2015. The bonds are trading healthy, as if nothing was wrong with the company and they are unsecured. Odd no?

They’ve drawn $550 million from an $850 million credit facility, which is scheduled to be “redetermined” in April. The credit line is likely to be cut.

They’ve been promising joint ventures and asset sales for more than a year, in the barnett shale and horn river basin. At current prices, they are estimated to raise anywhere from $100 million to $300 million–parting ways with property.

They’ve cut cap ex to the bare bones, down 59% from last year to just $120 million.

Botton line: they need to recapitalize their 2015 debt, else it’s lights out. Production is going down, low single digits, and their only hope is to partner up with a big oil company to develop their fields for them. Unfortunately, many natural gas companies, like GMXR, CWEI, are trying to do the same thing right now, which is bound to have an adverse effect on asset prices, in this case acreage.

If they get a positive response from the bank in April, regarding the credit facility, the stock might go to $3. It’s also very curious to me that the bonds are trading without a care in the world.

For a trade, this might work–especially if natty goes up. It’s also worth noting, they, like CWEI, have superb hedges, with more than $300 million hedged north of $5.00 for natural gas.

He might be the Manchurian candidate, a man sent from nefarious dwellings to destroy America from within. Nonetheless, the stock market enjoys the theatre and now people are going back to work, after months of hiatus.

The unemployment rate dropped to 7.7%, adding 236,000 jobs for the month, much greater than expectations. This has translated into lower precious metal prices, crushed yen and higher euro. Futures are up and Obama is smirking, whilst plotting to take away your guns, macaroni and cheese, soda pop and general every day freedoms.

Carl Icahn stepped in and upped his HLF stake to 15.5%, further tightening the screws around Bill Ackman’s head. I love Carl Icahn and hope to God he becomes a vampire, so that he can live forever, immortal, brutally punishing his enemies through financial means.

I intend to make money today on a variety of fronts. I hope you heeded my warnings and listened to the advice of men, such as myself, who are seasoned, experienced in the trends of man–gifted in all things pertaining to finance.