The Amazing Market

Aside from my positions, which are curated (no Stocktwits) to conform with my emotions, I am a huge fan of many companies and industries–powering this market higher.

One stock is CREE. I’ve mentioned it before and I’ll said it again: the incandescent light is to LEDs what kerosine was to the incandescent light. Eventually, all lighting will be of the LED variety. CREE is the main player and will continue to do well.

I am amazed at NFLX, not only because I sold 20,000 shares at $65–but for what it stands for. As much as I complain about the market, I am always looking for spectacular opportunities. I had one with NFLX–but didn’t possess the edge needed to hold through the tough times. Carl Icahn did and has been richly rewarded for it.

That’s what we are here for, not only to invest our nest eggs wisely, but to have a chance at hitting that elusive homerun. I know in a previous post I warned you about swinging for the fences, but that pertained to position sizing–not the concept of wanting to hit one.

I want to hit one and badly. I might have one with VHC–but it’s taking too long to materialize. A good friend of mine is a so called expert in biotech and has been pitching me about his ideas–but that sector is too unpredictable for me.

I know if I hold long enough, I will make plenty of coin in MTW, USG, BZH, BX, GS, MOS, RH, and WNC. But what else am I missing?

How about social networking?

Shares of FB and LNKD have done well; and YELP has managed a fair return, despite its high valuation. Perhaps it is time for GRPN, ZNGA and BCOV to surge. I believe GRPN is very undervalued.

Look at TRLA roaring today. How can you sit there and ignore the fact that housing is back? Zillow must follow suit, wait and see. But how about ANGI? My contractor pays ANGI $300 per month to bump to top of search results. That sounds like a terrific business model for them. He gets about 1-2 new clients per week using it. To him, it’s a highly profitable investment. Subscription based models are very attractive to potential suitors, due to predictability of cash flow. Unfortunately, The Street. bomb (TST) has failed in that regard.

The only way to save TST is to start over from scratch. Forget about Cramer and his idiotic salary.

JIVE is a name that seems ripe for the picking, as well as NXPI–who benefits from electronic and auto industries.

Remember GSVC and SVVC? Those stocks haven’t moved in ages. I believe GSVC still owns a chunk of Twitter. Perhaps it can make another run higher too.

The point that I am trying to make is– don’t limit your horizon to the view from your window. Sure, the volume stinks and not every sector is ripping. But we’re steadily climbing higher, while volatility and bonds get crushed. This is the proverbial sweet spot of investing.

From refiners to airlines, there have been countless winners. Find the next winner, or at least try your hardest. I know I will.

I added to my BZH position into this maelstrom of selling.

The ongoing calamity on the Carnival Cruise ship, ironically named “Triumph”, reminds me of an old movie called The Exterminating Angel.

‘People are fighting over food and stuff – that’s a bunch of savages. It’s ridiculous. Carnival has nothing at all in plan in case something like this happens.
source

In the movie, a fine assembly of aristocrats join for dinner–but for reasons unbeknownst to anyone–become “stuck” in a room, unable to leave. Soon enough, they turn into savage animals–killing each other along the way.

I reckon the same thing is occurring on the ship right now. 4,200 people went aboard, hoping for the time of their pathetic lives, only to end up on the receiving end of grave misfortune.

Human nature will never change. We always devolve to the lowest form of depravity, when adversity hits us hard. How many people are killed in nightclub fires– due to trampling and disorderly exits?

Panic is our #1 enemy. It is the very worst characteristic of man. It makes us do things we would never do under normal circumstances. When panic sets in, our brains turn off and we transform into cavemen, cannibals even, fighting for survival like stark raving mad lunatics. Pray tell me, if the majority of man believes in God and the afterlife, why do they become so desperate to save their lives?

Perhaps they are fighting for status quo, in order to see their family grow old, to enjoy the World Series and such.

Nevertheless, CCL is a short. Their accidents have become legendary and is bound to hurt business in the short term. Knowing American ingenuity, they will likely branch out to unsuspecting countries, like Nigeria, and offer cruises to see the Statue of Liberty. I am not touching the stock, either way.

Back to the subject of panic. How many times have you lost money or missed opportunities because you were scared, frightened to lose too much? More often than not, these feelings are a legitimate concern. What you should be asking yourself is “how can I avoid feeling panic in the future?”

The antidote is simple.

Never bet more than you can afford and be somewhat traditional with your allocations. The idea of turning $12k into a million is very nice indeed. But you cannot replicate lightening in a bottle. Anyone who tells you there is a formula for “quick get rich schemes” is simply lying to you for his own benefit.

A few years ago, I turned $100k into a million–but I was jumpstarted by a very large position of mine (FTK) tripling in value. I then proceeded to exercise leverage at 225% to play the ranges, using TNA and TZA as my tools. The PPT was my guide and I was impervious to defeat.

Then I took it to the next level and started to play options in a big way. I’d bet $250k on a single, short term, strategy–using greed as my vice. There was nothing remotely intelligent about this form of trading and eventually led to a 50% drawdown, before I closed out the account to finance the purchase of a new home. I didn’t need that money, per se. But it became a very big distraction for me, so I eliminated the distraction. Very simple.

If you are interested in longevity, especially if you are managing other people’s money, keep your position sizes below 20% and more regularly in the 5-10% range. Own a wide array of industries and never become fascinated with glamorous stories of stock market ascendency.

Like the lottery, only a select few will ever make money that way. The majority of people will lose their entire investment and more: their friends, families and retarded items of value etc.

I’ve been telling you about asset managers, Japanese exporters and of course a certain patent litigation play that is sure to make Tim Cook cry. But I haven’t really touched on my top 5 position, MOS. We are now in the planting season, small men reading the internets. Last year farmers received rail spikes through their stupid faces, thanks to mother nature bestowing dust bowls upon their property and livelihood.

To be clear, nitrogen and potash are going to be needed in great quantity this year, to stave off catastrophe. Yields need to be better this year, else prices are going up again. The Chicken Gods and King Obama will not like that.

There are many ways to skin this cat. You can play the water side of things, via irrigation plays LNN or VMI. Or, you can go straight to the source and buy MOS, TNH, CF and AGU. POT used to be in play; but now they’re just some stupid Canadian potash company that is poorly operated and unable to make its shareholders any money.

DE is always in demand and their earnings were good. Grain elevators will be needed (ANDE) and genetically modified corn is all the rage these days. You might as well join the dark side and buy MON.

Bear in mind, most of what MON stands for goes against everything that I believe to be sound and just. But making money is not about ideology–but realism. Go ahead and make some money off MON, then use the proceeds to buy your family some food from WFM.

Quit being such babies.

In my next post, I have two underdog internet stocks worth a dice roll.

“The Fly” closed the day punching off chest hairs like Bruce Lee, up 13% for the year. Through clever limit orders, I managed to partially divest from my gargantuan VHC position. I had to do it, so shut your cantaloupe heads and go back to playing second fiddle.

I’ve made millions this year and with the +13% year to date, I am only 15% from my all time highs. When I hit that number, and trust me I will (you can bet on 10,000 bibles), I am going to shut this stupid site down for an undetermined period of time. You’re all spoiled brats. You want picks from me, Chess, RC and everyone else. Yet what do you give?

YOU DESERVE NOTHING.

You offer nothing but drivel and when things go on pause for a few months, all of a sudden, you’re a financial guru–qualified to tell Le Fly how to run money.

Let me tell you something, little trollop: I’ve been doing this, successfully, since the 90’s (started from dirt). Keep listening to complete retards with no skin in the game, no real experience in managing large swaths of money. See where it gets you in the long term. I do more volume in one month than all of these clowns combined, over the course of a year.

A pathetic man once said “officer, some man in a black cloak just walked in here, with a giant bowling ball, and threw it at all of us, knocking us into the back of the lane.”

I sold off a portion of my VHC position for three reasons.

1. It was 30% of my assets.

2. I was up 18%.

3. I have another place to put the money and I am 100% long.

Don’t believe that I’ve lost confidence. However, it goes without saying, I warned you many times that I’d sell VHC to finance my thesis trades. I will do exactly that.

Stay tuned for new buy.

Shares of MAS are up sharply this morning after beating earnings expectations. But it’s more than that, pickled face. They make kitchen cabinetry and people are spending lots of money, further solidifying my belief that we are in the 3rd inning of the housing recovery.

“We expect new home construction to show strong growth in 2013, and anticipate repair and remodel to grow modestly, with big ticket items continuing to lag. Our focus this year is to successfully execute new product programs, improve profitability in Cabinets and Installation Services, and expand our brand leadership positions. We believe the actions we have taken over the past several years, including investing in our brands, reducing our cost structure and paying down debt, have strengthened our business. We believe these actions have positively positioned us to take advantage of the upturn in the housing cycle.“

Masco’s direct competitor is FBHS. The stock is being overlooked today and should be bid up. I bought back BZH on the MAS news. I think housing related stocks are about to take another leg up. I’ve also added to my USG position (2nd largest position next to VHC).

There is no better way to play the housing recovery than wall board. Warren Buffett knows it and will likely buy the remainder of USG, keeping its future profits to himself.

Why don’t you?

Get your heads out from the pickle jars and buy a house.

Off the MAS earnings beat and comments, I bought back BZH and added to USG.

I know the condition of the market, with its lack of volatility and exciting news, has many of you “bored” or unable to appreciate a slowly moving tape. But money isn’t boring is it? Last I checked, money affords me to do exciting things: travel, drink like a fish, renovate my house until the neighbors surrender. Learn to appreciate the moribund and profit from the bland.

Deep in the bowels of the market is a select group of stocks that are soaring higher, without the prerequisite fundamentals or anything to do with proper institutional support that typically characterizes a winner. Small capped stocks are being bid up by the very worst investors in the world, men saturated in their own urine and feces, trying to make enough money to pay down their credit card debt.

BEHOLD the top 25 stocks under $5 list.

The number one stock embodies this type of saturated investor that I mention. Its share price has gone from .17 to $1.60 in a very short period of time.

Oh, you want to know what they do?

No one knows, not even the company itself.

Japan’s HGH powered economic minister, Akira Amari, said Japanese stocks are “still low” and that “…there is no doubt higher stock prices are better than low ones.”

I happen to agree with this man.

Everyone thinks Japan is this pathetic island nation beholden to the degeneracies of their mortal enemy, China. The fact of the matter is, as the Chinese build phantom cities to keep their pathetically poor vagrant farmer class content and away from the pitched fork, the Japanese are living a life of luxury, with unemployment in Japan at its lowest level since 1999.

So don’t feel sorry or make fun of the samurais until you find a job.

But things are about to go from good to very good in Japan, despite their psychotic 205% debt to GDP dilemma.

ENTER KURODA!

“Japan’s economy has suffered from prolonged deflation that must be eradicated — that would raise short-to-medium term growth prospects significantly,” Kuroda, 68, said in an interview in Tokyo yesterday. “Two percent plus for calendar year 2013 would be quite possible and for some years could be sustained,” he said, referring to a pace of expansion not maintained in Japan since stagnation set in in 1992. source

To be clear, the favored new head of the BOJ is intent, hell bent even, on seeing Japanese inflation at 2-3%, in order to stimulate the economy.

Umm, the last time Japan had real inflation was in the 90’s, aside from that weird period of 2008-2009.

Japanese inflation is at zero right now. In order to jack it up to 2%, the yen will need to decline by another 25%.

Your trade is to be short yen, via long YCS, and get long banks and exporters. My favorites are NMR, MTU, HMC, TM, PC and CAJ. And of course, the best way to play it from a savage leech American perspective is to be long WETF, as inflows swell into DXJ.

The NIKKEI is up 2.5% for the session, so far.