Be Inspired

That was the last tweeted words of old school rapper “Heavy D.” He passed today at the age of 44, reasons are still opaque.

About 6 months ago, I unfollowed Heavy D on Twitter because he was too damn positive. I refollowed him again today. I’m fucked up that way.

For example, he posted this on 11/4/11:

@Heavyd
Back in the USA.. I love my life.. Only because I always have!!! BLESS UP!

A “normal” person wouldn’t have an issue with such words of positivity. Part of the cynic in me says “see where all of the positivity got you, dead at 44.” Then again, my Father died when he was just 30. For me, it’s hard to take people at their word, trusting the intentions of others. I view people as diseases, spreading their own version of plague through habits and influence. I am a big advocate of the right to bear arms and use said arms on vagrants indiscriminately.

Look at the people down near Wall Street. I know many of you nice liberals agree with their core message, as did many wealthy socialists agree with the Bolsheviks. But it’s the people who are delivering the Occupy Wall Street message who are your true enemy. They will stunt any and all progress because they are vagrants. I can confidently declare that 90%+ of the people who opt to be homeless and throw urine tainted blood at local food cart owners are degenerates. Our government and police are allowing this to carry on and it is a disgrace to this country.

Some of you are skeptical of me, due to my anonymity and coarse behavior. The truth of the matter is, I don’t care enough to hoodwink anyone. I find people like TIM, and other internet personalities, to be distasteful and the bane of society. I just want to document my experiences and help people along the way, without the spotlight or notoriety. You will never see or hear me on Fast Money or any radio show, not due to lack of eloquence or oratory skills, but because I want to be left alone. So you know, “The Fly” is one handsome devil.

Some investors believe to be successful they must read every fucking news article and research report available. They comb over the balance sheets of every company featured on CNBC and desperately try to find “the next big winner.” When they finish up their research and get long NILE, they are SHOCKED to see the stock down 8 bucks on an earnings miss. What is the lesson?

We don’t know anything. Sometimes less information is more. After all, by reading all of that research, you are infusing your psyche with the flawed opinions of others. I probably read more research than all of you combined, and post plenty inside of The PPT. However, I view research as comedy relief, not so much an investment catalyst.

My best ideas were concocted after hours of quiet thinking, imagining how the future might look. There are clues everywhere you look, from anecdotal evidence at the mall to the demeanor of a CEO on a conference call to Dow 30 component gross margins to the investor sentiment here on iBC to the algorithms inside of The PPT. Everything should be considered when molding an investment thesis.

As I get older, for the sake of my family, I am trying to be a positive person; but it’s hard. I much rather carry sawed off shotguns under my overcoat and menace at old fuckers when waiting for the red light to turn green. Space Alien Magicians (SAM) aren’t nice. They abduct fuckers from 0hio and launch them into outer space for fun. But we make great investors and that’s good enough for me.

GOOG, AAPL and GS look great.  The market is pissing on those who are fading this rally. It truly is a sight to bear witness.

I didn’t make money today, however, as shares of silver stocks slumped–alongside NFLX. WNR went up, but DK negated it with assholish losses. Ultimately, “The Fly” will win in glorious and grande fashion. I am patient enough to wait for my wins to be served hot, on  the finest china, alongside the very best silverware.

I took a heinous loss in BORN and shuffled the proceeds in BZH and made back 4% in the process. These small trades do not effect my NAV so much. They are more for sport than substance.

I am a firm believer in the GSVC business model, despite its latest decline. The moon and the stars shall align under the auspices of The Fly soon. The stock Gods have informed me of great wins and horrendous losses for my enemies, all to be told here on the first class blog.

At the time of this post, my YTD gains stand at 16%. My goal, believe it or not, is to make an additional 20% in Q4, which will serve as a reminder to all of my haters and doubters that Senor Tropicana reigns supreme on these internets. Failure to acknowledge these facts shall lead to the disposal of your “virtual world” and elimination of your skeleton by way of bone shattering gravity hammers to your person.

http://www.youtube.com/watch?v=p9kdRQv4m5Q

I bought BZH.

I’ve been scouring the market all day, trying to find some stocks to buy. All of the precious metal stocks are up too much to chase. The semis have gone parabolic and financials are landmines. I sort of like MAS here. And, if it wasn’t for their horrible balance sheet, AKS is interesting.

Nevertheless, I am finding it extremely hard to chase stocks, even though I feel we move higher.

Gold and silver is due for a pullback. Instead of freaking the fuck out, I will use any decline as a chance to buy more. RGLD, an olde Senator Gint fav, is of great interest to me.

My food and beverage theme is not ripe yet. The fruits are low hanging and they will be delicious when picked. But it’s not time for that trade to be put on yet.

NFLX is selling off, following THE COMMODITY KING, Dennis Gartman, announcing he is building a short position. Really? I will remain long.

This whole Berlusconi resignation rally is fucking retarded. Mussolini isn’t going anywhere. This is NOT a reason to chase stocks.

In summary, today is a good day to eat a sandwich and do nothing. Perhaps tomorrow will prove to be a more fruitful day.

Italian yields are now north of 6.7%. At the same time, the Ragin’ Cajun is absolutely killing it inside 12631. Both Chess and RC are extremely talented in catching swing trades. If you are a PPT member and haven’t given them a shot, you are missing out on raw talent.

As you can see, I am stubbornly holding onto my silver and refiner positions. I could switch it up and delve into some other low brow names. But I need to stay focused.  I really hate being disorganized, or invested without a theme. My whole life is about a theme. Before I do anything, I like to have it planned out to the minute. Without organization, there is chaos. With chaos, you get the sort of productivity seen by the vagrants at Occupy Wall Street. Seriously, what kind of fucking revolution is that? George Washington would shit on their faces.

I am fully invested with 10% in cash, for a rainy day. I still have that bastard short, EXH, only because it is small. I really should have covered it last week. And, I have little to no desire to add new names to the mix. Although I sense the markets want higher, several shoes could drop at anytime, sending this circus packing. That is why I want to remain focused, long in names I have confidence in.

Top picks: EXK, AG, NFLX, WNR, DK

I told you about the first time I got fired. Now let me tell you about the time I got fired after I quit my fucking job.

I had left a boiler room operation because, well, it was a fucking boiler room. They ripped people off and the brokers were dicks. I was unlicensed and never sold stock to anyone. I went to a small start up firm, got my series 7, then left after 6 months because my boss was a fucking pussy and I couldn’t learn anything from him. However, I did learn a great deal from a gentleman and “professional account opener” and prolific cocaine addict named “Ed Motta.” However, that’s another story.

Anyway, after I got licensed, I went to another start up firm. Back in the late 90’s, Wall Street was littered with boutique investment banks. I was hired and assigned to their biggest broker. Let’s call this prick Neil.

Neil was in his mid 40’s and was doing about $110k in gross commissions per month. Even back then, despite living on a cold callers salary of $200 per week, I looked down on such a number, mainly because the biggest broker at my previous firm was doing $300k per month. Then again, that was a boiler room and Neil was selling NKE.

By the time I met Neil, I was fairly adept at opening new accounts. On average, I’d get about 7 new accounts per month, with hardly any renegs. Other people did more, most did less. But my new accounts were usually big guys, due to my ability to hold a conversation with intelligent life-forms, unlike Neil. The first morning working for him, I was handed a sales script. This did not surprise me, since scripts were commonplace in any brokerage house. However, what did shock and appall me was his insistence that I follow it, verbatim, like some sort of idiot robot.

In Neil’s small brain, there was a canned response for any possible objective. If Mr. Jones said “not interested” or “go fuck a chuck wagon”  Neil wanted me to reply with an exact set of words, strung together by dicks, without deviation–no matter how retarded it seemed. Basically, he was the FOXCONN of the brokerage industry. He had this shit down to a science. Any objection you could think of, this fucking sociopath had a canned response to defeat you, then cajole you into sending him money. Every morning and afternoon, he’d call me into his office to “skill mill” and he was never happy. I was always stubborn and refused to use his “straight-line” approach, which ironically was invented by the scumbags at Lehman. We’d get into heated arguments and it always ended the same way.

“Fly, who’s the fucking millionaire here and who is the piker cold caller?”

After three weeks, I called the owner of the firm from home and told him that I quit. In a fury, Neil called me back, trying to address my objections  with his patented canned pitch. It was hilariously pathetic. I told him I wasn’t anyone’s doormat and I’d do just fine without him. The truth of the matter was, I had no money– other than some account set up by my Mother that I used to purchase American Online stock. I had just moved out into a basement apartment with my wife and newborn baby and relied upon the $200 per week check to buy food.

The owner of the firm called me back and said “fuck Neil, come work for me.”

I kind of liked that idea on several levels. One, I knew bouncing around from firm to firm would look horrible on my resume. And, secondly, I needed the money and wanted to get my shot at “going on my own” by managing my own book.

I agreed.

The next day I reported to the owner and Neil just glared at me, like “WTF is this piker with the bullshit money tie still doing here.” I didn’t care. I put my head down and went to work on a new iPO the firm was underwriting. That same day, Joe Montana (football legend) came to the office for the roadshow. He was on the board of directors of this company and I got him to sign my prospectus. It is likely worth something today, as only 50-75 of these fuckers exist.

Anyway, I did some calling and got about 30 “indications of interest” for the bullshit deal. It was 5pm and the junior brokers were all called into a meeting. In the middle of the meeting, the owner of the firm barged in like Jack Nicholson in the Shining and said “where is Fly?” About 20 other people looked at me, as I raised my hand, and he said “you’re fired. Come with me.”

This really shocked me, since I thought the owner was “cool.” The truth of the matter is, no one is cool. The owner convinced me to not quit, just so that he could humiliate and fire me. I was young, naive and I thought I was special. These guys were making millions of dollars and couldn’t care less about my plights, goals and aspirations. As a matter of fact, I wasn’t even mad for the affront. I viewed it as a game of chess and I got mated.

I picked my shit up, made a few phone calls and had a new place to work the next day.

http://www.youtube.com/watch?v=RS_ux2H473I&feature=fvwrel

I don’t give a shit about Italy, France, Germany and especially not Greece. All I know is stocks want higher. Are you so dense to see what is in front of your face? The market is begging for you to get long, yet there you are studying CDS spreads.

I am going to make this very simple for you. The Turkey Gods never lose. Getting long ahead of Thanksgiving, following an up October, is a high probability trade. Forget about the news and scary shit that is promoted by your favorite news anchor. I want you to understand that after everything is tossed into a frying pan and reduced, all that is left is a big ol’ turkey leg, nothing more or less.

Into said Turkey Rally, I like DK, WNR, EXK and AG. Oh, and GSVC bottomed today.

Check out Hugh Hendry singing this song.

http://www.youtube.com/watch?v=-io-kZKl_BI&feature=related

Will JEF or MS fold first? Better yet, how about Italy or Spain? France or Germany?

There is such a wide range of potential market killers, it’s staggering.

Yet, here we are with an impotent 100 point decline. Hell, with all of these headwinds, the market should be 3,000 points lower from here, literally. This is my conundrum. A few weeks back I got caught up in the idea that stocks had to go down because it made so much sense. If you listened to fucktards like Chris Walen, you would sell short your mother and move to China to work at a FOXCONN factory. Things have a way of working out–really. Sometimes you have to trust that things will work out, even if the world is on the precipice of laughable insanity.

But that doesn’t mean you should go out and buy anything.

For one, don’t repeat my mistakes by believing anything Chinese is worthwhile. Avoid Chinese burrito stocks at all costs.

Secondly, tech stocks are really hard to trade now. Don’t you wonder why networking stocks aren’t 1,000% higher from here, with all of the smartphones and bandwidth intensive products? Due to intense competition, there is massive deflation in tech. The cost of goods and services are dropping, while the cost of labor increases. Anyone in the tech space in the market for a good programmer knows what I am talking about. Tech is the quintessential stock pickers market.

Right now I am trying to keep it simple, especially going into the 4th quarter. I want to preserve my gains and build on them via precision guided logic. It is my belief that the European crisis will be papered over. In order to do this, currencies will drop in value and gold/silver will appreciate. It’s simple enough, especially considering the fact that miners have underperformed–greatly–compared to the price of the underlying metals. My other theme is to be long refiners. Their margins are great and America loves gasoline, yet has made it illegal to build new capacity.

Lastly, I like NFLX here, but not into earnings. You fat fuckers aren’t going to stop watching movies and the stock is pricing in disaster times 100. I like it for the $100 roll. Should next quarters earnings show subscription growth, we will look back on this time as an unbelievable opportunity to own one of the great internet franchises. Every upcoming internet company has had set backs, even AMZN, even AAPL.

Before I answer your pressing questions, I have a few things to say. Frankly, I don’t know why world markets are so calm when Italian yields are north of 6.5%. But, in my experiences, when stocks don’t go down on bad news, good news is likely around the corner. Something is brewing and it bodes poorly for bears.

As an aside, a friend of mine bought a NYC medallion 9 months ago for $660,000. A few weeks ago, 2 NYC medallions sold for a million a piece. What the fuck are we wasting our time with bullshit stocks, when we could be billionaire taxi drivers? Doubly aside, FUCKING APPLE SUCKS DICK these days. My God damned whole apple echo-system, from the iPhone to Airport to the MAC to AppleTV down to my motherfucking Safari browser is broken. I’ve been running in circles trying to fix this shit and I am not pleased.

Now here are your answers.

1. Fly, you still thinking with the elevator shaft lower before CYE thesis? If so, what’s the best way to play it? Specifically, what do you think of shorting the insurance industry?

2. GSVC: Does this thing eventually see $40?

I think the crisis will commence in Q1 of 2012, not during Turkey season. Let’s not be ridiculous. Best way to play it is via long TZA. GSVC to $40? I am not sure about that. But I do think it hits $20.

is God real?

of course not.

Is now the right time to buy a bigger house (NJ) or wait more time?

NJ is a piece of shit, tax sinkhole.

If this market goes parabolic into a Turkey Day and Santa Clause rally … what does that do to Precious Metals? Will my ZSL purchase be epic or the lump of coal in my stocking?

ZSL will be dismantled. The only way out of the EU debt crisis is via printing of money. That will, inevitably, lend credence to the precious metals story.

Fly, do you forsee a buy and hold market coming some time soon, maybe after the Euro finishes dissolving? This whipsawing is killing the ports of people who sometimes have to blink, or go to the bathroom, and who thus miss huge market moves. And it’s driving lots of us to sit in cash forever.

Unfortunately, the only buy and hold market is in NYC taxi medallions.

favorite way to play latin america? hold refiners thru march again?

If you like Latin America, buy EWZ.

what will destroy the market first and which will hit it harder?

China banking crisis

European implosion

When China hits, it will be game over for the “global growth story” for a decade.

Fly,

If you had to pick 2 or 3 metrics to look at as two good indicators for future stock price, what would you choose?

Also, please rank these NYC rappers: Biggie, Talib Kweli, Jay Z, LL, and Nas

ROE, FPE and gross margins expansion. Jay z, Biggie, Nas and the rest suck.

1. Planning anymore vacations with your Neighbor Steve?
2. Did Grandpa Fly invest in the stock market and was he proud how his Grandson Fly turned out?
3. Did you ever punch your fist through something or throw up watching a stock go big the opposite way(like in the internet bubble)?
4. What would do you do for a living if you couldn’t do this $$ management thing?

No. Grandpa Fly never “bought those fucking stocks.” I believe he was proud. I’ve punched through plenty of stuff, but never upchucked. If I wasn’t buying and selling stocks, I’d be a Blogfather.

Fly, how many times will Eli Manning humiliate the New England Brady Gurls?

The Giants will humiliate New England as often as they please.

is the market goin up or down? will i end up in prison? will all these douche bags really get a response? thnxs.

Up. Yes. Yes.

How do you think the upcoming budget battle will play-out? What should I invest in ahead of it?

Not seamlessly. No idea.

Fly – I’ve missed the ups, downs the last 6-8 months, by being completely, 100% in cash. It’s driving me nuts how little I earn, so …

where is the best place, investment, stock, strategy to earn a bit more than the money market rate if I so choose to stay in cash?! And if it matters, it’s a 3/4-1mm account, so enough to be flexible, dangerous.

Utilities with low beta and decent dividends should do the trick. For more, look towards the food and beverage space.

What do you think about taking a flyer on nviv for a few years!

WTF is NVIV?

I am down 8% on the year and hoping to close the year out on a positive note. What is your *best* idea into the end of the year?

Refiners.

Do crack spreads really matter intermediate-term to refinery stock prices?

More specifically, what priority do said spreads have on position confidence?

Superior to galactic alignments!?

Crack matters! It’s not the level of the spreads but direction. For example, the recent recovery in the WTI-Brent spread has given new confidence to shares of the refiners. Should 321 head back to $30, then refiners will explode to the upside.

What is the meaning of life?

To leave a legacy behind.

do you like sex?

What the fuck do you think I am, a eunuch?

Do we have free will, or is God making my trades?

Free will. God is a figment of your imagination.

After the Occupy Wall St movement is defeated… Will “they” erect a statue of Mr. Benjaman Bernanke in Zuccatti Park as a rememberence?

No.

Fly, why did you sell CIEN and did you sell all of it?

As a younger investor, is it better for me to just wait for downswings in the overall market and then throw money into mutual funds, rather than trade in and out of the market? Some trades succeed and others don’t, but I have a day job and don’t watch the market all day, and longterm, the market goes up. Is all the trading an exercise in futility?

I wanted to make room for DK. I will not dip into my 10% cash position. Therefore, when I buy something it must be paired with a sale. As a young man, you should trade to garner experience. If you lose money, chalk it up to an education. Trading can be incredibly rewarding.

Dr. Fly, I’m trying to put together my trading plan, in order to help detach myself from the daily circus put on by the business news media.

How do you detach yourself from the BS in the news so you can purely focus on the next correct trade?

Try to put things on a moving average and avoid watching the tape all day long. Expand your trading horizon to more than 2-3 hours.

You have one year to make 50%. High risk is implicit but you’re not looking to simply throw a hail mary. How would you go about doing it, and would you choose stocks, options, multiple trades throughout the year or upfront?

A combination of stocks and options. For example, long refiners and long puts on airlines is a high beta trade. Also, timing inflection points with TZA/TNA can yield 20% in a single trade. If timed correctly. 100-300% returns are possible in options trades. Be careful not to allow emotions get in the way of a cogent investment plan, however. There are no short cuts.

is andrew ross sorkin really gay,and does he have to spoil squawk box every morning. will michelle cabesa caboosa finally show some cleavege before becky quick comes back? signed joe kernan

Sorkin’s sexual orientation is not relevant and I don’t care.

Fly..The Question I have is What did you see at the start of Oct which told you there was going to be a Mega Rally??? Markets can be oversold for a long time, but what was the one special thing that told you?????

It was intuition. I’ve been studying the market since the early 1991. Sometimes gut feelings turn out to be the best trades ever.

Hypo Question…What would happen if the Turkey and Santa Claus Rally fails to come?

Turkey never fails.

What minimum cash poition do you recommend and does it change based on conditions? Is it better to have some cash with leveraged etfs or fully invested without leverage? How do you know when to really press your bets?

10% minimum. Leveraged ETF’s should not be part of a long term investment strategy. Better to go with stocks and leverage instead. The PPT has really fine tuned my inflection point trading.

FLY, does it ever get easier, or do you just more used to it?

With experience, you will get quicker and make fewer mistakes.

Fly, when did you understand you got ready to run other people’s money? Tell us the story how you started the business. That should be interesting. And, by the way, what is your estimate of assholes to smart people ratio on the Wall Street? Tell us about the smart ones, who are they (whom you personally know)?

After a summer internship at Seligman and Co, working under Paul Wick, I knew money management was in my future. I will discuss my whole story in another post. The ratio between intelligent life forms and miscreants in the money management business is 1:100.

As the elder statesman here I am compelled
to question you as to the portion of your household income allocated to a 401k/IRA .

IMO the biggest mistake young guns make is
not understanding the value of these opportunities . Many of my peers failed
to understand the risk inherent with not
properly perparing and now they are wondering
how they will manage on meager low seven figure NAVs .

Are you going to be in that group ?

No.

Often times I get caught up in the heat of battle and forget about some of the little people out there in desperate need of assistance. The year of our lord 2011 has been especially tumultuous and has frayed the brokerage accounts of millions of uninformed plebs out there. When I think about it, frankly, it brings a singular, yet masculine, tear to my eyes.

I’d like to offer my condolences to your portfolios and lend my oversized brain to assist in your uphill battles. So, without further delay, feel free to throw out “hypothetical” questions in the comments section and I will be sure to address them in future blogs.

In the meantime, “The Fly” will be reading a book, whilst sipping on black tea infused with bergamot oil.