Don’t Get Whipsawed

Frantic price action, coupled with obscene amounts of unprecedented news flow, will kill off many investors. It’s very hard to keep a moving average when stocks are moving in 7% daily increments. Although I am guilty of moving in and out of contrary positions, such as today’s failed attempt at ERY, I always keep those trades small.

The market is a form of gambling, if used to trade frequently. Like gambling, people tend to get caught up in the emotions and the digits, forgetting there is real money at stake. Just because the money is in an account, dressed with cool fonts and fancy looking graphs, don’t lose focus of what you are trying to accomplish.

Get rich?

Maybe. But I think trying to get rich in stocks is an easy way to crush yourself. Unless you are 99 years old and have been diagnosed with stage 4 cancer, you have time to see your money grow over time.

I know this site is all about gunning for the markets, while killing people with clawhammers. But, that’s for me. You wouldn’t suggest a newly licensed driver participate in a NASCAR race, would you?

Before you crap all over your profit and loss sheets, figure out what your theme is. After you figure it out, initiate a plan to buy or sell said stocks with the understanding that you will be wrong on your initial purchases. Once you’ve taken the hubris out of executions, you won’t get pissed off when your new buy drops a buck for no reason. If you have a strategy to buy or sell, stick to it and adhere to those disciplines.

As for me, I have a theme: long silver/gold/refiners, with a blend of high beta gambling stocks. I just replaced NFLX with LULU, after booking 8 points in the former. I am not worried about EXK/AG/RGLD dropping because I intend to buy more if and when they dip.

Even though GSVC was looking mighty fine (southern accent) at $17, it looks even better at $14. I was never going to sell it at $17, so it’s pointless to get mad at shit like that. I intend to see it through, watching the development of their holdings in Facebook, Twitter, Zynga and others.

Lastly, I hope you have other streams of income. If not, try to get one. The stock market is on especially tenuous grounds and it can disappear one morning, Merlin style. You will wake up and turn on CNBC and Steve Liesman will tell you “in an unprecedented move, the Federal government has halted all trading in equities and bonds, indefinitely.” And that will be that. Poof, no more bullshit Italian yields because there will be no such thing.

At that point, “The Fly” will wander off into junkyards and finance local militias to secure grain.

I bought LULU and DK.

And, I ditched ERY.

Don’t look now but French 10 year yields are blowing out today, +6% to 3.4%. When they break 3.5%, people will discuss. I don’t know what is going on, just reporting the small nuances that is the stock market.

I sold out of NFLX to raise cash. I am now about 22% cash and intend to raise more.

Gold and silver are being liquidated. It is always a painful and arduous trade. But, more often than not, buying the dips turns out to be profitable.

I am not buying here and sense a lot of weakness, sans the trannies.

Bottom line: we’re not out of the hot water and stocks should be viewed with a skeptical eye.

UPDATE: I bought ERY.

Remember when MSFT and DELL were the hottest stocks around? Many of you young punks were in diapers when MSFT and DELL were ripping higher 4 points per day. Or how about when INTC had separately traded warrants INTCW? I made a fucking killing in those.

Before DELL won the PC battle, Gateway computer, ticker GTW, was just as hot. They had that cow shit going on and people loved GTW. Anyone remember when U.S. Robotix was independently traded? The ticker was USRX.

Into the dot com bubble, naturally American Online, ticker AMER, was supreme. Then the idea of high speed internet access resonated, sending shares of At Home, ticker ATHM, through the roof. I made a million in that stock. All of the network plays were on fire and the big theme was “B to B” stocks or Business to Business internet names.

Remember when QCOM split at $1,000 per share?

To get stock quotes, sometimes I called up an automated service provided by Charles Schwab from a subway payphone.

One of my largest positions in 1999 was a little telecom company called Global Light Telecom. I rode it from $7 to $20. Eventually it went to zero, like most stocks back then. But before the bubble era, during the 1990’s, there was stock market nirvana. Set aside the fucktarded LTCM and Asian contagion crisis, it was smooth sailing.

OZ Email (OZEMY) or Infoseek (SEEK) anyone?

One day I will take a picture of one of my old posting pages. Back then, at the end of each day my sales assistance would log every trade into a ledger. It was a big black book, sorted in alphabetical order, and every broker cherished it. Today everything is automated, but some retarded brokers still maintain a book. Anyway, during one of my hot streaks, I remember going 30 for 30 in successfully profitable trades. Clients were mesmerized by the percentage gains and would send money in, even when I wasn’t asking for it. I was so young and making so much money, ignorant to the world around me.

Nothing was hotter than CSCO.

Fast forward to today, I am older and much angrier. I don’t have an interest in booking day trades anymore. Back then, I was the king of day trades.

Futures are up big and Italian yields are cratering. I am guessing the ECB is stepping in here, supporting Italy. However, don’t look now, but French yields are up 4%+ to 3.35%. If it breaks 3.5%, the people on the teevee will talk about it.

Bottom line: this is fucking bullshit. None of what you see makes any sense and it is one giant clusterfuck. I am making arrangements to travel back in time, as we speak, to re-trade the bull market of the 1990’s when oil was at $10 per barrel.

Much props to David Einhorn for nailing the GMCR short. His timing was sublime.

Stocks like GMCR, ROVI and NILE should pose as a serious warning to all investors: do not stay long companies with high expectations into earnings. It is a recipe for cataclysm.

My target names for purchase is very small and I am most interested in gold and silver, despite today’s carnage.

But let’s be clear (no Obama), we are at the point of no return. The ECB will step in and buy incredible amounts of Italian debt when the crisis is at its apex. Why?

Answer: to make money.

Why should they buy Italian debt @ $95 when they can wait it out and buy it for $75? This is where the crisis is heading. Things will seem so incredulous, so unbelievable, then BAM: the ECB will pull a Puma Punku on the world and flood the bond markets with cheap money while socializing with high priced hookers.

Truth be told, I am so fucking sick of this roller coaster. I want to kill the people who do this to me but I don’t know where they live. Can you help me with that?

Thanks in advance.

I’m not afraid of the whole deck of cards being burned to dust. Despite my positioning, I am as bearish as can be. As a matter of fact, inside of my soul, I make the psychopath from Zerohedge look like Mother Theresa.

It’s all coming to a head now, isn’t it? This is the main event. The side shows of Ireland, Portugal and Greece are over. Welcome to the death match, starring Italy and France. After we are done with Europe, the contagion will spread to South America, then Asia and eventually America. But the policy response will be the same: more free money.

Do not think for a second they will allow for sanity to take hold after years of propping up this dead system. We know who pays the penalty and it’s not people with money. Everyone else gets taxed through artificial inflation, doubled with wage deflation. It’s the worst of all worlds for the middle class bus driver trying to put his kids through college. This, mind you, is not the message of the fucktards down at Occupy Wall Street–because they’re not part of the system.

VXX and FAZ are ripping higher, yet oil is flat. Banks like DB, ING, BCS, JEF and MS are in the heart of this current mess. Any sell off will hit those stocks hardest. On the flip side, any upside reversal will send shares soaring just as quick as the dropped.

I can’t add to any non-precious metal names here, with Italian yields so high. And, I can’t short stocks, based upon the laws of Turkey. For now, I am obligated to sit here and take my lumps, like a man, while accumulating gold and silver like a greedier version of Senator Gint, if at all possible.

I bought 10,000 RGLD

Disclaimer: If you buy RGLD because of this post, Germany will withdraw from the EU and tell Italy and the world to fuck itself. And, you may lose money.

Okay, this is going to be a very simple trade.

First let me start off by saying this is not a surprise. We saw this train coming for weeks, if not months. The Italian locomotive of death and despair is here and it wants blood. Everything gets marked down because a full fledged crisis is now materializing.  However, this is going to be resolved shortly. Let me tell you what is going to happen.

Italian 10 yr yields were hitting 7.6% earlier this morning, now trading at 7.26%. Spanish 10 yr yields are at 5.8%, approaching dangerous levels. And, believe it or not, French yields are widening, now 3.2%–record levels versus Germany. The ECB must monetize its debt or else pandemonium will hit the EZ and world markets are going to crash. The reason why markets are behaving like a gentleman with a top hat and white gloves, gingerly falling down a flight of stairs with grace, is because the nuclear option is on the table.

The nuclear option is the decision to monetize the debt in a non-sterile way aka printing of money.

Question for you to ponder: Will Germany walk away from the EU now and let the shit hit the fan?

If so, short oil with reckless abandon. WTI will fall $30 in a matter of weeks from current levels. On the other hand, if the nuclear option is initiated, gold and silver are your best plays. The denigration of paper money will funnel asset managers into hard assets.

Nothing else matters.

I will be taking this dip to add to my silver positions.

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