Playing Now: Margin Call

I don’t go to the movies often, aside from mandatory children films. But I will be seeing Margin Call.

Trailer
[youtube:http://www.youtube.com/watch?v=Y2DqFRsPrns 603 500]

Review
[youtube:http://www.youtube.com/watch?v=39eIvH_Arto 603 500]

Rotten Tomatoes 84%

Most of you will not be offered an allocation in Groupon because you keep accounts at Zeeco and are literally nobody on Wall Street. However, there is a conduit to get in on all of these hot privately held names, even before the ipo fuckers get an allocation. The solution to your piker problems lies in the shares of GSVC.

Per GSVC’s 10q:

GSV Capital’s current portfolio provides exposure to investments in venture capital backed private companies including Bloom Energy Corporation, Chegg, Inc., Facebook, Inc., Gilt Groupe, Inc., Groupon, Inc., Kno, Inc., Serious Energy, Inc., SharesPost, Inc., Silver Spring Networks, Inc., TrueCar, Inc., Twitter, Inc., ZoomSystems and Zynga, Inc.

Since then, the company raised another $30 million and is in a position of strength to make additional investments. My best hunch, they take a piece of Yelp next.

Bottom line: the stock price of GSVC trades like shit, with low volume and little momentum. However, if the ipo market opens up to the likes of Facebook, Twitter, Zynga and Gilt, that is going to change quickly.

I’ve concluded my study on the psyche of the Occupy Wall Street mob and have decided that they are, indeed, mentally disabled. There are very sick men and women over there, who pose a real danger to themselves and the people around them.

Bear with me.

You might support their message. As a matter of fact, I support a lot of what they are chanting about, sans the class warfare, burn rich people’s faces off, type of rhetoric. My main beef, mind you, is the very fact that these dirtbags (yes, that is what they are, literally) live in the streets. As you know, “The Fly” is not a fan of the homeless man– and supports using said men in early FDA trials for the benefit of BIG PHARMA. Instead of going home at night, bathing, laughing it up while watching horror movies on teevees, these maniacs sleep on concrete slabs, hold “council meetings”, play drums 24 hours per day, defecate in the streets and fornicate out in the open with one another–or sometimes by themselves. There is a collective insanity taking place there, supported by a lot of Wall Street people, ironically, from the luxury of their warm beds.

There is a Jim Jones, cyanide koolaid, aspect to this movement. There is no fucking reason to live in Zuccotti park, amongst dog shit and birds. Why can’t they go home and come back on the weekends to throw “petrol bombs” at one another, like normal anarchists? Instead, they are ignoring all of the tenets of modern hygiene. Modern hygiene aka bathing daily, is the litmus test for mental health. Don’t compare these fruity screwballs to soldiers. They aren’t starving or being suppressed. Nonetheless, they choose to live like vagrants, shitting in water fountains and eating hotdogs for breakfast, egged on by rich people in Mcmansions.

Going into the colder months in NYC, if you care about the health of these people, asshole, discourage them from living in a park, in favor of weekend “revolutions” and weekday showers.

Scientific fact #1: 99% of all known communists are avid coffee drinkers. Back in the good old days, Stalin would execute rich folks while sipping on a cup of joe. Truer words have never been told. As a matter of fact, a staggering 100% of all Occupy Wall Street protesters are in fact prolific java juicers.

Scientific fact #2: 99% of all serial killers are in fact coffee lovers. Exhibit A, Exhibit B. If you are a parent of a young child be sure to raise him or her correctly by encouraging tea consumption over “the black death.” Should you fail to do your duties as a parent, there is strong chance your child will grow up and slay you while you sleep.

Scientific #3: Coffee drinkers are accounting cheats. Look at GMCR, Enron, Calpine and Bernie Maddoff: all coffee drinkers.

Look, we can debate this for hours, if not days. Just know this, when I used to drink 5-20 cups of coffee per day, I’d slap people in the face, unprovoked, with hot slices of pizza. I’d also kick old men in wheeled chairs down subway steps, whenever the chance presented itself. Ever since I’ve reestablished myself as a gentleman amongst the Tea drinkers of Great Britain (TdoGB), I’ve been well mannered and cordial. Look at Scott Bleier, Jakegint and Woodshedder: fucking cavemen and coffee drinkers.

In closing, try to avoid being an uncouth, degenerate miscreant by drinking the evil bean and take up the avocation of proper and honourable tea consumption, preferably of the black variety or mate.

WARNING: This video is a horror show.

Evil doers.

Miraculously, the market has just erased all of its losses, more than 100 Dow points, in less than 30 minutes. Why? Well, there was a rumor of a rumor that Germany wants not one but two conferences next week. Clearly, this means something substantial will happen.

This is the height of idiocy. Forget about my biases for a moment. Trading this market is too hard, unless you are trading on a 2 minute time frame.

Having said that, I am allocating 20% of assets into TLT, in order to park cash. As you see, I am not adding to shorts or longs. My beta is very low and I am happy. After this European crap-show is finished, I will begin allocating assets on the long side, in select names in the food and beverage sector.

The trannies are doing well and tech sucks. You’re better off throwing darts at a board, in favor of doing hard analysis in these convoluted sectors. I’m not lured any longer by big returns and promises of decadence. The new Fly is all about watching Iron Chef and partaking in retail channel checks to see how milk sales are doing in the midwest.

10 yr yields are now at 6%. Italy’s debt to GDP ratio is at least 125%, making them the third most indebted nation in the world. France has the most exposure to Italian debt, with more than 500 billion euros in worthless meatballs on their cheesy balance sheets (I know, that was good). The German’s are not stupid and know this is a fight for survival, literally.

If Italy goes, which it is as represented by 6% 10 yr yields, Spain is next. Listen to me ever so quietly, Germany is not going to backstop 3 trillion euros in Spanish and Italian debt. It is simply too big to save. There will have to be restructuring and the banks will likely trade to $00.00, all of them.

Naturally, before that happens, do-gooders will continue fighting the good fight, telling you that “everything is okay” and “this is manageable.” But they are speaking with forked tongues and fool no one but the weak minded simpleton.

All that aside, I am continuing to do research on my new food and beverage thesis. I am sick and tired of trying to catch the beta waves of stocks like CLF and DECK. It’s a suckers game. There is a whole segment of the market that is rising in a quiet, yet predictable fashion. I am interested in good free cash flow and decent growth.

The PIGS may fall; but people still need to eat and drink. Cliches are for corn can fucking asshats. However, in this case, I am only interested in protection of principal; therefore, I can say whatever the fuck I want to say, AND MORE.

UPDATE: I am allocating 20% of assets in TLT.

The Greek communists are now battling the anarchists. Apparently, the anarchists feel there should be revolution, right fucking now. The communists believe it is not the time for revolt. This is like the French revolution, prior to the guillotine. This is just the beginning of the Greek fun. These fuckers are not docile. They are violent and militant. Stock market aside: the ECB is out of their fucking minds lending any more money to Greece. They should boot them out of the EU, send that funding to Italy and the market will soar. By funding this Greek tragedy, they are encouraging revolution. Imagine if Greece gets the money, then the country falls to maniac anarchists?

Futures are strong based on this not being 2008 again. People are just dying to buy stocks, no matter what. As bearish as I sound, if we close out October with a 5%+ gain, I will be positioning long for a gobble-gobble run, thanks in part to the Turkey Gods. However, after Thanksgiving, rest assured, Santa Claus is going to bash your brains in with a mace.

In short, I believe we have a maximum 2% upside to this market in October and another 3% in November for a grande [sic] total of 5% upside from current levels. The downside is 20%.

Put your handguns down and click this link and listen to the Steve Wynn conference call rant, starting at exactly 45:00.

I will try to get my own audio shortly.

UPDATE: We uploaded it to youtube.

Direct youtube link for iPhone players.

My take: Steve Wynn is a master orator. His command of the english language is unparalleled and his cadence is perfect. This administration has infected the psyche of America to hate the rich. There is divisiveness like I’ve never seen before, coming from the left and the right. Instead of uniting this country in a time of hardship, Obama has opted to drive the wedge deeper. This is not an endorsement of the republicans, as I hate them too. I am simply giving you my observation and insight, as to why this economy is doing so poorly at a time when businesses are so rich.

Personally, I’ve been struggling with making a major business move for over a year, mainly due to complacency. Should I choose to make this move, it will employ people at a premium wage. But I’ve opted to wait until the business environment improves– because I can.  I’m not struggling, so why take the risk? The entrepreneurial spirit is being stifled under the loud fog horns of government, both Federal and local. On a separate note, I’ve been meaning to move into a larger house for over 2 years, yet have opted to “stick it out” due to an “assholish housing market” (the words of my realtor). I have more than enough savings to buy my target home 100% cash. But why buy now when that shit is going the fuck lower?

There is no sense of urgency, which is the primary reason why we are stuck in the mud, spinning our wheels.

Bear with me for a moment. To be optimistic is constructive and desirable for all successful, well rounded people. I get it. However, on occasion, you need to take a step back and look at the big picture for a moment.

With regards to Europe: I contend, it’s impossible for Germany to accept any terms that lead to a pan-European bailout. No German politician can survive the backlash at home. Moreover, the numbers do not work. Italian 10 yr bonds are north of 5.9% for Christ’s sake. How the fuck do you expect the IMF or the ECB to fund Greek, Italian, Portuguese and Spanish debt–all at the same time? I’m not being bearish for the sake of being a bear or to be different. This is not rocket science, but hard facts staring you right in the fucking face.

And yes, European QE is a non-starter.

While I am sure some savvy politician will concoct some plan to stave off the inevitable, I do know one thing for certain: the s&p will be under 1,000 inside of 6 months. It’s never keen to bet against stocks heading into Turkey day. But, after you stuff your fat faces, like the gluttons that you are, we are going lower–and fast. It will be quite the spectacle.

For the day, I was almost exactly flat. WNR @ 20% of assets down 7%= -1.4%. GSVC @ 5% of assets down 2.6%= -0.13%. VXX @ 20% of assets up 6.67%=  +1.33%. EXH short @5% of assets down 4.64%= +.23%. And, in my personal, I am 100% long TZA. Despite the string of wins for the bulls, my current hedging strategy is successfully holding my 16% YTD gains. After this episode of selling is complete, and my research is done, I will begin allocating cash into longer term positions, all to do with my new thesis mentioned earlier today. For PPT members, I posted my raw, unedited list of stocks for your perusal.

Finally, I’ve come to grips with the notion that trading in and out of inane tech and basic material stocks is equal to playing with a dynamite rigged Jack in the Box. It’s all fun and games until Jack blows your skeleton to pieces.

Over the past 6 months, I’ve been dodging bullets, using my market timing mechanisms, via The PPT, to trade in and out of stocks like CLF, WNR, TEX, VMW, just to name a few. Generally speaking, despite my gains, I am not happy with my lifestyle here, always worrying about shoes dropping or special market moving surprises from our beloved politicians.

So, I’m going back to my roots, delving into food and beverage again. There was a time when I traded names like HANS, BWLD and WFM exclusively, some of you are well aware. At any rate, I’ve done the preliminary analysis and will begin the process of elimination to find some solid companies that I can toss millions into without worrying about catching a knife to the face, whenever the market decides to tank again.

A few freebies: FIZZ and SUSS are booming, both in different ways. FIZZ is in the process of cleaning out the company coffers, via special dividends. Why? Answer: insiders own 76% of shares outstanding. Dividends are taxed at a lower rate and these fuckers are cleaning house, having paid out over $160 million in special divvys, over the past two years–both done in Q1.

SUSS is a great play on the Texas economy, being the largest transporter of fuel in Texas and having over 500 food service locations. They are benefiting from favorable demographics, as the Texas population increases and an overall strong local economy.

I will have a full list of stocks worth your perusal within a few days to a week.