Valuation Calls Await

The deeper this correction gets, the greater chance of catching good old fashioned analyst upgrades, based upon valuation. For the most part, analysts are slaves (sorry AB) to their models and look at nothing else. So, as the world crumbles, stocks “look cheaper” to them, based upon their excel spreadsheets, forcing them to write fancy reports.

I need to be on a plane in about 3 hours, so this will be brief.

No one is going to want to be long over the weekend, with exception to oil, gold, silver. It’s okay to nibble, but not bite.

Hot money is being tossed into small cap oil. See The PPT screen I tossed up yesterday for details. All in all, I expect the market to shatter the dreams of many, while emboldening people like me to activate orbital space cannons. Due to my schedule, I will not have a chance to really have a look at the market until 2pm.

See you fuckers later.

Current

For most of you, especially those who work for a living, being in cash is the best option. I am at the turret all day, like some sort of paradiddle. I can easily sell a bunch of shit and pull retarded rabbits out of my magic hat. Most of you are simply too busy to partake in this gamble.

I’ve been able to skip getting slaughtered, thanks to my large positions in AG, NGD, APC and CLR. Some of my other stocks, like BZ, BORN and FORM, are bleeding out. But the losses are acceptable, since the majority of my holdings are in the right sectors. Late in the day, I bought CENX, strictly for a bounce play. However, if I was all dumb and shit, like you, I’d sideline my cash and wait for a better opportunity.

My year to date gains stand at about 5%. My personal aggressive account is down about 15%. However, that shit is so volatile, it could swing around 20% in a few days. Following last year’s 875% return, you’d think that I’d accept a small pullback. I cannot.

Bottom line: I’m not sure if we are on the “other side of the mountain,” or simply resting before going higher. Aside from gold, silver and oil, your best bet is to wait with cash.

I bought CENX, into the death of the monarchs.

[youtube:http://www.youtube.com/watch?v=pNeNTMmltyc 616 500]

Developing…

Okay, this is when the people with gray matter separate themselves from the imbecilic dart throwers. Now is not the time to randomly pick stocks, based upon your fucking charts. I piss on them. You need to recognize that oil can go a lot higher and that geo-political risk is inherently good for precious metals.

Here’s how to play it.

Hedge via any number of macro inverse ETF’s, like TZA, SKK, SRTY or SQQQ.

Get long gold/silver/oil ETF’s, like AGQ, GLD, USO or UCO.

In the event the metals implode too, hedge that with a little Hugh Hendry, via TLT or UUP.

If you believe we are in the verge of an epic homosexual opera, get long VIX, via VXX or TVIX (double madness).

Drilling down to specific names, I’d remove any overweight holdings that are not specific to the gold/silver/oil complex. That means Ag is OFF THE TABLE. See MOS.

When buying gold/silver/oil stocks, be sure to buy the ones that are responding to the crisis. Today, small cap oil is exploding, namely ROYL, PDO, FPP, BDCO and TGC. But those are gambles. Other, more established, names worth a look are: SA, APC, AG, EOG, CHK, CRK, PBR and CLR, just to name a few.

The name of the game, as always, is survival. Not to sound all melodramatic and shit, like those fuckers who say “and so it begins”: but you really need to stay on top of your holdings now, else miss out on the next inflection point. Always remember, fuckface, the key to outperformance and lots of digits in the checking, is minimizing losses while throwing trash on your neighbors lawn. Hopefully you are taking full advantage of the tools inside of The PPT right now.

The House of Saud is giving away $37 billion dollars to placate its citizens. What the fuck!? Is Ben Bernanke giving them advice or some shit? You don’t give away anything. Tyrants are supposed to order jets to drop bombs on protesters, not flower them with coin. This will not go over well in the middle east. They will view it as a sign of weakness and desperation. The plebs will curry to eat the King’s liver. I realize if the crisis ends, gold,silver and oil will take a hit. However, what if it escalates?

If you are short stocks, what if the crisis ends? You will get your dicks cut off is what will happen. I insist, with the stubbornness of 10 cement heads, being long gold, silver and oil is the way to play this bullshit. However, if your stocks are underperforming, sell them immediately. Get long stocks that are responding to this nonsense, sort of like how I swapped out of ATPG for CLR and AG yesterday.

The oil sector is much stronger today, as investors start to understand how stupid they were for selling yesterday. This is NOT about price of crude. This is about access to reserves. Should Saudi oil go offline, the world is fucked. Those in possession of oil will be “rich as fuck,” while the world burns. You need to get with this end game shit, else lose your house.

As for me, I will be monitoring the egregious events in the middle east, like an Israeli spy.

Top picks: APC, CLR, AG, EXK, NGD

I closed out of my ATPG position, locking in a small gain. I didn’t like the pin action. With some of the proceeds, I added to my AG and CLR positions.

For the day, I lost about 3%, thanks to that lunatic in the middle east (pick one). However, I am optimistic over the pending and inevitable impalement of my bearish colleagues.

You don’t start hedges when the nasdaq is down 80 handles. That’s a low probability bet. I much rather take my chances embedded in stocks that stand to benefit from the ongoing crisis: oil, gold, silver.

That’s my position (90% long, 10% cash) and I’m willing to see it through until I get bored.

Yes, this is the type of mood the perma-bears clamor for. I imagine all of the bears are dressed up to the nines today, with two blue blazers and burlap ties to match. They see the news and get sexually aroused. The more revolution the better. Every time a Libyan fighter jet drops a 2,000lb bomb on protesters, they applaud. I am not suggesting that perma-bears are evil—quite the opposite, actually. It’s always been my position that perma-bears are crazier than a butter sandwich wrapped in bacon.

Talking fast, with crackers and cheese falling out of their mouths, they warn you of the tough times ahead. They tell tall tales of crisis and how the stock market is both fixed and should trade lower. It’s mental impairment at its finest.

While it’s true, markets do ebb and flow with investor sentiment. It’s also true that the proverbial glass cannot always be empty.

In summary, beware of listening to people who have never made a dime in this market, for during times of crisis, their voices tend to be heard most. They are idiots of the first order and should be treated as such.

Having said that, I’m not selling shit, based upon 1 bad trading day. The majority of my positions are in gold/silver and oil. I do not own any of the shit that is getting blown out today. I am down a rather tepid 2.5% today. I say tepid because most high beta names are down more than 5%. Always remember, Ben Bernanke has your back. Go to sleep knowing he will defend you, sword in hand, whenever times get tough (2% sell off or more). It’s almost comical; but it’s true. The bears are setting themselves up for another power packed punch to the neck. Anvils and shit will be released from the heavens, through their bullshit roofs, onto their skulls.

Once the House of Saud falls, great fortune will befall those who are long oil. Wait for it.

Unfortunately, today is playing out exactly as I expected: bad. Over the weekend, it was nice to see gold/silver/oil shoot through the roof. Most of my holdings are in those sectors and it made sense that I’d make a small fortune when the market opened for trade. My fears that the stocks would deviate from the commodities has been realized, as investors race for the exits, dying for liquidity. Oil could be up $50 right now and my APC would still be down. The only way to profit from this fucking disaster is to be long the commodities directly.

Early on, things looked peachy. But, it doesn’t look so fucking peachy anymore. Someone needs to drop neutron bombs on the middle east, STAT!

Aside from AG and CLR, I am getting donkey punched in a variety of stocks today. My losses are plaguing me to no end. I’ve been trying to ignore them, thinking “oh, gee, golly, whiz, it will come back.” But it’s getting worse. The sacks of shit that I call investments are melting right in front of my face and here I am chatting away with you misfits, as if my brain was surgically removed from my skull.

Nonetheless, I’ve made a commitment to see this crisis through, no matter how dire and bleak things may seem to be. The majority of my holdings are in commodity related stocks, so my losses should not be as horrific as Bill Millers. Plus anyway, I entered today at all time highs. At a minimum, I should afford myself 5% wiggle room.

Off to go wiggle away.