18 years in Wall Street, left after finding out it was all horseshit. Founder/ Master and Commander: iBankCoin, finance news and commentary from the future.
Joined Nov 10, 2007
23,531 Blog Posts

The Semis Approach the Cliff

The semis fell anther 1.8% today, on top of the nearly 4% drubbing on Friday. I do not want to reconcile this move as it “being over” but we are fast approaching the pressure point of a mean reversion move higher or rout. For me, the rout option is preferred. Like, if I had a choice where to send the SOX index I’d send it all the way down to hell and lower. The fact that I’d lose vast sums of money would be a secondary concern to me, as I am fixed on presiding over a broken market — being able to at some point convert my Bitcoin back into dollars to acquire assets cheaply.

Nevertheless, do not count on the semis to fall much further. The overall trend is still up.

I closed the session +147bps, 50% cash, 6% $SQQQ and the rest a short list of low beta stocks. My positioning is defensive — since my MTD gains are nearly +4% and I haven’t even traded well. When I enter the zone I want to be in, which can happen at any moment, I expect my YTD gains of +13% to quickly jump into the mid 20s. It might happen this week or next month, or maybe later. But rest assured, my gains will hold and my losses will be minimal and the breakout to come will be obnoxious.

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Bitcoin Has Busted Loose

Listen to me —

If you’re selling $BTC here — you simply do not understand human behavior and how we respond to asset price inflation. After years of being BOGGED DOWN below record highs, we have finally achieved new highs for $BTC and other cryptos — sending the bears downward for good. The way this works, if I might suggest, is the price action will take on a ribald nature and GIGASPIKE towards the next logical rest place of $100,000.

I am not long $BITX at the present — but still own my $BTC, $SOL and my wife seems to have other shit coins and some $ETH. I am a believer and want to see the proliferation of $BTC to continue — laying waste to the trust people have in the FOMC.

I am 72% cash now, indifferent to the tape, +165bps.

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I stepped into today with 12% positions in $SQQQ and $BITX, mainly because I loved Bitcoin and hated stocks. I had 4 or 5 stocks too, all risk averse names that would do well in a bad tape, the rest cash.

The subsequent result was winship of extreme magnitude, +153bps at the open. Seeing this I liquidated and moved entirely to cash. If I so choose, I can take the balance of the day off and read books, writing a novel, sit and listen to classical music and contemplate the end of mankind.

I have no desire to chase the morning carnival and will wait for the afternoon to step back in. Just know and find solace in knowing there are men out there, specifically me, who can trade and trade well.

Up nearly 13% YTD, fresh recourd highs.

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Are We Traditionally Overvalued?

In Stocklabs I compile valuation data going way back. I don’t need to examine stocks like $NVDA to show you how overvalued it is. We already know that — just like we knew $AMZN was overvalued in 2003, 10,000% ago. But what about the overall market?

Let’s examine the data.

A look a gross margins, so we get an idea about how profitable companies are now compared to the past.

2023: 48%
2020: 49%
2016: 46%
2012: 43%
2008: 42%
1993: 37%

Computers and technology have consistently increases corporate profits over time. Based on 2023 data, margin have really never been better.

Now let’s look at price to earnings for the tech sector.

Median PE/% above overall market median PE:

2024: 24.7x / +40.3%
2020: 30.6x/ +51.3%
2016: 23.9x/ +17.5%
2012: 18.4x/ +12.4%
2008: 16x/ +14.2%
1993: 15.5x/ -12.2%

How about that data!Tech is so profoundly dominant in the market is now sports a 40% premium to all other stocks in the $SPY. You can see how this progressed higher over time and what about 1993 being a 12% discount to the overall market? This is before the internet revolution and all of the hype that came with it.

Price to sales/% above overall market median PS:

2024: 2.33x/ +14%
2020: 3.69x/ +52.5%
2016: 2.12x/ +4.4%
2012: 1.57x/ +0.45%
2008: 1.36x/ +12.7%
1993: 1.03x/ -7.3%

Here is the PS table on $AAPL



The most undervalued part of the market?

I have a tool that measures the future price to sales or earnings ratios against a 3 year average to produce price targets. To filter out bullshit, I will only include stocks with market caps above $5b. Here is the upside from current valuations, based on next years sales estimates, per sector.

TECH: +0.6%

Within basic materials, here are the industries with most upside, based off a median 3yr price to sales valuation metric.

Alt Energy: +47%
Ag Chems: +16.9%
Major Oil: +13.2%
Independent Oil +12.2%

Now for tech.

Solar: +28.7%
Chinese stocks: +25%
Semi memory: +18%
Semi equipment: +16%
Data storage: +15%

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Arrogant Bulls Bleed

It was long overdue — the degenerate class of investor had their oatmeal eaten for them today with drop dead pin action impugning the dignity of the semiconductors — sending shares of $NVDA down more than 5%. The entire index bled out, alongside tech, to the tune of 3.9%.

The arrogance of the bulls is completely unhinged and unchecked and a great comeuppance not only looms — but all but assured. Into the close, I doubled up on my $BITX position — as I am convinced a great big splash higher for $BTC looms. I am also 12% allocated into $SQQQ — because fuck the transgendered bulls. I hope this market rots in hell.

Acrimony aside, I had a pleasant session — +47bps — because I am a professional and do not give up gains. I am certain the vast majority of you absolute pants shitting clowns got racked with losses today, massive reversals underway and you did nothing but gawk at it. You let it happen and now you’re only hope is mercy.

Come Monday, I fully expect BROKEN ELEVATOR pin action — cables cut clean — everyone drops to the fucking car crashes and blows up.

Have a nice weekend.

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Hold Your Nose and Jump In

The reason why I sell almost all of my stocks every morning is due to a sense of dread that I cannot shake about the market. I see a shoe dropping around every corner. Every large red candle is a collapse. I find it hard to buy into a tape as obscene as this one and fully expect, at some point, to bear witness to another full blown rout.

HOWEVER, in the meantime I have a job to do. Sometimes I’m not so sure what that job is anymore — but I think I have one. Ergo, I follow the trend and buy stocks even though I don’t want to. I let the trend direct my trades, not my ego — because experience over a lifetime has proven to me that is the best course of action.

Last night Biden mumbled through his state of the union. No real surprises, other than the fact he didn’t drop dead during the live broadcast. The political situation cannot be worse; but I keep telling myself “you live in an economy mic zone, not a country” and that’s keeps me sane. If you, at any point, pretend America has agency or sovereignty of self governance you might become bedraggled my morose thoughts — since nothing makes sense. The market doesn’t make any sense either — but I just hold my nose and jump in anyway.

+31bps early going, mostly cash.

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My Solana position is cresting higher again and all of the alt coins, or at least some of them, are rather enjoying their time in the sun — basking in the glory of an effervescent bull run. It should be noted, $BTC is consolidating recent gains and all of the price memory at its previous highs are being digested now.

Once we get the sellers out of the way, I fully expect $BTC to pitstop at $75k, en route to $100k. People like round numbers, and so do I. You can look at stocks busting out past $100 or $1000 and track them weeks after and find the returns become both predictable and ribald.

During this session, I’ve bee trading my way back a bit, down 37bps, up from -90bps — due almost entirely to $VKTX collapsing like a fat fuck sitting on a weak lawn chair.

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Skinny Guy Caught Leaning Heavily into the Fat Trade

All I wanted was one more day.

I leaned into $VKTX yesterday with a 6% allocation with the simple mindedness of wanting the fucking stock to drift a little bit higher above $100 and crest. At which point, I envisioned myself eagerly selling and thanking the obese for their service.

Instead of any of that happening, it’s pandemonium at House Fly with $VKTX plunging through the fucking floorboards, heaving lower sloppily based off GOOD NEWS from the ozempic King, $NVO.

Naturally I glared at $VKTX down 14% at the open and wished to the Gods for a small bounce, at which point I’d sell it and regret ever looking at the ticker. But instead of that happening, the Gods offered me another 4% lower for my troubles and I sold it there for a nice fat loss.

I had very nominal overall losses of 35bps until $BTC splashed lower with a red candle from hell itself. So now I wait for its recovery, as I am handsomely saddled with a 12% $BITX position.

Wish me luck!

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Establish Accounts to Release Your Inhibitions

If you’re a strong trader you will find your trading accounts will almost always outperform your longer term accounts on a long enough time frame. Vice versa, if you’re a poor trader. For anyone delving into the world of personal finance, I strongly advise that you keep separate accounts for long term ideas, experimental practices, and trading. This way your focus is clear and the mandate for those accounts never get muddled. I cannot tell you how many times, when I was younger, that I violated the ethos of my accounts — thinking of XYZ as “long term” only to later on be lured into another stock and missing out on the long term success of XYZ.

Set static rules for your accounts and stick to it. If your thought process for $BTC is capital gains — you’re looking at it wrong. Bitcoin is a current hedge. Each day of work you make dollars and those dollars, hopefully, increase your net worth. If preparing for a Mad Max world where the dollar will one day be worth less — it would BEHOOVE you to not maintain a percentage of your liquid assets in what you deem to be a currency hedge. Ergo, maintaining a 5 or 10 or 15% allocation into $BTC should be a life long journey and process.

Same could be said about conviction long ideas. Perhaps $VKTX is too volatile for short term trading accounts. But what if you believed their obesity drug was life changing. Drop it in your long term account at 5% of assets and should it get mired in a sell off and cut in half — determine to bring the percentage back up to 5% with an average down.

To be content when trading is hard. Today I only made 12bps because I didn’t see the market well. However, my quant made +130bps and my longer term strategic account +90bps. Emotionally, the success of those accounts made me feeeeel better and I understand that, in regards to my trading, it’s only a matter of time before I see the seems on the ball spinning and will crush it out of the ballpark.

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Cryptos Will Leg Up Again, Soon

Rest assured, the recent surge in $BTC is just the tip of the iceberg, a teaser if you will. The initial shakeout was classic, followed by, but not limited to, texts from distant cousins asking about $SHIB and the specter of it going “to the moon.” In the larger scheme of things, the volume memory of $BTC and other major cryptos have all but vanished and all there is from here is air. It might sound befuddling to novices, such as yourselves — but $BTC is, in fact, just getting started.

Peering into the future across a war torn ruined landscape, Bitcoin at $1,000,000 per coin and dollars worthless except for the tinder they provide as fuel to start BBQ’s — you will rue the day I made fun of you for not owning it — instead relegated to an ignominious death amidst caitiffs and swindlers.

I tell you this now, not to make you feel bad or to boast about my success — but with a charitable Christian heart to help those living in the dark, cavernous dwellings replete with porn, GMOs, and bad coffee.

Free yourselves from the shackles of the Federal Reserve and cease cuckholding yourselves to evil. BEHOLD the global movement out of fiat currencies into Bitcoin — envelope yourselves as a maximalist and work hard and be industrious with a goal to destroy your enemies.

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