Cramer is Lying or Wrong

Last night Cramer put Equinix, Inc. [[EQIX]] in the “sell block,” based upon some far fetched idea that EQIX’s clients no longer need them. He cited some new Intel Corporation [[INTC]] technology that renders EQIX’s server farms useless. Oh boy, is he lame/wrong.

First of all, thanks to 4g, led by the smartphone, bandwidth is in high demand. Not only did Equinix, Inc. [[EQIX]] smoke quarterly estimates, they guided up for next quarter and for 2010. Not only is business great at EQIX, they are running out of capacity.

If what Cramer said is true, don’t you think the company would be keen to this sort of competition. See, I am just a guy who manages money/blogs like the wind on the internet. Cramer is just some teevee personality, with connections to all sorts of nefarious people on Wall Street. Tell me, what in the world does Cramer know about data storage, other than a few of his colleagues being short the name?

Here are the hard facts, without opinionated rabble:

• EQIX is increasing the amount of cabinets in Europe by 1,700, thanks to strong demand. As of now, 75% of the 1,700 are pre-sold. Oh, the lack of demand is just so startling.
• 96% of revenues are recurring, usually 2-3 year contracts. In other words, businesses are not in a rush to fulfill their bandwidth needs elsewhere.
• Current capacity is 81%, near historical highs.
• And, finally, the company has guided revenue estimates up from $863 million to $879 for ’09 and from $1,023 to $1,055 for 2010.

In other words, despite what Cramer is saying on his teevee show, the future looks bright at Equinix, Inc. [[EQIX]] , much to the chagrin of the very vocal 20%+ short position. Hmm, I wonder is Cramer knows anyone short Equinix, Inc. [[EQIX]] from the $50’s?

NOTE: I will increase my position, once the stock hits the high $80’s.

I know a lot of investors who just buy a bunch of stocks, put them to bed, and think they are diversified. However, when you look closely, their portfolios are a mess, with too much exposure in one sector and nil in another. If you are serious about being an investor, not a trader, you must adhere to certain principals.

No matter how hot a sector is, DO NOT PUT YOUR EGGS IN ONE BASKET. That applies to both individual equities and sectors. Force yourself to buy stocks in different sectors; it will make your investment life a lot easier. When you do it this way, your task is defined and the goal is simple: find the best names in each of the 8 principal sectors.

Here is what I mean, as an example (top in sector, ranked by PPT):

Basic Materials: Teck Cominco Limited (USA) [[TCK]] Consumer Goods: Skechers USA, Inc. [[SKX]] Financials: Discover Financial Services [[DFS]] Healthcare: [[APT]] Industrials: Bucyrus International, Inc. [[BUCY]] Services: Genesis Lease Limited (ADR) [[GLS]] Tech: Compuware Corporation [[CPWR]] Utilities: Duke Energy Corporation [[DUK]]

Get it?

So, instead of taking your entire life savings and buying all Amazon.com, Inc. [[AMZN]] or all Whirlpool Corporation [[WHR]] , take a portion (10%ish) of it and buy your favorite stock in each sector. Granted, this will eliminate any chance of a 1,000% YTD return. However, it will also prevent a severe blowup, which is the top priority. Remember, if you merely grow your account by 10% per annum, over 30 years, you will be rich. However, if you blow it up, to the tune of 25% or more, in any given year, you are destined for blue collar mediocrity (no rib eye dinners), no offense to garbage men of course.

When picking stocks, it’s important to do homework. You do not need to be a business major to understand the basics. Listen to conference calls. Read research reports. Educate yourself about the businesses you are investing in. Remember, although the stocks on your screen have cute little ticker symbols with fancy charts affixed to them, they are real companies, with employees, expenses and legal issues. Before I invest in a stock, I ask myself, “if I had start up capital, would I want to enter this business right now?”

Because of that question, I rarely, if ever, invest in airlines, biotech or automobiles.

In short, quit being so damn lazy and stop using the mystical theories of technical analysis as a crutch to avoid putting in real work. As successful as you may be, gawking at charts, you will better yourself, as an investor and a trader, by knowing what the hell you are buying. Furthermore, never go “all in,” no matter how solid or tempting the idea is.

As for this market:

A bit disappointing, following stellar earnings out of Amazon.com, Inc. [[AMZN]] and Microsoft Corporation [[MSFT]] . I was impressed with numbers out of Whirlpool Corporation [[WHR]] too, which gives me greater confidence with my Jarden Corporation [[JAH]] position, going into earnings on the 28th.

I expect the market to stay down today, mainly because of the anti-climatic nature of the early morning reversal.

NOTE: Cramer is dead wrong about Equinix, Inc. [[EQIX]] . I will explain later.

Banks, Commercial Re and Basic material stocks soared higher today, as the dollar got punched in its face.

My Equinix, Inc. [[EQIX]] position got poleaxed, as the early recovery in the stock waned, so did men with balls.

At any rate, today was a good day for stocks, offering a quick knife through the chest retort to the morons who sold short yesterday. My position has not changed: sell into strength, until my cash position hits 25%. However, during the course of today’s action, I got sidetracked, buying Jarden Corporation [[JAH]] and more Equinix, Inc. [[EQIX]] .

My sense, tech stocks are going to marinate for a minute here, as other sectors take the spotlight. I have a general idea where I want to go with new funds. I will reveal such “gifts of knowledge” over the coming days and weeks to come.

Out of all of my positions, I enjoyed looking at [[MWW]] and IAC/InterActiveCorp [[IACI]] most today. Something just isn’t right about my positions right now. I need to do a little more reshuffling.

UPDATE to Shorts: Amazon.com, Inc. [[AMZN]] smoked you.

Despite selling out of my small Guess?, Inc. [[GES]] position, I am optimistic about the consumer.

From my personal observations, people are spending themselves stupid again. Shop clerks are bragging about sales again and women are whipping out their plastic cards, from their over priced Coach, Inc. [[COH]] bags, faster than the CNBC crew does lines of blow.

Just today, I took a position in thinly traded Jarden Corporation [[JAH]] . They sell all sorts of crap, from camp equipment to blenders. They are, essentially, levered off of the success/failures of retail stores, like Sears Holdings Corporation [[SHLD]] , with great vigor.

Do not misconstrue my passion for the American idiot; my position is a mere 10,000 shares—going into earnings on the 28th. However, in my sick/twisted head, people are rich as hell, smoking pipes and devouring beluga caviar, as if it was cereal.

Bottom line: At the moment, many of my tech positions are stale, not doing a damn thing. I have built up a cash position, just north of 20%, and I am bored. So, to remedy, I am taking out a few floater positions, while keeping my eye on my current heap of “waste o’time,” so that I may sell them into strength. In other words, I am reshuffling the deck a bit.

DEVELOPING….

I bought 2,000 Equinix, Inc. [[EQIX]] @ $96.90.

Disclaimer: If you buy EQIX because of this post, real zombies will attack you this Halloween. And, you may lose money.

I want to lose money. It’s true, I enjoy having my back up against the wall, cornered like a rat, so that I may claw your eyes out with the sharp edge of my Monster Energy soda can.

For some strange reason, this website is hosting new readers. I thought I told you bastards: don’t come here, especially if you are above the age of 47.5. Frankly, unlike others, I do not want readers; they make me sick. Most of you just prance around, thinking you are God’s gift to the world, when in fact you are just a “reader.”

Quit putting my trades under a microscope; quit having a boring life. I told you, my time frame is looonger than yours, just like my anatomy. I will see this market up and down, without flinching, without making a trade, while you blow your little e-trade account up into pieces.

Young man, I play in a big sand box, where the stakes are larger.

With my money, on this dip, I will allocate the rest of my cash to my proposed “Foreign Thesis.” For folks on The PPT, here is my watchlist.

After viewing the pathetic results of TriQuint Semiconductor [[TQNT]] , it dawned on me: this country has little to offer, as far as growth is concerned. Granted, there are a plethora of niche plays, all worth buying—particularly in the tech space. However, if you look abroad, it’s like U.S. 1960 all over again, with regards to growth rates.

Equinix, Inc. [[EQIX]] blew away numbers. I mean, they were absolutely incredible. However, they agreed to acquire Switch & Data Facilities Company, Inc. [[SDXC]] (another Fly 4g index member) , which in turn is putting pressure on the shares this morning. Without a doubt, sometime soon, EQIX will roll past $100.

Finally, keep your eye on crude, [[USO]] . Should crude firm up, this market is going higher.

UPDATE: I sold out of Guess?, Inc. [[GES]] , $39.05

I see the future and there are a lot of stupid people in it.

Most of you will turn on “The Fly” at the first sign of imperfection. I don’t have to be paranoid to know, you are all out to get me. Sure, I’ve had a good run and the pantry is full of high grade caviar (just kidding. It’s in the fridge)—while you sit there in a stupid Halloween banana costume. I’ve made good coin in this market and will sacrifice aka “donate” some of my winnings to the stock Gods, in order to keep my head right.

If I told you once, I told you a thousand times: “The Fly” will not accept your apologies through the email mechanism. Your barbarism does not go unnoticed.

Just today, at the first sign of market weakness, I was accosted by two hecklers, on my very own BLOG, who were exclaiming the virtues of independent thinking. Much to their chagrin, they were quickly discounted by the “internet cognoscenti” as mere “fringe,” and were hastily tossed into an empty flaming barrel of garbage.

Over the years, I’ve given a lot to the internet clown aka “reader,” while asking for very little in return. The story is always the same, just placed in a different time and with an assortment of moronic characters. I will save you time, Mr. Future Heckler of iBankCoin:

THE FLY WINS ALL THE TIME, EVEN WHEN IT APPEARS HE IS LOSING BADLY.

I do not play games on this here internet, for life is not a game. Many bloggers out there do not take life seriously. This is true; go ask them. As a result, they are shining my iBC standard. My winship, while seemingly unbelievable, is the closest thing to a guarantee, since the great War Bond issuance of WW2.

Big reversal ensuing, led by stupid stocks.

Crooked men, wearing burlap hoodies and velcro shoes, crawl out of their ancient homes, like zombies, to eat the brains of those who like stocks. “SHAME ON YOU,” yell the Tea Party protester, while selling short [[SPY]] with great vigor.

We have a reversal gentleman and the bears are eating your faces.

“This is it. This is the big one. We shall have a Red October, after all,” they chant from the dark alleyway, sewer pipe scene.

Back on Wall Street, men with jumping jacks in their pockets and lots of caffeine running through their veins laugh, all the while the world crumbles beneath their Bruno Maglis. Truth be told, today’s sell off of 0.9%, while discomforting, is exactly what “The Fly” predicted. None of that matters now, since the planet is tagged with a economic time bomb, not seen since the late super-fun days of the Tulip craze.

Nevertheless, as the carnage commences, I will sit here, chuckling at the birds, while counting my money. I have been selling into strength so that I can buy on dips. Essentially, the market is doing what it should do, drop like a stone—Pearl Harbor style—to the chagrin of the retail nerd.

Good Day

Everyone loves a good funeral, no? The dollar, as you know it, is about to get its lights punched out, for good. The daily dips of 0.5% will soon be replaced with 2-3% drops, all thanks and praise to the Federal Reserve and Executive branch for such gifts of fiat.

To hedge your wallet, once again, you should be long basic material stocks. Names like BHP Billiton Limited (ADR) [[BHP]] , [[VALE]] , Southwestern Energy Company [[SWN]] , Arena Resources, Inc. [[ARD]] , Suncor Energy Inc. (USA) [[SU]] , POSCO (ADR) [[PKX]] , Allegheny Technologies Incorporated [[ATI]] etc, can be bought in size. Howsoever, when I say “size,” I do not mean right away. Only idiots buy everything at once. Measure your buys over a period of time. There is no rush to own anything. The likelihood of you hitting a homerun is far less than you striking out.

With commodities running higher, it’s only a matter of time before the shippers respond in kind. Names like Genco Shipping & Trading Limited [[GNK]] , TBS International Limited [[TBSI]] , DryShips Inc. [[DRYS]] and Diana Shipping Inc. [[DSX]] can be owned as well.

Truth be told, I am not buying anything. Into this rally, I will lighten up, in order to build my cash position back up to 25%. Selling is a process too, by the way.

In short, as long as the dollar [[UUP]] is weak, equities are free to run with the wind. If you are short stocks, you are in for a very arduous Halloween.

Top picks: Equinix, Inc. [[EQIX]] , Sociedad Quimica y Minera (ADR) [[SQM]] and Guess?, Inc. [[GES]]

Okay, this is an internet intervention. I am watching many of you make mistakes, here and on The PPT. Typically, I allow others to make mistakes because it builds character in a man, not so sure what it does for a woman. At any rate, you need to listen to me, ever so quietly.

STOP BUYING PENNY STOCKS YOU FREAKIN’ IDIOTS!!!!

I know, with Flotek Industries, Inc. [[FTK]] being a living stain on my pristine recourd [sic], I have no right to lecture you, the internet idiot, for buying penny stocks. However, I do have the right—AND MORE—because I am much smarter than you.

See, Flotek Industries, Inc. [[FTK]] represents less than 10% of my total assets. All of my other investments are mid to large cap, for the most part, with marked exception to quick in and out trades. The market is no longer valuing the small crappers. Instead, investors have moved on to bigger and better names. Do a quick search and you will see; big cap is where it’s at. The market is all about cycles. You really need to pay attention, else get singed.

Which is why, in my infinite wisdom, I have taken it upon myself to start playing the $100 roll stocks, for psychological reasons of course. I do not need science or concrete statistical data to support my investments. I have experience.

Investing is an art form and Senor Tropicana is the Picasso of this game.

In closing, stop being a piker. Man up and buy some high priced stocks. You will make your Dad proud.

In other news, I like the “pin-action” in the semis today, thanks to blowout numbers from SanDisk Corporation [[SNDK]] . Going into Lam Research Corporation [[LRCX]] , Novellus Systems, Inc. [[NVLS]] and Applied Materials, Inc. [[AMAT]] numbers, I might buy Advanced Energy Industries, Inc. [[AEIS]] and MKS Instruments, Inc. [[MKSI]] , lcd subsystem plays, both levered to the cap ex budgets of the aforementioned names.