Patience With Cash

I have cash to spend, but choose to leave it idle, in order to have “special opportunity” liquidity. My conviction for my current positions may be at 100%; but I will not spend the 5-10% of cash in reserve, unless of course it was used for a “special opportunity.”

I never want to be in a position where I am forced to sell something, in order to finance a buy. I will gladly sell for profit or for a stupid loss. But there is nothing worse than having a great situation, but not having funds to buy. That is why I try to keep 5-10% in cash at all times. Just don’t even acknowledge the money. Make believe it isn’t there.

Special opportunities can be rumor mill stuff, market dislocations or even key reversals. In my opinion, this morning’s dip —almost— warrants a market dislocation buy, mainly due to the semi’s not acknowledging a significant uptick in business. I mean, fucking [[TXN]] beat the street. Those queers never beat anything.

Into this dip, I want to be long 4g plays [[ALU]] and [[STAR]]. And, I like [[TBSI]], [[ODP]], [[CAVM]], [[CIEN]], [[GMXR]], [[LVLT]], [[CROX]] and [[TER]].

One final thing, I want to acknowledge the kickass stock picking work of Chart Addict. That fucker has been knocking the cover off the ball, most recently with his [[THC]] and [[FEED]] calls. Great job.

A wide variety of earnings sucked balls this morning, as the ill effects of the economy kick in. However, on a brighter note, M&A is back, with BRCM ripping out ELX for a song.

If news is what you need, my man CRONKITE will hook you up.

Bottom line: RFMD caught an Oppy upgrade this morning and TXN beat earnings. The idiots from Texas NEVER beat on earnings. Expect to see better than expected earnings coming from the chips and more of the same criminality from the banks.

God speed.

The blasphemous IT department at iBC, finally, caved into my demands and redesigned the tool bar. Enjoy it with my compliments. Note the drop down on the Peanut Gallery. Some of you will appreciate that.

The winner of iBankCoin’s Final Four contest needs to email me at Flybroker-at-Gmail.com, in order to collect bounty.

Also, expect bowling balls to come your way, shortly.

And, finally, I have a devious surprise in store for the iBC collective. A surprise that will please a handful, but anger a great many.

Good Day and Good Night.

I am not one to point out specific fuckery, when it comes to the internets. After all, the internet is a place where morons are smart and genius is belittled as fringe.

If you were surfing the internets today you read this story, which was picked up by several 3rd and 2nd tier blogs (aside from iBC, there are no 1st tier blogs in existence). In short the guy is claiming to have the actual results of the bank stress test. Apparently, someone who is into going to jail and shit had no problem leaking it to a third tier blog.

I give the guy, Hal, kudos for going with it. I mean, if I were in possession of such a document, I would be throwing logs on the fire, while laughing at all you clowns buying [[BAC]]. In no way would I discuss it, for fears of the SEC prosecuting my ass and delving into my personal shit.

Lo and behold, according to his blog, the SEC already made an inquiry.

I will go on record and say THERE IS NO FUCKING WAY THAT REPORT EXISTS, stating 16 of 19 banks are insolvent. If it does, well then, you better get your muskets ready, for the shit is about to hit the fan.

[youtube:http://www.youtube.com/watch?v=2XY5v_arKjc&feature=channel_page 450 300]

Will you shut the fuck up already? Don’t tell me how to operate my award winning, 1st tier financial website. Psychologically, today was one of those “OMG, WTF am I gonna do days,” as the bottom dropped out of banks, cre and everything in between.

As for me, aside from adding to my FAZ/SRS positions this morning, I did nothing. I could have added to current longs, but most of them are small cap losers. I do not like buying into sharp declines, since painful down markets beget more pain. However, I will say, we will trade higher tomorrow.

If you shorted stock into the bell, you are gambling 100%. Let’s face it, the time to get short was Friday, not following a 20%+ dip in [[BAC]]. I just can’t get myself to sell short into such a mess.

All of the past winners were down double digits today. There is an old adage that applies: “the market takes the stairs up, but the elevator down.”

At the moment, major market tells can be found in the price action in [[UUP]], [[FXY]], [[TLT]] and [[USO]]. If you can figure out the correlation then you are not as stupid as all of your friends and family say you are.

Anyway, I gave back a good 6-7% today, lowering my ytd gains to around 18%. As difficult as this market is, I am confident, without any doubts, by the end of the year you will bear witness to Senor Tropicana knocking the cover off the ball, yet again. He always does and he always wins.

[youtube:http://www.youtube.com/watch?v=RitLYSwGV-w&feature=related 450 300]

The market versus its participants.

Many of you are like small retarded children. I suspect you entertain yourselves with colorful blocks and crayons. I chuckle at your comments, for you are nothing more than clapping seals, easily trained, easily killed. Men, like “The Fly”, will be around to toss men like you into lit fireplaces, drenched in turpentine, indefinitely.

With that in mind, it’s easy to understand your perspective— a simple lowly reader of some Godly blog. Do not fret, for the blue collar gloom and doom is right around the corner. At that time, you will all like “The Fly” again, as he resurrects HORATIO CLAWHAMMER from the dead and dispatches him to eat the brains of overzealous bulls.

However, before that happens, it’s important to test the waters, in order to get situated, if I might suggest doing so. Making bold, decisive moves is what “The Fly” is all about. That is why I am opting to keep a long bias into this decline. My position could be a loser and I might have to correct it later. However, I accept the task ahead and understand the risks.

If you choose to take the direction of the market, based upon every tick, you will find yourself on the receiving end of an egregious foreclose notice, within the year. You’re too nervous; calm the fuck down.

Instead of watching each tick, I suggest smoking a cigar, while gingerly sipping on a lot aged scotch. Wear a robe: punch someone in the stomach. Unwind a little, you’re making me nervous just reading your “SOS style of writing.”

If you are long, today is a bad day. Big fucking deal. If you are short, you’re feeling like an adolescent with a summer crush.

As for me: Don’t you worry about my affairs, for they are none of your concern, nor the interest of any civilian.

This is “down the elevator shaft you go” trading action, for those of you keeping track at home. I have one long up, JDSU. Other than that, it’s been bloody murder—all day long.

I added to my underwater FAZ/SRS positions and thankfully admired my FXP. However, my short exposure is limited, effectively leaving me naked and exposed to the cold winter winds of a bear market pullback.

The question on everyone’s mind: is this a pullback, or the resumption of the bear market? Those answers, and more, will be answered later on this week. For now, it’s important to run personal stress tests and figure out pain thresholds and whether it makes sense to buy more, down at these levels, or head for the hills. After all, if this is simply a pit stop, on the way higher, today is a divine buying opportunity, with many stocks down 10%+.

In my opinion, the banks never deserved to go higher anyway. Fuck the banks and the bullshit jalopy they drove in on or inside of or whatever the fuck they use to transport themselves from A to B.

My point: the rally was never about the banks or cre. It was about a pick up in end user demand, as evidenced by the sharp increases in factory utilization. However, let it be known, people are still woefully unemployed and the country is a dastardly-bastardly mess. I said it once and I will said it again: I am bearish on stocks for 2009, no matter what. But, I have no problem getting long, if only to prostitute myself for a little coin.

With my money, I will keep my overweight long position in place; but add to some shorts—just in case.

Regarding my deflationary vortex theory: at the moment it is not working. However, that does not mean it won’t work later. Now, I could have dug in my heels and averaged down on SRS/FAZ, instead of selling them, entrenching myself in loser positions. However, I opted to live to fight another day. Then I opted to join the other side and kill some bears, with blade in hand.

When oil was north of $125, I was bullish on oil/gas stocks. Conversely, once oil broke $100 on the downside, I got bearish. I do not use charts; but I respect price action more than anything else. There are real fundamental ramifications that must be recognized, with respects to commodity prices. I, Sir, respect none of them (just kidding dickface. I respect all of them).

However, generally speaking, every quarter or so, I layout my investment thesis, a guideline of sorts— in order to have something to default on whenever the investing waters get murky. At the end of the day, investing, like life, is about not sucking. You don’t need to nail every trade, or even 75% of them, to be successful. As long as you know how to manage risk, via stop losses/ position sizing/ diversification, and can pick stocks like a motherfucker, you will not suck. As a point in fact, you will win, a lot—similar to, but not like “The Fly” (The Fly is always better, no matter what).

Lucky for me, I have a God given ability to identify trends and see the future through the prism of my space aged watching glass.

At any rate, we are entering the 7th week of the rally. I will be looking for signs of a market climax, particularly since I NEVER like to press a bull run more than 7 weeks. The most likely scenario: the small cappers, explode once again, to the upside, vacuuming every fucking lemming North of the equator into this wretched market, just in time for some marvelous guillotine action.

Personally, I will lock in gains this week and scout to initiate shorts in the banks/CRE/oil.