iBankCoin
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
21,146 Blog Posts

Another Gentleman’s Return

I am a picture of good health and calm equanimity. Whilst the lot of you got badgered and beat up in a little of this and that, Le Fly boosted his returns by a genteel 62bps, upping his YTD gains to a very ribald +213%.

While it’s true, the old Fly was more of a stakes taker, go getter, and over all gauche man, the new Fly simply trades for small returns, not too big for fears of alerting someone. I do not care to have the SEC knocking on my door, or Jim Biden with his vaccination in tow. The Fly is a man of modest means and wealth and would like to remain in the shadows achieving returns uncommon to the average pleb, while at the same time enjoying the comforts of anonymity and relaxation.

My opinions on the market, at this point, are in fact moot. I am in a zone that cannot be negotiated with, as my streak has begun and I shan’t cede to the market , but instead weigh into her and extract the returns I deem considerable.

I closed out the session above 60% cash.

Good day.

 

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A Narrative Buy and Hold: $CELH

I’m a sucker for consumer brand plays — mainly because they always work and are rare. If you’ve been reading me for a long time, you would know I was first to Hansen and then Monster, hopped on the GMCR/Keurig train very early and also got involved with FIZZ and the La Croix craze. Well there is another one now — ticker CELH — goes by the brand Celsius.

I know — another energy drink.

But these guys are crushing and all of the data points to higher prices.

I listened to the last two conference calls and here are some of my takeaways.

CEO’s cadence is extremely upbeat and bullish. This is anecdotal evidence, but in my experience a very good tell for how the company is being managed. He sounds like a killer and knows how to operate.

Due to COVID — aluminum can supply has been short and they’ve been forced to find alternative sources, added to input expenses. This is temporary, just like COVID lockdowns, and will abate over time.

They landed TGT and WMT and in 50% of all WMT stores and expect to be in the rest of them by the end of 2021.

In all, they are in 100,000 locations and growing, covering 75% of the metro markets in the US.

European growth is about +25%, expanding.

Their Amazon sales are up ~200%, just pushing ahead of Red Bull — making them the #2 energy drink retailer on Amazon after Monster.

In total, they have about 1% of the energy drink market. Red Bull has 20%.

Sales have been ripping, +75% and looks to be accelerating into the summer.

Inventories are WAY up, 100% QOQ, indicative of higher sales in the current quarter expected.

Stocklabs price target is $123, based on next year sales estimates.

At 35x sales, the stock seems expensive. However, based on 2022 estimates, which are probably too low, the stock is only trading 15x. MNST, which has only 15% growth, is trading at 10x sales.

For me, I have little to go on here in terms of the product — as I have not tasted it. But I bought the stock based on these numbers and know these trends do not die fast. Sure, there are plenty of energy drinks out there — but this is the cool kid stealing share from everyone else. During the call the CEO could not stop talking about their TGT roll out and how their sales were outperforming all other energy drinks. Online, their sales are beating out peers by 7.5x.

At some point they will slow down and the stock stall. But, at just $50m in qt sales, heading into the best season for beverages and coming out from COVID lockdowns — I like the stock and will likely hold it for the next 6 months minimum.

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Paper Hands Fly

Markets are at it again, fucking with people’s emotions, causing people to trade poorly. I just had a terrible trade close out in BLM stock BYFC.

I bought it because another black owned bank CARV was up 250%. Little old BYFC was up 15% and wanting MOAR. I bought it at $3.19 and quickly saw it rise to $3.43, a 7% gain. I didn’t sell of course because I wanted MOAR. More money, more prestige, more greed.

It topped there and then quickly traded lower, as CARV collapsed to +135%. I ended up selling for a 5.5% loss, which is always the worst type of loss. My emotions were like “but I was just up” but my mind said “asshole you fucked the trade, now manage the risk.”

It might very well go up and exceed $3.4 — but I will not lament it because I simply traded it poorly. This new culture of having “diamond hands” and never sell is toxic and stupid. You fucking piece of shit traders are gonna bankrupt yourselves with that asinine mentality.

At any rate, I am down 60bps, 90% cash, mostly watching the market get clubbed.

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Genteel, Conservative, Easy Gains

I had an easy day, mostly in cash — trading whenever I felt like expressing some gratuitous risk tolerance. I was range bound and cautious due to the dislocation of the entire fucking market, safe a handful of secular stocks.

We are without question on the verge of tilting over and diving lower. But I will wait for confirmation before betting against the market.

I gained 46bps in what can only be described as a risk-free, genteel, pastoral even, trading session. I ended with 80% cash, betting DIBS will perform like NEGG tomorrow — worth a shot — taking advantage of the stupid fucking morons who pile into shit stocks for the laughs.

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Approaching Oversold Levels That We Can Trade From

Breadth has been dreadful for weeks, if not months now. While many larger capped stocks treaded higher, many of the smaller more popular trading stocks plunged. We are now oversold on Stocklabs 12mo algorithm, which is a RARE event. The data is good and a mean reversion bounce is just around the bend.

Here is some more data for you.

Our custom indices in SL, suggest and point to strength in risk aversion. Reason being: rated have plunged and many of those stocks pay dividends. You’d be wise to heed attention to this.

Industries not in play include the riskiest/funnest ones — the stocks that Bill Huang and Kathy Ark buy often. There is nothing but gloom enveloping these plays now.

We break down the market by market cap — all real time, custom made indices. As you can see, Tera cap ($100b+) are doing great whilst small is drowning.

This is my go-to screen inside Stocklabs. It takes the volume of a stock and pro-rates it down to a minute, comparing it to monthly min volume to produce a delta score. If a stock is spiking in volume, I see it first and you most likely buy my sales.

 

For the session, I am +25bps, 80% cash.

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It’s Over

The US 10yr has collapsed in yield to 1.30%. Small caps have been bludgeoned to the tune of -2%. Everything but NEGG, AMZN, and AAPL is getting hammered. Each and every morning — gains fade and dissipate in a whirring and repetitive process designed to cause disillusionment and despair. Confidence is waning.

We perceive things based on recency bias mostly. Six months ago I would have and probably did suggest we were in a new era, a dawn, of great intellectualism forged by a wave of innovation and technology. I willingly ignored social strife and all of the bad things because markets were going up. When markets go up, the perception of greatness is overwhelming, which is why more people buy into tops than at the bottom or on the way up. When prices are high — the advertise themselves and normies pile into the riskiest stocks because they’re mostly ribald caricatures of what humans should do with their investment income.

This morning, as always, I sold everything (save 1 stock) and booked 200bps in gains in my YOLO account and I am about break-even on my trading. The Quant is still fully invested and I will not touch that until the first of every month. The way it works is Stocklabs chooses, via a quantitative process, 20 stocks to buy all equal weighted. I buy all 20 without offering my own opinion and rinse and repeat the first of each month. YTD, it is +22%.

The YOLO account chooses 1 ETF to buy per day, based on the SL Intelligence Algos. Yesterday it chose QLD.

As for my trading, I do not feel like ebbing into this fire. When I see stocks like NEGG +155% while small caps are down by 2% and breadth is 25%, I am immediately reminded of 2014 — a year which will always live in infamy with me. We are seeing the same sort of pin action in 2021 and if we are to follow that path — the NASDAQ should do fine — but the breadth will be narrow and the trading favorites dispatched into hell.

More later.

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MAGICAL MAGIC

I am off to tennis within minutes. It was a hard fought battle for nearly everyone but me. I managed to sashay in and out of several late day trades, sell out of most of my positions, and close the day near session highs +120bps. See pal, that’s who I am and you’re nothing. Good father? FUCK YOU GO HOME AND PLAY WITH YOUR KIDS.

It’s very important that you understand this — I am on the precipice of another grandiose run. It’s gonna be a hot hot summer you fucks.

Ciao.

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CATACLYSM FENDED OFF BY TERA CAPPED TECH

If it weren’t for Andy Jassy jerking his way through the DOD and making them cancel MSFT’s cloud contract in order to give Amazon it’s fair share and Apple trading up, we’d be down bushels in the NASDAQ today. We’re down 35, but it feels like 300, with 80% of stocks lower.

The commodity trade has been up-ended and obliterated, with earth shattering decline in Corn (-7%), Soybeans and Wheat. The 10yr bond is plunging in yield and everything you thought you knew about inflation is upside down. Apparently, it doesn’t exist at all. Once the stimulus checks have stopped going out and gibs reduced to a bare minimum, dare I say a reactionary reversion to the mean is in order — tossing inflation hawks into the fires to roast for eternity.

I’ve missed innumerable trades today and have watched my gains dissipate to nothing. I was +130bps and then slipped to -55bps and now I am holding on to dear life +15bps. I have sat here in amazement at my inability to pull the trigger on stocks I felt and knew would go up — and have done nothing to help my cause since the opening hour.

For the balance of the day, somehow, I will attempt at preserving my gains and perhaps building on them via a nice fat juicy trading profit.

DEVELOPING…

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Morning Fades — What Else is New?

I got out of mostly all of my position within the first 10 mins — held onto a handful and have seen them drift lower as the general market collapses, only held up for aesthetic purposes via tera caps. The small caps are being bludgeoned to death and I propose the time is near to get overall short the tape. Before I partake, I’ll need to see some confirmation via DEFLATIONARY PRESSURES. With oil hovering the mid $70s, I am not all that comfy making that bet. I am, however, pleased to see the 10yr yields PLUNGE below 1.4%, suggestive that inflation is in fact TRANSITORY and what you’ve seen in lumber recently is nothing more than an opening salvo into the full collapse of the inflation trade.

My gains have bee sawed by 2/3rds, after a nice +120bps bump and I am now trying to maintain +50bps with 80% cash.

Although it looks grim and I am biased to believe the time is near to bet against the tape, I am always on the lookout for trades and recent trends have been to fade morning spikes and buy back after 10am.

Let’s see if that holds true today.

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Fired Crackers Are Too God Damned Loud

When I was a boy we’d take packs of lady fingers, light them, and then toss them into the iced cream man’s truck as he served cones — laughing like devils as we ran down the street with sweaty faces and dirty elbows. As a younger man, I enjoyed being the caricatute of Americana — cladding myself in the American flag, hoisting dozens of flags outside my home and on the lawn — reveling in Americana apple pie and lighting firecrackers at night with the kids — beer in hand, hot dogs on the grill. The smell of burnt hot dogs wafting through the block as the kids ran away from low grade pyrotechnics is how I’ll always remember the 4th as a younger parent.

But now the kids are older and I’m older and I no longer desire to hear sticks of dynamite exploding next to my ear drums. My idea of a good 4th of July now is much different from what I posted here in 2014. For example, tonight I intend to grill ribs, chicken thighs, and maybe drink 1 or 2 beers, only because I feel obligated to do so. We have one American flag instead of 100 and I’m listening to classical music now. The idea of grilling hot dogs now makes me sick and it’s worth noting the younger generation doesn’t partake in hot dog consumption and views it as the food of the reprobate.

I might venture off for a walk later this evening with my estate pipe in tow, or perhaps take a drive to a local event where higher grade pyrotechnics will be on display. I do not view the 4th of July as a holiday to celebrate the government of this country, but instead its people. With that in mind, I am happy to celebrate this day, reminiscing on better times and offering a salute to the country I was born in and always felt as a child was God’s gift to the world. Whether that is true or not now is irrelevant, as I have ribs to cook, 1 or two beers to drink, and an estate pipe to smoke.

Cheers.

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