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
23,420 Blog Posts

Starting Off April With a Small Win

I closed the session +26bps in highly astute, highly professional trading. I was in control from the morning and very rarely lost ground. It was one of those days bereft of any meaningful purpose and the sole job was to not blow out and up.

My focus into tomorrow is financials and materials with very little interest elsewhere. I gather we are in for some minor correction — all to do with spiking rates. I haven’t any hedges because I don’t think the sell off happens tomorrow. Nevertheless, a defensive portfolio is advisable.

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Good afternoon —

Markets are soft with notable strength in gold/silver. The apprehension is of course in the bond market, where yields are flying again. The US 10yr is +13bps to 4.32%. Once again, we are barreling headlong into peak housing months with restrictive financing. How long can the US economy endure these yields before it CRACKS ASUNDER?

The presumption is forever. However, I suspect it’ll end when I get back into the business and am immediately entreated to broken elevator cable PIN ACTION with limited ways to hedge.

The bias you see today with rampaging higher commodity prices and soaring yields would suggest a renewal in inflation; but I believe the underlying issues are far more insidious.

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New Month, New Focus

At least in my head, I have big plans for April. I’m biased towards basic materials and really feel this is the breakout month. I’m also reticent to chase semis here, based on seasonal factors. And, lastly, BIG FAN of cryptos here. I made my monthly contribution to $SOL today. My basis is around $73.

The market is middling this morning but major breakouts in gold/silver and semis. The semis up the most seem to be the ones focused on AI. In between all of this bullishness is a maudlin tape with pathetic action in many a growth name.

Today is also new quant day. Once per month the quant account is re allocated based upon the Stocklabs algos, choosing the best stocks. The Quant formula is different from last year, with a more aggressive bent.

Into mid-afternoon I’m likely to remain long with heavy cash in trading, due to my reticence of chasing stuff unworthy.

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What Does a Diversified Portfolio Look Like?

On the side I do a little investment coaching and often run into the issue of diversification. For some reason, people tend to believe that if they have 20 tech stocks in a portfolio they are diversified. While not all tech cos are the same, this is a disaster waiting to happen in the event of a risk off scenario. Tech and healthcare always get hit most severely in sell offs, so if you’re structuring a portfolio for the long term — you need to make sure the allocations are balanced — but not too spread out otherwise you become an index fund.

Here is what I consider to be a diversified portfolio. Bear in mind picks change often — but the weightings are what’s important.

Basic Materials (15%)
$PBR (5%)
$SU (5%)
$PR (5%)
Consumer Goods (10%)
$RACE (3.3%)
$VRT (3.3%)
$CELH (3.3%)
Financials (10%)
$JPM (3.3%)
$MUFG (3.3%)
$UBS (3.3%)
Healthcare (10%)
$NVO (3.3%)
$DXCM (3.3%)
$ALNY (3.3%)
Industrial Goods (10%)
$BRK.B (3.3%)
$TDG (3.3%)
$HEI (3.3%)
Services (10%)
$BKNG (3.3%)
$LVS (3.3%)
$CP (3.3%)
Tech (20%)
$NVDA (5%)
$PDD (5%)
$NOW (5%)
$CRWD (5%)
Utiltiies (5%)
$NEE (2.5%)
$PAM (2.5%)

cash/special situations/trading (10%)

Now the picks can be adjusted quarterly or even monthly, however you decide. The important point to this is the structure. Admittedly, I do not always deploy this method for my accounts, since I am my own fiduciary and consider myself hyper-fixated/expert tier investor — who can make adjustments when needed. However, for 99% of you out there — you need this structure.

The 10% cash can be used for special situations, hedges, trades, or alt investments such as $BTC. With that 10%, gains should be reallocated back into the portfolio at adjustment intervals.

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Q1 is in the Books

Clinical studies have shown that men who cancel Stocklabs are in fact homosexual. I could not believe the data myself — but it’s true.

I closed the quarter of 2024 +13% for trading,+11% in Quant and +10.4% in strategic. Up against the NASDAQ’s gain of +8.5% and the $IWM’s +4.7%, I am pleased with myself — but I do realize I could be doing better.

I haven’t really applied myself in 2024 and will try to do better in Q2. All in all, markets are playing out exactly as they should, with no real big surprises other than a rapid breakout in $BTC and $GLD.

Allocations should be even and full, leaning into growth.

My trading returns the last 12 month indicate an aversion to risk and this is mostly true. I have been trading defensively for a number of reasons — chiefly the tape isn’t inspired. We have seen tera caps go up and the smaller/funner names underperform pretty consistently.

That’s not to discount the interesting movement in AI related stocks, especially $NVDA. Nonetheless, I feel like there is a dark cloud looming just above us and at any moment it’ll strike us all dead.

If I stopped being scared and only allocated long and increased the sizes of my positions, I’d likely be up 27% like some of the criminals inside the Pelican Room. However, I am a professional of the first order and like to comport myself with honor and dignity at all times.

Have a blessed extended weekend. See you catamites on Monday.

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Bitcoin To Bust Loose Over the Long Weekend?

It’s an interesting proposition. All of those days till Monday and people sloshing around with their money and nothing to do. Why not buy a billion dollars worth of Bitcoin? It’s easy to do and it goes up often.

I am long $BTC-$SOL and will keep those positions intact until I foresee a crescendo top — a waterfall of cantankerous propositions coming down on the proletariat to steal all of their coins. Unlike yours, my coins can never be stolen.

As for markets, I opened up down 60bps, so I closed the screen and didn’t bother to think about the market until after 11am and then found myself, much to my delight, +40bps. I have since sold everything, bought some $BITX and $SQQQ for the afternoon drift.

I have been trading defensively for weeks now, as I am risk averse and do not like to lose money. My gains are approaching 5% for the month, +14% for the year. My quant, which is allocated monthly, is +11% YTD and my best ideas long term strategy is +10.7%.

Sirs — I am a professional, never tricked or fooled, always on a prowl in search of meat — hunting till dusk by chasing about the weak.

More later.

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The inverse of yesterday, naturally. We tanked into the bell yesterday and today enjoyed the mirror image. As such, I managed to scratch and claw myself back into the green — literally akin to pushing a handicapped wheelchair up a steep cliff — only to perhaps tomorrow speed downhill directly into an dynamite depot where I will explode.

I fished out one of the most depraved portfolios YTD, affixed with a beta of 2 now, slightly leveraged, long all sort of craven degenerate stocks. I will either rejoice and revel in my own ignorance tomorrow or pay a very severe price for my sins of wanton greed and lust for material earthly items.

In other news, I am busy studying to get licensed again — off to manage other people’s money again for both sport and pleasure. I have been out for 7 years and miss it — bedraggled with a feeling of being UNDERUTILIZED amidst a cadre of unsophisticated and dwellers. It might entirely be plausible that this blog ceases to exist within the year. Nothing is written in stone — but I am giving you all fair warning, as I have grown bored and want to embark on a new task.

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Some Broad Stroke Ideas Going Forward

Good afternoon —

Markets are doing just fine, with exception to some big tech plays. I’ve been trading well this afternoon, after digging myself into an early crevasse — now down by just 20bps. I am tempted to go to cash — but since I am hedged with some $SQQQ — it may not be necessary.

Some broad stroke themes that are worthwhile in the coming months:

Semis, Cryptos, Gold, Dissident Right media, undervalued EV

The semis are easily the go to place for traders, based off crypto mining and AI development. Gold is at record highs and crypto is the best dollar alternative for the younger generation, and also a conduit for growth. The dissident right media can be best enjoyed via $DJT and $RUM — but really just Rumble. Lastly, electric vehicle stocks, one hot, aren’t hot anymore. I like $TSLA and $RIVN. Many will fail but I believe those two can make it.

There are some wild eyed ideas to consider too, such as Flying Taxis: $ACHR, $JOBY and the companied tasked with mapping the sky like GPS maps the ground. Thus far, the only publicly traded company that I know doing this is $NN.

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I was having a rather genteel day, enjoying easy returns of +100bps when markets decided to drop. It went slowly and kept that pace into the bell, with very little respite. If you were buying the dips on the way lower you were dominated by sellers into the close and now feel very bad about yourself, having squandered a gift horse in the face.

DO NOT CONCERN YOURSELVES with the likes of me, as I am never tricked or fooled. As markets collapsed, I caught myself and hedged and kept trading and fighting into the close.

I capped off the session +46bps in highly professional, highly astute trading. It’s very good that I spend my time and my talents all day with people trading $8k at $HOOD. This is exactly how I intended my life to play out.

Into tomorrow, I am 18% short, 45% cash, with a negative beta.


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When to Sell?

I want you to examine the monthly returns for the $QQQ since 1999.

You see that there are just two months out of the year when stocks trade lower.

The NASDAQ went down just two times since 2008.

If you chose to invest in any day during the week, only Friday would be a bad time.

My point is — markets are RIGGED to go higher. The times it drops — it’s fairly predictable and if you’re paying close attention — you can avoid the bulk of the drawdown. This doesn’t have to be complicated. If you’re only focused on shorting the market, you are trading too emotionally. The numbers do not lie and the only way a person could’ve lost money in the tape since 2009 is if her was in stocks non-central to the greater economic schemes of the world. In other words, own companies that correlate to the economy and not outliers in the tech and biotech realm.

The question of “when to sell?” is an evergreen one, something myself have wrestled with intensely during my entire career. Since I trade a lot and am always fishing for new ideas — I often sell stocks that later run up to be great winners. I justify my actions by pointing to my returns being great and the idea that stocks are mere vehicles to an ultimate destination. You do not need to be fixed to one. HOWEVER, not everyone can trade as good as me or have the time necessary to keep in tune with trends. For those people I suggest a quarterly review and stringent dedication to allocation weightings.

I’ve said this many times before and I will repeat it now.

If you start a position in XYZ at 5% and it jumps to 9%, at your quarterly adjustment — pare it back down to 5% and if you have a down stock at 3%, increase it to 5%. We are assuming the long term fundamentals are still intact for the loser and nothing material has changed. If the loser missed earnings and lowered guidance and is counter-correlating its peer group — SELL IT and replace it with a company performing well.

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