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
23,598 Blog Posts

Macro Trends for Longer Term Investors

I am going to take a break from talking shit and boasting about how wonderful I am and actually provide you with a service, a view into the market to identify some longer term trends. Some of the complaints that I get for Stocklabs is that it’s geared heavily towards day trading, which is what I prefer to do. There are people out there, apparently, who work at companies and cannot trade 100 times per day. This post is for those work-slobs.

Median returns, 1 year
Median return for “all stocks”: -3.9%
Basic Materials -7.5%
Consumer Goods -7%
Financials -10.5%
Healthcare -8.8%
Industrials +9.6%
Services -3.1%
Tech +9.1%
Utilities -8.9%

As you can see from the data above just two areas of the market have been ‘safe.’

Now let’s look at those same sectors but affix a minimum market cap of $10b to them.

Median returns, 1 year (min cap $10b)
Median return for “all stocks”: +1.3%
Basic Materials -1.28%
Consumer Goods -7.7%
Financials -4.3%
Healthcare -7.4%
Industrials +6.5%
Services +5.7%
Tech +19.5%
Utilities -8.8%

Wow, we can make some easy assumptions here. We want to focus on larger capped stocks and avoid buying “cheap” small caps based on our narcism. With a minimum market cap, we see material improvement in the following industries: basic materials, services, financials and tech.

Let’s dig deeper into those areas. My assumption here, as a principle while investing — things in motion tend to remain in motion and today’s trend will be tomorrow’s. There are exceptions to this thinking, mostly when accosted by small cap stocks. But generally speaking, larger cap trends remain for long periods of time.

For the next set of data I am going to showcase the top 10 ranked stocks in basics, services, financials and tech using Stocklabs 1 year technical ranks, which is the aggregate scores on a 1-5 scale, 5 being best, for the past year.

Financials: $ACGL, $APO, $BBVA, $UBS, $ARES, $MUFG, $SMFG, $MFG, $AJG, $ING
Bascis: $PR, $SCCO, $LIN, $PAA, $MPC, $SLB, $BKR, $TRGP, $HAL, $DD
Services: $BLDR, $DKNG, $RCL, $UBER, $URI, $TTD, $ODFL, $RYAAY, $FDX, $USFD
Tech: $NVDA, $JBL, $SMCI, $AVGO, $ORCL, $META, $DELL, $ANET, $SAP, $SPOT

Analysis: My broad assumptions is there is a bull market in foreign domiciled banks, very large oil services, logistics operators and a heavy focus on tera cap monopolies with an emphasis on the proliferation of AI.

Here is some further insight into the type of companies being bought the past year:

Median, 1yr

Revenues: $19.9b
Earnings $1.9b
FCF $3b
FCF growth +39%
EPS growth +29%
Rev growth +9.9%
Gross margins +47%
Debt/market cap: 0.15x

The median market cap for the above stocks is $37b.

Conclusion: for longer term investors, take your portfolios and mine the data I just provided for you to compare and contrast. Once you find outliers in your portfolios, replace them with names that fit into this very specific framework. Ultimately, you’ll be investing in great companies and you’ll possess a clear vision for what deserves to be in your portfolios for the longer term and what is temporary.

I hope this helps a little.

Good day.

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HOUSE FLY WILL CELEBRATE IN SPLENDOUR

Listen to me —

There are two types of people in this world — those who can do things and those who talk about doing things. You are now encountering a person who is able to do things, all sorts of things. For example, today I traded very well without risk — closing up 43bps for the session — extending the length of my cock to +7.1% for November.

For those of you who did not follow me into a bullish position for the month of November, you have only yourselves to blame. Warnings were sent out liberally about betting against the fat man heading into National Feast Day. The instructions were as plain as they were explicit, yet you and your ego were unable to deal with this and now you are RACKED heavily with losses and your families fortunes have been ruined. Once the money goes, both the wife and kids will leave you. After all, there is a not so secret dynamic to a happy marriage and it goes as follows.

Men must maintain their income to afford a certain level of quality for his wife and children.

Women must remain thin and attractive.

Should anything get in the way of this dynamic, the kids and the wife leave to find some other man with means.

Do not shoot the messenger. Stop being poor.

Over the weekend, House Fly will partake in fine dining and some fall landscaping. Things are good and they will continue to stay that way, as I am the principle bread winner of my domain and my achievements are at recourd highs amidst the brilliance of both my timing and my position. Amidst the pomp and circumstance and the veneer of success of The Fly, which at times ebbs into cartoonist qualities, lies a very serious man who is about serious business who is solely fixed and focused on the legacy of greatness.

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There Are Have and Have Nots

Life isn’t fair and never has been. You can view this weeks trading as metaphorical for what to expect in life. There are times when the underclass thrives under the auspices of bubbles, frantic rushes into assets that cause them to inflate, creating unprofessional swindlers to pretend to be experts in all manner of things — elucidating the opportunities abound. We saw them after COVID shine in their magnificent greasy glory — instructing the masses and the masses took onto them like barnacles to a lobster. It wasn’t long before said lobster got trapped in a cage and retrieved to be eaten. The barnies were shucked off the lobster and discarded like the trash they were back into the sea.

For the week the NASDAQ is +2% and the Russell 2000 is down 4%. Any idea what it means?

I will be your guru and request nothing other than your attention.

It means the underclass cadre of investor is bedraggled and destitute. He keeps trying to capture lightening in a bottle to enrich himself in order to buy things because buying things makes him feeeeeeeeeeel better about himself.

A great man once said “you’re not your fucking khakis” and I rather agree with that sentiment, in spite of the fact that I own 20 pairs of khakis.

The only way to trade seriously is to take serious bets with serious risk analysis set by serious goals. The idea that $AMC will go to $1,000 based upon the feeeeeeeelings inside your testicles is more than hilarious. People of that ilk should be executed, post haste — heads cleaved clean of their bodies.

For the session, I am +20bps — because I had big shorts in the morning and I courrected the errors of my ways and got very long and here I am now telling you about it.

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Notch Another W for House Fly

I wasn’t going to blog after the close today as I felt it was beneath a person in my station to do so. I ended the session +48bps in flawless trading, increasing my returns for November to +6.7%. Juxtaposed against the harrowing experience bulls faced today, with the small caps knifing lower to the tune of 1.75%, I’d be remiss if I didn’t inform you, rather emphatically, how fortunate you are to have me here telling you what’s going to happen next.

Most people are expecting some spectacular event to harangue us, arresting markets in zero bid pin action. But the most likely outcome is the one we’re on — slow and methodical moves lower betwixt by massive ramps — frustrating the amateur trader into retirement.

My overall philosophy is as follows:

Allocate primarily into large capped stocks, in excess of $10 billion. Do not believe in the runaway bull no matter how alluring the idea might be. As a risk off hedge, both gold and Bitcoin offer unique price action that can perform in both up or down tapes. I am largely bullish on both assets.

When in doubt, hedge your portfolios with very large inverse ETFs positions, but close them out every morning.

After 8 consecutive days up, we finally traded lower. I hope the bears do not become overzealous by just 1 small victory after two weeks of non-stop losses.

A good trader is neither hot or cold and weathers all storms in a most resolute and professional manner. Look at me — stoic and collected in the face of irrational investor behavior, the result of decades of experience and natural talents bestowed by the Gods for the benefit of, but not limited to, the garrulous third estate canaille, nouveau riche, monkey brained class-less parvenus grifters.

Good day.

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Treasury Auction Gone Awry Beheads the Bulls

Look at how nice things were before the TREASURY AUCTION GONE AWRY!

For a professional explaining, go to ZH for the details. If you want to hear a nice fucking story, stay here.

When I started in the business circa 1997, I vividly recalled TREASURY AUCTIONS being all the rages. It was probably 1998 when a really bad one caused stocks to CRASH and halt for the remainder of the session. I remember seeing brokers pulling out their hair, unsure as to what to do. No one wanted our fucking bonds and it made people sad. Shortly after that, we had the LTCM crisis and markets really didn’t like that.

Whether this auction means anything at all is a moot issue. The fact that markets responded to it by jacking up rates and crushing down stocks means we are in a new paradigm where every tick on the 10yr matters.

Because I am a wise man, omnipresent and all knowing, I took off my hedges on the initial swoop lower and then reapplied them with even more weight in anticipation for a CRASHING OF THE FUCKING CLOSE.

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The Gains For November Might’ve Already Been Had

I’ve been saying this feels like 2018 price action. If that’s the case, consider the fact Nov 2018 closed up 1.7% for the month and we’re already up 3%. Also, Nov 2018 was wretched up until the end. Perhaps some strong BLACK FRIDAY data bailed it out. You damn well know this BLACK FRIDAY will be featured in 3D, with hordes of people robbing stores blind. They’ll rush into stores, just like before, but this time they’ll loot everything in sight.

Nov daily price action, 2018

I closed out all of my positions in trading except for the $TZA; and I’m higher by 45bps. The gains are in large part thanks to $MSTR, as $BTC careens higher. I’m a big fan of Bitcoin.

The other notable concern today is the price of oil is rebounding, providing succor to an otherwise pathetic cadre of big oil investors. For all of the hype, oil has been a fantastic disappointment for more than a year.

We never did get the big spike to $150.

Lastly, rates are higher by 5bps. Keep your beady little evil eyes on them and be mindful the market might’ve already achieved the gains for November. We might even backslide a bit until after Thanksgiving to get a better look at holiday sales and shrinkage.

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Divergences Abound: The Fats Are Getting Skinnier

The $SPY closed up for an 8th consecutive session, extending gains for November to a ribald +4.5%. On the other hand, in the housing tenements of the $IWM — it sank lower for a 3rd consecutive session — reducing its gains for the month to +3.25%.

This is not unusual and has been the custom for some time now — with the S&P 500 up 14% for the year and the Russell 2000 down 2.5%. The reason being: companies in the S&P are well established money makers — houses of refined repute, whereas the Russell is bedraggled by small capped money losers accelerating into perdition with every FOMC hike.

The easy trade is to remain long free cash flow winners against the losers and continue to be merry and happy, as the world burns around you.

I closed the session down 18bps and barely felt the need to really trade today. It was my day off.

I did close the session with a 15% weighted position against the small caps paired wonderfully with an array of hand selected longs, such as $LLY.

The story for both $NVO and $LLY is as follows: people are fat fucks and cannot stop eating, so they are attracted to expensive drugs that PARALYZE their stomachs to decrease the burden of hunger. Their stomachs stop working and food sits idle inside them for weeks, enabling the fats to lose some weight due to lack of appetite. This has caused the share prices of $LLY and $NVO to rather ironically expand in a post COVID world — big pharma at it again with new schemes to cajole the money out from the purses of the catamite class and into theirs.

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Took the Morning Off — Now Back At It

Mrs. Fly likes to tell me “you haven’t worked since the early 2000s” — referring to the time I decided to quit working for other people. But she really does think I do little other than bring in large sums of money, which, seemingly, fall from the sky into her wallet. She used to tell me that “anyone can go out there and make $250k” and that if she wanted to — she could do the same.

Who can argue with such madness?

There is some truth to what she says, however. When I was younger and less secure, I’d posit theories that “working with the brain is more taxing on the body than manual labor.” At the time it seemed like a nice way to defeat her, tossing obscure pseudo science into her lap just to see what she’d do with it. But her natural instincts are very good and I’d quickly lose that argument too. It wasn’t until I hit my 40s that I realized that being stoic and unflinching in the wake of turbulent waters was the best remedy to defeat chaos.

I take a similar approach to my trading. When I’m on I cannot stop trading and can, at times, over trade myself into lunacy. There isn’t a pause button on me so the only way to remove me from the trading turret is to do something else. At times a good nap is in order. Other times I’ll read book in my library whilst listening to baroque era music. Today I did exactly that and didn’t bother trading the market, since my body is taxed from all of the toil I’ve been enduring using my brain to trade effectively.

Perhaps today I’ll remind Mrs. Fly how difficult a job I have, always on call, just like a doctor, to help others manage their affairs — tweeting on X — and writing important blogs that will one day be inspected by future generations as to the mental capabilities of our people.

At any rate, I’m heading back to the trading turret now to gun down some fucking bulls. Wish me luck.

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Closed Extremely Cautious into Tomorrow

With the VIX under $15, I like my chances betting on upheaval and took out a long position on volatility into the bell. The only other positions I have now are $ANF and $MSTR — plays on the white economy and Bitcoin.

It’s true, my gains are fantastical and I make it look very easy, almost in a cartoonish like fashion. I come on here and talk extreme shit, post things all day that make half the people angry at me, and still continue to win at a rate and speed that defies logic. My enemies are hoping for me to wander off to an insane asylum somewhere and lose my touch trading — bear witness to me and my family falling into squalor.

Good Sirs —

I’ve been off the plantation for some time now and have never conformed with or adhered to any of the social norms you hold dear. I cannot and will not be stopped, just like you’d never be able to stop a shark from eating smaller fish when hungry. I am hungry and wish to eat, so I will. If you attempt to stop me, I will eat you too (extra cannibalism).

The world is a confusing place today, with cross currents that make us love and hate everything to extremes. On one hand we are gaslit with attacks and government propaganda by who we deem to be craven and evil people. On the other, we rather like and enjoy the modernity and the comforts they offer. We have built grande and eloquent civilizations before and will do so again. I suppose we are now in the midst of a transitory period whereby people have become alerted to their identity. With these new societal traits, fractures will soon become apparent — and then we will collapse. I give America 10-15 years maximum before roaming militias frequent the countryside in a lawless land, full Civil War.

Detractors might say “things have always been bad but we always seem to improve.” But this isn’t true. The America you once knew and read about no longer exists. It will need to be rebuilt and the people who ruined this one will be quarantined, separating those who seek to build and those who endeavor to destroy.

For the session, I closed +57bps with 85% cash, in easy trading — as I am most comfortable in this type of tape — teetering with disaster and flirting with my RECOURD HIGHS of +50% for 2023.

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It’s Nice to Rally — But Don’t Get Too Comfy

We are ramping now and there is nothing the bear can do. They’re all there now, laying down and bleeding out — heads bashed in. They had a plan and it went sideways, as their plans always do. The bulls occupy all of Wall Street now, popping champagne, corks and all, into each other’s faces. Grand and elaborate celebrations — bringing back memories of great economies and even greater markets. Maybe this will turn into that too? Maybe just maybe XYZ will go to $1,000 per share making me the richest man that I know.

The truth is, unfortunately, the bears are immortal and after we kill them — they’ll just come back at us — again and again — taking bites off our weak — eating the really weak with savage appeal. This battle for supremacy will never end and at times it will seem to be over. How could it not? But then something will happen and we’ll all dance and sing again — like apes in banana trees cooling in the mist.

For now, the bulls are in charge. We have the Iranians in their box and the enemies of the GLOBOHOMO on the ropes. The LGBTQ flags are basking in the sun of every western capital and the transgendered bulls are urinating standing up in the ladies bathrooms — lipstick affixed, eye shadow and knee high stockings in tow.

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