Get Me My Coke Straw

I’m sorry that I couldn’t be here for you on Fed Day. The celebrations couldn’t be fit into my tight schedule.

All you need to know is as follows:

The Fed will never taper again. In fact, they are in negotiations with Merriam-Webster to abolish the word.

The real goal here was to push interest rates higher so that the Fed could buy up yield. They want to have their cake and eat it to, and will do just that, on the backs of anyone who trades news cycles. Trade with your emotions, add your pound of flesh to the masonry.

The Fed created a few months of economic headwind; so what? It was all worth it if they bought enough bonds. Each round of purchases at high yields gives them more control back over the monetary supply (for when inflation does matter), and now yields can fall back nice and low again.

Precious metals will be a big winner here. Commodities as well. In fact, just think of this as 2010 again.

Janet Yellen is coming, and her blunt is bigger.

I have a smaller cash position than the 50% I was holding this summer. My current cash level stand around 20%, with purchases of HCLP, NRP, DRI, RMCF, SCO and a handful of dips in my current assets eating up the 30% cash position.

I sold EUO weeks ago.

I’m not sure if I chose exactly the moment to lever up into the firestorm but I’d say we’re about to find out.

What I do believe, though, is that feminism has seized Ben Bernanke’s chair, and Janet Yellen can smoke blunts with the best of them.

There’s only so much upside in a company you can let slip away before you start feeling a little dumb. RGR has now pushed past that point.

I made the call last year that RGR would run straight back to $60. Well $60 is about here, and once again I find myself having duck and run, shunning such a quant idea as “windfall profits”.

It’s not like I was impoverished trading RGR. I made 40% inside of 8 months. But I lost out on an extra 20%, just sitting there on the table.

My reasons for running were good enough. Even though RGR is just blowing away estimates, gun background checks are really falling quite fast. The on the ground information was and is pointing to the gun consumer tiring out – much faster than I originally expected back in December. Maybe it’s not setting up for a decade lull like some are anticipating; but it’s definitely going to hit a dry patch.

RGR shares are pretty steep in price. The company is solid and maybe they have enough in back orders to just ride it out. But I’m inclined to think a slowdown in gun demand will give them a hard time, as far as market pricing is concerned.

Still, I also should have guessed that the average investor-monkey wouldn’t bother looking at gun checks this far out, as they have only short term memory, fueled by pure greed.

For the moment then, yes I am pouting.

Hah, I nearly lost money in equities today, but explosive moves higher in RMCF, HCLP and AEC kept me near the surface. Then silver had to come along and ruin the fun.

The silver market is churning hard, dumping out today. When this happens, a big move is always just around the corner. Which sadly probably means silver bleeds out. The cult following it once had is being ground up on a daily basis. Only a few of us have the heart to weather the the storm, I feel.

Really, I refuse to raise any more cash. I’m double digits and not quite fully invested. But something just seems out of place for a big selloff. I don’t know, maybe I’m asking for a beat down. It wouldn’t be the first time.

CCJ is up 4.93%

SCO is up 3.59%

BAS is up 1.89%

And nothing seems to be letting up here.

It’s time to make my year. Keep your bellyaching whines to yourself. I have a legacy to cement.

The next person to offhandedly quote Keynes to me, explaining why my Tesla short is doomed for failure, gets boxed in the scrotum, then lit on fire. The 9th floor is declaring taboo any and all “mainstream” financial references. If you heard it in high school, that trash is not welcome here.

I wouldn’t care if it were even remotely applicable to what I am doing.

But it isn’t.

Do you understand what a put option is? It’s a contract, that costs a finite amount of money to establish up front. Its value is derived either absolutely through execution, or else by pawning it off prematurely to startled counter-parties who are sweating profusely at the thought of massive losses, for a fat premium of course.

Do you know what never comes up as a concern, remotely, when you have 2-3% of your account in a non-margin put position?

Solvency.

It’s crazy, but not fucking once lately have I worried, “OH MY GAWD, THE MARKET CAN STAY IRRATIONAL LONGER THAN I CAN STAY SOLVENT”.

Do you know why?

Because I’m fucking solvent.

These products have been cut in half since I bought them. I am solvent.

These products can go to absolute zero for all I care. I am solvent.

I am solvent because I’m not a complete dumb ass, and know how to take a negative view of something in a way that only has massive payoffs. I’m solvent because I understand how to set aside 1-2% of my account annum (less than I make in dividends) to buying something that has well defined losses attached.

I don’t need to know what will happen to Tesla to make it sell off. That is an adminicular point. I just need to believe that something none of us here can possibly expect will occur to shock people. It then requires only modest stipulation that, at current positioning, that something is more likely to be really bad than really good.

If my January 2014’s expire worthless (of which there is a strong possibility), then I will put another 1-2% of my account into January 2016 puts (I currently hold January 2014’s and January 2015’s).

Do you know what my upper bound is on losses?

6.1%, spread out over three and a half years.

Do you know what I will lose, in real terms, if I am wrong about Tesla?

Probably <6.1% in losses, spread out over three and a half years.

Do you know what I don't care about?

6.1% of losses, spread out over three and a half years.

I'm up ~20% this year alone. The amount of money we're talking here, 1-2% of my account annually, is just so de minimis…

Please, stop slaughtering economic quotes by using them out of context. It may shock you, but I actually am quite familiar with Keynesian-isms. That happens when you've followed the markets and finance for a long time. And frankly, if you can pick up a bit of financial advice out of a copy of the Rolling Stones, it probably isn't worth anything.