I turn dials and fiddle with knobs to hone in on harmonic rotations
Joined Oct 26, 2011
4,121 Blog Posts

On The Important Matter of Position Sizing (A Tale)

In wake of the multi-orifice TVIX skull fucking exposé here in the iBC_BN, I thought it time for a friendly reminder regarding position sizing. I hate to be brash and I never take schadenfreude in another trader’s hardships, but fuck (butt fuck?) come on people. We need not concentrate our money in these markets. You know…eggs in a basket. We learn that shit trolling church parking lots on Easter when we’re like five years old.

Everyone has a different percentage profile for how they concentrate speculative funds, but I guarantee a prop desk would fire your fucking ass if they saw you 75% allocated to an underwater leveraged ETF position. I got UVXY’d last week to the tune of a 28% loss. There I was, jogging at a casual eight minute mile pace in the park, banking coin long stocks, when a boy came walking from the jungle gym wearing UA shorts and a Dri-fit running shirt.

“Hey guy, you want a Gu Energy Gel? It will put some pep in your step. Finish hard brah.” smirked the athletic child. Charmed by the unsuspecting kindness of the boy stranger I agreed. He gestured to follow him to his “office” just inside the tree line behind the playground. He reached behind a makeshift blind and grabbed a heavy black garbage bag. His arms shook from the weight of the bag as he extended it to me. “Ga’head, the best ones are at the bottom.”

Puzzled and curious by the entire exchange I peered into the bag but was unable to see all the way to the bottom. As soon as I put my hand in the bag it erupted with action as a band of fucking rabid squirrels began slashing at my hand like a school of piranha. “Ouch bastard!” I cried out. And I pulled my hand out the bag and started running away.

“Shit sorry guy! The squirrels must have snuck in to steal the Gu packs. Die squirrls!” the menace yelled as he beat the garbage bag against a nearby tree. “They seem to have scurried off. Look they left all these Gu packs perfectly untouched. Come back!” he pleaded in a most innocent manner. But I had already made my way back across the playground, shoving several children to the ground as I sprinted through. His sinister laugh, more like a sick dog’s croon, faded in the distance as I continued my run through the park. I eventually made my way to a wash station and cleaned the hand up. It wasn’t until I returned home and my running endorphins subsided that I realized I had lost a finger in the exchange.

Had I been totally gay about running in the park and guzzling Gu packs that day I may have greedily reached in with both hands and been pulled into the bag only to have my bones picked clean by this evil fucker’s mutated war beasts. Did I mention the squirrels had switchblades and hand grenades? I live to run another day.

Moral: Don’t put 75% of your speculative funds in one place. Not even the 400% man does that shit with BRK-A. I most always top out at 15% concentration.

In the markets:  Initiated BID long.  Added to HFC

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Swim and Think

Good friends and pen pals, my how heavy a burden it is wearing UVXY chaps. The looks one gets and the weight the damp leather adds to the stride is more than enough to belittle ones demeanor. I’m happy to have cleared all shares of said toxic ETF from my accounts and will add to my commissions and losses the purchase of a VXX Halloween costume. A must own garment for remembering ones jaunt down switchblade alley. It’s like buying the candid portrait of horror they snap on a roller coaster.

It was clear after a high intensity swim gave way to a casual freestyle daydream the VIX position needed to cease bleeding out. Then my thoughts carried onto other parts of the market. Investors are sashaying in and out of TIF, how stupendous! LNKD is being guided higher by the grand muppeteers. I see more upside in the name for following three reasons:

Goldman wants to reassure their clients they love them and they’re privy to favorable information. (perhaps some jabs and winks yesterday afternoon)

Investors love clamoring over a social stock.

$100.00 roll. Get’em while they’re hot.

Why thank you very much Mr. Sachs, now don’t you go fucking me while I turn my attention to other market concerns. Disclaimer: I never use LNKDs resources. Seems lame. I digress.

I bought KSWS today as I want a shoe stock, the chart looks primed, and Kenny fucking Powers continues to be funny. Oh what a life this is, speculating on such trivial nonsense. If you don’t like the game, then leave.

The bottom line is this: define your risk and buy some fucking stocks. It’s hot outside and USA #1 on fyah!

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You Vee Ex Why?

What to do, what to do…

Did you see last week when I penned an article about my merits for owning UVXY? I thought the idea strange but simple; volatility could be underestimated here. So I watched it trade for two days, and bought it when it turned up. That was last Wednesday. The next three trading days went like this:

Tick, tick, BOOM!

The position knifed lower today and is down 15% since my entry. But am I worried? Should I be worried? Absolutely not good sir, that’s no way to speculate! Had not I known the nature of this freaky little instrument I would not have positioned myself in the name. And of course risk management makes my job a lot easier. So here’s how the rest of this trade will play out. I will enact the following steps and not deviate from them:

If UVXY stabilizes and some buyers come back in, I will double my position.
I will only double down on a green close or if a green close seems imminent during the trading day.
I will scale my double down completely off if/when we trade at the original entry ($25.44).
I will accept being wrong and sell this shit instrument if/when the VXX closes below $19.33
A reassessment of the trade will occur upon scaling off the double down.

See? Simple. If you think you’re going to catch knifes like a fucking sideshow clown and not bleed out from time to time you’re more delusional than cockboy over in Cali with his “rush hour whack off” fiasco.

Of important note: The above trade will not DEFINE me guy, you one star rating internet prick cock sucker hobo fucker (I had to get all that out as it’s frowned upon in the tweet streams). The total risk involved to my portfolio is about 1.5%. Aka a fucking hedge isn’t going to derail my otherwise fantastically well year.

Finally, I’m still long and with the help of others on this site I’m banking money fast (and B.M.F. on the weekend) in my newest positions DRYS and YELP(s). On Dasher, on Prancer! Okay nevermind they’re selling off into the close ROFL.

One last thing since it’s Moday, my current holdings are as follows (by weight): AWK, HFC, FR, WFM, LNKD, F, NIB, DVAX, GSVC, DRYS, UVXY

The degenerate account is 100% long YELP.

May your days and weeks continue on swimmingly.


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Taking a Classic for a Ride

Sometimes a classic car makes its way into the hood and gets “donked the fuck out” with twenty six inch rims and lift kits. And it’s a sick look, but it makes the right turn hard and otherwise destroys the original feel of a classic treasure. However once in a while you see a restoration like the above with touches of decadence but an appreciation given to the original look, a masterpiece of gangsta driving if you will. This is the type of car you drive ten under wearing a Tommy Bahama shirt and fedora while smoking a large Montecristo no handedly.

The refinery stocks have been restored in a similar way. They trade classy and smooth. I’ve owned HFC since I highlighted it at the end of 2011. I increased my position this week. The Fly has penned several posts for understanding the refinery trade and you can query the iBC using its attached Google machine and get a plethora of advice. In the refinery space my personal favorite is HFC. I know several in the iBC community own/trade WNR. WNR allows the speculator to make hundreds if not thousands of penis references in communique which is fun and fine and fair. I like HFC. HFC continues to trend well, which is also fun. Driving this stock has more than covered my fuel expenses for the next few years and rides like a perfectly restored classic. I would chase it up here but will consider taking a scale around $37.33.

Regarding St. Patrick ’s Day: May your hands and minds always have work. And may you guzzle many fine ales and lagers tomorrow and eat corned beef in celebration of Irish folks and St. Patrick. If you fight tomorrow, do so as a gentleman. Go outside, square up and put up your dukes. None of that UFC hugging and humping shit is to be tolerated unless you’re fighting in California’s inland empire.

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Strange Days

I’ve spent the better half of the day considering putting on a pleather VXX vest and riding a little tricycle wearing a tiny tophat. Or perhaps I will instead don a pair of assless UVXY chaps for my curious tricycle ride. Volatility has absolutely collapsed but I would never call a top, or a bottom for that matter. No, cynical one star rating internet miscreant, I don’t understand the intricacies of VIX VXX veddy VXX tits and its contango and other obfuscations. But is wanting simply to be long volatility for a bit too strange a reason to use these POS instruments? The VXX with its flaws and brokenness and UVXY with its stupid ticker symbol? At these prices I feel more excited than a gregarious Rottweiler at the Westminster Kennel Club.

The markets are being bid up as we approach the FOMC meeting this afternoon and it has me and others puzzled and cautious. Again to be clear, my bias was and continues to be bullish. I’m underinvested, sure. And that’s fine. My portfolio sits at its high watermark. Investors and traders I pen pal with also appear under positioned to take advantage of our current market. Their caution is part of what keeps me in my longs. I also feel it’s too risky to NOT be long in this environment where shit stocks rip on light volume and no news. Pikers are killing this market with their unscarred fresh faces. Such is life in the markets.

I do twitter, and I’ll let you know ova there if I gear up for my trike ride.

Be well my friends, define your risk, and engage.


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Building Energy

But what’s the next move?

Perhaps today is a needed pause for the bulls but more and more of the charts I’m looking at are either decent short entries or in need of a breakout to the upside. Extended names like BKE, CLNE, and KORS are offering decent entries on the short side. Some of my holdings DVAX, LNKD, FR, and F are nearing the fuck or walk stage. I’m sticking with the names and being patient, giving the benefit of the doubt to the bulls if you will. But to be clear, I have the “65% cash on the sidelines” conviction.

The market feels like it’s hunting the next catalyst for direction. So much discussion takes place between us pen pals. The media conveyor never shuts off but today it feels slow like a 1996 union job. It’s just a matter of time until the market finds direction. My ideal scenario is to see a dip in the indices while my longs continue to rest. Then I can go back to gobbling up stocks like Lisa Lampanelli in a hotdog eating contest. At this junction it appears it wouldn’t take much sell side volume to alley shiv unsuspecting longs with the cold blade of volatility. Or we continue to see a pleasant spring time levitation.

In summary:

Still long bias

Want more stock but only on my terms (cheaper)

Don’t underestimate Lampanelli’s stomach capacity

Having a short or two in your arsenal could be decent (playing both sides (no homo))

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Here’s a Free Lesson

Quick timeline for you pole smokers:

September 12, 2011 Big Sean drops Dance (A$$) ft. Nicki Minaj

In the song Minaj references Michael Kors

Song catches fire by November

Next month Michael Kors goes public December 2011

Flash forward to today and KORS has only gone up, oh 105% since IPO

Lesson? Listen to new shit, like it or not, and snipe the brands…especially the name’s coming fucking public.


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Cowboy Coffee

Today marks a new energy level. You see, I’ve turned back the clocks and brewed myself a cup of coffee like a rugged mean mugging cowboy. How do you make cowboy coffee exactly? It’s simple really, as it should be; put coffee grounds in your cup, add hot water, stir and settle the grounds to the bottom and enjoy.

Now I wouldn’t drink just any Dunkin’ dipshit in such said manner. I happen to have procured a small bag of the finest, Jamaican blue rim coffee. I’m not going to gallivant through my office all benevolent and shit, brewing pots of liquid gold for the unwashed only to see them drown my rare blend in fucking Coffeemate. Fuck you and fuck your Coffemate. And your poison sugar, fuck you too very much.

So fuck it, I’ll make it as I will and enjoy the rich aromas and body. Needless to say, I’m jacked.

Regarding stocks. I like ‘em. Current holdings by weight: PBR, AWK, FR, HFC, LNKD, WFM, DVAX, NIB, F, GSVC. HOLY MOUTHFULL!

Going into yesterday I was most heavily in LNKD and HFC but I had to scale some shit off into that monster run up.

LNKD for the $100.00 roll. That shit’s serious. I don’t use that site it’s gay (no homo).

Good day to you, may your portfolios be blessed with outsized gains.


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The Calendar Rules

Last year’s volatility came to an abrupt end when we began THE NEW YEAR. Market participants collectively said, “Fuck it, let’s buy shit every day. Fuck selling.” The way stocks trade on a daily basis changed. I’ve produced the following image to display the difference in daily chart candles:

Maybe sentiment always completely changes at the strike of the new year. I’ve never experienced such a radical change. Scott Bleier talks about calendar anomalies in great detail. He can be found on twitter decreeing April 15th as the day perfectly aligned single file dicks will be chopped off with the surgical swing of a kukri. I love his commentary. Watch out when Mr. Bleier wields his weapon:

Pray tell will March 1st be some sentiment shifting force? The bears certainly closed out the leap day with a snarl. The Mayans may perhaps have me reading too far into the calendar for significance.

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Think High Net Worth

Often times I plan what I will do once I get my money right. Having several income streams is vital if you want to enjoy your stay on earth and partake in decadent hobbies like casually sailing the Caribbean or joining a Model-T demolition derby circuit.

One such plan I would rollout immediately if my net worth was say, EXPONENTALLY larger, would be to average into about 200,000 shares of AWK and collect the coupon. Think about it, you’re getting $0.92/share and the company provides water utility. Pretty damn stable.

Since high net worth is being pushed into the market, they will clearly divert their income producing funds to such a security and this rotation has shown in AWK’s multi-year tape. See the below monthly chart:

I bring the stock to your attention today as it’s nearing what could be an opportunity to get involved with the name at a decent price. See below:

I know we play high-beta names while dodging landmines for better or worse, but adding some stability to your portfolios isn’t the dumbest thing you could do.

Finally, my attention was drawn to said name by Mr. Cain Thaler, one of the distinguished tabbers of iBC. Thank you kindly good sir.

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