Stocks are not Equity

I haven't been posting to my investing blog because I haven't been investing. I'm up to 75% cash on my personal account, not optimally timed exits but not terrible timing either. Sold my TDG too early but my RIM was well timed. Hanging on to smaller positions in NRG, CJT, and AMD.

I made a personal decision to focus on my career as a financial wizard of sorts rather than battling it out in the pits of my retail equity and fx accounts. I have built up momentum at my workplace and I intend to ride it out which requires more of my focus. I will be back to slaughter the pigs in public equity markets when they most expect it but are too paralyzed by greed to do anything.

Now on to the title. Stocks are no longer Equity. Equity represents a fundamental underlying interest in a company. While owning a stock grants you the illusion of owning equity, the truth is that is empirically a lie for retail investors today. The real equity that I have is myself and the value I can create with my sales/math/programming/brainstorming/communication skills.

Perhaps this blogs time has come to an end. I have failed at long term passive investing, market conditions over the past 4 years are no excuse. When I return to the market I will be a speculator.

Haters gonna hate

Damn this market sucks. I am down as an investor, most of my stocks have been personally and individually knee-capped by god/satan himself. The ones that have survived were handicapped to begin with. But I will not sell into fear. I am becoming a man of principle, I don't care what it costs in the present because I know what it will be worth in the future.

All You Can Eat

Buffet. Buffett.

Can words describe this deal? 5 Bills of preferred equity and 700 Million warrants at 7 bucks. Get out of town. Shut the front door. I'm still down and out on BAC but it's retribution enough that bears are being impaled skyward by none other. What else is there to say? The man's a monster.

Where's the red

You call this a down day?! If you don't know who I'm talking to it's safe to assume it's the American media because they are the easiest target on the planet.

C'monnnn. We're not even down 1%. Everyone knows last week was just some trillion dollar shennanigans. And everyone is mad about it. Mad that they got scared out of their positions. Now they want their money back. Even if they have to rally this mother trucker past previous highs.

Let it be known

I made money shorting the swiss franc yesterday. The swiss franc rallied 5% vs the US dollar yesterday.

This needed to be chronicled as evidence to my "give me a market and I'll give you a profit" mindset. Tight stops and balls of steel.

Ideas are scaled by execution. Even a bad idea can be executed into a profit.

World Ending

Here's a math problem for you, if we go down 5% a day every day, how long does it take for the world to end? Answer: Next Month.

This shit can't continue. It's literally hysterical. I didn't get out last week, and I should have because I am small and liquid. I won't sell here because I do not like to wear mine or anyone else's ass for a hat. I would prefer a coffin first.

This drop is so unlike 2008. We've seen it before. Let's head down.

Choppin

Took just over 10% of my portfolio and bought RIM shares with it yesterday.

A lot of people say "Why try to catch a falling dagger?"
To them I say "Why not, are you afraid?"

It's clearly a value play. I could lose all my money in a year if RIM gets dominated by APPL and whatnot sure. However, RIM doubles in price as soon as it so much as sneezes a profitable new product. I like RIM management, they've shown they can stick to their guns. I would like to think these guns can blow the limbs off of short sellers (mostly americans and/or foreign institutional investors that underestimate the human capital pool RIM has access to).

I hated RIM for a while, then I got over it. You will too.

Boom! Headshot.

AMD up 15% as of 5 minutes into the future. I'm holding because I care not for spurious events and have greed in my veins. I believe this is a catalyst to continue to move higher. Stupid, silly analysts. I could do more analysis from my memory on the back of a napkin at one of your petty american fast food restaurants.

Feels good to win. But not too good. Never good enough.

One Shot, One Kill

Speculation at its finest here folks. AMD announces earnings tomorrow, had a bearish beatdown over the past month, has strangely traded upward this week, like a cat sneaking up on a mouse.

I got long and strong AMD today. I see it going to $9 with at least a 50% probability, and barring the whole market going materially lower I don't see it south of $5. It's just math, don't take it personally.

Updated 4 hours later: Intel Posts Record Sales, earns normalized 0.59 per share vs 0.51 analyst estimates

I was Dead Wrong

About BAC. Bank of America. What a piece of crap. 12.50 Jan calls virtually worthless. I admit all this on the day BAC breaks $10 on the downside because that was my target to recognize the loss. Not a monetary target, NAY! Money is for the common folk. This loss is far worse than that, it is one of pride. I thought I was fighting the good fight, buying America. Bank of America. You can now buy a piece too, for only $9.99. This price happens to correspond to a $100 billion valuation. How foolish was I to expect something like a national bank of the great American empire to be worth more than something like a social networking website.


Facebook and Bank of America have the same estimated value right now.


Yes there are plenty of good reasons for this, but just take a look at that line again tell me something inside of you doesn't find this rather absurd. Don't worry about me though, I'll get mine. I'm gonna go all nutty and start wearing bow ties and buying/drinking high quality oil on the daily.

Who Cares

Instead of being frustrated by the sluggish market and doomsday scenarios I'm just ignoring them. It's becoming pretty clear that calendar 2011 is going to be one of THOSE years. The ones that you look at in recoveries and think, "Hmm! wonder why that happened..". Human nature likes to find things to worry about when it becomes impatient.

We go down until Sept-Oct and then come back up when the economics turn out to be stalled and not downtrending. Look for seasonality similar to last year.

Please Sir..

May I have s'more?

It's an grueling market out there for the bulls right now. But I just so happen to enjoy gruel. I have stayed at 30% cash while the losses from my longs / calls are bleeding the life out of my portfolio. However I am not the boy I once was; getting all up-petty at the nearest 20% portfolio drop and doubling down. No, this time I shall wear my losses as face paint for the battle ahead. I hope we see a serious spike down, then I will look to enter.

Didn't miss much

As far as being a position trader/investor/primate is concerned, I haven't missed much the past couple weeks. Some commodity traders and homeless men traded places. Woohoo.

Is it just me or is does anyone else think that nobody really wants to pay for their groceries in silver/gold shavings? Does anyone else see the disconnect between the more and more digital age we are surrounded by and the medieval gold and silver days? Some of the hottest companies today essentially sell well placed electrons. Yes that's an understatement because those electrons convey information. The point remains, and has been proven, information is currency. What information do gold and silver provide? What is the real value in their utility?

Got stuck on the gold tangent. Damn it.

Run for your life

I want to get 100% cash right now. I feel like this market is manipulating me into selling my positions. I wish bank of america a slow and painful death and it will be my pleasure to join them. If I sold today it would be mostly based on emotions, therefore I can not do so even if it is the right move.

Don't Slip

The breadth of the downturn today is quite impressive. Being heavily long oil I am down somewhere between 3% and 4% today. Tomorrow will be an informative day but I don't see myself selling very much. We are about to turn the corner into earnings season in a bull market. I'm 20% cash with the ability to raise funds if the market chooses to fight me. Because the market isn't fighting me; it's fighting itself.

Depending on what tomorrow looks like I will consider allocating cash, probably in US refineries because that seems to be the unstoppable trade right now. Wouldn't look to hold beyond July though.

It's the climb

By looking at the monkeys on CNBC you could probably figure out that we are going up. What's left to do? Sell? Who wants to get short this market? What do you think institutional money mangers are thinking en masse? What is the economy doing?

I ignore the rhetoric in the media and focus on answering these questions.

This question I ask myself a lot when it comes to sourcing motivation around uncertain events. You can apply it to the bulls and bears if you wish.

Who's starvin' more?

Where do we go from here?

This Dow 12200 and NASDAQ 2700 is becoming old hat. It feels like we were over at a friends place for dinner, had some wine, played some cards or talked about old times. Now it's getting late and we're just talking for the sake of talking and nobody wants to be the first to get up and leave because maybe the night will get interesting again.

That is what this market is like. Nobody wants to drastically change their long/cash (if you're short, god be with you) positions for fear of missing out / overcommiting.
One side is stronger than the other; were headed higher, this party is gonna be an all nighter. It's just a matter of time.

You don't need fundamentals if you have psychology, and you don't need psychology if you're crazy.

Chit Chat

A convo I had with a friend today:

Me:
if only bank of america could stop bankrupting america


Him:
financials have to be your worst sector


Me:
i actually am about even
up marginally perhaps


Him:
disbelief


Me:
yes, from the very start
jan 08
i made 2 5000$ transfers
into us funds
and paid a horrendous 30$ a trade cause i was a noob
it has been solely long US financial equities since then
and i am at 2.80*3000 + 1200
which is what.. 9600
im down 400
4%
probably mostly transaction fees
thats the kind of stock wizardry i am wielding over here

Can't Go Wrong

Finally I know what it's like to be in a "Can't go wrong" market. I dare not touch my positions for fear of missing out of the next double digit jump. I speak in old tongues to myself when looking at my portfolio value. I think about ways to lever my leverage. I am 100% positive that I will see the peak coming far ahead of time and will perfectly time my exit like I am George Clooney robbing a Las Vegas casino. Invincibility is yesterday and inevitable is tomorrow.

Doesn't Hurt

A little luck never hurt anyone. Intel comes out and announces an erroneous chip the week after I get long AMD. Can't complain about that. The nominal amounts are fairly immaterial for Intel but the momentum it gives up to AMD's side of the court is what really counts. AMD was already looking for an excuse to pop, now it just needs to have the support to stay popped and then explode via actually making a sizable profit.

Personally, I'm thinking of taking some cash outta the market and buying some good ol' fashion real estate.

Not a loser

You don't have to be first to be a winner. That was the thesis of my purchase of $10 Jan2012 calls on AMD yesterday. They just need to keep their market share and their price should rise with the market. Upside is, if their GPUs do what they intend to, they could gain market share and open up growth opportunities. Equity investors love growth opportunities. Stock price doubles and I slam home a 10-bagger. There has to be a 10% chance the price double from current levels for me to be happy here, and at the moment I'm a happy camper.

disclosure: The future is bright until you have lost all your capital. These posts are for my future credibility as an asset manager. I wouldn't follow a noob and neither should you.

It's not a tumor

I should get involved with stock twits or twitter due to posts like these.

NYSE:NRG looks good. I've been with it through the downturn and was thinking about adding to it. Finally buyers are around, could go to 24-26 in next 2 months.

disclosure: I own it, don't take my advice.

Cut em loose

I'm done with this BAC drama, it's like a bad relationship for me, I just can't let go. I was sitting pretty now my profits are down but still above 25% on the position. I won't let them get below that. I won't.

In hindsight the smart idea instead of writing a dumbass post about BAC DEFENSE I should have had the inclination to buy short term just out of the money put options when the earnings came in as horrendous as they did. Now we all must pay for my investment sins because had I done that the stock would have stayed put.

I am not letting this position become a loser. Like a 6th grader in the war against drugs and strangers, I will just say no.

BAC DEFEND

I am truly sorry to keep ranting about Bank of America but the movements in the price of their equity vs. the market at large and their financial results are, I find, quite interesting.

Take their release this morning of Q4 '10 results. 2 Bils of goodwill impairment. 16 cent loss for the quarter. I saw this and naively thought it was time to sell, time to pack up and head for the hills. How foolish of me. I took one look at the premarket action and knew what was going to unfold. BAC losing money for all eternity is somehow already priced in.

BAC will lag, but hopefully not terribly so. I plan on getting out when they show another overextension like last week.

BAC ATTACK Continued

I seldom celebrate victory. That being said it is important to cherish victory occasionally. With my Bank of America (BAC) calls up almost 100% now, I write this BAC ATTACK as a toast to the American financial system. May you remain, Too Big To Fail. Cheers.

BAC Bacon

BAC to reality

BAC to basics

BAC to business

Here's a link to reasoning behind the gutsy investment decision. It's a good read.

EUR/USD

I can't not blog about this. The EUR is lighting up the USD like a mf'in christmas tree. I was short the EUR and got out for a 35 pip loss at 1.3030. I figured it was good risk management as even though the EUR was fully expected to continue downward, it was worth negating the risk of getting squeezed. Then it began. The 300-pip--slap-the-tits-off-yo-gramma rally. I mourn for those we lost. If I was smart I would have got long with a tight stop.

There will be a retracement but when/for how long/and is it worth it? Those are the questions to answer. I'm not getting back in until this beast shows signs of reason instead of the murderous treason it inspires on a 5 minute basis. Fear the beast. The EUR/USD beast.

2011 a-go

Stocks have been given the green light to go higher. Nobody is surprised by this. The term double-dip has returned to reference veggie platters and salsa chips, where many sane people believe it will stay. The last 90 days have been kinder than all previous periods of said length, in terms of the market value of my equity accounts.

I am quite comfortable letting it get to my head for the time being. I will need the confidence to buy out of the money calls on stupid names with mild chances (mild but not minute) to double or triple. If this year is as the scrolls of the internets have foreshadowed, there will be gains.

Image this: It's Dec 31st 2011 and equities have rallied 20% over the year. You look back at values on Jan 1st 2011 and think, "How did I miss that?"

That is what people are thinking right now. Nobody likes missing the imaginary mean reversion bus.

I don't write this to make sense anymore. I write it to make money.