Saturday, April 28, 2007
Seasonality in the Stock Market: Part II
After last year's publication of The Only Three Questions That Count, market pundits such as Eric Bolling have been talking quite a bit about the "Presidential Term Anomaly." Basically, the "Presidential Term Anomaly" states that the third year of a presidential term is usually the best year to be invested in stocks. On page 73 of The Only Three Questions That Count, Ken Fisher (who apparently knows his stuff) has a table that lists all of the presidential administrations since 1926 followed by the corresponding annual return of the S&P 500 (which was started in '26). Fisher's study can be summarized as follows:
These figures certainly appear to substantiate the claim that the third year tends to be the best. In fact, it looks like the entire second half of a term is generally more rewarding than the first half. But why?
According to Fisher, the weakness observed in the first half of a president's term is probably due to all of the changes that a new administration is likely to impose on the country. He explains that, "Markets view the redistribution of wealth or property rights [by a new presdiential administration] like witnessing a mugging. It causes fear beyond the size of the action itself because it makes all witnesses realize that they could be mugged next. Consequently, the market can be weak somewhere in the first two years because the market doesn't like the politically forced changed." Makes sense to me.
But Fisher himself isn't terribly bullish about his findings. He continues, "I'd see its being a third year as a definite mild market positive. Would I bet the house on it? No way. If lots of people start talking about the third year being positive and getting excited about it, I'd know this phenomenon was discounted into pricing already and I wouldn't count on it at all." Efficient Market Theory strikes again. Interesting phenomenon, though.
In the third and final part of this article, we'll take a look at how seasonality affects individual stocks and how we might benefit from it.
Seasonality in the Stock Market: Part I
It's well known that "The Fly" often uses the monthly seasonality of stocks (along with the licking of illusive, prescience toads) to help him make his trading decisions. Given the fact that Fly's seasonality trades have generally been profitable, the study of monthly trends should help us become better stock pickers and more Fly-like. (But not at all in the 1986 Jeff Goldblum sense. You crazy?) In an effort to learn more about the potential opportunities afforded by seasonal analysis, this article seeks to briefly introduce the subject. With any luck, it'll add another valuable tool to your due diligence toolbox.
History suggests that some months are more favorable for investing than others. If you've been watching CNBC during the past week, you know that they've been spamming the phrase "sell in May and go away" ad nauseum. Sounds like a genuine piece of Wall Street wisdom, but does it work? Well, consider the following:
As the table shows, the historical statistics do seem to corroborate that pithy little rhyme. If you were indexed through those years, you certainly would have banked more coin had you only invested in the market during the "Nov.1 - Apr. 30" period. The month-to-month data also seems to lend credibility:
Admittedly, things don't look very bullish during the "May 1 - Oct. 31" period. So do the bears actually have a legitimate excuse for being the lamers that they are? I don't think so. After all, we're not really making bets on the profitablility of market as a whole. We're active portfolio managers who take on huge amounts of "benchmark risk" every single month with our hand-picked stocks. Broad weakness across the major averages certainly doesn't help us attain our daily dose of Grilled Chicken Buffalitos®, but I don't think that it makes any sense to pull out altogether. Instead of bailing out of "the greatest story never told," we should be able to find some good-looking individual stocks that have positive seasonality (despite the lousy seasonality of the market as a whole).
Friday, April 27, 2007
Rihanna ft. Jay-Z: Umbrella
However, despite MVIS' desire to wreck "The Fly's" 8 week winning streak, I closed up 0.3% for the week.
Now, I know what you are thinking. Many of you wish me doom, thinking "fuck this guy and his oatmeal" or "I hope this guy gets hit by a cement truck." I'll have you know, "The Fly" looks both ways when crossing the street.
As for today's trading:
We are in a true bull market. Despite bad economic news, the market still ripped. With my money, I want to stay long the fat guy, via NTRI, BWLD, HANS, PNRA and soon JSDA.
Finally, if a shotgun were put to my head, in order to extract one stock pick, I'd say: "Sir, shoot me if you must, but before you do, go long INSM."
NOTE: Be sure to visit this weekend. "The Fly" has hired some dude named "Jeremy" to blog, this weekend. Elections will be held Sunday night.
Fly Buy: MVIS
Disclaimer: If you buy MVIS because of this post, the economy will spiral into recession. And, you may lose money.
Fly Buy: INSM
UPDATE: I bought 75,000 @ $1.00
Disclaimer: If you buy INSM because of this post, your septic tank will overflow. And, you may lose money.
Fly Sell: CENX
Fly Buy: WGAT
Disclaimer: If you buy WGAT because of this post, the next time you are on a hot date, you will suffer the hiccups--all night long. And, you may lose money.
Sector Spotlight: Internet
As for today's trading:
Consider yourself lucky. We should be down 1%+, with that fucktarded GDP number. Nonetheless, the bulls want to run, so I am buying stock.
Today, on the back of BIDU, the Internet sector is on fire, with gains in SNCR, MFE, SOHU, ASIA and GOFH.
Thus far, the earnings season has been a major success, with the exception of a few names, like RACK and BRCM.
With my money, I want to weigh into the NTRI shorts and nibble at a few speculative names-- like WGAT.
Finally, keep an eye on the dollar. While it's true, a weak dollar helps out multi-nationals, it is utterly fucktarded for our economy to have a fucking wheel barrow currency.
Without a doubt, FXE, GLD and SLV can appreciate, as the dollar depreciates.
Asshat of the Week Award: Herb Greenberg
I mean, this man got his ass kicked by a fucking donut store (KKD) and was wrong on just about everything, with the exception of OSTK.
Furthermore, Herb's bear picks don't just go up a little. They fucking explode to the upside, with 1, 2 or even 10 baggers.
If this man ran a hedge fund, he would lose 99% of its money, within year one. That's how bad he is.
From NTRI to HANS to AAPL to JCI or ISRG, Herb is always wrong. He makes the "Suck my Nasdaq" guy look like a fucking guru.
So, the next time you hear Herb trash a company, just go long. You are almost assured of making truckloads of newly minted cash.
Feel free to congratulate Herb aka "BearShitter," via a message on his blog, of this crowing achievement.
Thursday, April 26, 2007
If any of you were across the room from me, I'd make sure to throw a pot of boiling oatmeal on you.
After the close, a slew of companies fucked themselves with bad earnings, while some did great and are raping the shorts-- all in the ah's.
BIDU, VSEA, SIMO, SWIR and MSFT are ripping, while WFR, CENX, BRCM, BOOM and YRCW are getting pummeled.
With regards to CENX, aluminum prices were flat to down, over the last quarter. I did not expect a blow out number. I am in CENX, long term, because I feel aluminum prices will surge.
Finally, I have a new enemy. I have a vendetta against the short sellers of NTRI. "The Fly" will not rest until he destroys them and sees the stock print $72.
Pearl Jam: Corduroy (Live)
Sorry, no CC's again. Too busy.
Fly Buy: NTRI
Disclaimer: If you buy NTRI because of this post, the internet police will arrest you for music piracy violations. And, you may lose money.
Position Updates: MVIS
This is why I am holding and buying more:
-- The company is reported to be in late stage negotiations with 4 major cell phone manufacturers.
-- In order to get a significant cash infusion, the company needs to have its stock price above $5.30 for 20 days. Further, management is aware of this fact and it is my belief they will get it done.
-- Shortly, I believe the company will give a progress report to its important shareholders.
-- In order to stay on track, with a mid 2008 launch of the PicoP, the company must sign up with a cell phone manufacturer, by June 30th.
-- There is a lot of institutional and retail interest in the shares.
If I am wrong, "The Fly" will no longer call himself "The Fly" and will retire to the hills of Romania and herd goat-- for the duration of his pathetic life.
Quick Alert: A View of an NTRI Long Today
Fly Buy: MVIS
Disclaimer: If you buy MVIS because of this post, your bread will mold faster than normal. And, you may lose money.
Sector Spotlight: Networkers
Many of you are all hot and bothered over MVIS-- with its slow drip to hell. Look, I am in this stock, for the duration, no matter what. So, if the inaction or "turdish" behavior of the stock is annoying you-- sell it.
Just know this: The company must sign a cell phone deal, for its PicoP, by June-- in order to stay on track with its timeline. If they can pull off a major deal, you will likely saw your own head off for selling the stock, because it was stalling, before the company cut the nuts off of the short sellers.
Right now, I am impressed with the Networkers. Despite AKAM, which I fear will be under pricing pressure from LVLT, the sector is very healthy. The proliferation of video on the web is exploding. To take advantage of this trend, I like SVVS, NTGR, FFIV, EQIX, GLBC and BBND.
Finally, I suspect the market will melt higher, towards the end of the day. This is the type of market that can destroy short sellers. Right now, they are hesitant about covering their shorts, after such a big run up. However, should the market start gaining momentum, you will see their blood run through the streets of Wall.
Fuck You Shorts, You're Dead
Basically, I feel the company deserves a 35 multiple, considering how incredible their growth and momentum is. Should the company earn $3.45 cents (top of the guidance) and trade 35x, well then, the stock should trade at $120.75. It's called multiple expansion.
When RIMM had the lawsuit from NTP hanging over it, the street denied RIMM a rich multiple, due to risk. However, once the lawsuit was settled, the stock never looked back.
Wall Street will bid up any growth stock, providing the risk to the business cycle is limited.
NTRI does not have a rich multiple (19x eps)-- because investors had reservations over the sustainability of their growth. However, with this report and guidance, much of that fear will be put to bed. In addition, 40% of NTRI's shares are sold short.
Get ready for a short squeeze, bitch.
Finally, I am sick of everyone bitching about how "expensive" the market is. Do you idiots realize, the S&P, Nazz and DOW are only up 5% for the year?
With my money, I will probably buy more CENX, ahead of tonight's earnings-- and add to my MVIS position.
NOTE: I would like to publicly apologize to Steve Jobs' face ( not his real face, a picture), for throwing all those darts and small hand axes at it. It's worth noting, Mr. Jobs is a great business man and can probably kick the living shit out of Bill Gates, if properly motivated. "The Fly" loves AAPL, today.
Wednesday, April 25, 2007
NTRI Shorts Get Mugged in AH's
Which reminds me to award Cramer an unprecedented 2nd Asshat Award-- for being a NTRI bear fucker @ $43.
Mims: This Is Why Im Hot
No time for CC's. Too fucking busy counting my money.
I WIN AGAIN
|16:52||NTRI Nutrisystem beats by $0.13; guides above consensus (58.24 +1.43)|
|Reports Q1 (Mar) earnings of $1.04 per share, $0.13 better than the Reuters Estimates consensus of $0.91; revenues rose 62.4% year/year to $238.4 mln vs the $213.3 mln consensus. Co issues upside guidance for Q2, sees EPS of $0.82-0.86 vs. $0.71 consensus; sees Q2 revs of $190-200 mln vs. $171.68 mln consensus. Co issues upside guidance for FY07, sees EPS of $3.34-3.46 vs. $3.07 consensus; sees FY07 revs of $790-805 mln vs. $736.00 mln consensus.|
UPDATE: 16:30 AAPL prelim $0.87 vs $0.64 Reuters consensus, $0.64 First Call; revs $5.26 bln vs $5.17 bln Reuters consensus
Quick Alert: Just Killed 10,000 Shorts
Fly Buy: WGAT
Disclaimer: If you buy WGAT because of this post, you may have brain damage. And, you may lose money.
Position Updates: PNRA
Thus far, the company has about 1,100 stores and no foreign exposure.
Bottom line: The stock will be accumulated and rightfully so. Also, it's worth noting, JSDA has a sweet exclusive deal with PNRA. What's good for PNRA should bode well for JSDA.
I'll have more details later.
Fly Sell: ARWR
UPDATE: I sold 10,000 ARWR @ $6.55.
Sector Spotlight: Transports
Within the Trannies, I like OSG, CHRW, YRCW, EXPD and LSTR. The Transports are the central nervous system of our economy. When they do well, expect the stock market to trade up.
Frankly, if you are short this market, you must be fucking brain damaged.
Look you, there is nothing in your ridiculous charts that says we will gap lower, 2000 style. Stop fucking embarrassing yourself, while bankrupting your family, with delusional machinations of stock market calamity.
While you waste time preparing for disaster, I bank coin-- fucking idiot.
Speaking of coin, NTRI, ARWR and CENX look terrific. With my money, I will prepare to buy more MVIS, now that it's under $4.50.
Should the stock get in the $4.20's, I'll be buying with both hands.
NOTE: With the CFO resigning at DIVX, I would take advantage of this dip.
Position Updates: NTRI
In short, I anticipate the company will beat the estimate by 6 or 7 cents. With that being said, I am up 12 straight points on my bottom shares and wouldn't hold it against you (the average coffee drinking dicktard) if some profits were taken, in order to avoid tonight's showdown.
Keep in mind, I'm fucking nuts and will buy this stock on a 10 point gap down, mainly because I have nothing better to do with my money.
So, should the stock get poleaxed tonight, I don't want to hear a fucking peep, not even a peep, from the likes of you-- the internet mob.
This just came out, via Kaufman:
|08:15||NTRI Nutrisystem: 1Q07 preview - Kaufman (56.81 )|
|Kaufman notes NTRI is expected to report 1Q07 earnings after the market close. For 1Q07, firm is expecting revs of $212 mln and EPS of $0.90. They expect the co to add approx 300,000 customers during the quarter at a CAC of $140. They expect Direct Channel gross margins to be 54%, down from 55.7% in 4Q06, as more customers have been added in 1Q07 and hence, more "one-week free" trials. Firm believes the stock buyback should lead to upside to their 1Q07 ests and an increase in guidance for 2007. They expect the number of new Men customers to increase 163% YoY as mgmt is focused on that segment to leverage the mindshare created by the Dan Marino and friends campaign, as well as to benefit from the better economics.|
Tuesday, April 24, 2007
Cypress Hill: How I Could Just Kill a Man
Overall, the market did well, with oversized gains in the Semi's, Chemicals and Networkers. At this point, I really do not see much downside to the market. I expect better than expected earnings for the majority of the market leaders and anticipate the bull run to continue.
Currently, I am up over 25%-- year to date. My goal is to push the envelope, before the summer malaise hits, and go for 50%. Naturally, "The Fly" may surprise everyone with a triple digit 2007 return. However, at this point, I do not want to jinx myself with fucktarded goals. Sort of like putting the carriage in front of the horse.
Very soon, I will take a position in a semiconductor name. I like the action in the sector and feel left out--during the recent semi run.
Finally, in all seriousness, enjoy the incredible run we (U.S. markets) are on. Bull runs like this are rare and should be milked for every last penny possible. At some point, sentiment will shift and there will be a time to take profits or short stocks-- but not yet. Luckily, for you, "The Fly" with his superior IQ and market prowess will guide you fucking retards with charts-- when the shit hits the fan.
Until then, I will continue to methodically break the legs of short sellers.
Off to go coach a little league baseball team.
Position Updates: ARWR
|12:54||ARWR Arrowhead Research initiated with an Overweight and a $9 tgt at Global Crown (6.16 +0.38)|
|Global Crown initiates ARWR with an Overweight and a $9 tgt. In their view, several ARWR's subsidiaries are going to exit the adolescence stage by the end of 2007, raising the potential for significant licensing revenue stream, IPO or sale of the subsidiaries in the next 12 months. They expect near-term catalysts for the stock from the licensing and partnership deals in electronics and from the expected conclusion of the phase 1 clinical studies of Insert's lead anti-cancer drug candidate in mid-2007.|
Fly Buy: NTRI
UPDATE: I bought 2,000 NTRI @56.21
Disclaimer: If you buy NTRI because of this post, your dog will relieve himself on your bed. And, you may lose money.
Fly's Analyst Tip of the Day
Sector Spotlight: Semiconductors
The good news from TXN goes a long way. Furthermore, I feel the market will enjoy a new leg up, this time led by the Semi's.
Being that I have been neutral on the Semi's for awhile, my research is stale. However, right off the top of my "calculator brain," I feel BRCM, SLAB, FORM, SNDK and DITC are decent buys.
Also, the more I learn about ARWR, the more I like it and want to buy more. In my opinion, the stock is heading for $10+.
Finally, I want to roll the dice here, buying WGAT. Should the company get a cash infusion, I feel the stock may spike. If not, oh well. And, should NTRI go negative today, I will trip over myself--trying to buy more.
Monday, April 23, 2007
Truth Hurts: Addictive
See, unlike you nervous type, I don't fucking sell when shit starts going red. I've learned, after losing millions of dollars on dumb trades, to hold my fucking ground-- when the upside is great.
Also, I don't take on positions, with the exception of swing trades, without having an edge. In other words, there is ample research done on my stocks, either done by me or people I trust, prior to "The Fly" taking down a meaningful position.
Now, the million dollar questions is: Why do I share my research with retards on the internets?
The answer to that question is still being researched. Maybe I'm just a nice guy-- but I doubt it.
Finally, I'm afraid today's spike in oil may disrupt the current Tech rally. However, I still feel my neighbor's are fat fuckers, who ought to sign up for NTRI's fat man diet.
Bottom line: Pick and choose your spots carefully and watch the inflation trade.
Off to the Mets game (field level, of course)
Quick Alert: Fly's Computer in Grave Danger of Being Destroyed
I kid you not, every 10 seconds or so a fucking pop up ad flashes in my face, annoying me to no end.
I want to track down the spyware people and saw their fingers off. I fucking hate this computer and will now back up my main files, in order to throw this piece of shit out the window.
In other news, the market is acting gay, with reversals everywhere, but NTRI.
Fly Buy: NTRI
Disclaimer: If you buy NTRI because of this post, your favorite baseball team will finish last place, for the next 10 years. And, you may lose money.
Sector Spotlight: Metals
Without exaggerating, I am making thousands of dollars, per second. Which means, by the time I finish this fucktarded post, I will have already made enough money to buy a new car or several bottles of "rich man's whiskey."
Naturally, "The Fly" is a humble man, with little desire to be recognized or applauded for his "calculator brain." However, it's worth noting, "The Fly" is destined for ridiculous greatness, via the stock market.
So far, today, MVIS is shooting higher, on the back of minor news. Now, just imagine how high this fucker will go, once they sign a major cellphone deal.
Additionally, I like the Metals, right here-- specifically CENX, SCHN, PCU, ZEUS and RTI.
Once again, the shotgun to the cranium pick is NTRI.
However, if you have a small risk tolerance, get the fuck out of the stock, now. If "The Fly" is wrong on NTRI's numbers, you will fucking regret the day you were born. The stock will get obliterated in true "mushroom cloud" fashion.
Finally, I am getting lots of fucking tips and recommendations. Maybe this means, money begets more money. Or, we are close a near term top.
Either way, I am having lots of fun, roasting the livers of short sellers and throwing empty root beer bottles at my servant/trader.
Position Updates: HANS
And, JP Morgan made bullish comments.
| || Hansen Natural-HANS consensus rev growth looks conservative, reit OW@JPMS|
|JP Morgan reiterates its Overweight rating after reviewing Hansen's revenue drivers through 2009, which suggests upside potential compared to consensus. They believe upside to revenues would likely drive upside in the shares since the market priced in risk vs. consensus, as shares trade below its peers. :theflyonthewall.com|
Position Updates: MVIS
Microvision Secures New Contract To Develop Laser Projection Display for a Commercial Transportation Sector CustomerREDMOND, Wash.--(BUSINESS WIRE)--Microvision (NASDAQ:MVIS - News), the leader in light scanning technologies for display and imaging products, announced today that it has entered into a commercial product development contract with a world leading transportation sector systems integrator. Details of the contract were not disclosed for competitive reasons at the request of the customer.
Monday April 23, 8:35 am ET
Under the agreement, Microvision will work with this world leading system integrator to initially design an innovative projection-based display solution for an aerospace application based on Microvision's ultra miniature laser display projector platform.
"In 2006 we defined and implemented a common technology platform strategy which resulted in a flexible display engine, PicoP(TM), that can be leveraged into many high-value applications in the broad transportation market segment," stated Microvision President and CEO Alexander Tokman. "Our unique display engine offers many inherent advantages, such as improved safety which is the focus for this specific program. Increasingly, prospective customers are endorsing Microvision's display platform strategy and we are thrilled that it is resonating with our partners focused on commercial display applications."
Sunday, April 22, 2007
Show Some Damn Respect
I'll have you know, "The Fly" is extremely superstitious and did not want to jinx the market, nor my holdings, with some weekend bloggers' utter stupidity.
Aside from that, I've been too fucking busy to hire anyone.
So, for all of the wanna be Fly's out there, keep the "job applications" coming. Maybe, just maybe, I'll let you disgrace yourself, via retarded blog posts, here on FlyonWallStreet--next week.