Saturday, June 16, 2007
The bankable trend of skateboarding
The easiest way is to have an edge. If two of your cousins live in Omaha, and work at LNN, they could probably provide you with a more in-depth context of the industry and the challenges it faces than a simple SEC filing on LNN might reveal. I am not talking about inside info, just better context to make decisions going forward. As we established in the previous discussion, it is the background trend that really drives a stock's price over time.
Many of you know that I skate, but it is a little more than that. I used to film pro skaters for their videos as a job. Here's a sampling of stuff I filmed and edited and threw up on the 'tube for fun.
That was a good fucking time, let me tell you--I traveled the world for free, and met many cool people. If you don’t like me now, try this on for size: I was paid, at 17, to take a 4 week trip to Melbourne so I could film one of the best teams in skateboarding for this video. Some of the guys didn’t arrive so I ended up with a 2-bedroom suite at the Marriott. I got per diem, a fat check, and the experience of a lifetime. That doesn't include the Americas, Canada, Spain, or Europe trips. When was the last time someone paid you to gallivant? Anyway, I am in “the industry.” I talk to pros, shop owners, and skaters and am therefore up-to-date on the goings-on.
Skateboarding is blowing the fuck up, and it is not the same beast it once was. What does this mean? Look around you--have you noticed more of them? I sure have. Shit, you are probably the ones annoyed by the skaters, you stodgy middle-aged raccoons. Skateboarding is getting more popular.
How popular? Well, according a survey published in 2004 by boardtrac, skating was growing at 20% a year, and had annual revenues of 5.2 billion. There were 12.5 million participants, 85% of which were men.
I engaged in a little email back-and-forth with a guy I know who owns two shops in SD and another guy who the photographer/editor of a major skate magazine, and they both agreed that this growth rate was accurate.
A lot can change in a few years, though. Companies who were struggling 3-4 years ago and are now coming back. The companies now are MUCH stronger financially than the companies of 2004, when that article was written.
It’s funny how sometimes the times can affect a subset so far removed from “mainstream” life. When AOL merged with TW, TW owned a skate mag, Transworld. The 100-page mag exploded to over 350 pages by 2000!! The mag was back to 100 pages by 2002-3. Who would have figured a skate magazine would encapsulate the excesses of the time so perfectly. Most of the new pages were fucking gay sketchers ads anyways. Right now, skating is in a stronger expansionary phase that the industry has ever seen. I know non-skaters who insist buying certain skate shirts and jeans--you know how CA leads the nation in trends.
Regarding tradable industries, I bet Fly wishes he could trade the MLB. Well, skating is growing a lot faster than base-a-ball, and thankfully for decision-making's sake, has only two publicly traded proxies. The growth of the sport is limitless: no mountain lift tickets, no waves, no field, no team, no coach--no rules. Man, that already sounds like an ad campaign. You can skate whenever, wherever, and I think the growth is in front of us, not behind us. By the beard of Zeus, you know something's up when you have amateurs driving around in CL500s.
So, what is the stock already, fuckstick?
I hope that I have done a satisfactory job of establishing myself as an authority on sentiment within the skate industry. This leads me to my pick: Volcom Clothing (VLCM).
Shares are not at an "ideal" buy point (~42) but it is still somewhat cheap. VLCM is currently trading at 22.5x 2008 earnings, and have a five-year growth rate of 28%. It does, however, remind me of the buffalo I stared in the face with 32x f/pe, and a growth rate of 30%. The pps of 55 seemed reasonably valued (except to ducati)...until the stock bumped 90 a few months later. I do not expect VLCM to rocket up, but it was just added to the S&P 600 on Friday, and it has a long way to run over the next few years. It just finished the transition of selling directly to Europe, versus licensing their logo to manufacturers. This change, accretive in 2H07 (now), should accelerate earnings into Christmas and next year, IMO, above estimates.
The balance sheet is beautiful, they have 50% gross margins, and countless other blahblahblahs, but most importantly, I have a real edge with this stock. I know much more than Wall St. does about this brand and I can tell you it's strong and there is much loyalty/retention with the name. I absolutely and for sure know things about this company that not even a hot-iron scouring over a 10-k will reveal. The loyalty among employees, their rep in the skate industry, how they participate and foster the industry—none of that is in there, and I think they are really creating a lasting franchise with substantial value.
Much in the way Fly is our resident MVIS authority, I feel like I am the VLCM authority. Certainly so on the sentiment end, which for a clothing company can be a direct indicator of future sales. They have a premiere team of some of the best pro skaters, like the gods--why is this important? Simple, kids emulate the pros and support the companies they like the most.
This is a long article, sorry, I am just trying to cover all the bases. Have a scotch, and join me back in five.
Anyway, the fucking kids.
As skating becomes more accepted by the mainstream, more kids will do it, but there will also be droves that skate with less enthusiasm than a hardcore skater does. If I were to be a strict-constructionist, I would say “unless you dream about skating all day, knowing how to ollie doesn’t cut it.” The sport is attracting huge numbers of casual users, but not necessarily life long skateboarders. This “less than hardcore” consumer is more likely to enjoy the look of skateboarding than the act itself, and that leads to increased shoe and clothing sales--the two areas that VLCM deals in. Additionally, they are much more apt to go to the mall, because that is where they go for clothes anyway, and that is where their parents take them. That's coincidentally where VLCM does the most of it's business. It is opening stores and working to difversify itself better of it's one large customer, PSUN (25% of revenues).
VLCM has long been misunderstood by Wall St. and they price it as if it is a fickle retailer, which, like CWTR, could at any moment turn from ‘OK’ to “hideous” to “god-knows-where” and back again. They do not treat it as a proxy to a hugely growing sport, and a whole demographic of people. By the time they do, I will be sitting on several bags (My cost basis is $23.xx)
Despite the seeming clash of “core” and “mall,” VLCM has pulled it off masterfully. Part of the reason is they don’t consider accounts with smaller stores, which limits the chance of excess clothes lying around and getting stale. Even though they don’t hold accounts with smaller stores, they support the industry so thoroughly with contests and ads, you cannot help but like them, even if you are a "core skater." VLCM has purposefully limited expanding its distribution to avoid becoming a blown-out, shite clothing company. That is why they sell their wares in some--but not all--JWNs--scarcity increases desirability.
The clothing and shoe companies right now are printing fucking cash. Some pros now, due to the successes lately, have begun to start up companies. Krew is a popular clothing company owned by Jim Greco, a pro. Now, his boss, Andrew Reynolds, who owns Baker skateboards (also very successful), starts up a clothing company which is almost identical, Altamont, and it too is successful. You don't have every pro going out there and forming some company and milking it, but the superstars know the potential and I think they are right on. Niche clothing styles are popular, and the growth of the industry and sport are great environmental backdrops for VLCM, for the next 3-5 years. They are well managed and their brand is strong. This is precisely the strong macro trend that coupled with strong fundamentals makes for a winning stock.
This article is long as fuck, but I hope I adequately explained the forces and drivers of this secular trend. Of course, there are both stupid people AND stupid questions, and I suspect the former will be asking much of the latter. Interestingly though, I will field all questions in case I have left something out and you have a thought. For more color on VLCM, read an old post here
Find a Winner, Fly-Style
[T-ed: ask yourself which you prefer: no swearing and boring sentence-structure Danny, or regular Danny]
[d2]GME:GME will continue to rise because of the game cycle. In two years, the stock might be a sell, because at that point it will be looking forward another year, wherein the cycle may have peaked. I suppose time will tell. The point is, what separates store A (GME) from store B(…HOTT)? [D1] Well shit, a trillion things in that example, but the answer is one has a strong macro trend (game cycle) the other has whatever you label a horrible goth store for 13 kids who really need a 55th trimester abortion. Readers, if you’re child dresses like a goth, or shops at HOTT, or buys their stock, you have failed your duty as a parent, and you disgust me.
NTRI: Land of fat assholes, 30% of our nation is obese, as in “honey, grab the butter,” and NTRI delivers. [d2] Another easily identifiable, strong macro trend, which supports the estimates for NTRI’s future growth. [D1] So lazy, so fat--where’s my food? I’m on a diet, motherfuckers!
[d2] The trend is clearly important, and I could continue listing other trends and strengths among Fly’s stockpicks, but, you want something new. Well here she blows.
Tomorrow that is. The article needs to be a single post.
Speaking of legit, you already know this, but Howard is the second most legit guy I’ve never met. The fact that he is over 37 ½ means he could be one of "them," but so far, I doubt that. Howard said himself, "if you cannot make money from this blog, you are a Putz," which is a jewish euphemism for, "you are a person who sucks horse nuts."
I also think he bears a resemblance to Al Bundy, which is awesome for so many reasons. Al is a timeless character. "Peg, you can stab me with knives, you can beat me with clubs, you can make me open my eyes when we're having sex, but there's no way on earth you can make me get a second job."
"The opera isn't over until the last heterosexual falls asleep"
His show wallstrip is good, though I do believe I gave him a run for his money with my HANS vid. In my mind, they go hand-in-hand. Go there, and let Howard and Lindsay entertain your brain. In fact, now is a great time to buy, sell, or hold some of the stocks they talk about, if you live in Qatar, and haven't checked 'em yet.
Oh, and Lindsay, if you’re reading this, I would like to take this opportunity to ask you a couple questions: Is your dad saddam, cuz girl, you da bomb. Are you wearing space pants? Cause your ass is out of this world.
So after you have read the weekend shit here, go there, and entertain yourself.
Howard From Wallstrip is Insane
Here is proof. Go leave him a nice message.
Friday, June 15, 2007
In Loco Parentis
Why the hate? Why the harangue? Because day-after-day, Ducati picks apart MVIS and makes bold aphorisms like those that "intellectual property" can be stolen. Bra-fucking-vo, Dick Tracy. 'Scuse my caps, but, MVIS HAS HAD A TOKMAN AS A CEO FOR JUST OVER A YEAR, LOOKING BACK AT LOSSES INCURRED UNDER THAT DOUCHE RUTGOWSKI MAKES NO SENSE. Oh and all their forward-looking prospects and stuff, but never-mind that. Look, I don't sit in my palatial house and promulgate on the happenings of a Maori buttfuck, and yet, you seem compelled to sit in your hut and talk about BWLD as if you know your dick from your elbow. Shut up. Your pedantic posts reiterate your remote position in the world your sub-par intelligence. No one reads your blog anyway, you geriatric kiwi fruit.
Your fund, "Shenandoah Capital" is not real, and if it is, you oughta be getting redemptions left and right for keeping your clients out of the market. What do you invest in? You are a horrible day-trader, and you hate the stocks that go up. What exactly do you buy? Banks have mortgage exposure, stocks are too expensive, and IP is stolen all the time. Yup, that's it. Who's your risk-guy? Kidstock? Bwa-hahahaha.
What I am interested in, like so many other pundits in my field, is the psychology of it all. I mean, there is a myth behind the man, and this “ducati” requires a more thorough explanation than simply: “faggy kiwi on a vespa.” I believe in Latin that comes out to “Il quom peregrinus gaius vehiculum.”
Perhaps a little color on the background situation of ducati...
Ducati was born Galadriel “Grant” Macdonald on October 29th, 1936, to parents of unknown Gaelic origin, in a tenement house in Cornwall, England. Galadriel was a precocious child, who dreamed of following in his stepfather’s footsteps as a salt miner. His true parents separated after his birth, his mother a Eurasian otter, his father a shifty Grecian sailor.
Primary school was a tough time for Galadriel, who began to call himself Grant, to spare himself the mockery of being named after a woman from middle earth.
Despondent and alone, he decided to move it all to the big city in hopes of a better life. While searching for vintage, color swatches at a festival for anoraks in Southampton, he spotted the woman of his dreams: Beustice Kristin Myliaf, a woman of sizable girth looking for a waifish man to wed.
So, you and your tub moved to New Zealand, probably to escape the very men who remind you of how frugal and lame you are, and now you live a useless life tending to your cats, churning your sour llama butter, and marveling at the nothingness that surrounds you.
I suppose the rest is history, and congratulations are certainly in order for you Ducati.
update: There will be a buyable stock-related article later this weekend for anyone who is concerned that this ducati weekend reading is shit. Keep in mind how right I've been on my last few articles (HANS, AAPL, DIVX premonition), and just get ready.
Local H: Bound For The Floor
Has this man been looking at the charts lately? The market has ripped off the necks of his bear buddies and shit down their headless necks.
The market did just fucking fine when oil was $70. It will do just fine at $68.
I'm going to word a few sentences very gingerly. I did some checking and found out who some of the MVIS sellers were, yesterday and today. Let me just say this, they are wholesale idiots, who do not know fuck from fish. In other words, they are just like your "financial consultants." There may be a small amount of supply left on Monday. After that, I feel the stock will head back to new highs.
I can account for 300,000 shares sold.
As for me, I am more confident now, than ever before. From what I understand, there has been no delays with their prospective partners and should get something done soon.
Be patient and you will reap many fucking rewards.
All in all, I was up 2.9% today, as HANS stampeded over the 11 million shares sold short. My year to date return is now 40%.
Finally, the market is set to break new highs. With my money, I want to buy more LNN, CORS, HANS, NTRI and BBY. And, buy more ARWR, providing it can get its fucking act together.
Also, I am hearing some good buzz on micro cap dice roll MATH.
NOTE: Danny will be weekend blogging. Make sure to tune in.
Goldman versus HANS Short Sellers
Cheers to Goldman Sachs
Considering HANS is my second largest position, I felt it necessary to praise the kick ass analyst, Andrew Sawyer, from the world's best investment bank, Goldman Sachs.
Fly Buy: BBY
Disclaimer: If you buy BBY because of this post, the bottom of your swimming pool will crack. And, you may lose money.
Position Update: NKI-wt
Basically, should the NIKKEI run to 22,000, NKI-wt or NKI' (Thomson one systems) will go to $20-- now trading at $7.50.
Asshat of the Week Award: Herb
Come on, thou shall not fuck with Goldman Sachs.
Even though Herb has already received an "Asshat of the Week Award," he's getting another one. I have to get these fucking trophies out the door.
Sector Spotlight: Semiconductors
Mention MVIS going lower and I'll send someone to break your legs.
Of course the market is going higher. We have good growth, tame inflation and lots of cash to invest. Plus anyway, people, like me, enjoy grilling the short sellers, until they are extra crispy.
It's time for the semi's to run.
As you know, the big industrial names have led this market higher. However, with stocks like POT, DE, AG and VLO already up huge, I suspect investors will look for bargains. Believe it or not, on a PE to growth basis, the semi's are cheap.
In that space, I am warming up to TRID, FORM, BRCM, SNDK, MU and SIRF. I outright like and own INTC, MRVL and KLAC.
Also, the telco's are ripping, with nice gains in GLDN, RCI, RCCC, TCN, TKC and HTC.
Finally, with my money, I will be adding to my MVIS, BBY and LNN positions.
Very Late Night Laughter
It's worth noting, due to his lack of understanding of how the market works, coupled with his obsession to talk shit about anything "The Fly" buys (BWLD, NTRI, MVIS, LNN, HANS, etc), I took his link off my site-- and promised to never visit his garbage heap again.
Luckily for me, a friend sent me this link.
Fucking read it before "The Ducati" deletes all the comments. It is, by far, the worst "internet beatdown" I have ever witnessed in all my years traveling the internet-- also the funniest.
Here is a teaser of some of the gems on that comment thread:
Thursday, June 14, 2007
Method Man: Judgement Day
Something very urgent just came up. Therefore, no cc's today.
However, I will say, Jim "the bow-tied fucker" Rogers is old and stupid. Ignore everything he says. And, I just bought more LNN.
Fly Buy: MVIS
UPDATE: I bought 5,000 @ $5.36.
Disclaimer: If you buy MVIS because of this post, your wife will catch you cheating on her. And, you may lose money.
Position Updates: MVIS
If you have been invested in MVIS, you know the stock has a tendency to look like shit-soup, every once in awhile.
For me, whenever I feel like ripping someone's face off, due to a MVIS decline, it usually is a pretty good time to buy.
If you are invested in the stock, you are in it for its future--not present.
The company has spent over 10 years time and 200 million dollars perfecting the technology called MEMS. This technology is their meal ticket, which is protected by dozens of U.S. issued patents.
In due time, MVIS will join partnerships and be the recipient of big contract wins and strategic alliances, with some of the biggest handset companies in the world-- if not the biggest.
In short, for me, owning the stock is not a trade. Sometimes having patience pays off. In my opinion, this is one of those times.
UPDATE: It appears some fucktard put a market sell order for 140,000 shares.
Sector Spotlight: Fly's Stocks
They want to lose weight, while stuffing their fat fucking faces with meatloaf and shit like that.
NTRI delivers food to their house. Who can beat that?
Aside from NTRI, I see my CORS is running. Fuck that stock, until $20. Then, we'll talk.
Also, I want to own LLNW, long term. Naturally, if VZ decides to start its own CDN, then LLNW and AKAM will have their stock prices cut in half, for them. However, if not, I feel LLNW will be a monster winner.
Speaking of monster, I hope you have some HANS.
BBY is posting numbers on the 19th. I want to own BBY, ahead of those numbers, just in case. And, with rates calming the fuck down, Metal stocks are on fire, again. I suppose the water is safe to take a swim in RS or CENX.
Finally, I expect to see the shorts die today. The sun, moon and stars are aligned just right, to see them massacred on Wall Streets filthy streets. Keep an eye on LNN, for a monumental short squeeze.
NOTE: I like the way MVIS is consolidating, post huge move up.
Position Updates: MVIS
He even has some live footage.
Wednesday, June 13, 2007
Shiny Toy Guns: You Are The One
All day, I have been hanging up on my bear fucking friends, telling them to "go fuck a jungle goat," then slam.
Just yesterday, I caught a minor case of the "pussies," worried about where my long positions were heading. I even sold some stock to boot.
However, today's "fuck you shorts, you're dead" rally has reinvigorated "The Fly," which will result in many video's showing so called short sellers-- being eaten by sharks.
Basically, all my positions, with the exception of CORS, went up nicely, especially GILD, RIMM, BBY, LNN, HANS, CLX, ADBE, FMCN, AEO, JCG, BBND and EQIX.
I know many of you beartards like repeating yourselves, discussing how fucked up the economy is and how over priced equities are. To them, I say: "fuck you econo-slave-- you're wrong."
Talk all you want about the pending doom us longs face. Last time I checked, my refrigerator was stacked, my oatmeal bowl is full and my pay check comes with a special note, which says: "You bank coin."
NOTE: Today, "The Fly" was up 1.2%, putting ytd gains at 37.4% or more than you.
Position Updates: HANS
1. I expect blowout numbers.
2. Now that the SEC investigation is done (options backdating), expect the company to resume its 75 million dollar share buyback program, which has been delayed since the investigation began.
In short, HANS is trading @ 19x 2008 numbers, which are too low anyway. Should the market give HANS a 35 multiple, the stock will go to $70.
Beige Book Eats Shorts
Sort of like this.
Fly Buy: HANS
Disclaimer: If you buy HANS because of this post, immediately after your next car wash, seagulls will drop a few loads on your windshield. And, you may lose money.
Fly Buy: LNN
Disclaimer: If you buy LNN because of this post, your only son will grow up to be a witch Doctor and spend his time betting against a bull market. and, you may lose money.
Bulls Versus Bears
Bulls (Godzilla)-- Bears (Japan)
Sector Spotlight: Metals
I thought, instead of falling into lockstep with the rest of "the internet sheep," I would buy the fear and attempt to kick old bond guys into subway tracks.
So, with that being said, Steel stocks look attractive, with gains in ACH, RTP, PKX and BHP.
With my money, I will try to buy HANS on a dip and maybe a little LNN.
Also, FNSR looks bound for $4. And, MCHX look somewhat worthwhile.
In short, look for the bond fuckers to give way, sending rates down. As a result, we may enjoy a fairly broad base rally.
Good ol' fashioned "kill a bear and his family" short covering rally.
Pre-Market Fly Buy: TLT
Disclaimer: Fuck these bond guys.
Tuesday, June 12, 2007
The Notorious BIG: Juicy
Suddenly, I look at the market and sense fear and pessimism. Late in the day, I had my fucking trader/servant sell some bullshit stocks, in order to raise money. Sorry for the lack of "Fly Sell Alerts." I was busy being smart.
Additionally, I have a bunch of short sale candidates to mull over, which I will share shortly.
Irregardless of the current direction of the market, this whole interest rate panic is a rouse. That's right, they (the mysterious people who push the big buttons) are fucking you (the retard investor), again.
Aside from all this fun talk, MRVL and the fat fucks at MCD did well. As a matter of fact, technology stocks held up great, considering how fucked everything else was.
In short, it makes sense to raise cash and wait out the manipulators, who now reside in the bond market--elbow deep in shit. Also, it makes sense to be long dollars and short commodity related stocks, during this fucking scam. Oil, Steel, Euro's and Utilities are all fucked. However, a good ol' fashioned category 5 hurricane can change everything, rather abruptly.
Late Day Thought
Quick Alert: Bears Mowing Down Bulls
What the fuck happened to Pac-man and Jungle Hunt?
NOTE: I like HANS here on this rally.
UPDATE: The title of this post has been changed, in order to fit the mood of the markets.
The Important Matter of Oatmeal
Short answer: Yes
See, it's not the quantity of oatmeal or brand that makes the market go higher, but the level of pure cane sugar and milk. One is no good without the other. The old "lock and key paradigm."
So, will the market head lower, again?
Damn skippy, but not today.
No, today "The Fly" will declare victory on the markets, via oatmeal.
NOTE: Fuck you if you sold MVIS this morning. You know who you are.
Quick Alert: Oatmeal Bowl Forthcoming
Hopefully, after consuming large quantities of horse food, rates will go down and stocks will trade up.
Sector Spotlight: Financials
Suddenly, my appetite for stocks has gone away. Instead, I have decided to plan a vacation or look for a new car.
Nonetheless, the Financials are doing ok, on the back of LEH's blow out number. Other stocks in the space with momentum include: ITG, NITE, COWN, BLK and OPY. Everything else is going to hell in a hand basket.
In short, avoid bottom fishing today. I sense we are in for one fucked up trading session, with heavy losses across the board.
Position Updates: ARWR, MVIS
Fidelity files 13-g, reporting an 11.77% stake in ARWR.
MVIS added to Russell Micro Cap Index
Monday, June 11, 2007
Journey: Don't Stop believing
MVIS is for closers, only.
Also, I'm sick of all this bond talk. Rates will not go higher. This interest rate crap will pass--like all other distractions.
In short, we are settling into a typical boring ass summer for stocks. Anticipate stocks to do dick, for the next two months. However, use this opportunity, while it's quiet, to build positions in your favorite names.
For me, HANS is a must own. Over the next month or so, "The Fly" will be buying millions of dollars worth of HANS.
Finally, I do not want to buy anymore Metal stocks, yet. Although I like RS, there appears to be many sellers in the space. Wait for lower prices. For now, focus on what is trending higher, take it easy and enjoy the great weather.
Quick Alert: Shorts 'Bout to Get Their Lips Punched Off
Also, as the market trades up, look for short squeezes in NTRI, MRVL and HANS.
Sector Spotlight: Greasy Oil
Frankly, I've made too much money to be fucking around, answering gay questions like that.
As for today's trading:
The shorts are in serious danger, right here, right now. As the market holds these levels, after the big run up on Friday, the possibility of another breakout to the upside increases, exponentially.
With my money, I want in LNN-- in a very big way. Over the weekend, I read the U.S. is facing the worst drought, since the "dust bowl" days of 1937. Cha-ching.
Also, as always, I like HANS, ARWR and BBY-- on this dip.
As for greasy oil:
I've been hearing good stuff on AEZ. Additionally, DWSN, TTES, UPL, FSYS, CFW and GST have momentum.
Mandatory Soprano's "Review"
I know it wasn't "Goodfella-esque." Frankly, if my IQ were reduced by 75 points, I still could have produced a better episode, than David Chase and the asshats who help him write that gay show. No pun intended.
But, I thought the sudden black out, at the end of the show, was very clever. See, while everyone was waiting for Tony to get "machine gunned," or anyone else for that matter, Chase and Co. whacked you-- the audience.
You didn't see it coming and all you saw was nothing. Retarded, yet shrewd.