Well, today was quite interesting. A most definite respite from the doldrums that have plagued my investing psyche. Deep down, you know, in my heart of hearts, I am a value guy …a deep value kind of guy. I buy dumb shit that people hate like APP, BBRY, RAD. The amount of times I have heard “that shit sucks” or “I hate that store” is absurd. It makes me even more confident in my analysis and my investment. That being said, I have recently been dealing with a heavy work load at the formidable day job, and on top of that, an impending death of my grandfather, who in his own right is a straight up OG. Owing to these facts, I have pared down my portfolio to my core positions; the good stuff, the stuff that I makes you want to actually order a stock cert and hang it in your office so clients think you’re cool (I do have a few trades on as well). Because I give props when props are due, a lot of my heavy cash position is due to The Fly’s warnings. I admire and respect the man and like to be on the same side of a trade as he. So you ask, what is the point of all this? It is to say that I came into the day comfortable, stress free and anxious for a tit-ripping short squeeze.

Do you know why I was so amiable in my nature this lovely September afternoon? Because I was confident in my predictions that Sir Benjamin Bernanke would NOT initiate some sort of assinine tapering. That the entirety of Wall St. making largesse claims of “foregone conclusions” and “guarantees,” was so absurd that even a common layman would turn his head in bewilderment.

Do you know how I came to the conclusion that there would be no tapering at the September meeting? Because I listen and I know how to read. Blasphemy! you scream. No you plebeian, it WAS that simple. If there is one thing that everybody has become a purported expert on in the last 4 years, it is analyzing the FOMC minutes. I am here to tell you, that non of you are experts on the Fed nor on the topic of monetary policy, which is a tricky son of a bitch. To implement it is even more difficult; so difficult that once you make a decision you are stuck with it. There is no going back. So as Federal Reserve Chairman, you must be so sure of yourself as to be cocksure. Now if you had been paying as much attention to the language of the Chairman as you claim, then you would understand when, why, and how he is implementing his policy.

Perhaps it is my communication-centered Public Relations degree from the fine University of Florida (always number 1 or 2 for the PR major in the world), or my instinctual grasp of the English language, but, I take Ben at face value. By doing this, a pattern had developed. In hindsight you were able to see when, why and how he implemented that beautifully sexy tool, Quantitive Easing. Looking at the pattern, I realized that the economy is on the precipice of greatness, an American Renaissance of sort; but to taper now would be a fool’s errand that could derail the whole thing; Sir Ben has put too much at stake to turn back now. The myriad of recent economic reports have obviously been sub par, the complete opposite of what Bernanke said would be a reason to taper.

I made boatloads of money leaning long today. Even with a 45% cash position, today was still a blessed gift, and it all came because I listened and read a few reports. Nothing fancy, nothing extraordinary, and certainly no robot algorithms that my wonderful, button-pushing friend @Raul3 loves so much. Sometimes it is better to keep it simple and just shut up and listen. You have two ears and one mouth for a reason, gentlemen. It pays to pay attention.

Peace,

Harper

EDIT: After posting, I realized there was one other thing that confirmed my stance on the non-existant tapering; the relative strength of PMT. I am long that mREIT in size. I made a killing last year riding it from $16-$28 while collecting a 12% yield. And, since the tapering talk began I have slowly been acquiring a position into the discount. This stock has done nothing all summer, the summer of “The Taper.” Until this week when it slowly but surely crept higher, holding its gains, and setting up quite nicely. Now, if tapering was real in September, and MBS’ were not going to be bought in size this should have been underperforming this last week. However, the opposite was true. I posted my thoughts this morning inside The PPT.

Tweet