Canned Meat - CHFR Pumped & Dumped

I'm glad to see that someone made some money off of last week's spam-induced run-up in China Fruit (CHFR). Nexia Holdings, a diversified holdings company that also trades (NEXA) on the OTC market, dumped $200,000 worth of CHFR shares over this short week. In a shareholder letter dated today, CEO Richard Surber stated

Nexia's subsidiary Diversified Holdings, Inc. has realized about $200,000 over the last three days from the sale of a portion of its holdings in China Fruits Corporation. I sold a portion of the Company's portfolio securities to fund inventory production and development costs for spring inventory.

Things only get more interesting from here.

In this SEC filing, Chinese fruit company Tai Na became a wholly-owned subsidiary of Diversified Holdings.

Three months later, another SEC document shows that Diversified Holdings changed its name to China Fruit, and Tai Na became a wholly-owned subsidiary of China Fruit.

While the name changes are a bit obfuscating, it is clear there was a significant boost in both the volume and the share price of China Fruit due the spam campaign, which began on February 15. And "luckily" for Nexia CEO Surber, the increase in volume allowed him to dump the stock all the way down to its current pre-spam level. Good work, Surber, and congrats on catching the kind of liquidity that was oh-so-illusive - hell, non-existent - just two weeks ago.

An Overdue Update - Spam, VIX, and Vegas

The spam drought subsided as quickly as it came, and the portfolio now "boasts" five names. Things were actually looking surprisingly rosy over the holiday weekend, with CHFR showing some big gains on Friday (perhaps as a result of their incessant barrage of email?). But Tuesday proved to be another story as CHFR lost nearly 40% of its value on heavy selling. As Mr. Altucher put it in Wednesday's Blog Watch, things are "starting to get ugly."

The VIX remains unusually low, despite yesterday's and today's selloffs. This is driving some eager would-be short sellers absolutely crazy, and has others wondering if the market is redefining what measurement quantifies "low" volatility. And the subprime arena seems to have no bottom in sight after Novastar (NFI) dragged the entire sector even lower yesterday. I'm beginning to think the entry point on most of these names is Never. Or at least a long, long while from now.

The Canned Meat P/L Sheet will not be updated for Friday's close, as I will not have access to the Web after 11am. Vegas is beckoning (again), and who am I to argue with Vegas!

A Spam Drought

I suppose it follows that immediately after starting my spam portfolio, the usual monsoon of stock suggestive emails practically evaporates. Indeed, the flow of spam has been reduced to a trickle since implementing Canned Meat, and the majority of the emails are peddling pirated software and erectile dysfunction meds without a prescription. Hence, no new positions have been added.

In real market news, the VIX Index has tanked in the last two days. If today's rally holds through the day and the VIX stays below 10, it's time to short the SPX for some quick profits on a correction.

Canned Meat - The Fictional Spam Portfolio

Canned Meat (Spam) is my newly created portfolio at Stockpickr. It's a fictional portfolio made up stocks solicited via annoying spam email. Only two days old, and already listed in James Altucher's Daily Blog Watch at The Street. Two spots ahead of Mark Cuban, I might add :P

What's frightening about the Altucher mentioning is that his column is prefaced with this Editor's Note:

Every morning, James Altucher presents the most timely, topical posts from the Web's best business blogs.

Web's best business blogs? Well, I'll leave that up to my two (2) semi-faithful readers.

Canned Meat can be followed at my Stockpickr page, and in more detail by clicking "Canned Meat?" in the navigation at the top of this page.

SCU Broncos looking NCAA Bound

Oh yeah... The alma mater took out Gonzaga in Spokane, snapping the Zags' NCAA-leading 50 game home winning streak in the process. I smell a WCC title and a tournament birth.

And in other College Basketball news, Duke fell out of the Top 25 polls for the first time in what seems like decades. Duke Sucks.

Oil Slaughtered... Setup?

Yes, oil got killed today, effectively ending this nice 10-point rally. The optimist in me points out that there is a nice support level building here around the 57.50 mark. Also, Lent pointed out that it could be settling into support in a new uptrend line as well. Tomorrow will be telling.

Playing Catch-Up - Geographic Bias, Subprimes, and Super Bowl XLI

It's been a long while since I've posted. With school and work and weddings and whatnot, I just haven't had enough time to sit down and write. Which is strange, since I should be waxing endlessly about the recovery of crude oil. I was noting today, as crude danced above the 60 mark, that it seems the Fear that subsided in an Eastern US Warm Front just weeks ago has returned. Not only is it cold outside the NYMEX, but we may be on the verge of military conflict (read: WAR) with OPEC member Iran. And there is major unrest, rebel kidnappings, and general unruliness in Number Five Oil Supplier Nigeria. "Oh, the Horror," the cry comes from the NYMEX. Nevermind these conditions were completely foreseeable when it was still balmy in NYC. No, life was just peachy then. Not even a rocket fired into the US Embassy in Athens could spark a Fear rally. But things matter now. NYMEX traders are citing them. Throw in a refinery fire in California - which is surprisingly far from the NYMEX - and the Fear is Back.

My favorite lab experiment, the Subprime Sector, took a ValuJet DC9-esque nosedive yesterday on very bad outlooks from both HSBC (HBC) and the riskiest of the lab rats, New Century (NEW). The selloff continued today. You can read my sentiments and the sentiment of at least one other in the Comments thread in the post below.

Finally, the Super Bowl. Yes, one aspect of this game was predictable: Rex Grossman would commit multiple Foul-Ups which would cost the Best Defense in the League the Title. Many people saw this coming. What wasn't predicted - well, at least not predicted by statistics and probability - was the winning square for the final score of the annual Super Bowl Squares Office Pool. A 7/9 square has a historic probability of hitting on the final score .78% of the time; this makes it a loser, unlike 7/0 and last year's final, 1/0. However, it was observed by Yours Truly that during the 2006 season, the 7/9 came up in 2.25% of the final scores. This is significantly higher - nearly three times - than the historic rate, and moderately higher than the 1/0 that took the prize last year. This may be worth investigating, on a geek-hobby level, of course. And most likely after I complete my degree.