Being the Best

Szelhamos used to have a saying whenever he assessed a project that he had undertaken:

“It’s good enough” was the typical comment as he surveyed the fruits of his labor.

Of course, if you were paying for those fruits you probably wouldn’t want to hear that sort of statement.

He had a friend who was a house painter who used to tell the story of when he told his workmen in Hungarian that they were just going to do a quick sloppy job on one particular project, when the owner, apparently understanding Hungarian promptly showed the work crew the front door.

I remember when Szelhamos and I were trying to finish a small storage space in the basement. For some reason that I can’t recall, we didn’t include that in the rest of the professionally contracted basement project, which was a significant undertaking. That basement was actually larger than the entirety of our two story home in the Westchester suburb of New York City.

Of course, our end result was good enough. I doubt that it will be good enough for the next owners of this home.

Today I started thinking about just how important it actually is to be the very best in your area of expertise or business. You hear the phrase “best of breed” so often as the one one company in a sector that merits your investment consideration.

When news came out late yesterday afternoon that Borders, arguably the best in the business of book peddling was now likely to liquidate, it occured to me that being the best in a dying business offers no solace.

The fact that both Borders and Blockbuster used the same gimmick of a free Buggy Whip with every purchase or rental probably should have sent that message earlier.

I’m just not certain how Merril Lynch is going to work those into a meaningful promotion for its dying business.

G.E.D.In a way, this thought is a little bit in keeping with yesterday’s blog “Remember Report Cards”.

What I didn’t mention in that blog article was something that I learned from my oldest son, who at one point of his early college career had a GPA that if multiplied by 100 would give you an  IQ that might qualify you to wear a protective helmet 24/7.

I’ll give you a moment to digest that one.

What he taught me was that unless you were planning on going to graduate or professional school, grades really didn’t matter.

I’ll never know how true that really is, as he completely turned it around in the latter half of his college years and now only has to wear the helmet during waking and sleeping hours.

As a side note, he has done quite well for himself in his first few post-college years. Working hard, having fun, making money and joining the investor class.

So good enough?

As I look at today’s upcoming  end to the July options cycle, on the heels of Google’s blow out earnings numbers yesterday, I’ll be missing out on what may be a $50 climb in Google, as my call options will see shares taken away from me at $520.

Should I have tried to be the very best and get the most out of that and all investments?

Uh duh. Of course.

There’s no question that there’s an audience for a Home Run Hitting Contest, but there’s not much audience for a Scratch Singles Show.

If you owned unhedged shares of Google, you just hit a home run.

Otherwise, if you’re like me, the third base coach just tackled you as you rounded first base.

But I don’t have much in the way of regrets.

Tomorrow will end and once again I’ll do the final “is it good enough” calculation.

That’s the angst filled calculation that I do to see what my bottom line would have been had I not sold call options on my holdings.

I’m not sure why it continues to be angst filled, especially since most every month I come oit ahead. Not only do I come out ahead, but the money represents realized profits, as opposed to theoretical profits that assume that I would have been smart enough to take profits on the stocks, as opposed to the typical “let it ride” mentality of most investors.

Listen, I know who I am. Otherwise, I would have sold Google back in 2007 when it had reached $700.

One of the nice things about selling call options is that it creates a discipline of selling and forcing yourself to take profits.

It’s akin to admitting that lesser profits are “good enough”.

And they really are, especially if those lesser profits come on a  really frequent basis.

The New York Mets used to have a powerful home run hitter, Dave Kingman. Back in the 70’s or 80’s, he towered above other players. When he hit a home run it was really a marvel, but really accounted for nothing. One dubious record Kingman had, among others, was his home runs to runs scored ratio.

Worst ratio ever!

In fact, Kingman, purely for purpose of exaggeration, was possibly the best homerun hitter of the era and had some of the longest clouts ever recorded, ultimately became the first player ever with more than 400 home runs to fall off the Hall of Fame ballot on after his very first year of eligibility.

Given those highlights, I’d rather take it down a notch or two and be Lee Mazzzilli. Broad repertoire, nothing terribly flashy and ended up with a World Series ring.

Kingman ended dressing a rat up and placing it into a shoebox he gave to a women reporter. He was trying to send some kind of a message, but unfortunately severed horse heads were out of season.

I’m resigned to the fact that I’ll never be the best. But I’ve also come to understand that “good enough” can be good enough if you can just keep doing it year after year.

Mediocrity isn’t really bad as long as it’s consistent. Hitting a home run is great, but not at the cost of striking out in a 3 to 1 ratio. Just look at the high flier funds and see where they stand in the subsequent years

Remember when Fidelity Magellen was the very best? How about when it was the very worst? I’m not much of a mutual fund person, but over the long term, it was the Equity Incomes funds of the world that lived to see another day.

When today is over, I’ll look at all of my shares that are assigned and do the calulation. In Google’s case I’ll bid them farewell until the next time that we meet. Probably in the neighborhood of $510

As it will turn out I purchased this current lot of shares on June 13 at $507.39. I will give it up for adoption to a new owner for just $520.  I also received another $11.01 in options premiums. So for the one month of ownership or rental of those shares, my return was 5%

I’m really happy with that.

It’s good enough.