Won’t Get Fooled Again

How universal is that theme?

How many times have we been fooled, or used our best judgment and made a mistake that we’ve come to regret?

Ask Eddie Murphy that question.

What do you think would pop up first in his mind among the mistaken paths he’s taken?

Beverly Hills Cop 3, Pluto Nash, transvestite hookers, accepting hosting duties for the Academy Awards or walking away from hosting duties?

He’s only human, as are we all, so there’s probably many more regrets in the mix.

Until I started writing this blog I never realized how obsessed I must be with Eddie Murphy, as he’s been cited now for a third time and on the other two occasions his was the illustrative photo.

Not so this time.

I’ve learned my lesson.

The WhoAs a product of the 60’s and 70’s the classic song from “The Who” always comes to mind. Certainly Peter Townshend learned his lesson and now probably removes all traces of child pornography from his computer.

After all, isn’t “learning your lesson” the desired endpoint of any mistake?

The depressing close to that song is that what we think of as change is most often not.

“Meet the new boss, same as the old boss” also has a universal truth about it. That and the fact that we always do get fooled again.

This weekend we learned that Billy Crystal, the one time host of the Oscars is coming back to rescue the production after the surprise departure of Murphy.

The surprise departure came after the surprise selection.

Meet the old boss, same as the new boss.

And then comes news that Italian Prime Minister Silvio Berlusconi was truly resigning his position following Parliament passing economic reforms. He didn’t use Twitter to make the announcement as he had earlier to deny the announcement.

Instead, Berlusconi blamed “transformati” as the reason for his sad state. That is, the tendency of Italian politicians to change their policy positions based on shifting winds.

He described his decision to resign as being a “generous act.”

Replacing him and seeking to pull off the same kind of rescue as Billy Crystal is expected to do, is Mario Monti, a past member of the European Commission and who just a week ago was appointed Senator for Life.

With that a”Senator for Life” appellation also goes the title “Colonel”, befitting such previous lifetime luminaries as Moammar Khaddafi, who also had quite an Italian connection.

I’m not certain what the designation entitles the bearer to, but it would look great on a desk nameplate. Monti has already asured the populace that he will devote his complete attention to the task of rescuing the Italian economy.

Those efforts are already being hailed as “The Full Monti.”

After 20 years of dealing with the antics of Berlusconi, Italians are now ready to go back to their old ways and form a new government every few months. Even then, the unifying theme was that the old boss was the same as the new boss.

Monday is the start of yet another week and I’ve had a personal best for total options income generation, even compared to some options cycles that were 5 weeks long.

Sounds great, but I’m wondering whether I’ll have the strength to resist the lure of Berlusconi-like generous option premiums or whether I’ll get fooled again.

At question is Green Mountain Coffee Roasters.

This week, I’ll have only cash that’s been made available through the assignment of my Caterpillar shares. Every other holding that had calls written against it are still right where they belong. Still in my portfolilo and very close to their most recently written strike prices.

On Fridays that end like that I want something other than a “Down Monday”, which typically gives the opportunity to repurchase shares.

This week, other than Caterpillar, there’s nothing to buy back.

The prudent me would do what I’ve done the past few weeks. In fact, this has been the third time in 3 weeks that my Caterpillar shares have been assigned. Each time I’ve bought shares back and resold options. Along the way, I’ve been very happy as the “in the money” weekly options provided an adjusted 2% ROI.

To buy shares back again seems like such a “no brainer” especially if they open lower than the price where exercised, as they did last week.

But then there’s Green Mountain just waving at me, sort of like those underage hookers that Berlusconi seemed to favor.

In return for picking up shares about 3 weeks ago, I received a 6-7% premium each week. But likewise in return, the devil required accepting a 35% share price haircut.

So with so much uncertainty and questions out there regarding Green Mountain, is it possible that a momentum stock can actually be a value, or is it destined to spend the rest of its existence along with the heap of one time momentum stocks that never see glory days again.

I know that I should stick with Caterpillar or some other proven cyclic winner, but human nature refuses to believe that lightening will strike twice. Even if it does, human nature then tells us that we won’t be the unlucky guy who keeps getting shown in the Guinness World Records for the number of documented times he’s been actually struck by lightening.

Alright, so there’s human nature, but there’s also that need to “do as I say” kind of thing, as my segment on last week’s “Bloomberg Rewind, where I mentioned that I was holding Green Mountain and would continue to do so even after the precipitous fall, was replayed the next evening.

As Rick Perry would say “Oops”.

To compound things a bit, I’ll be enroute to Arizona when the market opens and am sitting on a number of new short call positions that I was hoping to open. With luck of the draw a week earlier I’d boarded a Southwest flight for Nashville that didn’t have Wi-Fi service, but it was an otherwise quite Thursday.

I’d missed nothing on that day, besides most of my weekly trades come on Monday and Wednesday.

There’s not too much that I can do about tomorrow’s flight. That too, will be hit or miss, but if a miss, our feet will be on ground before noon, NYSE time. At that time I can decide whether to ignore what common sense tells me to do.

In the meantime, I’m still somewhat confused by the goings on in the GOP quest for the Presidential nomination.

In that regard, it’s hard not to get fooled again. What other choices are there? The perfect example of how an intelligent person doesn’t get fooled again is to consider whether you’ve ever re-ordered from Godfather’s Pizza.

Without a single real vote being cast, the infinite number of debates, the most recent on The Cartoon Network, it appears the the choice is narrowing down to a steady and unexciting Mitt Romney or a ridiculously resurgent Newt Gingrich.

Either way, that represents getting fooled again.

The reality, though, is that American politics, sometimes those who lose in their quest to become boss, eventually do become the new boss, so giving up is never a good idea.

Look at Richard Nixon and Ronald Reagan.

Using Berlusconi’s view of politics, Romney’s perceived shifts are reflective of “transformati”, while Gingrich’s dogmatic adherence to 20 year old policy positions are the sign of a principled politician.

And if anyone knows a principled politician, it’s likely Berlusconi, as he’s purchased many over a lifetime of public service.

I suppose that many are saying the same thing about our current President, but many will likely change their minds if we can string 3-4 months of good employment numbers together.

In the meantime, knowing that giving up is never a good idea, there may be hope for Green Mountain, yet.

Maybe so, but I can tell you that regardless of what I finally do with the money, I wont get fooled again, again.

That gives me at least one more opportunity to take a stab at Green Mountain. If shares have at least another week of life left in them before the expected implosion, there may be very good opportunity to sell in the money weekly calls and erase some of last week’s loss.

If that strategy works, all that will remain is wondering how long to keep pulling that off until I do get fooled one last time.