It’s good to have strategies in most aspects of life.
Exit and escape strategies seem to be be especially important and have lots of attention paid to them.
Pre-nuptual agreements and Living Wills come to mind. I have only one of those two, because Sugar Momma wouldn’t let me have both. My guess is that if I had pressed hard for the one that I don’t have, there’d be no reason for the other.
She would have seen to it that there would be no lingering coma.
Being Monday, I had money in my pocket from stock assignments and as usual had an uncontrollable need to spend that money, just like a big kid in his own version of a candy store.
What made today a little different was that I had a minor procedure scheduled just a bit after noontime, so I felt a need to have that money escape my clutches in a very abbreviated period of time.
No problem with that.
My strategy was to spend money recklessly until the nearly 30% of my portfolio was redeployed.
I could have taken the easy way and escaped the responsibility of actually thinking and just bought some Berkshire Hathaway shares. But the big boy version doesn’t have options trading associated with the shares, as if I was really able to pick up a multiple of 100 shares of those.
I could have just let the whole thing ride on shares of Sprint, as I do with Option to Profit book royalties, but that hasn’t really been working out, as the fall in share price just continues to outpace any premium income that I can generate.
So I had to just stick with the strategy that got me here and went right back to my list of “old Reliables and either added to positions, such as Freeport McMoRan, Green Mountain Coffee Roasters, Halliburton and Focus Media or repurchased shares that were just assigned on Friday, but at lower prices, such as for Mosaic and American Express.
For the first time in quite a while, I actually bought shares of Apple after it started coming down from its all-time high mark.
That made me feel young again.
Of course, I then reverted to old man status once I sold calls on those shares, but a strategy is a strategy. In fact, I look at the sale of call options as an escape strategy. Knowing that most people, including me, find it very difficult to sell at the right time, I essentially purchase a stock and the call options sold then serve as a form of pre-nuptial agreement, except in reverse.
If things go poorly in a marriage, the pre-nup kicks in. But when it comes to stocks and covered call writing the agreement kicks in if all goes well. It’s when the underlying stock price goes all too well is when you wish you hadn’t entered into the agreement.
But still, everything is spelled out in advance. That’s why I have no excuse to further complain about Netflix adding on another 14% today.
I wish it well and am not likely to see a reconciliation. That story’s been told.
I said “no excuse,” not that I wasn’t going to complain.
Once arriving at my days’ destination and having changed into a much shorter than usual hospital gown, my “assets” were there for all to see. I realized that there really wasn’t much of an escape plan possible, other than for the parts of my anatomy that were escaping under the hem, as well as through the back.
As many windows as there were to see what sadness was lurking underneath, there were no reciprocal windows to mentally or physically escape the facility.
My escape, did come, however in an unexpected fashion, as I simply failed the pre-op. In hindsight, I think that it was the visible orange ring of “Cheetos” around my mouth that may have sent some sort of non-verbal message.
So I arrived home much earlier than planned, with yet another hospital tag on my wrist, but ready to get back to the work of watching television.
To my very pleasant surprise, for no reason that I care to uncover or understand, shares of Green Mountain turned around with a vengeance from the time that I purchased additional shares this morning. What better time to sell call options?
That’s a strategy.
I know that if Herb Greenberg were here, he’d probably slap me upside the head for buying even more shares of what is likely a stock story that is destined to end badly.
But as long as I can continue to get very rich premiums for those near the money and in the money options, I don’t mind having a front row seat watching the story play itself out to its logical conclusion, nor do I mind the black and blues.
That’s a strategy, too.
Had I not unexpectedly been home, I never would have gotten a special treat. As addicted as I may be, I don’t go prowling through the CNBC video archives.
Sometimes I’m not certain how so many things seem to escape me. After a single appearance, I seem to do quite well at remembering analysts and other talking heads. For some reason, I seem to also have a savant like talent of remembering what they said, although I’m often not blatantly paying attention.
So, you’d think I would recognize someone who’s referred to as “a legend.”
Watching Bill Griffeth and Bob Pisani interview a trading legend is always exciting, but I had no recollection of ever seeing or hearing or “Trader Vic” Sperandeo, and by appearances and otherwise, he’s a memorable guy.
Not to be overly stereotypical, but “Trader Vic” looked and spoke like lots of men that I recall as a child, growing up in my old neighborhood in The Bronx.
For those guys, the escape strategy was simple and was predicated on two things. There was the peep hole on the front door and then there was either the dumbwaiter or the laundry chute. If they didn’t exercise their escape strategy properly, sometimes we would go years without seeing Little Vinny’s dad.
Once I was over the superficiality of my initial response, I liked “Trader VIc’s” bravado. His strategy was to be short the Euro and long gold.
Then he added to his firm conviction by qualifying that he’s be long gold fo only 7 months.
Just like Bill Griffeth, I thought that was odd in its precision. To Bill Griffeth’s credit, he challenged the beast and asked why 7 months?
Trader Vic tied it to the timing of our election and then in a nuanced selection of his words, said that come November, “Obama couldn’t even win an election for dog catcher.”
Maybe that’s why he’s a legend, or maybe possibly just an escapee.
Interestingly, during Saturday night’s GOP debate in New Hampshire, President Obama was chided for fulfilling our Iraqi exit strategy. There was also the comment, related to America’s dependence on foreign oil, that “no American leader should ever have to bow to a tyrant again.”
Since these were actually more factually appropriate references to his predecessor it appears that distortion is also a treasured escape strategy.
It’s hard to say whether Wall Street analysts borrowed this strategy from politicians or whether it was the other way around. Clearly, there has to be some possibility that the strategy to create truths to fit your needs may have arisen independently.
Although I’ve always respected numbers and statistics, unfortunately they’re not immune to any distortions that would seek to create proof where none exists.
The best I can recommend is my escape strategy to prevent being influenced by people that could care less how much of your “assets” are exposed in that metaphorical gown.
Just escape.
Check out Recent PortfolioTransactions
| Today’s Trades | Security | Type | Action | Type | January 9, 2012 | GMCR | Option | STO | Weekly |
| January 9, 2012 | AAPL | Optin | STO | Weekly |
| January 9, 2012 | AAPL | Stock | Buy | |
| January 9, 2012 | GMCR | Stock | Added | |
| January 9, 2012 | FMCN | Option | STO | Monthly |
| January 9, 2012 | FMCN | Stock | Added | |
| January 9, 2012 | FCX | Option | STO * | Weekly |
| January 9, 2012 | FCX | Stock | Added | |
| January 9, 2012 | AXP | Option | STO | Weekly |
| January 9, 2012 | AXP | Stock | Buy | |
| January 9, 2012 | HAL | Option | STO | Weekly |
| January 9, 2012 | HAL | Stock | Added | |
| January 9, 2012 | MOS | Option | STO | Weekly |
| January 9, 2012 | MOS | Stock | Added | |
| January 6, 2012 | FCX | Option | Expired | Weekly |
| January 6, 2012 | MOS | Option | BTC | Weekly |
| January 6, 2012 | MOS | Option | Assigned | Weekly |
| January 6, 2012 | AXP | Option | Assigned | Weekly |
| January 6, 2012 | CAT | Option | Weekly | Assigned |
| January 6, 2012 | AA | Option | Assigned | Weekly |
| January 6, 2012 | GMCR | Option | Expired | Weekly |
| January 6, 2012 | NFLX | Option | Assigned | Weekly |
| January 6, 2012 | AMZN | Option | Expired | Weekly |
| January 6, 2012 | BP | Option | Expired | Weekly |
| January 6, 2012 | CAT | Option | Assigned | Weekly |