Month: January 2012

 

Most successful business leaders and individuals would agree that your business has to keep constantly moving forward and even re-inventing itself, if necessary.

In hindsight, some less than successful corporate shepherds will agree that moving forward is a better idea than just “seeing what develops” and then finally reacting.

As the case of Kodak has shown, nothing really develops anymore and no one really wants to buy cheap printers from among a plethora of cheap printers available from established market leaders

Treading water isn’t a very good option, because sooner or later, you end up sinking or being eaten by a shark. As so poignantly stated in “Annie Hall,” a shark….. has to be constantly moving forward or it dies.

Sears anyone?

But just look at IBM.

How much does the 2012 iteration resemble that of 1985? The change at IBM was more than just a move away from the obligation to wear white button downs.These days, if you seen an IBM logo on a laptop, you can be certain that it’s not going to be anew ultra portable.

Been there, done that and moved forward.

Whether through acquisition or playing to the strengths of your key players, successful companies manage to be ahead of the curve and anticipate the movement of the marketplace.

They don’t ask you for your zip code when you buy a pack of off-brand batteries

This past Friday was a big day for Standard and Poors and specifically for their Sovereign Ratings Committee, headed by John Chambers, the one not of Cisco fame (or infamy, depending on your perspective.)

Chambers had caught some significant missives hurled his way after his committee downgraded US debt just a few short months ago.

I was among those a little upset with the call and even had the audacity to question Chambers’ credentials, since after all, he was neither an economist, an MBA or anything remotely related to  such weighty  fiscal analysis.

He held a Masters in English Literature from Grinnell College. A fine institution, I’m sure, as they do not currently offer programs that allow the entire curricula to be accessed while in pajamas only.

In the meantime, he’s been a busy guy, in charge of a committee that is becoming a household word.

This time attention was all on the European Union and the downgrade of France’s national debt, in addition to its downgrades of Italy, Spain, Cyprus, Portugal, Slovakia, Slovenia and Malta.

Or as most people would refer to the final three: “Who?”

On top of that, with the creation of the European Union, Standard and Poors was able to also downgrade the derivative creation, the European Financial Stability Facility, as its rating is based upon the ratings of its component nations 

Let’s face it. The invention of the European Union has been great business for the rating agencies. A mere 20 years ago, what kind of sovereign debt was really there to even bother assigning a rating to? Even China wasn’t on the map a generation ago, much less Slovakia, Estonia and some lesser known countries.

European Financial Stability Facility?

That’s like a bonus for the rating agency. It’s not even a country. Who would have imagined that there would ever be such a thing that would even need to be rated?

But you have to recognize when you’ve hit your peak.

Bruce SPringsteen sang “Glory Days” as sad testament to those who don’t realize that the peak has come and gone and are caught in that downward spiral.

Standard and Poors’ glory days are now and it needs to realize that.

Or die alongside the shark

First there were the “BRIC” nations, Brazil, Russia, India and China, which at the time were a reflection of the booming economies in the nations that were driving world growth. Those were heady times.

Then we all remember the “PIIG” nations, the ones that reflected the frightening downside of the faltering banking systems of the likes of Portugal, Italy, Ireland and Greece. 

Once S&P gets though the next ratings assessment on the CRAP nations (Czech Republic, Romania, Austria and Poland) it will need new markets.

But that’s where the real genius of John Chambers comes to play. He knows that in a changing world you do play to your strengths, so Standard and Poors will soon be expanding its reach.

With Google’s recent purchase of Zagat and its famed restaurant ratings guide, it’s clear that this is the next big market.

But Chambers has his sights set on so much more.

Beginning soon, insiders tell me, Standard and Poors will take the restaurant and movie review world by storm, distinguishing itself from the universe of review services on the basis of its fluency with the wriotten word and literary stylistics.

Taking a page from Ted Turner, who decades ago decided to colorize the world’s great cinematic efforts, Standard and Poors will start by issue reviews of classic movies and restaurants.

Early word has it that there will actually be downgrades of “It’s a Wonderful Life” and “Citizen Kane,” while “Hardee’s” restaurants will be getting a strong vote of confidence.

Clearly, the impact on related businesses is for the investor to consider.

As advertising rates go down for showings of “It’s a Wonderful Life,” consideration must be given to lightening up on media holdings, particularly those sensitive to seasonal revenues.

Would you not want to get in on the deluge of new customers to Hardee’s?

The beautiful thing is that the potential for S&P is unlimited and the nimble investor shares in those opportunities.

But why stop there? Who wouldn’t want independent ratings of everything?

I for one would like to have Chambers ply his new vision and review the value and worth of “Consumer Reports.” Maybe if that option had been around earlier, I wouldn’t have been walking around with this anger over my purchase of a 1980 Pontiac Phoenix.

Maybe had that been done in 2000, Gore would have easily won Florida’s electoral votes.

Obviously, a natural area for issuing uprades and downgrades would be on our individual actions or thoughts. I don’t have the patience to wait for 1984, when I can have it all now.

For one, I wouldn’t have minded a downgrade of my poorly conceived idea of this past Friday to sell call options on the Amazon $175 call options expiring that same day.

When I scan the grocery store aisles for toilet paper, a rating from the Sovereign Debt Committee would go a long way toward allowing me to choose with confidence and to use the product without fear of future chafing due to inadequate support structure of the underlying plies.

Real synergy arises when you realize that the Sovereign Debt Committee could actually print its latest report on the CRAP nations on toilet paper itself. Or, if truly forward looking, could market nation specific toilet paper, made entirely of their debt instruments.

Now we’re really talking out of the box thinking.

And revenues.

The kind of revenues that could make the Sovereign Debt Committee an attractive spin off to help an therwise faltering McGraw-Hill.

Obviously, the real payday for Chambers would be the purchase of the spun off Soverign Debt Committee to Google, which could then assign Chambers to use his educationally derived skills and write copy for their Daily Deals division to go head to head with Groupon and LivingSocial, until Google does what it i ordained to do, which is to let it die an ignoble death.

Maybe in this case, even movement isn’t enough for this shark.

 

 

Check out Recent PortfolioTransactions

 

Today’s Trades	Security	Type	Action	Type
January 17. 2012	GMCR	Option	STO	Weekly
January 17. 2012	CAT	Option	STO *	Weekly
January 17. 2012	CAT	STock	Buy
January 17. 2012	MOS	Option	TO	Weekly
January 17. 2012	MOS	Stock	Added
January 17. 2012	JPM	Option	STO	Weekly
January 17. 2012	JPM	Stock	Buy
January 17. 2012	VMW	Option	STO	Monthly
January 17. 2012	VMW	Stock	Buy
January 17. 2012	AXP	Option	STO	Weekly
January 17. 2012	AXP	Stock	Buy
January 17. 2012	AAPLL	Option	STO	Weekly
January 17. 2012	CHK	Option	STO	Monthly
January 17. 2012	CHK	STock	Added
January 14, 2012	AMZN	Option	Asigned	Crumbs
January 14, 2012	AAPL	Option	Expired	Weekly
January 14, 2012	AXP	Option	Assigned	Weekly
January 14, 2012	GMCR	Option	Assigned	Weekly
January 14, 2012	GMCR	Option	Expired	Weekly
January 14, 2012	GS	Option	Expired	Weekly
January 14, 2012	HAL	Option	Expired	Weekly
January 14, 2012	MOS	Option	Assigned	Weekly
January 13, 2012	AMZN	Option	STO	Crumbs

  

 

 

 

A lot has been said about the recent Jockey underwear survey regarding who people would rather see in their upcoming ad campaign. Hurriedly arranged, the alternative new campaign had to be launched when news came that Chaz Bono would not be ready in time for the spring collection, due to some unfinished business left dangling.

Reportedly, the nation was evenly split in their opinion, but voting continues.

What a surprise. Although in our very recent past, evenly split is an apt description of just about everything with regard to our positions on political, social and economic policies..

As it would turn out at the end of Saturday evening, in the playoff faceoff between the two undergarment models, the “Brady Bulge” easily beat the “Tebow Twinkie.”

By “beat,” I meant was victorious over, as this is a family friendly site.

As someone who has long supported the cause of third party cadidates, I’m going to cast my vote for either Ed Asner or Danny DeVito, if the survey ever gets past my Caller ID defense mechanisms.

I’m really having difficulty trying to get the image of Tebow in his tighty whities doing his genuflection and then being greeted by the inadvertant escape of his He-bow. You know, the thing he uses when he needs to Wee-bow.

As I think back to my voting record I’ve voted for the following third party candidates: George McGovern, John Anderson and H. Ross Perot,  while ignoring the likes of Ralph Nader or Pat Buchanan.

I know that strictly speaking George McGovern doesn’t qualify as a third party candidate, but I think his performance that year was on par with the likes of Strom Thurmond, George Wallace and Robert LaFollette.

To a very large degree anyone running as a third party candidate has to have large doses of narcissism and denial running through their veins. So much so that they’re willing to see the side that they’re more closely aligned with lose, due to the siphoning of votes.

Neither Asner nor DeVito would ever do anything like that. They could just as easily lead or be a team player. Having appeared in an underwear shot in “It’s Always Sunny in Philadelphia,” DeVito has already proven that he has the literal and figurative goods. He is also willing to supply a wide angle lens for appreciating the full effect.

John Anderson may not fit into the narcissistic category either, but the other recent candidates certainly have changed election outcomes. Although I’m not really certain who Ed Asner would take votes away from, unless the mainstream dichotomous choice was between Tim Tebow or Danny DeVito.

In that case, Tebow slips in, but not before matrimony.

At this point who knows where Ron Paul is heading, but theres no doubt that he would receive lots of support in making that decision from those on the left side of the aisle. From purely a conceptual bais, probably no one would be more in favor of dropping the unwritten rule that ours is a two party political system than Ron Paul.

Why? Because it’s a rule, of sorts. That’s reason enough. If the good Lord had only wanted two parties he would have only made two human genders.

Well, that’s where he lost the evangelical vote. That and the legalization of heroin thing.

“Beats me” how he can get them back. And by “beats me” I mean in a self-pleasuring fashion.

Alright, maybe trying to meld evangelical views with libertarianism isn’t a great idea.

I was watching David Letterman’s interview with guest Senator John McCain the other night. It was really a good segment. I’m still struck by the comment that John Stewart had made a few years ago that he would have voted for the John McCain of 2000 if he had run against Al Gore in the Presidential election.

Politics does strange things to people.

Even good people. Don’t even think about what it does to people that are already inclined toward narcisism and entitlement.

Do you know what would be just punishment for that kind of person?

Change their name to “Newt,” or if you’re really feeling feisty and hot under the collar, just call them a “Newtchebag.”

One of the things that Letterman was hammering at, and McCain obviously agreed by body language, facial expression and non-spirited defense, was that perhaps the two party system was broken and both sides were to blame, but that it was probably still better than the alternatives.

Alright, maybe we don’t want the typical Parliamentary system where bizarre coalitia are formed and the smallest fringe party can hold everyone else hostage.

Just look at the European Union. Remember the curveballs thrown by Finland and Slovakia?

But is three really too much of a crowd?

The thought that only dichotomous choices are appropriate has long been the paradigm of life.

You either have one spouse or you don’t. Pity the Romney’s of centuries past that had to fee to “Old Mexico” in order to rid themselves of societal dichotomy.

But the thought that only dichotomous choices are appropriate has also long been the paradigm of personal investing.

You either buy or you hold.

That used to be the same with sell side analysts. Only in the past few years has anyone ever been so bold as to offer a sell recommendation. Doing so was probably as unsettling as the first time someone wore something other than a white button down shirt at IBM.

Black and white is great if you want people to act out of their visceral senses. Offer total opposites and make it easy for people to choose without the need to get bogged down in thought processes. The lack of regard for the ability of people to actually think is widespread. It explains why there are severe restrictions on the number of insurance companies that can offer health insurance in a given state.

Too confusing for the populace.

Without a doubt there are those that are paralyzed over the very prospect of having to make a choice or decision. You know the type. Maybe you were one of those kids that would take an hour to choose their socks each morning, even if they were going to be completely enveloped in snow boots.

But choice is the very essence of a free people.

Szelhamos used to tell me that under the Communists in Hungary, if you wanted shoes, the choice was brown or none. If you asked about black shoes the answer was “re-education,” perhaps on the Siberian campus, for good measure.

I’m glad we have choices and by choices, I mean options.

Not to overly “beat” it to death, but the ability to use a third mechanism to protect yourself from the unpredictable nature of the markets, as they are subjected to “eurosis,” greed and rumors is priceless. As difficult as your past may have been when selecting your socks or your stocks, the use of hedging mechanisms are simple and are likely to protect you from languishing in portfolio equivalent of Siberia.

In this case, “priceless” can be quantitatively analyzed for its influence on your portfolio.

Even though I do post my transactions, I’ve always resisted ever placing any performance data. Besides the fact that its information only between myself and my IRS agent, there really aren’t any restrictions on me from making whatever claims I like.

I wish it had been like that when I was the Chancellor of Germany.

Regardless of what my personal performance statistics are at any moment in time, sometimes, some things are best left hidden and out of the public view.

In the case of underwear, that’s one of the unwritten requirements.

Kneeling to honor your personal Savior can be tricky.

As I continue to ponder the survey choices I’m glad that I live in a world where Ed Asner and Danny DeVito can have a greater and longer lasting influence on society by virtue of their art and other activities than guys who can throw a ball and fill out a highly fitted piece of expandable material.

And by “expandable material,” I mean the underwear.

I’m also glad that I live in a world where we can honor Dr. Martin Luther King and celebrate his life and ideals, although I still don’t know why the markets need to be closed, especially since that means I have the burden of thinking for an additional day of how to remake the portfolio after about 30% of its value was assigned, as I say goodbye to Amazon, Green Mountain Coffee Roasters, American Express and Mosaic.

Someday, we will say”goodbye” to Tim Tebow and Tom Brady, future footnotes to society’s history, yet neither their ephemeral star nor coming in third of fourth to Asner or DeVito should carry shame

Foot notes are important, too, but will always take a second seat to TrollFoot Notes.

 

Postscript:  Join Ed Asner and “Asner’s Avengers in their fund-raising effort to support Autism programs and research.

 

Check out Recent PortfolioTransactions

 

 

Today’s Trades	Security	Type	Action	Type
January 14, 2012	AMZN	Option	Asigned	Crumbs
January 14, 2012	AAPL	Option	Expired	Weekly
January 14, 2012	AXP	Option	Assigned	Weekly
January 14, 2012	GMCR	Option	Assigned	Weekly
January 14, 2012	GMCR	Option	Expired	Weekly
January 14, 2012	GS	Option	Expired	Weekly
January 14, 2012	HAL	Option	Expired	Weekly
January 14, 2012	MOS	Option	Assigned	Weekly
January 13, 2012	AMZN	Option	STO	Crumbs

  

 

 

 

I have no business giving advice to anyone or making predictions. My track record is pretty abysmal.

I’m also a sinner.

Years ago, when running for the Presidency, Jimmy Carter, the Governor of Georgia, a gentleman peanut farmer, Naval Academy graduate and nuclear engineer (there’s a combination you don’t hear often) showed the good judgment to submit to a Playboy interview.

Probably the most memorable part of the article, beside the full frontal view of the future president in a man thong, was his admission that he had  lusted in his heart and “commited adultery in my heart many times.”

If you’re unaware, the adultery thing is big. Big enough to have made it into the Top Ten Sins list.

Just imagine that if coveting your neighbor’s wife made the list, just how badly adultery must trump coveting.

To this day, no other Presidential wannabe has submitted to a Playboy interview, not even Bill Clinton, of “boxers versus briefs” fame and other things..

The point of this is that in 10 presidential election cycles, I’ve only correctly picked the ultimate winner just 3 times. So you really don’t want to follow my path.

I’m completely agnostic as to political party when it comes to national elections and have always voted along a “who has the best chance of losing?” platform.

I’ve even been known to vote for a third party candidate if it meant preserving my voting record.

Jimmy Carter, for whom I did not vote, was essentially saying what we all knew, in that he was a despicable human being, at least in heart and mind.

Alright, maybe I read a bit too much into that single quote.

At the time, people were stunned both by the fact that he agreed to the interview and that he admitted that even a pious God fearing public servant was a sinner.

Back then, in the hierarchy of sins related to fantasies, you were more likely to be excused of wishing you could murder your boss than for lusting after his spouse.

In the world of stock investing there are sinners, and most everyone will agree as to who they are.

The short sellers.

They’re the people that are betting that stock prices will head downward. They sin not just in their hearts and minds, but in body and soul. They spread fear and gloom and wish and hope for bad things to occur. They find themselves naturally cheering when natural disasters.strike.

How un-American is that?

Very, but it gets even worse. The short sellers actually have even more evil Overlords, those that find joy in using leveraged short ETF trading vehicles.

Just as for millenia people have been blaming the Jewish population in the midst for all of their problems,. short sellers are the Jews of the market.

They get blamed for just about everything.

Sure, occasionally new enemies arise, such as algorithms, high frequency trading, insider trading and other egregious violations of “business ethics,” but when you get down to private and casual conversation, the truth comes out.

The short sellers have replaced the horns on their heads with crisply tailored Armani suits, ultra-rapid speech patterns and lots of coffee.

In a page taken from the playbook of every despot through history, when things start going badly, always look for an internal enemy. If none is available, then go external.

Short sellers are the root of all of our problems.

Certainly, you have to remember the regulatory response at the height of the financial and banking crisis.

No short sales on the financials. They even sought to enforce existing regulations regarding naked short sales. How desperate of a move is it when you start enforcing regulations?

And who could forget the always entertaining Patrick Byrne of Overstock.com, now trying to rebrand as O.co

In a near and somewhat sad, yet comical, paranoid fixation on short sellers, Byrne has created a place for himself in some sort of Hall of Fame, yet despite years of non-performance and floundering of his company, he remains CEO.

The rants are pretty amusing and do seem to follow in some lessons learned from generations of anti-semites.

It is somewhat ironic though that Byrne chose shortening the name as his approach to rebranding. He’ll probably blame the resultant consumer confusion on the shorts.

So here we are, at the precipice of JP Morgan announcing its most recently quarterly earnings.

And here I am with no shares of JP Morgan, not having held shares for 6 weeks.

Over the past two years, JP Morgan has almost continually been in my portfolios. It was one of the first stocks upon which I sold weekly call options.

Week after week after week.

During that time period I’d occasionally lose shares to assignment but would always buy them back as the price retraced, just in time for the next ride up.

But not this time.

I missed the entire $32 to $36 move.

So here I am lusting in my heart.

But it’s not the mild kind of coveting lust, wishing that I had owned shares.

No, it’s more the adulterous kind of lust, just wanting to go down on that stock.

Sorry for being so crude, but that’s the best allusion I could come up with.

Just like a short seller, I’m hoping for JP Morgan share price to make a marked move downward after it announces earnings on Friday.

Jamie Dimon has been in the news of late. It seems to me as if he’s actually trying too hard to put a good face on things, making me think that there’ll be a disappointing earnings report forthcoming.

But still, even though I have no vested interest, I find myself thinking evil thoughts, joining the class of investing sinners.

Is it a sin to lust for a downward move yet take no actions to support that lust?

Yes, Jimmy Carter proved that in a different ecosystem that is surely transportable to the current situation.

And so, I find myself a sinner.

Every trade has a winner and a loser.

Zero sum kinetics is the lay of the land.

Unlike real life situations when the victim may be know to you, when investing, the victim is unknown, unless you’re that victim.

But I do find solace when I realize that by selling call options, I’m doing my best to do battle with one of the Seven Deadly Sins.

You remember those, don’t you, sinner?

Sloth, gluttony, wrath, pride, lust, envy and GREED.

What could be worse of a sin than buying call options? Using leverage of MF Global proportions, the buyer is hoping to strike it big with a minimal outlay of money.

So yes, I’m a sinner, but I am trying, until I realize that I also dewell among the Overlords.

I’ve found great joy and reward from ownership of the ProShares UltraShort Silver ETF, while lovers of silver have found sadness.

I don’t know quite how to reconcile all of these conflicting feelings. except to hope that there will be room for all of us sinners in the Kingdom of Security in Retirement

 

 

 

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Today’s Trades	Security	Type	Action	Type
No Trades Today

  

 

 

 

This is precisely why I need to get out of the house more often. Either that or do something to diminish my ability to understand, comprehend and discern the babbled word.

Or maybe just learn how to work the “Mute Button,” but I’ve never been very good with technology.

Oh, and add recall to that list. Sometimes being able to remember details is a bad thing.

The past few days Microsoft has been on a roll, above and beyond the market.

You remember Microsoft. You know, the company that was everyone’s whipping boy. Although, to be fair, it is enirely possible that I’ve misinterpreted the expression “dead money” and the snarky tones and sneers may have always been completely unrelated to the stock.

Back when I was younger, it was incredible how popular you could suddenly become if you had a Spalding rubber ball, when one was desperately needed for a stickball game.

If you dont know what stickball is (or was), think basketball instead.

Suddenly, Microsoft is everyone’s favorite stock and no one is owning up to their past.

Instead of “dead money” it’s “undervalued.” All of a sudden Talking Heads are taking note of its dividend, the very same dividend that has long been decried as insufficient and not enough to make purchase of shares appealing.

The jokes.

Zune, Bing, WIndows cell phone, Vista, Clippy, Ballmer, Skype. It just goes on.

No one wants to admit that the own, want or need a Microsoft product. You never hear anyone sing “Oh baby you, you got what I need'” when it comes to Microsoft. People are ashamed and embarrassed.

It’s like admitting you crave veal or sauteed infants.

I’ve lost track of how many “experts” and “analysts” have called for Steve Ballmer’s resignation, firing or execution.

When you think about it, what better testament to the depth and strength of a company when it could have such a long list of failures and abandoned projects.

Have you ever heard of Google? Ever looked at their long list of litter along the technology highway?

The difference is that when Google abandons a project they do so because of their collective attention deficit disorder. They just can’t behave otherwise. Even force fed doses of Googlin and Googlall are virtually useless.

In the case of Microsoft, my guess is that nothing that we’ve ever heard of is a total and abject failure. Probably every project and product has something worthwhile that will add value to something that may just be a glimmer in a dreamer’s mind at the moment, but a necessary cog to make the dream come true.

And make billions of dollars.

Suddenly the Windows phone business looks promising, ultrabooks and Windows 8 are arriving and the world has reversed its axis of spin.

I’ve blogged about Microsoft a number of times and also included extensive discussion of the stock in the Option to Profit book.

To be totally honest, I haven’t owned Microsoft since July 2011, despite the fact that it has long been my favorite covered call and douple dip dividend play.

Sometimes you stray.

Although I looked elsewhere, there’s not much argument against the fact that as long as Microsoft traded in a tight range, essentilly reacting only to macroeconomic events, it was a slam dunk when it came to selling call options and collecting quarterly dividends.

To my great delight, my oldest son, who penned a guest blog for me, independently decided to write about his reason for buying Microsoft shares, as his first equity purchase, and somehow was able to tie it in with the rationale for the mistreatment of local Occupy Wall Street crowds in the DIstric of Columbia.

That’s my boy. What better way to express your true oppositional and contrarian self than to buy shares of Microsoft?

At least I’ve changed my errant path and own shares again.

As is my habit when I enter into a new position or re-establish an old one, I sell weekly in the money or near the money calls. In this case, I sold near the money monthly calls, compromising my ethos a bit, perhaps out of remorse and guilt.

Despite the fact that Microsoft fell about 1% in the after hours market on Tuesday when it announced that fourth quarter personal computer shipments were going to be even less than the previous disappointing numbers, it quickly recovered by mid-day trading on Wednesday.

And then some.

In Eric Jackson’s recent article in Forbes magaine, “Crowd Sourcing the Top 2012 Twitter Stock and Market Picks,” I chose Intel as my top short pick for 2012, although I will not likley be playing that conviction, because I neither know how to short, nor have the conviction to put myself at such risk.

Bearish on Intel, yet not on Microsoft?

Notice, I didn’t say “Bullish on Microsoft.”

For me, Microsoft works best when it’s dead money to everyone else. Besides, the sneers are amusing. The non-verbal communication is so much better than the verbal kind when it comes to many of the typical faces seen spouting their “opinion du jour.”

I wish that I was wordly enough to say “opinion of the moment” in French, but “du jour” will just have to do.

I don’t know what will happen with my Microsoft shares come next Friday, but I’ve vowed not to go this long without Microsoft shares in my portfolio, ever again. 

I guess that in a way Microsoft is really no different from any other stock that’s being discussed by the universe of Talking Heads. What I’ve come to realize is that taking advice from these guys is about as satisfying as watching a bootleg DVD when the video and audio are out of sync by a scene or more.

Although you may be tuned into their every word, all bets are off when the transmission has ended.

Circumstances change, news pours in and today’s hotter than hot buy is now “a neutral position.”

I’m not really certain what that means. I’ve never understood if that meant that there was just no opinion regarding the direction of price movement or if that was just a nicer way of saying “dead money.”

Suddenly, the fact that the Talking Head is spewing advice that happens to be free is utterly meaningless and certainly reflective of value.

That’s not to say that all things that are free have no value, maybe just the spoken word. You want value for free? Get Eddy Elfenbein’s Newsletter and read his blog, Crossing Wall Street..

Although Microsoft is a keeper an should be a portfolio mainstay, I’m still not a believer in buy and hold. That disbelief essentially stems from my own inabilities.

“It’s me. It’s not you.”

I’ve never been good at discerning a good stock from a bad one, although I do recognize pure crap.

But I’m also fairly terrible at assessing a timely purchase based on an appropriate price. Compound that with the inability to know when to pull the trigger and sell and you have the makings of someone who should never talk to anyone about stocks.

Or write about them.

In summary, I’m no Eddy Elfenbein.

That’s why I rarely stray from my list of “Old Reliables” and the comfort zone that they provide.

I like consistency and that appears to be just about the last thing you get from the Talking Heads.

Now, if Microsoft happens to crash and burn tomorrow, I’ll just believe that yesterday never happened.

How convenient.

 

 

 

Check out Recent PortfolioTransactions

 

 

Today’s Trades	Security	Type	Action	Type
January 11, 2012	GMCR	Option	STO	Weekly
January 11, 2012	GMCR	Stock	Added
January 11, 2012	RIG	Option	STO	Monthly
January 11, 2012	RIG	Stock	Buy
January 11, 2012	MSFT	Option	STO	Monthly
January 11, 2012	MSFT	Stock	Buy
January 11, 2012	HAL	Option	STO	Weekly
January 11, 2012	HAL	Stock	Added

  

 

 

 

 

As I get older, I often find myself questioning very basic beliefs more and more.

I do, however, understand concepts such as why humans must have a mechanism to register pain.

For example, while it seems meaningless to have a kidney stone associated with pain, perhaps the utility of the pain is to send a message that you have to change some lifestyle choices.

That assumes, however, that human beings have the desire to practice preventive medicine or that they even have the ability to learn from past experiences.

Our judgment is often flawed, even in the presence of compelling data. I know and am constantly being told by Sugar Momma that I need to drink more, yet I continue a camel’s existence, coffee notwithstanding.

That kidney stone example may be stretching it a bit, just as it needlessly stretches that ureter, but more concretely, it’s probably a good idea to sense pain if you put your hand inadvertently on a hot stove burner. You really want to have some feedback mechanism that would give you the incentive to remove your hand before it became completely roasted.

Delicious, yet destroyed.

Forget about the more controversial beliefs, such as that of an expanding universe. Those more etheral thoughts are really getting harder to accept or even comprehend.

Human judgment is a strange thing. There’s no question that collectively we do learn from the past and as a species we are able to read the data and respond to reality as it evolves, so that as a species our ability to interact with the world constantly advances.

It’s on the individual level that I have my doubts.

Although an expanding universe seems to fly against the idea of neither creating or destroying matter, the ability to advance a species requires a positive sum game. The net balance after considering good outcomes from judgments has to exceed the bad outcomes.

You can argue that cows will not change their society because they neither create nor destroy outcomes based on their judgment. They will forever go on in the same way munching on whatever they can and marching into whatever abattoir to which they’re led.

Of course, if you sat around arguing about cows’ ability to advance their society, culture or species you’ve already made the bad judgment of spending time on that philosphical pursuit.

For anyone who has ever watched “COPS” it’s also obvious that human judgment can be impaired. Granted, on that show it’s hard to control for those felons that are purely acting on the basis of impaired judgment, as many who have such an obstacle to overcome are also faced with the obstacle of flawed judgment.

To do so, you’d have to assess the actions of someone who was normally in reasonable balance with the world and who has appropriate interactions with society, while successfully navigating through life.

Those can be fairly powerful filters and are useful in determining who to keep out of your life and away from your family members.

Impaired judgment was a topic touched upon a few days ago when writing about the Percocet prescription that I had been given and how it might effect both clarity of mind and purpose.

Obviously, there are many times that you really don’t know whether your decisions were appropriate until many years later. The perfect example of that is how an American President’s legacy is really only fully understood by future generations as the consequences of decsions play themselves out.

In that regard, your children are the same. It takes a while to know, although you certainly get some clues along the way. I’m reasonably certain that Bernie Madoff’s mother probably would have had some reason not to be completely surprised by the eventual path that he took.

Otherwise, most decisions that we make tend to have fairly quick consequences. Everything else being equal, quick feedback from decisions should be more efficient in effecting change in our ability to learn from experiences.

Although I repeatedly say that I never have regrets regarding stock market related decisions, that’s not to say that I don’t question my judgment.

Most recently, I’ve had reason to question my judgment regarding sale of yet another series of contracts on the stock that I’ve beaten to death over the past few days.

Netflix.

I also have already expressed my doubts regarding proper judgment when I actually purchased the shares on the same fateful day as I most recently picked up shares in Green Mountain Coffee Roasters and Amazon

Flawed judgment? Impaired? I don’t know, but I do know that the net balance of those decisions has been negative.

The question becomes whether or not I’m capable of learning from the decisions.

Probably not.

Most of life is predictable. You live, you die and then fairly mundane stuff there’s stuff in-between.

The unpredictable events are memorable only becasue therre are so few and their outcomes are magnified as the mind begins to believe that “the exception proves the rule.”

That kind of philosophy probably arose from someone trying to justify a lifetime of bad decisions when faced with obvious facts.

I very vividly remember my first kidney stone attack about 7 years ago. Not only do I remember the pain, I also remember the words of advice. It’s just that I decided to fall back on relying on flawed judgment to disregard the advice.

I wasn’t impaired. At that point the pain was gone. My flawed judgment might have been averted if the impairment had continued.

The stock market, despite so many people living and dying on the basis of charts and algorithms, has never really proven itself to be predictable.

What I wonder about Netflix is how so many “smart people,” and presumably the very recent price rise had to be driven by deep pockets, which usually are found on people that are self-diagnosed as “smart” could have occured?

What kind of judgment was necessary to believe a rumor that on every level really didn’t make sense? Then compound that with the judgment that it was an investment worth pursuing.

It’s not terribly likely that it was the universe of individual investors that acted irrationally. The total sum of discretionary funds available for investment by that universe is dwarfed by funds that are professionally managed.

Today, an analyst was exceptionally blunt about Netflix.

Michael Pachter, of Web Bush Securities, may have taken his cues from the recent GOP debate tactics and didn’t even bother nuancing his words when calling out Reed Hastings, Netflix CEO, when he said “he’s crazy. He has lost his mind.”

It wasn’t much better for Whitney Tilson, who had previously been very wrong on the short side with Netflix and subsequently took on long positions in Netflix.

Here was a case when the filter wasn’t on. Was that good judgment or bad judgment being so blunt about fellow ‘smart people?”

From my perspective, Pachter was “pain,” but in a good and necessary sense.

When you do make a bad judgment regarding an investment, the pain may not be physical other than for the physical amount of money that you have left at the end of the day. The pain is emotional and obviously stress can effect physical well being, as well.

Pachter was sending that warning signal, although in this case, it was probably the individual investor that drove prices down an additional $2 after his pointed comments, as they scurried to get out.

My guess is that Hastings and Tilson also believe that Pachter is a pain, but not in the good sense.

Now couple that with the report that since December 19th, 2011, the only down trading hour of the day was from 2 to 3 PM. which happens to be when Street Signs is on the air.

Coincidence? Maybe, but among the reasons that I enjoy Street Signs is that the hosts, Mandy Drury, Brian Sullivan and Herb Greenberg don’t serve as cheerleaders. Instead, they serve out caveats and often give great reasons to be circumspect about “the facts.”

You have to like people that preach prevention and want to help spare you some unnecessary pain.

Oh, and they may also have been the ultimate judges in selecting this years’ “Word of the Year.”

In that regard, great judgment.

 

 

 

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Today’s Trades	Security	Type	Action	Type
January 10, 2012	ZSL	Option	STO	Monthly
January 10, 2012	ZSL	Stock	Added
January 10, 2012	TXT	Option	STO	Monthly
January 10, 2012	GS	Option	STO	Weekly
January 10, 2012	MOS	Option	STO	Weekly

 

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

  

 

I love extrapolations and projections, so based on this past week, I’m getting ready for a great 2012.

Even though this was a holiday shortened trading week, I definitely got my fill of thrills.

I’m not exactly certain how I should categorize the kidney stone that helped to welcome in the New Year. I guess that not all thrills are positive ones, but at the very least it didn’t cause me to miss anything other than some pain free stretches of time. It also seemed odd sitting in my usual perch on the La-Z-Boy without being able to extend the leg rests.

At that point, it’s just a chair, so what’s the point of a La-Z-Boy?

The unexpected probing was also an unwanted thrill, but this time the prober did not at all look like Woody Allen and had no sense of humor about him.

Slam, bam, than you man and that was it. No dinner, no drinks and certainly no conversation.

What I found somewhat unusual was not paying in cash to have my asets handled so unemotionally.

Sort of like the relationship with your stockbroker.

I suppose that the kidney stone is something that I’d prefer not to extrapolate. The thought of giving birth to a 7 pound bundle of crystal by years’ end isn’t as appealing as it may sound.

But how could you not love a week when inserted between every verbal comma was mention of the Hungarian currency, the Forint? With all of the discussion of how trivial the Greek economy is in the big picture, imagine where Hungary sits.

Actually it represents about 0.8% of the EU’s annual gross domestic product while representing 2% of its population. In contrast, its one time partner in two wars, Germany, has about 20% of the GDP and 16% of the population.

The Greeks, who have been maligned for their sloth and lack of industriousness, actually have a per capita GDP that’s 40% greater than that of my hometown, Hungary.

But maybe that metric is as meaningless as the retail shopping metric that I proposed to Telsey and Associates.

In hindsight, no pun intended, the use of aerial views of mall bathrooms and the quantittaive analysis of the number of toilet paper plies utilized, giving a Shoppers Hygiene Instore Tracker, was not adequately validated. Who knew that people would be offended to learn that the personal posterior hygiene of a Walmart shopper was less than that of a Nordstrom shopper.

Although closely related to the Forint in my lexicon, my next thrill came from a mention received in a Forbes magazine article by Eric Jackson. The article “Crowd Sourcing the Top 2012 Market and Stock Tips’” was a snapshot comparison of 2012 predictions solicited on Twitter. Apparantly, some of the Twitter users have a version that allows for 2000 space messages, but I was still thrilled to have the opportunity to put my 140 spaces in and to be included among a list of pretty well known people, who may be wondering why security let me through.

And the hors d’oeurves? Excellent. Worth crashing the party.

With all thrills, there has to be the eventual period of descent. That’s the roller coaster ride we are on all of last year.

For me, that descending part of the roller coaster ride was Netflix. After the speculation that a newly led Yahoo! might be a buyer of Netflix, its shares went soaring more than 29% over 3 days, never even beginning to question the insanity.

Of course, I had sold $72.50 call options and seeing shares go from $71 to $86 took a little bit out of my otherwise unbridled joy. Hence, the rant earlier this week.

The particular lot that was assigned was bought at $72.03 on December 27th. That lot, had actually replaced a previous one that was assigned at $72.50 the previous Friday, which had been purchased for $66.16 on December 5th.

So in addition to the $6.81 per share capital gains on that inital lot, the options premiums received during the 5 weekly cycles contributed an extra $5.14 per share.

Still a long way away from $86 though, but the reason it’s easy to say “never have regrets” is that these kind of opportunities always come back. It’s not likely that Netflix is headed back to its original heights.

The laws of physics just won’t allow that to happen.

Now, I do understand some of the physics behind roller coasters, drops, velocity and acceleration, although I choose to not even attempt to understand the application of differential calculus to the process of options trading. But from a pure respecting the laws of physics point of view, following the fall with the Netflix experience, there should have been no way to get to a point that was higher than where I had originally soared, but if the mind obeyed the laws of physics there would never be any fantasies.

There’s a reason the saying “it’s all downhill from here'” exists.

All during the week, the hosts of “Street Signs” on CNBC had been asking viewers to send in their recommendations for the 2012 “Word of the Year'” as it was time to replace “Hopium” the 2011 word.

I spent a good part of 2011 watching Street Signs in 2011 and especially liked the decision to pair Brian Sullivan, Mandy Drury and Herb Greenberg, but to tell the truth, I don’t recall how “Hopium” crept in to become the rage of the 2 PM hour.

I don’t know if there were many other entries besides my own. Among my losing submissions were “shopandippity” and Eusaster.” 

I won’t even bother giving definitions for those losers.

But at the end of Friday’s show, with requisite drumroll, they announced their word of the year, “Eurosis.”

My word.

Whoever said after the competition results were in “there are really no losers” was a loser. And since Eurosis is sort of lame, you can only imagine what the rest must have been like.

Since it was the winner, I’ll give the official definition. 

Eurosis. The fear of European Union monetary policy and its effects on American interests. It’s a less severe form of “Sarkozis,” which is a fear of monetary policy decisions promulgated by the President of France.

I like “Hopium” better.

Still, as they say, a win is a win, regardless of how sloppy.

The tradng week ended with the kidney stone still in place but without the intense pain. From my perspective, it’s as if the roller coaster’s end of the ride was at a different and higher station.

I know that the kind of extrapolating that I’d like to do isn’t possible. Not that the laws of physics control the markets, but greed and fear have every bit as much to do with market movements, as real data do.

This week starts quarterly earnings reporting.

What I have extrapolated, based on the past quarter is that I will no longer try to play a stock right before earnings.

Again, no physical laws involved, just a simple case of “fool me once.”

What a week.

As Sunday is the traditional start of the week, at least for my purposes, this new week has gotten off to another nice start.

Today, I drove my son to New York and dropped him off at JFK airport, as he goes on a trip to Israel, as part of a great program called “Birthright.”

A few days ago I didn’t think that I’d be able to make that 9 hour round-trip drive, due to the kidney stone. Hard to believe that an errant finger could have jostled it free, especially from the other end, but whatever, I was grateful for the opportunity.

Part of the reason that I’d wanted to drive him was to stop at a Kosher-style restaurant, Harold’s Deli, that was featured on the Food Channel show “Man Against Food.”

A big part.

We had a great time trying to stuff ourselves and barely being able to make a dent in the plated offerings.

I got back home just in time to eat some of the doggie bag remainders, still leaving plenty for tomorrow.

Happiness was one last fat filled meal before tomorrow’s procedure and more jostling of personal assets.

Luckily, the procedures aren’t scheduled until the early afternoon.

I say luckily, because Monday starts with me needing to find a home for about 25% of my portfolio, so there’ll be some more jostling of assets going on.

Yes there’ll be cash involved, but at least there will also be that missing emotional attachment.

Ah, it feels so good to have those assets moved around.

 

Check out Recent PortfolioTransactions

 

 

Today’s Trades	Security	Type	Action	Type
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

  

There’s an expression that combines “clarity of mind” with “clarity of passion.”

“Clarity of mind means clarity of passion.”

Having watched enough episodes of Dateline over the years, I’m not certain that clarity of mind is a necessary pre-requisite for clarity of passion.

Given my current state of pharmaco-reality, I’m not certain that I can negotiate the thought process necessary for the whole “necessary and sufficient” exercise. Certainly, you can possess clarity of mind, yet find yourself without the ability to recognize the passionate nature of anything.

Anhedonism.

People, even smart people, seem to know exactly what they want, and often it is passion for passion’s sake and they then concoct incredibly stupid plans in order to requite that passion.

If you have to look up the word “hubris” today’s Daily Dilbert won’t make too much sense, even if you look up its definition. Otherwise, it’s very funny, as usual in its simplicity.

Clarity of mind is certainly not pre-requisite for clarity of purpose, either.

Take the past few days for example when a kidney stone was making its unwelcome re-appearance.

My mind, which is usually quite clear and reasonably analytical, refused to recognize the symptoms, even though I’d gone through the lovely experience before.

The mind muddled the purpose, though. My purpose should have been to take steps to avoid exquisite pain, rather than to ignore the obvious and expect the irrational.

I spent last night and this early morning in the emergency room of our local hospital. Sugar Momma happens to work in the emergency department of that hospital and it was she that convinced me, as I was writhing on the floor, that I should bite the bullet and make the journey.

Now, given that she works in the psychiatric section of the emergency room, deep down, I suspected that this was some sort of scheme for having me involuntarily commited.

I was ready to rally the rest of my family around me in my defense, but despite the pain induced delerium, I had enough reason left to realize that they wouldn’t have a lot of credibility.

At least I think this is my family.

Maybe Sugar Momma was right. She was especially questioning of my sanity, when while laying on the gurney, I was able to let the FourSquare world know that I was awaiting the joy of giving birth to a 7 pound delight.

But you may not be able to fault her for otherwise questioning the screws.

After all, why would a perfectly capable person sit on his behind all day long and sell calls on stocks that are rising for no apparent reason?

What kind of clarity of thought was behind writing calls on Visa or Green Mountain Coffee, right before each really hit their meteoric rises?

My purpose and passion were clear at the time and were one and the same. It’s just that occasionally the reality or signs leading one in the appropriate direction are either ignored or mis-read.

In hindsight, I can’t necessarily say that the decision to purchase shares in Amazon, Green Mountain Coffee Roasters and Netflix, in quick succession just prior to the previous earnings reports were reflective of clarity of mind.

Hubris?

Probably.

Certainly, if you exclude the call options premiums, the performance of all three haven’t met my defined purpose.

“Making profits out of nothing at all” was the refrain always going through my mind. That’s a well defined purpose, just not always met.

While waiting for some final word on what was to come next, my concern was whether I’d be able to make it home in order to assume my La-Z-Boy position and trade, as the opportunities warranted.

Instead, laying in the emergency room I just kept hearing the physician say, over and over again, “Everybody must get stoned.”

Funny stuff.

In the past, I’ve not done well with physicians who thought they were stand up comedians, having received my first rectal examination from someone who had great reason for looking like Woody Allen.

No, it wasn’t an even more perversely behaving Woody Allen impersonating a physician. It was his cousin, impersonating a comedian while doing the exam, which was made much more unformfortable by the literal and figurative punchlines.

I was unable to find pleasure in neither the examination, nor the jokes. Again, anhedonism or the working title for “Annie Hall.” I don’t think that Dr. Gnarlfinger would have appreciated the reference.

I don’t know if this morning’s emergency room physician was making a joke about how kidney stones are inevitable or whether he was referring to the prescription for Percocet that he was pinning to my sweatshirt.

Or, it’s very possible that it was all an illusion, as the actual suggestion for that tie-in came from Lee Grindinger and I just felt a need to somehow work that in to the theme.

We’ll never know.

But I do know that Lee is a Forex trader, happily retired in the Virgin Islands. If he’s to be believed, he also enjoys running around in the nude during the winter solstice.

I would do the same, but I’m tired of getting those black and blues around my cankles due to excessive dangle.

Among the nice things about Twitter is that you can actually “meet” nice people, or in this case, we were “introduced” by TradeFast, another one of those nice people, but who does the investing thing for a living. He has to deal with people and their money. That’s not easy. I’ve saved a Percocet for him.

Ultimately, there was reason to believe that my physican was referring to pharmacological management for pain, as a prescription for the narcotic came with the usual advice regarding driving and the operation of heavy farm equipment.

What he didn’t tell me was whether I’d be in a proper frame of mind to responsibly trade stocks today.

It was bad enough that I’d already tried to barter the entirety of the prescription to E*Trade to offset trading costs, but I should have given up before asking whether I could margin the pills.

The one thing that I can say about the Percocet is that it made it much easier to discern Twitter sarcasm.

Maybe it was just coincidental, but a Tweet from Reformed Broker “What’s great about this ADP report today is how perfectly it always confirms BLS numbers” was so much easier to recognize as having been sarcastic as the screen fonts seemed to take on severe skew.

And when did Twitter start talking Tweets back to you?

So trading didn’t seem like a good idea.

Mosty of the time, I take a very short term approach, especially now that the weekly options are so readily available.

This Friday, I expect to have holdings of just a few days assigned, such as Freeport McMoRan and American Express, in addition to others.

But one of the longterm plays, the Sirius Satellite Radio puts that I purchased in July, will expire in 2 weeks.

Lo and behold, it was up 10% today, putting it above the $2 strike price.

Now, Momma (not Sugar Momma) always told me never sell puts on a stock you wouldn’t otherwise mind owning. She actually told me that in Hungarian and was probably thinking in terms of the local Forint currency.

But still, that lesson didn’t go wasted on me.

Back in July, I thought that Sirius was a stock that I wouldn’t mind owning at $2 at the end of January 2012.

But now, as I look at the call premium for February’s Sirius $2 call, I’m not certain that I could justify owning the shares. WIth 6 weeks to go until the February options would expire, the $0.12 premium for the $0.04 in the money stock just doesn’t seem worth it.

But my drug clouded my just couldn’t make the logical decsion.

“Making profits out of nothing at all” was obvious, but buying and selling is pretty much like heavy farm machinery.

But who gets hurt if I make a bad decision behind the mouse?

Only my heirs, as I have no plans to spend the money other than perhaps for new racing shoes and an athletic supporter.

Hmm. Only for my heirs. Have you seen that motley bunch?

With my head spinning, yet the pain somewhat better, I realized that I neither filled the prescription nor had I taken the 1 tablet that I was sent home with, that the conspiracy theorists posit was given to get me hooked.

Hmmm.

With that realization, clarity replaced delusion and I closed out the Sirius position.

Netflix? Yesterday’s rant, when it seemed the world lost clarity and instead focused on unfounded rumor? Eh, not so much, as it only gave back a small bit of yesterday’s unwarranted, not short selling fueled run-up.

Clarity is fleeting, as are strategies and profits.

Hopefully, the stone will follow the same path.

 

 

Check out Recent PortfolioTransactions

 

 

Today’s Trades	Security	Type	Action	Type
January 5, 2012	SLM	Option	STO	Monthly
January 5, 2012	SLM	Stock	Added
January 5, 2012	SIRI	Option	BTC	LEAP

  

I must be fixated on “oxymorons,” just having written about them a few days ago.

Had it not been for a Tweet from Marek Fuchs of TheStreet.com regarding his attendance at a Fordham versus Harvard college basketball game in the Bronx, I’d never have known about the event, despite the fact that I’m an alumnus of both.

On the other hand, I did know that CNBC was broadcasting live interviews from within Goldman Sachs and was wondering whether a high school classmate, CFO David Viniar, would appear.

To his great credit, absolutely nothing untoward was ever said about him throughout the slew of slings and arrows directed at Goldman’s higher offices. Sometimes, keeping a very low profile is a good thing, so it’s not overly surprising that he didn’t make an appearance.

Fuchs, who somehow finds the time between filming his entertaining and educational series “They Just don’t Get….” for TheStreet.com and his parental responsibilities, Tweets with regularity. At last night’s game his Tweets ranged from wanting his money back, despite the fact that his ticket was free and it being one of the most exciting games he’d ever seen.

He also was the halftime entertainment and penned an article for a local newspaper, while simultaneously putting out a fire in the Village of Tuckahoe.

Really. That’s the name. Tuckahoe.

Oh, and did I mention that he was an author?

My guess is that somewhere along the line either the ecstasy kicked in or the game got competitive. I doubt that the halftime sermon alone would have moved him to hyperbole.

When I went to Fordham, there was a general understanding that Fordham alumni went, in disproportionate numbers into the service of the FBI and CIA and in turn, spent an inordinate amount of time investigating Harvard graduates.

Competition. Think G. Gordon Liddy and then think dirty competition.

Great mustache, just nasty competitor who believed that in order to protect our nation from its enemies you had to use the U.S. Constitution for personal rectal hygiene.

Friendly competition is more like the sort Inspector Clouseau engaged in with any of the adversaries that he faced, yet nonetheless, respected.

The adversaries, in turn, received amusement for their troubles.

I really don’t know who won last night’s competition, but I doubt that it was friendly.

There’s a big schism between “The Bronx” and Cambridge. “Jenny from the Block” and William F. Buckley are reasonable poster children of their respective homes, just add some needle tracks to the former and ample elbow patches to the latter’s images.

Whereas the stereotype of the Harvard man would have him asking “may I top you off, my good fellow?” the Fordham man was just as likely to ask “Yo, you gonna finish that least slice, or what, Mofo?”

With the  conclusion of the Iowa Caucus, whatever that is, it’s clear that the competition for the hearts of living room ballot casters, was anything but friendly.

Newt Gingrich, given plenty of opportunity to soft peddle his assertion that Mitt Romney was “a liar,” acted in a very unpolitical way. He repeated that Romney was a liar and that he lied everytime someone asked him what he had meant.

I’m not certain that the latter was necessary, as being a liar requires the actual lie, but the emphasis was there for good measure.

That’s very different from the Newt Gingrich of the early debates, when he castigated moderator Brian Williams for seeking to foment dissent among the candidates.

Imagine that? Trying to elicit differences from among the debaters. How un-American is that? At the time, Newt embraced a “Kumbaya” approach to competition, just like in T-Ball.

Everyone is a winner. We’re all Charlie Sheen, at least until the caucus results are in.

A few weeks ago, as Newt was just beginning to show some slippage from the suprising rising poll numbers, he implored his followers to show the world that negative ads don’t work.

For a guy who takes every opportunity to let the world know that he’s an “historian,” he certainly got the history of political ad campaigning wrong, in addition to the historical facts regarding his own past.

So the competition just turned a bit less friendly.

Not able to stand the heat, or perhaps realizing that God really didn’t support her candidacy, Michelle Bachman dropped out of the GOP race.

In a related statement, God, when asked for a comment simply said that “It was him, not her.”

I’ve never been an overtly competitive sort, although my Sugar Momma tells me that I’m fiercely competitive.

Not wishing to fight that assertion, I’ll go along with her assessment of things and instead count on some level of passive aggressiveness to get back at her.

But forget that. These days, the competition in trying to beat the market is all I need.

What makes it especially appealing is that the opponent is nameless and faceless.

Unless I’m in a state of total fiction, I seem to remember that a few years ago there was a website that the user, for a fee, was able to control a gun and then aim and shoot at something. Maybe even a human target, who can remember these sort of fictional memories? I think it was a deer or a feral cow, actually.

The point is, what kind of guilt would you have shooting an individual in total anonymity?

Isn’t that what drives most criminals? At least their expectation that their anonymity will be maintained until the very second that they’re caught.

Each and everyday there’s an objective way to measure how you did in the market, in what really is a friendly competition if done properly.

As opposed to real life, in the market, there’s no reason to really think that there’s a Zero Sum game involved. There’s no reason to think that your fortune is matched in quantity elsewhere, only in an opposite direction.

There’s a commercial that I see on CNBC with some regularity, yet I have no clue what company is behind the ads. But in a nutshell, it’s some sort of hand holding trading academy where you can learn the trade of the trade.

Near the end of the commercial, where the student completes a profitable trade, the instructor says “now imagine how the guy on the other side of that trade must feel.”

All of a sudden, its become less friendly or at least a face has been put on the loser. For me, that would kill it.

Would you really eat veal if you could see the face of that cute calf right in front of you? Okay, maybe that’s not a good example, because veal is so delicious.

But in most everyhting else, anonymity is great. How else do you explain the popularity of the “glory hole?”

But there’s a problem for everyone else that comes along with anonymity.

If an unwarranted rumor causes a crash in the forest and you’re not there to hear it, did it really happen?

Misinformation, disinformation and unverified information are all tools of unfriendly competition that can hide behind the cloak of anonymity or disengaged responsibility.

Today, for example, one of the Najarian brothers, and I will never be able to tell them apart, was referring to the sudden uptick in Netflix, based on the purchase of a large number of forward month call contracts. He then commented how Netflix shares were working their way back from their disatrous fall into the $40’s.

That comment, may or may not have gotten anyone to make a trade, in one direction or another. More likely, the comment by Gene Munster of Piper Jaffry & Co., just a short time earlier that suggested Yahoo!, which also announced just earlier that it will be under the new leadership of Scott Thompson in just a couple of days, was a potential buyer of Netflix.

Problem is, that Netflix never made that drop into the $40’s, although at its nadir following the subscription pricing fiasco, it did get down to $62. Further complicated by some pretty out there speculation.

Now, I’m not saying that there was any vested interest or any personal gain from streaming bad information, but who gets hurt?

Certainly not like the case a couple of weeks ago when Dennis Gartman frontran his clients and announced that he was out of gold, whereas their accounts could only be traded at the end of the month.

Equity go poof.

As far as the promulagtor knows, the victim is usually no one that he’ll ever know, because he’s allergic to pine trees and knows better than to enter into the forest. He’ll never know, that is, unless some aggrieved lunatic confronts him. However, if that person traded merely on the basis of the bad information, he was a lunatic to begin with.

In trading, everyone is your competition and yet no one is your competition.

Why in the world would anyone give away their proprietary secrets, insights or knowledge other than to help push outcomes in the direction of their hopes?

Okay, so that guy is your competition and his clone is on some other station, so escaping them is not that simple.

Whereas in a basketball game ignoring the point guard may carry perilous cost, I increasingly believe that ignoring the Talking Head is necessary for avoiding the same.

It’s not the competitor you know, it’s the one you don’t.

 

 

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Today’s Trades	Security	Type	Action	Type
January 4, 2012	ZSL	Option	STO	Monthly

  

 

Maybe I wasn’t listening very carefully today, but this year in the stock market seems to be getting off on the right foot.

For me, that has nothing to do with a 200 point gain, but it has everything to do with platitudes and what is frequently assumed to be the “conventional wisdom” not making their annual appearances.

Okay, maybe the 200 point gain has something to do with it, but I like to think that I’m bigger than that, even though I know that my superficiality won’t take me there.

Specifically, getting off on the right foot means that there was a noticeable absence of anyone getting on the typical first trading day of the year talking points.

In the years that I’ve been fairly addicted to business television the beginning of the year stories are always the same.

Dogs of the Dow, January stock rally, retail sales revisions come in better than expected, Super Bowl Indicator theory and so on.

There’s usually also some human interest story, like the twins born in different years.

Great stuff.

I guess I’m so sensitized to these kinds of stories that the recent nightmare I had made so much sense.

Listening to Dana Telsey describe how this year, once again Chinese restaurants and movie theaters in major metropolitan areas saw 30% of their annual profits maerialize during the week between Christmas and New Years.

So far, there hasn’t even been a summary of best and worst performers, although that has to be related to my inattention.

Although, still, its absence may be plausible. I guess when you can go an entire year and not see anything change in the S&P 500 level, it’s almost as if the year had never happened, other than memories of the vomiting during the up and down segments of the ride.

That’s exactly why you need to sit in the front row of the roller coaster. Staying ahead of the curve works. Sitting behind someone who vomits doesn’t.

Now to be totally fair, I did hear someone refer to the “Dogs of the Dow” theory on Friday, but did so only in the context of pointing out that the list for 2012 looks pretty much like the list for 2011.

That’s not the way it’s supposed to work, so maybe that explains today’s silence. Of course, that silence may make adhering to the theory a good idea, were it not for the stocks involved.

After the past week, which was so utterly boring, it really was nice to see a definitive move, especially in a higher direction, but I pretty much traded myself out for the day after the first 60 minutes.

I’m not usually prone to making New Year’s resolutions, but I did so this year.

The first, has already been satisfied.

I resolved not to send out a single Tweet on New Year’s Day and I kept that resolution, despite the fact that my quality of life was demonstrably  lessened as a result.

I made no other resolutions, so I’m pretty clear for the rest of the year.

There are, however, a few investing mistakes that I’ll try not to repeat in 2012.

The fact that writing calls so religiously has sometimes caused me to miss out on some unexpected stock gains, such as Visa, on two separate occasions, is not one of those mistakes.One of my investing resolutions, year in and year out, is to not have regrets.

Probably the biggest mistake I made was to think that I could time stocks and decide what direction momentum stocks would move prior to announcing earnings.

Since I’ve already made it abundantly clear that I’m a lousy stock picker, why not compound the misery by adding timing to the equation?

Although I’ve very much cushioned the disappointment of Green Mountain Coffee Roasters, Netflix and Amazon with aggressively going after call option premiums and cost averaging down, the investment dollars could have been better spent elsewhere.

It’s not likely that my hope that all three would stay in the current ranges for about 40 weeks would have a chance of occuring. But if it did, selling weekly calls would bring you share cost basis down to about zero.

As much as I tell myself that I like the thrill of the ride and the opportunity to make hedging corrections, life would be much easier if the roller coaster went only in one direction.

In the case of CNBC Fast Money, that direction is downward. Its probably become my least favorite show show on CNBC, although I do like Scott Wapner, who is the new host of the afternoon session. For starters, Dennis Gartman is on far more often than even my tuned out ears can take, although I tend to have the same opinion about the regular panelists.

I still pine for Jeff Macke.

Occasionally, they do have irregulars, such as Ron Insana, who provide added value, as does a semi-regular, Zach Karabell.

I hate it when people say, “in my humble opinion'” as there nothing humble about expressing an opinion, especially my own.

Today, however, there was a gem of a comment that definitely made paying attention a worthwhile pursuit.

Of course, it came from an irregular, Mark Fisher. His softly stated comment was “How can people have opinions on everything?” He further went on to say that if you do have opinions on everything, it’s as if you have no meaningful opinions on anything.

The mystery that plagues me is how Mark Fisher is associated with Dennis Gartman.

When I say “plagues me,” I’m over it already, but his comment was a very refreshing one to hear so early in the year.

As the year wore on, meaning by 1 PM on this, the first day of trading, a corollary to the January Rally story line did pop up.

This one was the observation that as goes the first day of trading for the year, so goes the entire year.

Well, that would certainly be the kind of uni-directional roller coaster that most of us would want to climb upon. I’d whip out the calculator to see how 250 trading days of action like today would extrapolate out, but I don’t think my trusty Texas Instruments circa 1974 calculator can carry through on that many digits.

Although there was a reportedly 60% concordance betwen a positive open to the year and the S&P 500 close, to their credit, the two experts downplayed the correlation, in all likelihood, because there is none, if you use the strict definition.

Or real statistical analysis.

However, one did go on to say that in the very few times that a year has ended perfectly flat, the following years, on average, had a 35% gain.

Since that’s based on only 4 instances, it’s not likely that you’d want to invest the ranch.

But still, with the year getting off to an auspicious start, I’m looking for a year end S&P at 1450.

That would represent a 15+% increase, or as I like to look at it, a rate that would take less than 5 years to double your money.

That leaves me in an even bigger quandary.

For me, the call writing philosophy that Barrons had so warmly embraced, is based on my long term optimisitc outlook that is in turn attenuated by short term pessimism.

That turned out to be a good way to go in 2011, as long as you define optimism as meaning neither up nor down.

But given an outlook for a 15% rise, where does the buy-write strategy fit in, especially if fear of missing out (FOMO) on any rallies is a concern?

That gets me to yesterday’s blog.

I guess that could also count as a New Year’s resolution, in that I did vow to not overthink. Since buy-write got me here, it’s buy-write that I’m going home with.

That was easy.

Today that included selling calls on Green Mountain, Freeport McMoRan, ProShares UltraShort Silver ETF, Alcoa, Mosaic, British Petroleum and Riverbed Technology in addition to buying more shares of the UltraShort Silver ETF, which plummeted in price as silver and gold both rallied, continuing last week’s stunning reversal.

Although I know and understand that you really can’t predict that this will be a great year on the basis of a single day, my optimism was set in concrete as Mandy Drury compared the price breakouts seen today to “zits on a teenager’s face.”

How can you argue with those sort of signs?

That one alone makes it worth paying attention. 

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