I’ll Take My Chances

Maybe it’s just a coincidence, but recently it seems that every story that I want to recount has to be preceded with the qualifier “years ago.” I guess that spending the vast majority of my time sitting on the La-Z-Boy makes it difficult to come up with new adventures.

And when I say recently, I mean like in the past 10 years.

And so it was, years ago that I had tickets to see Bob Seger and the Silver Bullet Band in concert.

Bob Seger - I'll Take my ChancesThat was at a time that concert tickets were come by honestly. There was certainly no internet to facilitate the ability to corner the market and extort ridiculously high prices from the faithful.

Interestingly, the Seger concert was supposed to occur at about the same time the Hunt Brothers had tried to corner the silver market.

Given today’s giant move in silver, the Hunt Brothers may have been right all along, just many years too early.

Still, it’s always nice to be vindicated.

As it would turn out there was no silver bullet to cure the throat infection that Seger had picked up just prior to the concert that ended up being cancelled.

As opposed to the controversy surrounding Aretha Franklin’s withdrawal from performing at Whitney Houston’s funeral service due to illness and then subsequently performing that evening, no one really questioned Seger’s sincerity, as it was undoubtedly a less cynical era in history beneath the haze.

“I’ll take my chances babe, I’d risk it all'” still ring out to me.

Except for that “risk it all part.” That part seems pretty stupid.

Besides, were he to sing and perhaps unduly strain that “instrument” he may have actually risked it all. Just because he sang it doesn’t mean that he believed it.

Music would be a lot less enjoyable if accompanied by disclaimers.

“I’d take my chances babe, I’d risk it all, unless by doing so, I’d take a fall.”

And why should he believe what he sang? Does anyone really need to practice what they preach? Television evangelists certainly don’t. Politicians don’t remotely come close. Who knows what the market’s Talking Heads are actually doing as their words are circulating.

Ultimately, I’m not really certain that anyone would have been able to spot even a significantly more raspy voice, especially given the amount of liquid and other “refreshments” that would have saturated the crowd.

I never did get to see Seger perform.


Yet he undoubtedly did the right thing, as opposed to taking the short term gain of the ticket sales for that evening at the potentially untold expense in terms of future value if his performing career was to be adversely impacted by vocal frailty.

On the other hand, I take that short term gain at the potential expense of future gain all of the time when selling call options. Those call premiums in hand just feel so good that it’s pretty easy to dismiss the prospect of some future gain down the line.

But so far, 2012 has seen an incredible ratio of assigned contracts to expired ones for me. So much so, that for the first time in four years I’m actually underperforming the S&P 500.

Sometimes when I look at what I do during the day I sit a little stunned that the very same person can’t stand the idea of placing a quarter, or its electronically debited equivalent into a slot machine’s slot.

Theoretically, selling a put on a stock, as I seem to be doing quite a bit over the past three weeks, could lead to a complete loss, just as buying a call or put contract may do. Or just like pulling that bandit’s arm.

But somehow, the complete loss of that quarter bothers me so much more than the potential for loss involved with having sold puts today in Research in Motion, ProSares UltraShort Silver ETF, British Petroleum, MolyCorp and Chesapeake Energy.

Go figure. Maybe it has something to do with the certainty of losing that quarter. Maybe it’s the actual feel of the silver that used to be in that quarter, as opposed to the wood that used to be in those paper losses, that aren’t even on paper anymore.

I have no idea what’s in Gorilla Glass.

In the case of the stocks and their options which way they will go seems to follow the flip of a coin more closely than the odds that a slot machine spits out.

Today, there was an absolutely great Tweet by one of my favorite people, Tradefast.

“Most of us are working with the same data set – confident forecasts usually unveil the forecasters’ hunches and biases – nothing more.”

It’s amazing that you can speak volumes in the course of 140 spaces or less, but Tradefast does so on a very regular basis. Great observations, commentary and all with a human touch.

Szelhamos always used to say theat “Money brings out the best in people and the worst in people.”

As opposed to “many years ago” it was only recently that I realized the significance of the word “and” as opposed to “or” in that sentiment.

People are capable of going either way. Ultimately, we’re probably measured on the net behavior that we exhibit over our lifetime.

Twitter seems to do the same thing.

There are many very good people sharing their expertise, humor and wisdom on Twitter. Unlike me, some people actually earn livings on the basis of their expertise, yet selflessly share with a community of unknowns.

Twitter helps to bring out the very best in those people in an all new dimension.

Yet for some inexplicable reason, Twitter seems to attract some that seem to revel in a destructive relationship. Fascinatingly, some of those people also get paid for their expertise, yet take the opinions of others as full frontal assaults. Despite the fact that both sides are essentially working with the same set of data points, and despite the fact that most rational people would recognize an inherent right to an opinion, some seem to believe they possess propietary rights to data interpretation.

Conveniently, retrospect doesn’t play into the equation when that proprietary interpretation proves to be errant. In fact, from my perch it seems that the assault escalates, just to divert attention from reality.

That strategy has always worked well for despots. When things go badly, like a very badly missed call on “Buffalo Wild Wings,” search for an external enemy to deflect criticism.

Disclaimer: No actual chickens were harmed in the use of that purely fictional example.

Yet, the good keep right on going, to the benefit of the greater community. When faced with an onslaught of mean spirited behavior, it’s not immediately clear to me why the good keep on going, but fortunately for chorus, the lead singer doesn’t call it quits.

Sometimes you end up taking chances precisely for that reason. To benefit the greater community.

Despite my better judgment, that’s how I look at the spate of put contracts that I’ve been selling. The income that they generate keeps eveything else going, until something good in my comfort zone comes along.

Today came news that Transocean, previously part of my “Evil Troika” was going to recommend at the May 2012 shareholder’s meeting that it’s healthy dividend payment be discontinued.

Transocean, which has seen better days, has very recently moved up 25%, after a very difficulyt 18 months, that have seen British Petroleum and Halliburton, the other members of the troika fling accusations at one another.

As it happens, Transocean goes ex-dividend tomorrow. After being down by about 5% in the pre-open, I purchased shares shortly after trading began and sold calls, trying to Double Dip on the Dividends, along with the option premiums, such as I had recently done with BP, Boeing and Aflac.

Perhaps lost in the commotion, tomorrow’s dividend was still safe and the premium for the weekly contract was attractive enough to warrant bringing Transocan back into the paddock.

To complete the Troika, I sold puts on BP, whose shares were also assigned from me this weekend.

For now, anyway, the evil family is back togeher, hopefully to bring some joy to the rest of the community.

Some chances are worth taking, others not so much.

As Tradefast so correctly and humbly says, it’s just a hunch.

And wouldn’t you know it, there was yet another of Tradefast’s Tweets that said it all:

“I have a healthy respect for the difficulty of forecasting the future –  am often wrong, & often in doubt – view all forecasts accordingly.”

We all take chances, but when you take the caveats and follow the advice to think things through, you’ll never risk it all.

Priceless advice.









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