Is that All it Takes?

The day started with a nice surprise for me.

Still upset about the bad luck I’d had when my computer froze during the final minutes of FrIday’s trading session, I was prepared to start the week with most of my Freeport McMoRan shares assigned from me after just having sold those calls earlier in the day on Friday.

Compound that with only a net $8 profit from the big mega-Millions drawing and you’ve got some blood pressure raising seething going on that can be internalized for only so long.

Sometimes, though, the system is neither perfect in its execution nor in its pricing.

For example, sometimes really stupid people win really big lottery prizes.

They can be safely assessed as having been stupid on the basis of blowing through tens of millions of dollars and more in just a few years and being left with nothing but memories of days of grandeur.

That reportedly happens fairly often, so there may be an inverse corrrelation between jackpot winners and IQ. I still don’t understand all of the testimonials of past jackpot winners who claim that their lives became worse in so many untold ways after their good fortune.

Is that All it Takes?Seven out of ten people that I polled on that issue agreed that it was a sign of stupidity at its greatest height.

Sometimes the system gets it wrong too, as shares are expected to be assigned if they closed more than a penny above their strike price.

But the surprise, the yawn of a system taking a break, was right there, staring at me this morning.

I felt as if I’d gotten a gift when only the smaller lot of my Freeport shares was assigned, leaving a bit more than 75% of the shares still safely stored in my portfolio.

Not quite a Mega-Millions jackpot, but I gladly accepted it.

Of course had those shares not taken a well deserved climb well higher this morning, I’d be muttering about the inequity of the system letting me down and would be raging against those 1% fat cats that comprise the 1% of the 1%.

Instead, move over and make room for me and my boys, Mac and Moran.

As it would turn out the market was poised for a dull open to begin the week.

That suited me just fine since I ended up having much less available for re-investing, having already jumped the gun on Friday by picking up shares of JP Morgan in a Double Dip Dividend play andnot having as many shares of Freeport assigned.

The market played along with its pre-open futures script, opening a bit to the downside, but without much in the way of conviction.

And then, just as we’ve seen all throughout 2012, it doesn’t take that much to get a party started.

Today all it took was the release of a private survey of American manufacturing executives that  “suggested” that all was rosey with regard to factory activity, employment and output.

Add to that yet another private survey of Chinese exporters indicating they had sunk to their lowest level of exports in three years and all time high post-Euro unemployment rates, and then all of a sudden things start looking pretty good right here in the U.S.A.

That’s why you should always follow the strategy of hanging out with uglier and stupider people than you.

It’s all in the comparisons.

It never ceases to amaze me how quickly market sentiment can turn on an intra-daily basis with the release of data that may not even enjoy an official imprimatur.

Never mind that the day’s data may be inconsistent with the manner in which yesterday’s data was interpreted, because that was so yesterday.

Top that off with a reliance on survey results of Chinese exporters who clearly must be reliable reporters and you further wonder.

What I really begin to wonder about is whether we in the democrarcy and feedom loving western civilization have had it wrong for so many years.

Maybe Marx was right about there being an “opiate of the people,” but it may not have been religion, after all. Maybe all we really need and crave to keep us pacified is a steady stream of good news, regardless of validation or corroboration.

Look, The Soviets and Communist Chinese, back when they were the non-capitalistic Communists routinely put out stellar reports of their 5 year plan accomplishments.

That system worked for each of them for 40 years or more. It’s easy to feel good when you’re told that things are good. More importantly, if you believe that things are good, but they are not so for you, you’re not likely to tell anyone, for fear of being ridiculed while everyone else is supposedly thriving.

Of course, at some point, reality and the reports of reality begin to clash and the cover-up gets more and more difficult.

But so what?

We seem to have emerged from an incredible cover-up of the wobbly supports of our financial systems.

Lehman, Bear Stearns? You could bank on them.

And then you couldn’t.

But here we are just barely 4 years later and the mood is elevated.

The market is back to within easy striking distance of its all time highs. Unemployment rates are coming down. Inflation is non-existent.

How many years did we get away with lies? And what was the price that as a society we paid once those lies caught up to us?

In the big picture, doesn’t seem like it was a terribly large price, as long as your number didn’t happen to get called.

So with that kind of a backdrop, I felt confident enough to think that Groupon’s woes from its most recent battle with accounting standards would be just another blip created by lies and then perhaps corrected by a new set of lies or the new reality.

So I sold puts in Groupon, assuming that the April Fool’s joke of Rocky Agrawal, perhaps Groupon’s largest detractor, not actually joining Groupon, was a positive for the company.

Groupon was not on my list of things to be involved with as we started the new shortened trading week.

I did pick up shares of Morgan Stanley as planned but didn’t get the kind of downward price movement as I had wanted on Focus Media to make it reasonable to sell put contracts on those shares.

But that’s what next week is for.

With volatility low and this being only a four day trading week, options premiums aren’t very appealing, so I may find myself holding out for captal gains on the underlying shares for a change.

What’s clearly needed is some private survey firm to widely release the results of a poll that can be administered to a group of self-interested individuals to advance their agenda.

In that way, it’s not really just a rumor. It’s market movong survey results.

These days, that may be all it takes.



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