The Legacy of Woody Guthrie

When I was growing up, Arlo Guthrie was a rebel.

In an era when songs were neatly packaged for radio play and rarely even approached 4 minutes in length, his “Alice’s Restaurant” was a beautiful gift for those disk jockeys with Irritable Bowel Syndrome. Prior to that, the first 4+ minute song to regularly receive airplay was “Ode to Billy Joe” in the summer of 1967.

The Legagcy of Woody GuthrieArlo Guthrie wasn’t an accidental rebel. It was in his genes.

His father, Woody Guthrie blazed the trail.

Fascinatingly, despite the off beaten path of his ne-er do well life, Woody Guthrie is best remembered for his stirring songs, such as “This Land is Your Land,”  that sing the praises of America’s natural beauty, as well as our own rights as a free people..

But he left behind another legacy.

That was for the passage of the genes necessary for that horribly generative neurological disease, Huntington’s Disease, a disease which makes itself known during early adulthood and then eats away at the core of those so cruelly afflicted, until they just wither away to nothingness upon expiration

Huntington’s Disease itself is at the core of a great ethical issue and internal personal conflict, as the presence of the gene combination necessary for it to manifest itself as the disease in future years can easily be known long before signs and symptoms appear.

The question facing the heirs of Woody Guthrie is whether they want to know their fate, especially since there is no treatment and certainly no cure.

How do you live your life knowing with  absolute certainty that you will begin a horrible descent? How do you look your own children in the eye knowing that you may have very well passed the same fate onto them?

The dilemma is further heightened when you consider the possibility that the health insurance companies that may pay for the diagnostic testing may conceivably then become the very same companies to deny care on the basis of the insured having a  “pre-exisiting condition.”

We were never meant to know the unknown.

Yet, here we were waiting for the market to open on Monday morning with great certainty that a plunge was our immediate destiny.

How we knew that was to be our fate this morning was because of the disappointing jobs numbers released on Friday. The very same Friday that our markets were closed in reverence to Good Friday.

The brief futures market that day was the equivalent of genetic testing. It foretold of the sell-off that was to come and that was to be kept pent up over the weekend.

But there was absolutely nothing that anyone could do.

The die was cast.

As mentioned in this past “Weekend Update” I had no cash to use for this coming week.

Not only did I know that there was some form of horror awaiting, but it was akin to not even having any palliative medication to lessen the blow.

It’s bad enough when there’s no cure, but compind that with not even being able to take an aspirinb and then you’ve got some real tragedy to rhapsodize about.

For the past two weeks the only trade that’s been working for me has been to sell weekly calls in the Barclays Volatility Index ETN and then either buy it back or let its value wither away to nothingness upon expiration.

I did so again this morning, as the VXX rose about 5%. Unfortunatreky, I was nimble enough to only do so on 50% of the shares.

Then the waiting game began.

I tried to buy back some ProShares UltraShort Silver ETF puts so that I could put the freed up money to work elsewhere, as there were so many bargains that seemed to be at hand, yet were so out of reach. I would still love the opportunity to pick up some combination of shares in Caterpillar, Goldman Scahs or Freeport McMoRan and perhaps sell puts in Focus Media and Riverbed Technology.I’ve also added Sallie Mae to my wish list of purchases, as it nears $15.

And like yesterday’s re-watching of “Titanic.” I just watched some of my portfolio shares seem to slowly fade and then die, all along knowing precisely what their fate was going to be and without enough hedges to safely take care of all aboard.

Imagine the agony of the Captain of the Titanic. knowing what the fate of his ship was going to be, but helpless to do anything about it.

Maybe if the Captain had a pair of 3D glasses he would have been better able to see the iceberg that awaited the hull of the unsinkable cruise liner and would have been a better position to react in a timely fashion.

Right now, those 3D glasses aren’t really providing me with any help or relief as all I’m watching is a sea of red, that is no less disturbing and is without any clear way out..

Although I never have the feeling that I’d built an unsinkable portfolio, at least I try to have enough lifeboats and preservers to help weather the predictable obstacles..

But that’s not the case this morning, as most of my holdings fall into the “weekly option” variety and aren’t safe from the morning’s foretold decline.

There may be some sort of “women and children first” rule, but I don’t know what it would be. Do you preferentially protect your gains or do you protect those that may be poised for out-sized losses when the wave comes?

I suppose that today’s market is a much better situation than faced by some of Woody Guthrie’s heirs.

At the very least, we know precisley when today would occur.

Not suprisingly, it occured today, the first day of trading after the disappointing news.

We also know that it’s unlikley that there will ever be a fall to zero. The trajectory, nor direction may not be known, but even if its downward, there will be good days interspersed with the bad.

The funny, yet wholly predictable thing is that if the direction turns out to be upward, then there will be bad days interspersed with the good.

Today, Instead of the slow and inevitable decline it was sudden and yet, without much in the way of negativity, as we are getting closer and closer to 2011. The past 10 trading days have seen some re-awakening of volatility as the market is looking for a new and safe level from which to re-strategize.

With advances in medical technology, including gene therapy, there’s never a need to give up hope and stop that re-strategizing and human need to plan for the future.

You just have to survive long enough to see the Promised Land and get on the other side of that “No Trespassing” sign.


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