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<P><SPAN style="FONT-FAMILY: arial,helvetica,sans-serif; FONT-SIZE: medium">I'm at that age that I don't dream that much anymore.</SPAN></P>
<P><SPAN style="FONT-FAMILY: arial,helvetica,sans-serif; FONT-SIZE: medium">Maybe I still do, but if so, then I don't remember much.</SPAN></P>
<P><SPAN style="FONT-FAMILY: arial,helvetica,sans-serif; FONT-SIZE: medium"><IMG style="BORDER-BOTTOM: 0px; BORDER-LEFT: 0px; MARGIN: 10px; FLOAT: left; BORDER-TOP: 0px; BORDER-RIGHT: 0px" border=0 alt="Ear hair" src="

Nothing Makes Sense

Don't get me wrong. I love Sallie Mae.

Obviously, no one really loves Sallie Mae if they are their student loan processor, but I'm well beyond that stage of my life and fortunately my kids didn't need to go that route.

Sallie MaeBut you have to love Sallie Mae if you're a trader. Even investors have to admire Sallie Mae, although the ride from $6 to $10 was bumpy, as it was from $12 to $14.

 

I have to credit Jim Cramer for first putting Sallie on my radar screen a few years ago. That was when Sallie was at about $6, recently up from about $3. Even with that kind of move, Cramer was convinced that Sallie was going higher.

You could have made your career on that gutsy call alone.

 

At that time, there was widespread belief that the Obama administration was going to dismantle Sallie Mae, so a trade in it was fraught with risk. Since I don't like risk and don’t like to speculate, I'm still amazed that this one caught my interest.

Remember cousins Freddie Mac and Fannie Mae?

The upside, though, especially if you were a covered call trader, was considerable. In those days, Sallie's volatility was high, but the share price always seemed to revert to a slowly increasing mean.

On top of that, the options premiums were in the 6-10% range for the near term strike and money price.

I had not owned shares for about 2 months, but then repurchased for the March 2011 options cycle, as Sallie kept testing the $15 mark, I was always happy when the cycle ended below $15.

Even though the options premium in the lower volatility environment was now in the 3-4% range, still not a bad monthly return.

On Monday I sold May $15 options and then bought them back on Wednesday, as Sallie fell prior to its earnings announcement.

So what happens?

Sallie announces earnings 25% less than it’s comparison quarter.

Bad news, right?

Oh, it also announced a pitifully small $300 million stock buyback.

And you guessed it. The stock surges by about 17%

Now I'm not complaining, because that gave the opportunity to sell new call options. even though Sallie now went well beyond $16, I still sold the $15 options, as I expect the price to fall down somewhat. Since my purchase price was about $14.50 and the cost basis now even less by a few months of options premiums, the in the money call option will give penny for penny profits if the stock price falls.

Now all of this happens on a day that GE, which is not the parent corporation of this blog, announces great earnings and another, albeit small, dividend increase.

Again, you guessed it. GE moves down, after a very nice pre-market move, testing $21. Not just down, but below $20.

In the first iteration of this blog, a few years ago, I thought that I had learned not to apply rational thinking to the market's moves.

Clearly, I haven't learned that lesson, as I'm still amazed at the irrational reactions.

It can’t be reading between the lines. There has to be something else at work here.

While I can't complain about Sallie Mae, I can about GE, as I still haven’t had an opportunity to sell call options. As it is, the GE shares are becoming the dreaded "dead money." Even Microsoft is performing better. At least I can get a decent options premium on those shares, which barely move outside of their tight range.

In the end, does it matter that nothing really makes sense?

Not really, but it's still very difficult to get a rational mind to think irrationally on a consistent basis.

Fortunately, as I'm getting older, the rational part of my mind seems to be diminishing in its relative strength, being replaced by the need to grow hair out of areas that never had hair before.

When you think of the divine nature theory of the creation of the universe and all creatures, you really have to wonder what was in the grand plan that called for hair to grow from your ears as you got older.

That really doesn't make sense.

Why couldn't the creator of the universe rest after creating the need for a rising waistline and a complimentary white belt?

I guess rational thought has never really had a place in the universe.

Sadly, tomorrow is a stock market holiday. I hate those days, with all due respect to dead Presidents, religious celebrants and laborers. It means that I'll have to actually do something less constructive, but it will give me the opportunity to ponder how I might implement irrational thought processes so that they operate in the background.

But if I did that, they I could never become a talking head or "contributor'"  because that would mean that I would correctly be predicting and analyzing the markets.

I wonder what I would say about the price of silver?

Maybe not making sense is really the way of the universe.

Go figure, but do so irrationally.

Something has to Give

Today was actually one of those rare days that I worked.

Although I think that I work just by sitting at home, watching TV and trading stocks and options. In addition to all of those responsibilities, I also screen telephone calls from tele-marketers, as we still have a landline or two.

My wife doesn't use the same lexicon as I do and considers work to be something more honest in nature whereby money is exchanged for services. 

I don't know where she gets these kind of ideas, but I do know better than to disagree.

So today I worked, which was compounded by the fact that I worked on Monday, as well.

The problem, though became apparent as early as Monday, and something really does have to give.

I'm not one of those people who feel that they really need to have it all. I'm not a Cosmo woman. I'm perfectly willing to sacrifice.

But now that my son has convinced me that I need to get with "The Twitter" and revive the blog, all in the name of generating buzz for the OTP book, I barely have time to watch TV or trade stocks.

And now there's this work thing.

Guess which one I'm perfectly happy to give up?

Today was especially difficult to juggle all of these demands, and I'm afraid that my tweeting suffered.

This came as an especially cruel blow, as I was so proud to receive a direct private Tweet from Herb Greenberg, now back at CNBC, and was looking forward to even more recognition from one of the greats.

His one word Tweet to me was "Funny.".

That was good enough for me. I didn't even care if he didn't call me in the morning. His scent on my Droid screen still remained.

Today was one of those days that really deserved lots of attention toward watching the tape and trading on it. After all, how often does the market move up about 200 points from the open and then just stay there?

Not many. But what made it a really good day was that I still had plenty of positions that I had not yet been able to call cover.

That happens even less often.

What was so nice about selling so many contracts today was that it generated enough options premiums that I could use the proceeds to buy even more shares in some of the holdings that weren't moving today.

I was able to pick up more shares in Mosaic, Riverbed Technology and Textron.

And it was that same Textron whose call options I bought back after just having sold them yesterday.

Now, all we need is for Textron to move up a bit more, since it did recover much of its earlier days' loss and then sell new call options.

As my son would probably say after seeing Charlie Sheen on his Violent Torpedo of Truth Tour, "Winning."

But I didn't have much opportunity to Gleet.

That's gloating while you Tweet.

What I did realize is that my wife, who is increasingly more accurately portrayed as my Sugar Momma, needs to step up her game just a bit.

Perhaps a second job.

That would be a very nice good faith move on her part, and one that would certainly be appreciated by me.

I can write these kind of things in this blog, because she has the good sense not to read it, although on certain days I've been known to suggest that she read the days' entry.

Today won't be one of those days.

Since I'm not "working" tomorrow, I plan to juggle all important aspects of my life in their proper proportions.

At the rate that I'm going, I'l have Ashton Kutcher like Twitter numbers in no time and I promise to do it without a backside view of my sugar momma in her granny panties.

I won't pander for numbers.

Tomorrow, I'm hoping for a negative image of today. I'd love to see a market drop in pretty much everything, except for those of my holdings that didn't participate today.

You've got the idea.

Textron, Mosaic, and Riverbed. But add to that list JP Morgan.

And then there are those that didn't participate enough.

Goldman Sachs, British Petroleum and Hewlett Packard.

There may be some others, as well, I just can't remember. My mind has been too drained by working for the man.

Something has to give.

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