TheAcsMan's blog

Party Like it's 1999

I don't remember much about 1999.

Not that I was in a drug filled haze, or anything like that. If anything, that would have been many years earlier and I still remembered all of those times.

What I do remember is that we spent the most pathetic New Year's Eve ever welcoming in 2000 at our neighbor's house.

I can make those statements because they have since moved to Florida and I don't believe that they were literate.

PrinceFor starters, just about everyone at the party was wearing a Pittsburgh Steelers shirt. Mind you , we were in a part of Maryland that was not at all close to the Monongehela River. Most of the men and some of the women, I think they were women, were watching ESPN Classic Pittsburgh Steelers games from the past.

Happy New Year to you, too.

Anyway, the only music playing all night was the ubiquitous song by Prince, at a time when he was known as something else. It amazes me that an entire world had been waiting 17 years for that song to be relevant. But then again, these were the people watching an equally old football game that had at least as much relevance.

What I do remember about 1999 is that I sat on the sidelines when it came to my investments.

If you were a reader of the first incarnation of the Szelhamos Rules blog, you'll know that I had a wonderful broker, Bob Shapiro. If you read the Option to Profit book you'll also know that he passed away very unexpectedly.

Back when Bob was managing my account, I still followed the markets daily, even though he had full discretionary trading rights. I never micro-managed.

But on the sidelines I saw the wild amounts of money being made by people who weren't me. It didn't really matter that my own portfolio was performing well, because it wasn't performing dot com well.

The stories of excess were legendary. The money was coming in and was going out even faster. Unfortunately, the money that was coming in wasn't really from sales.

Long story short, I was spared the roller coaster rides of that era. I don't have any sock puppet momentos inthe closet, nor reams of class action papers as a reminder of the wild times. Bob stayed on a much more sedate path. Sure we had ups and downs, but I never puked on the way down.

And so yesterday the big news came. No, not the news that Goldman Sachs was served with a subpoena by the Manhattan District Attorney. We all knew that was coming.I've got nothing left to puke on that one.

It was the other news that we all knew was coming.

A couple of weeks after the LinkedIn IPO came the much awaited word that Groupon was going to go public.

Within minutes also came word that Pandora, the music service with the artificial intelligence algorithm was also coming public. Since both are Morgan Stanley offerings, you'd think that maybe they would have timed the announcements to let Pandora have at least a little glory that Groupon was gobbling up.

Now, for full disclosure, my son works for Groupon's biggest competitor, LivingSocial. He is responsible of overseeing the huge hiring spree that LivingSocial is currently engaged in. At least, that's what a proud father would like to believe. In fact, a silver lining in ADP's employment numbers was that LivingSocial accounted for 1/3% of all new hires in May. Not bad for a pretty small company.

A pretty small company that keeps company with Steve Case and Jeff Bezos.

Anyway, you remember Groupon. They spurned Google's $6 Billion offer.

You remember Google, don't you? They're starting a Groupon like sevice tomorrow, Google Offers, in San Diego. Interesting, just a couple of days after they announced Google Wallet. 

Have you seen Groupon's CEO?

'Nuff said. I'll let you scour YouTube for some clips, but yesterday's statement that the money losing Groupon would not measure its performance in the usual fashion, should be sending a bad message. But if you don't want to go the high tech route and search YouTube, just dust off your Funk and Waganalls and look for the illustration for the words "arrogant" and "obnoxious".

Remember, I'm biased, but I'm being objective on this one.

The fact that Groupon employs 400 full time staff writers should send another message. How much effort does it take to write the same tripe for every tooth whitening offer in the country?

But there was unbridled enthusiasm yesterday as the announcement came across the news wire at about 3 PM. LinkedIn was the teaser, Groupon just a tasting, with everyone waiting for the 800 pound gorilla.

Facebook, with a current valuation of about $50-80 Billion.

And if this really is 1999 redux, there'll be lots of drek coming along too, vying for your investment dollars.

What really makes me believe that we're already nearing a top in social media is that my son, who made his first stock investment about two weeks ago, had already read Groupon's S-1 filing and he was critiquing it for me, analyzing their dividend payments and compensation packages.

WTF?

Since I have an aversion to speculation, I won't jump in, even if given the chance.

Which I won't be.

On the positive side, I'm hopeful that my son's LivingSocial stake will get the benefit of a wildly bid up valuation on the heels of Groupon and others.

In the meantime, I see a different outcome, at least for LivingSocial.

Granted the Google alliance with AOL didn't turn out as planned, that alliance was with a Time Warner- AOL and not with a Steve Case led AOL.

Microsoft already has a small piece of the consumer market and no doubt that Google wants to keep Microsoft from gobbling up a big player in the daily coupon business.

After all, wasn't that why they picked up a stake in AOL in the first place?

So I see Google, Steve Case and Amazon coming together on this one and blowing Groupon out of the water.

The difference between 1999 and 2011 is that all of this froth is based on people to people businesses. No real technology, per se, just a better way to get the non-proprietary tangibles that we all need.

Food, recreation and 50% discounted bikini waxes.

Why didn't they think of that in 1999 and spare a generation that pain?

Is Ignorance Good?

I spent much of the day in an unusual environment cut off from the simplest pleasures to which I have become accustomed.

I believe that it's called "work". Since it's not really something that I have to do anymore, it's not really servitude, it's just work. Although I've been very fortunate in always having had good jobs and having been associated with very good people, it was still work.

Forget about the fact that for 20 of those years I actually expanded my mind, gained some professional stature and actually accomplished some worthwhile things, I would rather have been in my underground vault counting the day's receipts and profits.

I continue to get a kick out of people who profess to really enjoy what they do for a living. Not that it isn't possible, it's just that it seems so highly unlikely.

Even Mel Brooks, who for a while really had his pulse on human behavior, got it wrong, when he said "It's good to be the King". I'm sure that these days, even King Abdullah of Saudi Arabia must wonder who's serving whom when he has to release $135 billion in funds to pacify the populace with social program spending.

Not too long ago, one of my sons convinced me that I really needed to watch "It's Always Sunny in Phildalephia".

I was somewhat resistant because I don't want to emotionally commit to a new show and then see it get cancelled. Besides, if it wasn't on CNBC or Comedy Central, I wasn't really interested.

Poor Paul Reiser. I still grieve.

But this carried very little liablity, because the show had already been on for 5 years or so and now was being run in syndication on Comedy Central.

IgnoranceNow, as I've become a fan, the characters of this show are the ulimate representation of ignorance.

Since I have been to Philadelphia, I agree with that characterization, but the weather forecast would be more accurate if the show was entitled "It's Always Sunny in Riyadh". Surely, ignorance knows no national boundaries.

Today, though, I was the "Mayor of Ignorance".

For the previous 30 years I hadn't really appreciated how delightful being a stay at home empty nester could be. The ability to trade as needed made staying a home a true and profitable delight. Maybe not as profitable as toiling away on a regular basis, but as a bonus, it's something that is far from being "work". I was actually getting a kick out of being me.

But today was different. As much as I looked around there wasn't a single La-Z-Boy to be had. Although I did have a computer to call my own, there was no familiar background news of an ever-running television tuned to CNBC. I was beginning to question my decision to not drag along my laptop and stream CNBC through the Power E*Trade trading platform.

No coffee machine, no beautifully soft double ply toilet tissue and no dog in my lap.The people surrounding me were nice, but I had to wear socks and real shoes.

Still, trading opportunities weren't denied to me.

Although I knew that the pre-opening was portending a positive open, I had no idea why the market performed so well throughout most of the day. I was cut-off from all forms of meaningful communication.

I was trading, but had no idea of why. All I saw were the price movements.

Early in the morning, I actually bought back the Freeport McMoran shares that had been assigned to me, yet at a price lower than the assigned price.

As Freeport then climbed later in the aftrenoon, although still trailing the market, I sold in the money calls with a Friday expiration. If I could get 2% return on every stock every week just by getting lucky like that, I wouldn't have to write this blog. I wouldn'ty have to share my ignorance with anyone.

But I still wondered.

Was there news of a resumption of Chinese growth? Were copper prices going to sky-rocket? Was Pizar coming out with a Freeport McMoRan movie in 3-D?

No clue. I traded purely out of ignorance, fascinated by numbers red and green.

I also sold Visa call options expiring this Friday at an incredibly nice premium. Why were they so high relative to the next week's premiums? Don't know. Ignorance reigned.

Now before I try to portray ignorance as a bad thing, I did want to digress a bit toward my new found world of social media.

It was about 6 weeks ago that my son convinced me that I needed to "Tweet".

Up until that point, I thought that Tweeting was only a means to let people know about the mundane things going on in Ashton Kutcher's life.

He also convinced me to finally open up my "friend vacant" Facebook account and use it, together with my Twitter account to shamelessly promote my book.

Done and done.

On top of that, I just got a FourSquare account, as well, having entiltled my home address as "La-Z-Boy".

Here's where the ignorance is bliss part comes in, though.

Now that I have "friends", I get to see what's going on with them.

Most of all, I get to see what going on my my oldest son, who has always been quite the party animal. Fortunately, the youngest son is doing Army basic training right now, and it's not very likley that he's doing anything beyond the pale, other than learning how to impale.

Not only do I now know what my son is up to, I also get to see what his frends are doing. What kind of debauchery and havoc they are wreaking.

I've also learned alot about the world of Twitter hashtags and acronyms.

#PMGDDO is "Puking my God-damn dinner out". It took a little bit of concerted effort to figure that one out.

Context is everything, especially if it ends up on your shoes.

Do I really need to know this?

Here's one place that ignorance would be a good thing.

What little I could garner from today's events came from the New York Times web site. I learned that Michelle Bachmann, who announced to the world on Sunday that she would be announcing her presidential candicacy yesterday, actually announced her candidacy yesterday.

Reading between the lines, it would have appeared that she did so on Sunday.

Reminds me of the extraordinarily unsuccessful bank robber who would pass a note to the teller:

"This is a stick-up. I'll be back tomorrow at 10 AM to rob you formally"

When Chris Wallace asked Michelle Bachmann if she was "a flake" on his Sunday broadcast, he was also leaving a question on the table.

Yes, she's ignorant, as well. Just listen. You'll see.

But it doesn't really seem to matter, as she is now an official candidate for the Republican presidential nomination, who somehow was able to participate in the recent Repu\blican presidential candidate debate without being a candidate.

Another place that ignorance seems to have reigned. Apparantly, being smarter than a 5th grader is not a requisite for a legitimate candicacy.

But as the day came to a close, ignorance didn't seem to be so bad. No breaking news stories to deal with, no local cable advertisements and no disingenuous talking heads seeking the world's approbation.

All of a sudden, I'm not so distressed about working again later this week and twice the week after.

By then, I should be FourSquare's "Mayor of Ignorance".

           

Somedays it just doesn't Pay

Today was one of those days that you just wished that The End of Days had actually occured.

As if a 280 point drop in the Dow Jones wasn't enough, watching Trump eat his Pizza with a fork and knife in a prototypical New York Pizzeria joint was enough to question everything in life.

Trump PizzaDuring World War II, reportedly American GI's tested suspected spies by peppering them with baseball related questions. That was one sure way to test someone's stripes. If you fell for the old, was Joe DiMaggio your favorite Brooklyn Dodger question, your ass was toast. Especially if you answered "Yah".

No doubt, after seeing Trump elegantly dining on Pizza, one would be well justified to question the nation of Trump's birth. Even Kenyan's know how to eat Pizza.

They certainly don't stack their slices and they'll usually walk the extra 20 feet to bypass the Albanian Pizza place for a chance to get some really authentic New York Pizza, made my authentic Italians.

Let's be clear, The Donald's excuse for using a knife, fork, spork, whatever, doesn't hold up to well. He said that he eats it that way so that he can bypass the dough, to keep his weight down.

The stacking sort of speaks a different story, unless Trump uses one of those Intuitive Surgical Da Vinci robotics to extricate the mozzarella and tomato sauce from between the soggy crusted slices.

Palin Star of DavidAnd then, there's this image of Sarah Palin with her daughter Piper apologizing for pushing a cameraman. Well, as if the Jewish people don't have enough problems, Palin is wearing a huge Star of David.

It was pretty unmistakenable. Maybe she was just trying to be prepared for any possible host awaiting her upon last week's cancelled Rapturapalooza.

Don't know, but once again it has me questioning everything. I had no problem with a Tina Turner beating Ike Turner or baseball bashing Rod Carew wearing the Star of David, but this? Too much. Just too much.

These sights were no way to end an absolutely horrid day.

Like most days that the markets are opened, I eagerly look forward to the days' action.

Today was no different.

But like most days recently, our Dachshund, Laszlo, has been waking up and howling at an obscene hour in the morning.

Letting my Sugar Momma sleep, I get up and let Laszlo out with the full intention of going back to bed.

That never happens. Just can't do it.

And so, I wait more than 4 hours waiting for that opening bell with my days' trading strategies all planned out. I was fully expecting a rebound in Research in Motion and another upward bump in Freeport McMoRan.

Besides, the pre-open numbers indicated only a mild drop. Plenty of reason for sustained optimism.

But for the first time in a very long time, the market acted in an appropriate fashion for the economic news at hand.

The ADP employment numbers and then the ISM (Institute for Supply Management) data were not very good. But instead of moving in the irrational direction, the market actually did what a normal person would have predicted.

Given yesterday's 128 point climb, today's numbers gave a good reason to take some profits, but it was really an overdone reaction.

Given that Friday are the official government job numbers, I can't imagine another such reaction for the release of numbers that should roughly mimic ADP's numbers. The caveat being whether there are substantive revisions to previous month's data.

Unfortunately, I'm not very well hedged and today was quite a hit. Normally at this stage of the month I'm fully hedged, but I change gears a bit if the previous month didn't have many assignments. That usually means that I'm holding positions that are in negative territotry and I expect price rebounds.

In a perfect world, I'd rather make profits from an always upward spiraling stock price, but that's just not the way of the world. Sometimes stock prices move downward and options premiums offest those paper losses very nicely.

That was the case during the May 2011 options cycle. I chose to not write June call options on a number of positions until they exhibited some price rises.

That was the strategy that I used during the early period of the post 2009 recovery. Back then, I went for capital gains on the stocks and smaller call option premiums.

For the pasy year, however, especially when volatility was high, I was particularly happy with the options premiums that came with near the money strike positions.

So today ened up being a total disappointment.

Rather than rapture, today was definitely a day from Hell.

Trump, Palin, The Dow Jones and Laszlo.

But at least my day tomorrow will have a much better chance of improving.

Don't think Rep. Anthony Weiner will be able to say the same thing, although I guess we both could be guilty of letting the dog out.

Pages

Subscribe to RSS - TheAcsMan's blog