Making the Difficult Decisions

"That's why you get the big bucks" was always the statement made when someone was ready to pass the buck on decision making. Maybe funny the first or second time that phrase was ever used. it no longer seems to elicit even a forced chuckle.

Most people recognize that behind those words are the human sins of jealousy and wrath.

Cynics always say that behind every joke is the truth.

Whereas I used to believe that there were only two kinds of people, the ones with tattoos on their knuckles and those without, I now have a very different outlook on society.

DecisionsWe're essentially comprised of decision makers and those who would be quick to jump on the guy making the big bucks for a chance to make big bucks of their own.

For about 20 years I made decisions, but I never was faced with the aspect of someone waiting for a decision to go the wrong way for their own chance to become "the decider".

I was lucky in that way.

For the past 10 years I really haven't had to make much in the way of workplace decisions and I've come to like that kind of slothenly existence, even though that also qualifies as a human sin.

Actually, I haven't even had to be in any kind of workplace other than my own La-Z-Boy for most of the past couple of years, thanks to Sugar Momma and her faith that I could be more than just a love machine.

Today was a bit different, as I was uncharacteristically faced with a number of looming important decisions.

It all started with the realization that I'd be cut off from information today, yet again. For the second time this week I was going to be working, but at least I wouldn't have to make any workplace decisions.

What I had to decide was whether to bring my own laptop and modem to work today to complement the PC available to me. I thought that perhaps I would just stream CNBC and in someway recreate my at-home trading lair. I felt so lost on Monday without those literal and figurative tools of the trade.I just had to have more than one screen and just had to have the background noise, occasional gem of a segment and the screen crawl.

For a moment, I even thought about bringing the La-Z-Boy with me.

I stood over one of the laptops this morning, faced with the realization that in order to stream CNBC I would have to use the premium E*Trade platform, rather than the middle of the range one that I much preferred.

MarketTrader, the platform that I like has all of the views pre-arranged. Not much in the way of customizing necessary or possible. By contrast, the premium platform is fully customizable and can have as many pages as you like with their uniquely positioned and chosen tools and fields. Charts galore, research tools, pretty colors. You name it. Even the whistles have whistles.

It's just E*Trade's way of saying that frequent traders need and are more likely to appreciate a more advanced approach to trading. I suppose that's true,  but to do so requires lots of decisions.

So, easy decision.

I wanted no part of having to accustom myself to a different interface, even if it meant that I would miss out on what was going on in the world.

But that's why I get the big bucks, because I can make those kind of difficult decisions without agonizing myself into inaction.

With that problem solved it was time to lay out the day's trading strategy. My illness requires that I make trades even if there is no rational reason for doing so.

I was fully expecting some kind of retracement today. If this was a dead cat bouncing it didn't know the meaning of gravity. I actually had an image of Wile E. Coyote running past the edge of a cliff and somehow staying airborne until he realized there was nothing below him to stop the plummet.

But that's not what happened. It was just more of that unbridled enthusiasm that Greenspan had warned us about and that we hadn't seen for a while.

With the end of the trading week, I decided to follow yesterday's theme of exalting the lowly penny.

Today, the bet being made was that the prices for British Petroleum, General Electric and QQQ would retreat from their current levels by the close of trading today.

For some reason I decided that would be a good idea, even in the face of advancing prices. After all, at some point, Wile E. has to drop.

Coupled with the fact that the premiums for barely a days worth of time were really low, it seemed that the correct decision would have been to just keep riding the horse that's pulled us this high over the past few days.

Maybe making the difficult decision means making the wrong decision in the face of over-whelming facts, so obviously I was the perfect person to be making those decisions to sell call options on those shares.

My only connection to reality today was the Twitter feed that I was getting, but for some bizarre reason I seemed to be getting alot of re-tweets about horses today.

Horses?

So Twitter wasn't of that much help today.

I also noted two recurring rumors. One about Steve Jobs being hospitalized and the other about Tim Geithner stepping down as Treasury Secretary.

Since neither Apple nor the broad markets seemed to react to either of those rumors I decided to ignore them, even thought they kept coming fast and furious. At least the previous day's rumor of Steve Ballmer stepping down from Microsfot had come to an end.

Then I went to StockTwits. Amazingly, then couldn't find anyone similar to me to suggest that I follow.

Twitter always has plenty of suggestions, most of which fall into the lunatic range and so I don't take their advice, but at least that counts as another decision on my part. 

In all, despite the 152 point Dow gain, I was underwhelmed, maybe because my earlier decision to sell call options for Freeport McMoran left me wishing that I hadn't. I started questioning the decision to bearishly sell those call options and bemoaned the great likelihood that I wouldn't be enjoying the full benefit of their substantial price rise these past few days.

Until it hit me.

 I came to the understanding that I was living the best of all worlds. Not only was I getting paid today to go through the motions of working, but I was also helping those pennies pile up in the background by making these non-sensical and uninformed trades.

But best of all came the ultimate realization.

What better position is there to be in than to not only be the decision maker but to also be the one passing the buck and then questioning the wisdom of the decision.

Now comfortably perched back in my La-Z-Boy I can appreciate that no one is going to pounce on me for having made a bad decision, if that's the way it turns out by the time of today's closing bell.

There'll be plenty more bad decisions to come, but I've decided I can take that kind of responsibility.

And that's my final decision. 

 

 

Szelhamos Father's Day



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?

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