Author: TheAcsMan

What’s in the Szelhamos Portfolio?

 

Based on a one day move it’s probably a bad idea to suggest that a pattern or trend is developing.

That should be painfully obviouse for anyone that’s been following the markets and the daily intra-day moves the past couple of weeks.

Giddiness quickly dissolves into disbelief, and not the good kind of disbelief.

As usual, there was lots of discussion over the possible root causes for Thursday’s typical 400 point move.

There are those who believe that the European decision to limit short selling on the financials was the impetus. My memory is increasingly fuzzy these days, but didn’t we try that as well? Don’t think that it had quite the longterm impact that the decision architects had hoped.

Others pointed to the early return of French ministers from their month long August vacations to attack the French banking issues that are now emerging. The first photos from those finance meetings are a stark reminder that no one should wear European style bathing suits, even if there’s a conference table to obscure the details. 

For my money, I’d rather suspect that someone might have a similar background to mine by looking north of their waistline.

Today, however, I think I spotted the ultimate market indicator that very strongly suggests that the market is heading up with sustained gusto.

During a brief period of time, that seemed all too long, Herb Greenberg disappeared from the CNBC picture. He was always one of my favorites. A calm, analytical approach to macro and more importantly for the individual investor, micro-economic analyses.

Just as an aside, but a follow-up to yesterday’s basic math lesson, people like Greenberg are very valuable to the health of your portfolio.

I’ve never been a fan of mutual funds, but when I was gainfully employed and had to choose from among bad fund choices, I would always opt for funds that performed best during down markets. I certainly can’t take credit for that strategy, but I just don’t recall its source. For purposes of consistency, let’s just say it was from Herb Greenberg.

And it is a good strategy, as it really is more difficult to overcome a single large loss than it is to make up for a multiple missed opportunities.

When Greenspan would talk about “frothy exuberance” and paint on a broad canvas, Greenberg would pragmatically focus down on the specific issues that mattered, your false hopes about inappropriately moving stocks. He consistently highlighted situations where the investor may have been at unexpected and highly significant risk.

Valuable stuff.

Well, thankfully for viewers, he’s back and I hope, enjoying east coast weather. The fact that Sugar Momma and I plan to pack it up and return to her sunny California roots when the kids aren’t looking is in no way meant to be interpreted as a statement regarding the hideous nature of weather in the Mid-Atlantic.

Ever since I re-started the Szelhamos Rules blog in an effort to boost sales of Option to Profit and started Tweeting, Greenberg, no surprise, has been another favorite among the small number that I follow. In fact, after my son, he was the first account that I followed and along with Paul Kedrosky they remain the only three that I have consistently followed.

My son doesn’t necessarily help me with investment ideas, but at least I know what’s going on with his life thanks to Twitter. And if FourSquare is to be believed, he sure does party a lot. I don’t know whether Greenberg and Kedrosky have similar lifestyles.

But to be totally fair, however, I must give my son credit for early detection of VMWare and Iron Mountain, among others.

So here’s the good news.

As any Twitter user knows, it’s all about the Followers. Yesterday’s blog, “Depends on your Perspective” re-affirmed the importance of size in every aspect of life.

For me, Twitter has become life, but based on my number of followers, my life expectancy is somewhat guarded or at least the value of my life is highly suspect, perhaps due to accounting irregularities.

In the 4 months that I’ve been on Twitter I’ve looked forward to the Tweets from Greenberg as they’ve complemented his now increasing on-air presence.

As usual, on Twitter he dispassionately and objectively reports and dissects “data” in his alloted 140 spaces.

Somehow, I once got included in a Tweet sent to Greenberg that included quite a bit of venom packed into its 140 spaces, but as they say, that’s what it takes to make a market. I can only imagine how Jim Cramer’s inbox must look as it’s very easy to sling from behind a firewall of anonymity. (See “Why I No Longer Watch Jim Cramer“)

Maybe it’s the TV, maybe it’s the wide range of fashionably colorful dress shirts, but Herb Greenberg’s Twitter follower base has grown by about 60%, or an additional 4,000+ in short order.

That can mean only one thing.

As viewers and the Twitter universe are being ever more mindful and respectful of a circumspect and wary approach to stocks and the markets, the contrarian in me just knows that we are now poised for a major upward correction.

Forget all of those technical analyses and all of the charts and statistics. Face it, every math and physics PhD. out there has access to the same data and analytical tools and algorithms, yet they arrive at wildly distant conclusions. The fact that I’ve used a second derivative of the velocity of Greenberg’s growth in Followers to create a market strategy is largely irrelevant.

Forget the “science” and go with the “Greenberg Follower Contra-indicator Tool”.

As the number of his followers increases and becomes likewise increasingly engaged, it is a sure sign of investor capitulation. The water’s both too cold and deep and besides, your mother told you to wait an hour after eating before you go back in for a dip.

In the meantime, Greenberg will continue to present sage-like and cautious observations.

I tend to be a cynic and even though I’m a short term pessimist, I am a long term optimist on most everything.

But as individual investors are getting more cautious, I think of the opportunities that are akin to short squeezes. It’s related to something that’s called “FOMO” or “Fear of missing out“. FOMO itself is a first order derivative of greed.

Caution is absolutely the way to go. That’s why I hedge everything, although I don’t think I can use that strategy as an excuse to explain the girlfriend on the side. But when everyone is getting on the caution bandwagon instead of  judiciously exercising caution where appropriate, there is opportunity.

When the fear of missing out dawns on the individual investor prices go up. Demand trumps value.

So I, for one, am very happy to see Herb Greenberg’s growing popularity. By the same token, I fully expect this indicator to break down at some point as those who have blindly followed caution would be fools to unfollow Greenberg once their FOMO takes hold. If anything, they’ll need him even more to better protect what they’ve gained.

At that point I’ll just come up with something else to replace the Color TV indicator and the Greenberg contra-indicator.

It’s even easier than keeping everything contained in this bathing suit.

  

Addendum: Since this blog entry appeared in August 2011, Herb Greenberg has added on another 12,000 Twitter users, reaching 20,000 on December 1, 2011. Since then, the S&P 500 has gone up 6.8%. Unfortunately, 7.6% of that gain came this week (Nov 28 – Dec 1, 2011). Stay long, my friends.

Additionally, the following was not linked at the time the article originally appeared: “Fear of Missing Out“

  

 

 

 

It’s been a long week. I probably don’t have to tell you that.

For me, the highs and lows of the past few days were more than just quantitative matters, they were matters of the heart.

As Lou Grant would have said, “I hate matters of the heart”.

The week in question started on a real high note, as I watched my son graduate from Army Basic Training last Wednesday and escalated as we were able to bring him home with us to start his junior year of college. So, while stocks were just beginning to really shed some real market cap, I didn’t mind too much. Joy can make you forget such mundane things like skyrocketing paper losses.

In fact, despite being armed to the teeth with my traveling trading desk, after a few hours in the car on the first part of the trip down to South Carolina, I decided to spare my lap the deep thermal burns, shut down the streaming CNBC feed and give it a rest.

Of course, at the time, the market was up reasonably nicely and I had a feeling of calm and peace. So much so, I didn’t even care that much when I learned that the market eventually turned for the worse.

The next two days I was essentially cut off from any timely market related news. Although I did prove to my Sugar Momma that I wan’t addicted to the electronic market tether, I did find myself breaking into lots of cold sweats and sucking the residual sugar off of discarded gum wrappers.

For some bizarre reason, when my oldest son, who now follows the markets tracking his undiversified portfolio of one stock informed me that the market was down 500 points last Thursday, I took it in stride, after all, I had my whole family in tow, reminiscent of long car rides together 15 or more years earlier.

Not only did I take the news in stride, but I actually got a kick out of that news, even though I’m not a short seller. Despite the fact that I exercise a covered call strategy on nearly every holding and despite the fact that the bids on most of those call options were close to zero, I still felt a rush.

For me, the exaggerated bounces in the market never get old. They’re always exciting, even if I can’t find a way to take advantage of them.

Imagine then how excited I must have been on Monday. Can you believe losing even more than on the previous Thursday? If Dow down 500 points is good for the perverse part of my being, how great is 600 points?

When I was younger, I used to measure money in terms of how many color TV’s you could buy with that money. Our family got its first color TV back in 1964, just in time to watch the Yankees – Cardinals World Series. I remember spending most of my time trying to get the colors just right and trying to find the perfect antenna position. I usually ended up being the antenna and the grass usually ended up being blue.

After all, for $500 were you expecting perfection?

At Szelhamos’ highest earnings year, I calculated that he could have bought 50 color TV’s or one each week. Back then I was too unsophisticated to factor in taxes and things like present day value, or concepts like “constant dollars”.

Now that I’m older I don’t think in such childish and simplistic terms. Instead, I now calculate a days’ gain or loss on the basis of how many Szelhamos years worth of earnings it constituted. For example, instead of saying that Monday resulted in a paper loss of 200 color TV’s at 1964 prices, I would be much more inclined to say that the losses covered 4 years worth of peak earnings.

What a rush, albeit a downward spiralling rush to poverty.

While the market was going down, despite an occasional tease upward, the joy still overcame all.

Today, the story was quite different. This time, instead of having headed down south for a bit of happiness, I had to trek North back home to New York for a bit of sadness, as word had come of the death of a woman very dear to me. Not an actual relative, but very much a second mother to myself and sister.

A Holocaust survivor, a refugee from communism, she started a new life with her family and friends in America.Always giving, always smiling and door always open. As much as joy can help you to forget, sadness can help you remember.

But in her case all of the memories were wonderful, but unfortunately they had grown old and increasingly dim, until a touching eulogy reminded us that in everyday actions by her children, grandchildren and great grandchildren those memories live on. Sometimes that memory will take the form of a strudel.

And that’s alright, too.

As the days’ drive to New York began, I was in the passenger seat, once again with full electronic gear at the ready. Pleased to see the market hold its 200 point gain once again those feelings of calm and peace returned, this time though looking at how many TV’s I could buy with those paper gains.

At about 3 PM, heading from the funeral home to the cemetery, my oldest son who was in New York on a business and had joined with us, turned to me and calmly let me know that the market had given up all of its gains.

Serenity. Serenity now. Remember. It never gets old. I keep telling myself I love the violent and unexpected moves.

Now, I also love Ben Bernanke as much as the next guy, but I couldn’t imagine in my wildest dreams what he could have said to have shaken the markets so much. Normally I’d have been home rapt on every word and nuance, but today I was left to my wonderings. Did he call Tim Geither a “pussy”? I think I’d put up 1o color TV’s at 1964 prices to have a front row seat for that cat fight.

And I like both of them.

Finally arriving at the cemetery the rain was pouring upon us. Briefly it stopped and someone remarked “What a miracle, God is smiling on us”. Minutes later the rain came back with a vengeance and that same person took the opportunity to say “What a miracle, God is crying with us”.

That reminded me of something that does get old. The various talking heads that believe the viewer has no sense of history or at least no functioning memory. I like my analysts and miracles to be consistent.

But at least here the intention was good. Sun was good. Rain was good. We were celebrating a good life.

As I looked around the assembled crowd, it was no longer the elderly crowd that I remembered from my younger days. With very few exceptions, they are now gone, being replaced by newer versions of themselves.

Oy.

Once back in the car, my personal market reporter, whose personal wealth may dwarf mine if the IPO market can survive the downdraft ,once again turned to me and said “Wow, the market turned it around and closed up over 420 points”.

That’s a lot of color TV’s.

Hearing that kind of news never gets old. It may not be strudel, but hearing my son deliver that news is a sign that I will never get old, rain or shine .

Check out Recent PortfolioTransactions

 

In my book, Option to Profit, I have a chapter entitled “What are My Credentials?” I thought that if someone was going to buy the book, or perhaps browse through it, they should know who this person is making investing strategy recommendations that might have a very tangible effect on their lives, if followed.
I don’t try very hard to hide the fact that I don’t have any formal credentials such as being an economist, a certified financial planner or anything resembling a career in finance. I do know, however, how to use such phrase as “at the margins; opportunity costs; sunk costs and others. In addition, I’m well versed in all of the consulting buzz phrases of the 90’s and early part of the 21st century.
My credentials? I happen to have spent 30 years as a Pediatric Dentist and the majority of those years, in academics.
There you go. Those are the qualifications. I’m really not qualified for anything. I can’t even figure out how to mulch around a tree.
So that brings us to the only story of the day. The first trading day after the historic Standard and Poors downgrade of United States debt instruments. No small matter, but who exactly is charged with that incredible responsibility? Well, it was actually a decision that was finalized by a three person Sovereign Ratings Committee. The public face of that committee on Friday and Saturday had the unfortunate luck to share the same name as the embattled CEO of Cisco.
If you’re reading this blog you probably know that would be John Chambers.
Neither of the two John Chambers is terribly popular right now. But them both into the same room right now and all of the air and life would be sucked out. The joy, too.
Imagine the unbelievable burden of making the decision that would undoubtedly have both riptide and trickle down impact on the United States and the entire civilized world.
Imagine the education, training and experience necessary to weigh all of the information and to make a decision based on sound economic and mathematical forecasting principles. Balance that with a need to understand business cycles, political systems and social contracts.
Where do you find such people? Harvard, MIT, Princeton, Standford? What kind of multiple advanced degrees would such people need? Obviously doctorates, probably in economics, finance, analytical mathematics, even Physics all sound like reasonable entry points.
I suppose an MBA would be very helpful and might substiute for at least one doctoral degree.
So it would probably come as a surprise that the Chairman of the Sovereign Ratings Committee has an bachelors degree in English literature and philosophy from Grinnell College.
I’m not even going to bother to find out where Grinnell College is, but I do know that there’s no ivy on their walls. In this age of distance learning for all I know, Grinnell may not even have walls, although on a purely intellectual basis, there’s no reason that ivy can’t climb up your computer LCD screen.
He does however, also have a Masters degree in English Literature from Columbia University, so that puts him only one shy in the number of Ivy League degrees compared, to say, a one-time Pediatric Dentist, who isn’t even remotely qualified to be posting on Twitter.
Speaking of which, last week another of my favorite Tweeters and I only follow a small number, started a bit of a controversy when he made his case for the advantages in hiring MBA graduates from the top schools for analyst positions.
Like the chicken and egg argument, nurture versus nature and other exercises in sophistry, you can always make some kind of a case for for the role that experience may play in work ouput and quality.
The basic thrust was that by hiring a graduate of a top notch MBA program, at the very least you can be assured of intellect. True, the person may still be a loser in life and professionally, but to paraphrase @Tradefast, a corporate Chief Investment Officer, “at least they’re not dumb”.
In the limited universe designated by 140 spaces @Tradefast makes some of the most cogent observations and does so in a humble fashion. A rare breed. Although I am still a New York Mets fan and he tweets lovingly of the Yankees, he still maintains a very high degree of credibility with me.
Despite the earlier mentioned correlation between education and intellect, you can’t necessarily make a similar statement about experience and intellect. Having experience makes you neither a sure hing for smarts nor talent.
The longer you are in the workforce, the more you realize that there are plenty of people with experience that seem to be entirely mediocre, but somehow move up the ladder or move onto another organization just before his mediocrity becomes apparent..
No disrespect to Mitt Romney, but I don’t believe he is as distinguished or accomplished as he is portrayed. The great smile and hair do help, however. As did having a father with “Governor” on his resume.
Sometimes, that’s all it takes.
So what are John Chambers’ qualifications to lead the august S&P committee?
No doubt that the downgrade statement was beautifully crafted, making wonderful use of some great techniques developed over the centuries.
When he said “ask not for who the rating falls” in response to a question by a CNN anchor, there should have been some clue that deep analytical thoughts were not a priority.
What really caught my attention was “Out, out, damn debt”.
As the trading day proved to be far worse than the futures indicated there wasn’t much solace. I closed out some options but not much else. I’m still amazed that I can tolerate these paper losses far better than I can stomach throwing a dollar into a slot machine.
Glued to CNBC all day, I re-watched John Harwood’s interview with Tim Geithner. What appealed to me was hearing a cabinet secretary not use the typically nuanced words to describe the S&P decision. He was pretty candid. It was very refreshing. I wish that he would do that when appearing before House and Senate finance committees as well, when he really has to suffer fools.
Much was said today about the President’s late appearance for his 1 PM statement on the downgrade. When President Obama finally did begin, nearly an hour after the scheduled time, as if I had anything better to do, the market at first responded positively.
In just a few seconds about 75 Dow points were restored. Amazingly, at the very instant that he mentioned that our problems went back to the day he took office, the downward trend returned with new fervor.
Clearly the President didn’t read my blog entry yesterday, “A Call to National Action.” Had he done so, he would have known that this was a rare generational opportunity to exhort Americans to return to the personal and political behaviors that guaranteed our financial supremacy.
From the point early in the morning when Jim Cramer said that he liked the direction of the tape, to the closing bell, an additional 500 points was lost. I must admit, I thought that the script would play itself out with only a small change at the close, myself.
As the day came to an end, those additional 500 Dow points, in terms of market wealth, exceeded the cumulative value of every single copy of every work of literature ever sold, including e-books.
Certainly, that’s the sort of analysis that John Chambers should be able to comprehend.
 
 
 

 

 

What do Cisco and Standard and Poors have in common?

They are both headed by individuals named John Chambers. Given the recent news surrounding each of those entities, the reason you don’t see their respective CEO’s both appearing in the same picture is not because they are the same person, but because the world would implode if all of the evil intent directed toward them were to converge into such a tiny space.

Four months ago I wrote a blog essay entitled “S&P’s Mea Culpa“. On that day the occasion was S&P’s threatening word’s regarding the health of the United States’ financial system. Those words resulted in quite a market sell-off, but with a significant bounceback by the closing bell.

Alright, in the name of fairness, let’s just say the words were “cautionary”, rather than “threatening”. People, however, tend not to panic in the face of caution, whereas threats are more likely to evoke an adrenaline fueled response.

No one throws threats to the wind.

On that day, we actually had the last laugh.

At the time, S&P warned that a debt downgrade would be forthcoming in a couple of years if there was not a substantive alteration in our national ability to manage our debt and obligations. A “credible deficit plan” is what they called for and they seemed to suggest that our elected officials might not be up to the task.

In response the spin being put on the S&P pronouncement was that they were just gently urging the political process to move forward in a meaningful and constructive way.

Jay Carney, the then new Presidential Press Secretary replied to the spin by stating that the political process would “surprise S&P”.

Like most of my blogs, that one was written after the facts were in and was a blend of (attempted) humor, cynicism and faulty analysis. Today’s blog is different, in that it is written in worried anticipation of what tomorrow will bring, as our markets open. I don’t see very much in a humorous vein at the moment.

So do me a favor, read or re-read “S&P’s Mea Culpa“. Besides a laugh or two, it was a prescient piece (That sound you hear is a self-inflicted tap on the back”.

I won’t even join the bandwagon and lambaste S&P for their $2 trillion error, or their role in the banking meltdown of 2008. At this moment, even Friday seems like ancient history. I also won’t join the chorus and suggest that there was a political agenda behind the downgrade and its timing.

Well, slow forward a mere 4 months and the downgrade has become a reality. Time usually seems to go by quickly when you’re having fun, but somehow we missed out on about 20 months of fun from that “couple of years” warning.

And what of that political process? Was S&P ultimately surprised by the way our elected officials responded to the call for financial management? Probably not, but even the most wizened of cynics was stunned by the process. Whoever keeps track of these sort of things can perhaps make a statement regarding the public’s impression of their elected Congress compared to other periods of discord.

For my perspective, recent events highlight the fact that it only takes one to decide not to tango.

I suppose that you could file this thought in the “Irony Department”, but I doubt that it’s very funny to those sweating it before Monday’s market opens. But to the Republican leaders, what will prove to be more costly to the demographic that  they sought to protect during the debt celing “compromise”? The additional taxes they might have been required to pay or the wealth destruction from the recent market plunge and anything that may lie ahead? No doubt, that on a per capita basis, the wealthy will be disproportionately effected by a stock market debacle.

I’ve lived through the tumult and in-fighting during the Vietnam War era, by by the same token, saw the bipartisan disgust during the Watergate years.

Fascinatingly, but then again perhaps not, if you read “How Did We Connect Before Kevin Bacon?“,  August 8th the first day of trading subsequent to our S&P downgrade is also the anniversary of President Nixon’s resignation speech. As an aside, the market closed down nearly 1% following that news.

Wouldn’t a simple 1% drop on Monday seem liike an incredible gift?

I’ve seen the “Crisis of Confidence” coined by Carter that inspired no one, as well as the national unity during the Iran Hostage crisis. Had you purchased yellow ribbon futures then, you’d be having brunch with Carlos Slim right now.

I’ve seen us stand together when the threat of Y2K had even the most brave of us digging survival bunkers.

And of course, 9/11 was barely a decade ago and we even witnessed the most unlikely of all sights; our elected officials standing in unison on the Capitol steps, singing from a sense of shared national pride.

Borrowing from one of my 1970’s favorites, ELO, “But I never seen nothing like you” could very easily been written in anticipation of the United States House of Representatives’ response to the challenge S&P presented to them in April.

I don’t want to bury the lead, so here it is: They failed the challenge.

Remember that annoying British import game show, “The Weakest Link”?

If you’re ever looking for a political analogy to a terrorist, think “Tea Party”.

I was pleased to see that @TeaPartyorg stopped following me on Twitter on Saturday. As that happened, I could see legions of Angels in the making receiving their wings.

Imagine Michelle Bachmann, who just a few days ago pulled a George W. Bush and urged default on, now is taking the opportunity to demand President Obama’s immediate dismissal of Timothy Geithner as Treasury Secretary. Using her misplaced sense of logic, she should be lauding him, despite the fact that he has been a steady shepherd.

Truth be told, deep down I believe that if Geithner had sported an Angelo Mozilo like tan, maybe S&P would have given him a free pass.

Although it is certainly true that the downgrade, whether deserved or not, occured during President Obama’s tenure, the last time I looked, we are still a nation of three equal governmental branches.

Just this one time, I’ll give a free pass to the Judicial branch, as well.

I’m not an economist, but I don’t think it is beyond reason to believe that decreased government spending will result in greater unemployment than increased taxes on the top 1% will diminish trickle down benefits to the economy.

The fact that there is no shred of evidence of compromise in the debt ceiling agreement, specifically as it relates to increased revenues is clearly the reason S&P took their action in a much accelerated time frame.

Every business knows that cutting expenses can take you only so far. At some point cutting expenses accelerates destruction. There’s a difference between cutting “until it hurts” and “cutting to the bone”. Ultimately, the only way out of the abyss is increased revenues.

Unfortunately, there are those that continue to cling to the unproven axiom that decreased taxes on the most wealthy is stimulative to the economy and they refuse to use a rationale thought process to consider alternatives to an all or none approach to the economy.

I do understand that approach to a hot button issue such as abortion. It’s not terribly easy to compromise on that kind of issue, especially if there are religious overtones.

The last I looked, there were no such Biblical prohibitions on altering tax tables during times of economic need.

And man, for the United States, this is a time of need of Biblical proportion.

Since we are really in uncharted territory, no one has even the slightest idea of what Monday morning will bring.

Of course we’ll all look to the Asian markets as they open Sunday evening but we alone are in charge of our destiny.

Just as the nation responded to the horrific human tragedy that was September 11, 2001, so too must we now resolve to correct the mismanagement of our political system.

In fact, I don’t believe that there is anything inherently wrong with our economy that political compromise could not correct. It is time to send a clear message to all of those that have been entrusted to steer the national ship to forget about party alliances, blind faith and the need to campaign on a 24/7 basis. Ultimately, political dogma from either side, is the antithesis of our democratic foundations and principles.

There was once a very frightening expression “Deutschland uber alles” that belied an inflexible approach to existence, where the only alternative to complete victory was death. Germany above all was the siren call that led a generation to attempt to vanquish their perceived enemies.

Sound familiar? How else do terrorist organizations function? Only recognizing the extremes and going to any length to ensure that their misguided beliefs come to fruition.

Politics above all? Tea Party above all? Politics above nation?

It’s time for a national call to action to take back the debt and restore core principles to our daily lives.

 

 

I had a very hectic 24 hours.

Now that it’s over I can recount the fact that my youngest son completed his Army Basic Training and it was wonderful to finally see him after a 10 week absence.

The ceremonies today, for Family Day were really quite nice and I’d never seen so many home-made tattoos on family members. Skulls and swords seem to be very popular this year for the ladies. Sabers are this years’ Satan.

Just as I thought, my son really has become a very different person. He says that he is much more patient, less likely to get frustrated and much better able to deal with a varied group of people.

He also learned the value of not questioning reality when it’s imposed on you and you have no recourse. You never see the carcasses of ostriches littering the battlefields.

Good life skills. I wish I had those, especially in the past 24 hours.

Yesterday, our oldest son’s first flight leg got delayed, causing him to miss his connection.

After an 8 hour drive of our own, I drove another 90 minutes to pick him up at what was supposed to be his interim stop. Luckily, my initial exposure to Cracker Barrel didn’t cause any short term distress, so I was able to unload our car, check in to the hotel and hit the road again. Which is quite important, as I never use public rest rooms.

Funny thing, though. On the way to the airport at about 8 PM, I blew a tire on the highway. Not a simple hole in the tire, but rather the thing just sheared right off.

On a road where the posted limit was 70 MPH you really could feel the passing drafts of those big trucks kicking up that hot air and South Carolina dust.

Amazingly, in the near dark I was able to put on the temporary spare and get back on my way.

I won’t drag out the story about the details trying to get a new tire for Sugar Momma’s Volvo, but let’s say I’ve never been a big fan of the Swedes or their new Chinese overlords.

The day was so filled with events and car related anxiety that the only glimpse I had of the market was at about 10 AM when my son flashed his phone at me to show me that the Dow was only down 45 points.

We both shrugged and smiled. That was roughly the equivalent of a major gain.

But that was the last I heard of the days’ doings until sitting in the Volvo dealership awaiting the “clusterf**k” to build upon itself even more.

At least that had a flat screen TV with an easily accessible remote. I hope Judge Toler didn’t mind that I flipped those channels until CNBC popped up with the closing numbers.

Apparantly, it had been a fairly good 24 hours to have kept my head in the ground, totally cut off from the craziness in the markets. Similarly, at dinner with our newly minted soldier in the Officer’s Club, he told us how during drill training you never have any idea why you’re being “smoked”.

You don’t ask why and you don’t ask for reasons. You just don’t need to know.

He seems to believe, as do I, that he’s an even better person for the ordeal. He says that he’s learned a lot about leadership by basically keeping his head in the sand.

For starters, it’s much harder to get into trouble when you’re out of the loop. You don’t start hanging out with or following the wrong crowd and making ill fated decisions.

I’m glad that I missed the market’s mechinations over the past 24 hours. Had I been fully plugged in and aware of what was going on during the final hours of trading on Tuesday, I might have joined the crowd.

I’d like to think that I would not have done so, as I’m not prone to panic, but still, you never know.

My son also tells me that nothing really makes him nervous anymore.

Another good attribute to have and certainly a good one for soldiers and traders alike.

With Wednesday’s trading, had I been aware of the gyrations between the 45 point downward open and the 30 point closing gain, I may have decided that in fact, the time had come to lighten up and take some losses for the coming plunge.

But my head was happily in the sand. I didn’t see the drop. I didn’t need to make any decisions and I got to spend the day with my family on a very happy occasion.

Now, as for the fine folks at Volvo. Back in my younger days I probably would have considered putting some sand in someone’s gas tank, but that was a long, long time ago.

To anyone from the Department of Justice of the FBI reading this, if there are cold case files on such a crime, I didn’t commit any of those, I just would have liked to.

Sometimes thinking about things and not doing them is just as good as not thinking about things and not realizing what you could have done.

Thursday will be the actual graduation ceremony and since my son is doing a split enlistment, he is headed by for his junior year of college. It will probably be another day that I have my head in the sand.

I could easily plug in and create a trading environment in that Volvo on the way home, but I think I’ve enjoyed the last 24 hours of complete insulation and isolation, despite the minor calamities along the way.

Who knows, maybe a stop at South of the Border to see some ticky tacky touristy things and snap some pictures that will embarrass everyone may be just the thing to convince an Ostrich that it’s much safer beneath the sand. Maybe tomorrow I’ll just opt to spend one more day submerged

Besides, there’s always next week for the markets to shake the remaining sand out from its nether regions and get back into the game.

Now, it’s time to enjoy a family re-united and salute those that helped our soon grow in mind, body and spirit

Today may have marked the best day to have been in complete and utter isolation. If only I could have hidden my portfolio away in one of those salt mines that the government reportedly has available for its own uses.
Like the past two days I was otherwise occupied with the very happy occasion of my son’s graduation from Army Basic Training.
I spent very little time watching the news or paying attention to the markets.
That was probably a good thing as I forgot to pack my blood pressure medication for the trip.
On the drive back home, which took almost 10 hours with stops, there was a lot of napping and lots of questions asked regarding details of basic training. Sugar Momma was especially interested in every aspect of Army life but had a hard time comprehending that there didn’t necessarily need to be a reason behind anything.
What we didn’t realize was that during the 10 weeks away from home he and his fellow trainees had been completely cut off from the world around them. They had not heard of any news since May 25th. Imagine not knowing of any world events or changes for such a long time.
Sounds great, doesn’t it? If only there was a way to be spared the news of the world without having to do an obscene number of push-ups.
My son had said that they heard that Ryan Dunn and Hugh Hefner had died.
Granted they got the Hefner rumor wrong, although to the rumor mill’s credit, Hefner was in the news.
What amazed me is that Ryan Dunn, know only for some antics regarding a Matchbox racecar up his ass, as part of the “Jackass” crew made the news embargo cut.
But those represented not a sampling of the news they had heard, but the sum total of the news.
As my oldest son tapped me on the shoulder while I was driving, he just casually mentioned that the Dow Jones was down about 350 points at mid-day.
Once again, the thought of being buried deep in those salt mines seemed so appealing. Even push-ups with South Carolina fire ants marching on my back in the South Carolina sweltering sun seemed preferable to dealing with a wilting portfolio.
The thought that things can change so quickly and sometimes without any real stimulus at all became very real. Surprisingly, the market seems to be surprised or maybe it hasn’t had access to the news recently.
For his part, our son informed us that in the Army women are females, guns are weapons and bathrooms are latrines. Although those may seem like minor changes, they are apparantly very serious ones and trainees receive reinforcement in numerous ways to ensure that appropriate terminology is used.
For my youngest son, as I looked at him, a lot had changed in just 10 weeks of time, but now it was our turn to fill in the gaps in his knowledge of world events.
Amazingly, he didn’t seem surprised to find out that plaid had replaced yellow on all traffic lights. Nor was he surprised to find out that Amy Winehouse had passed away.
“Again?”
Being a football fan, he asked about the player’s strike and was happy to learn that tragedy had been averted. I was amazed at the level of detail my other son had regarding the settlement. I don’t think that I had ever had that level of understanding on any topic, but then I’ve never been as passionate about any topic.
I had been fairly passionate about stocks, but that was before yesterday.
One thing that did get my interest was the remark that “now that I have some money, I may be interested in buying some stocks”.
Even after the pain of the last couple of weeks, those words had curative powers.
The very first thing he had wanted to do after setting foot off base for the first time in 10 weeks was to go to Chipotle Mexican Grill. Of course, we had told him earlier that Chipotle had completely revamped its menu using goat and nutria as replacements for steak and pork, respectively.
That was change that you could believe in.
Unfazed, as long as they were free range, by 11:30 AM we had gone through the line, ordered and were sitting at our table. I got quite a kick watching him take that first bite, as it reminded me of some of the unadulterated joy little kids can have. He clearly enjoyed that first bite and quite a few thereafter.
I don’t even think he noticed the fluffy tail still wagging out of that burrito.
My father-in-law used to use the phrase “eating memories” to describe the disappointment in once again eating an old favorite food. “You’re just eating memories. It’s never as good as your memories”.
Maybe 10 weeks isn’t that long a period of time, but clearly nothing had changed here.
By 11:45 the line was out the door and very heavily populated by soldiers that had off-base privileges.
Chipotle is certainly no “cheap” stock, but might be a perfect first stock for the young investor who understands dining value.
As the market takes a sharp nosedive value is something that will never change.
Hopefully, some brave people will now step forward in recognition of the values that abound and quickly change the direction in which we’ve headed.
Sounds like a job for the U.S. Army.
 

 

Like most people of my age, I was a fan of Monty Python. I once worked with someone who thought that Monty Python was a real person and for some inexplicable reason kept calling him “Marty”.

Parenthetically, he was also the only person that I ever knew who would watch Monty Python and not be under the influence of anything.

At the time, being a door to door vacuum cleaner sales man it helped to have some other influences in life.

Yesterday, Sugar Momma and I started our drive to South Carolina to attended our youngest son’s graduation from Army Basic Training. She chose my wardrobe for the trip because she didn’t want anyone to be offended by my various tee shirts.

Normally, she tells people that I have some early stage neurolgical disease, not Allzeimer’s, she tells people, and then just makes up a name for something to act as an excuse for my behavior.

Even though I had spent about 95% of my life on a 500 mile stretch of Interstate 95, I clearly wasn’t prepared for the new world below, despite having lived below the Mason-Dixon line for 15 years.

There was a world of Cracker Barrels, Shoneys, Hardees, Bojangles and more. I kept hoping to see a Piggly WIggly but was satisfied with the endless stream of barbecue related billboards that all had some kind of chef hatted hog.

Although I don’t normally eat lunch, Sugar Momma does. She also uses public restrooms. So a few hours into the trip we stopped and ate at a Cracker Barrel.

My first time ever, but how could you not love a place where the waitress asks you “would you like some gratuitous fat with that, sir?” I even snapped a picture of the sign that said “New Fried Bologna Biscuits”.

When it comes to food, I’m fairly conservative. I still can’t understand how someone would destroy fried chicken with gravy. And besides, what gravy? What kind of chicken has gravy?

Grits? I don’t want to know from grits.

Since Sugar Momma likes to drive I just settled in with my laptop plugged into the inverter and fired the modem up and began the day like any other day, while streaming CNBC.

And like most days recently there wasn’t really much to write home about. Just another sea of red, this paricular flow worse than most.

Knowing that I didn’t really have any trades on the horizon my thoughts turned to new strategies. Even though the old strategies have at least cushioned the fall, you can never close your eyes to new and better.

I’m not much for speculation or risk taking, but I also get bored pretty easily doing the same thing day in and day out.

But I’d rather be bored than have kept the portfolio strategy that was in place for the first 25 years of its existence. There’s something very appealing about actually taking profits as opposed to watching paper profits disappear.

In the past few months I’ve slowly devoted a bit more to selling puts and buying various ETF’s and selling calls on those positions.

A few years ago I actually successfully played the ProShares Ultra Dow against the ProShares Ultrashort Dow. I say “successfully” because I didn’t lose money, but I didn’t make much, either.

Back then, I used movements in Goldman Sachs as an indicator of market movement. That actualy worked very well. A change in Goldman’s shares would seemed to very quickly be reflected in the ProShares, but not so quick that a nimble trader couldn’t get in, and more imprtantly, out.

But that was yesterday. And yesterday was a long time ago, as Goldman is anything but a market indicator these days.

One of the other reasons that I abandoned that strategy was due to the relatively thin options market and the wide spread between bid and ask prices. It does you no good to not have a trading market.

But lately I’ve been following the Direxion 3x Dow (FAS) and short Dow (FAZ) and assessing them as part of a variation of that old strategy, sans Goldman. When one goes up the other has to go down and the options move in tangent, but again in opposite directions.

So why nit hold both and sell call options on both?

Since what goes up does go down and eventually back up again, the strategy is based upon accepting losses, taking gains and closing out contracts and then rolling them over, but in the opposite direction.

So for example in this string of down days, while FAZ would climb in value, FAS would drop. That would give the opportunity to close the short call contracts on FAZ, which have quite nice weekly options premiums and then sell call options on the existing position.

In the meantime, there is an options premium gain on the FAZ and perhaps a capital gain on the underlying ETF, as one of the positions ultimately gets assigned.

And when it does, the assumption is that for the next cyxcle, weekly or otherwise, the direction of movement will be opposite of the preceding cycle.

Will it work? Don’t know, but it has looked good on paper. In practice may be a different issue as the challenges presented by greed, fear and envy will exert themselves regardless of how aware I am of their presence.

Although as with every investment there’s a chance for losing your investment, it can’t be any worse than the risk you take with that gravy they seem to pour on everything down here.

I do like the idea of trying something new, especially in bits and pieces. I typically hold about 20 “big boy” positions at any one time and try to evenly proportion them.

The others are my more child-like holdings, like the occasional short put position or the speculative play. Those are always small positions, since I like to balance not being overly greedy with not being overly stupid.

Although I’m equally fond of not having to think very much and this play does involve a little bit of decision making, maybe that will strengthen my weakening cortical matter and allow me to finally pick out minimally offensive tee-shirts on my own.

After these past few days it may not be a bad idea to try something new and different, which brings me to one other road side sign that I saw today:

Osaka Spa – Truck Parking in Back Lot

Based on the clientele that we spotted in the Cracker Barrel I’d be hard pressed to think that there would be anything very authentic in the Osaka Bar in that part of North Carolina.

As part of my decision to exercise good judgment for the foreseeable future, I didn’t investigate that opportunity any further.

If however, that exercise gets too tiring, I may just be in the market for some FAZ and FAS and a nice double helping of fried bologna biscuits.

Pass the gravy, please.

 

 

 

 

 

NEED GUEST BLOGGER FOR WENESDAY AND THURSDAY gacs@TheACsMan.com or Twitter DM

 

I used to think about how good and how bad it would be to live the life of a simple fruit fly.

The good? Not a care in the world, just hopping from rotting peach to rotting peach sucking in all of life’s sweet nectar.

The bad? Splat. You’re dead.

Actually, from what we now know, the simple fruit fly is not so simple at all. In fact, it now appears that nearly 75% of human disease genes have a homolog in the lowly fruit fly, while 50% of a fly’s genes have homologs in mammalian lines.

We are not so different after all, in that fruit flies and most humans are equally unlikely to know the meaning of the word “homolog”.

The fruit fly genome was entirely sequenced over a decade ago. I can’t begin to fathom how many fruiit fly years that is equivalent to, but for starters, 1 day in the life of a fruit fly is about 70 years for you or I.

Just imagine how many Armegeddons the Harold Camping of the Drosophila universe could have called for during that span. Haley’s Comet would have to come about every 20 hours or so, and so on.

What fascinated me was the life sequence. In the blink of an eye a female fruit fly transitions from “birth” to beginning the process of re-populating the species. With that kind of accelerated sequence, it’s not very likely that the show “To Catch a Predator” would have a meaningful species equivalent. Basically, after a couple of minutes you’re not a pupae anymore. Pedoflyia? I suppose that the equivalent would be flies ganging up en mass to hunt down a human predator with a swatter.

And then just as quickly, the lowly fruit fly dies.

Imagine having your entire life cycle crammed into just hours.

That’s exactly what yesterday morning’s market turned out to be.

In the blink of an eye the 130 point gain evaporated as just 3 letters, I-S-M took center stage.

I’d been watching the futures from about 6:30 AM and saw a slow erosion prior to the opening bell, but certainly nothing in the fruit fly realm of things.

The script, at least to my interpretation had a nice bounce and then a retreat, but nothing as rapid as turned out to be the case.

Luckily, I made all of my options sales within the first 15 minutes of trading. During that time, the market was already coming off of its opening highs. I was lucky enough to sell call contracts for JP Morgan, Freeport McMoran, Caterpillar and QQQ.

I had absolutely no inkling that the opportunity to buy them back and close the loop would come just an hour later.

Again, here comes the fruit fly. As it turns out, the female fruit fly, probably aware that her cycle is short, captures as many sex partners as she can during her brief stay on earth. Interestingly, it is the sperm of the final partner that appears most likely to father the offspring as the male fruitfly has an enzyme that actually displaces and destroys the sperm of its competitors.

You may call it slutty, but from my perspective the female fruit fly is hedging her species’ bets. The male fruit flies are like the universe of investors out there. They all want to drop their money, sometimes without due diligence being performed.

It’s all about timing. Anyone can trade, but not everyone can bring home the bacon or the insect analogous salted body part.

And as the market decided to erase its subsequent 140 point drop, it was time to start the cycle all over again.

What a day. I felt so dirty, just like a highly accomplished fruit fly lounging in a rotting peach on top of the world.

Luckily for me, the paroxysms of movement were just that. Thanks to the spasmodic activity I was able to roam around today taking care of errands before our trip, without really missing much. All of the action was at the tail ends of the day.

This morning my Sugar Momma and I are heading down to South Carolina for our youngest son’s graduation from Army Basic Training. In the 10 weeks that he’s been away from home, between his second and third years of college, he has no doubt experienced an incredibly accelerated series of events. If anything, he is just coming to life and will be a completely different person from the one we last saw before Memorial Day.

In the big picture these past 10 weeks were just a blip in time, but in terms of impact, I’m certain we’ll be seeing a new and improved version of a son who was already pretty good, but as good as he was, he couldn’t lob a grenade with reliable accuracy.

I’m cerain that the fruit fly metaphor is not terribly complimentary, but for me the message is clear.

Life moves fast, but we don’t have to go the fruit fly route. We have plenty of chances to enjoy, experience, self-correct and evolve.

Tomorrow is always new day, a day whent he market will completely ignore the antecedent events and trade in a vacuum. No historical memory and no ability to really be forward looking, despite the widely held axiom that the market, in its efficiency, discounts future events.

For the poor fruit fly it’s much more simple, but not all that different.

There is no tomorrow, there was no yesterday. It’s all about the present and the need to be the last one standing or piledriving to pass on life to the next generation.

For me, yesterday was good. I still lost a little, about 0.1% compared to 0.5% for the S&P, but today, with modem ready to go, DC inverter plugged in, I’ll be looking for more opportunity as we head to South Carolina., as Sugar Momma chauffeurs me around. Although there won’t be any procreating opportunity at least I’ve already outlived yesterday’s Drososophila brood and plan to see a few hundred more generations come and go.

As good as yesterday was for those wildly copulating flies, today will be no different for the next batch. For me, today and tomorrow will be even better than yesterday, regardless of what the market can bring.

 

 

 

The older I get the more I realize that the old saying about things that have an occurrence rate of 1 in a 1,000,000 is really meaningless.

With about 7 billion people in the world that would make for 7,000 of those all so rare occurences possible each and every day. With them being so common no one should really be surprised when they actually occur. Additionally, with advancing age comes the realization that pretty much everything is connected somehow as long as you can suspend rational thought processes long enough to see the connection.

A good knowledge of useful trivia also helps to see those connections.

At some point the Kevin Bacon game began to replace the one time wildly popular game Trivial Pursuit with a single minded focus on celebrity entertainers. But beyond being a game of mindless cinematic, television and theatrical trivia, the Kevin Bacon Seven Degrees of Separation game was all about the connections.

So before I get to the point of today’s blog, let me get my Kevin Bacon moment out of the way.

Years ago, I was in The United Airlines lounge in JFK Airport. I wasn’t really the sort of guy that would otherwise have access to the lounge, but United opened it to calm the nerves of passengers who were looking at a very long delay before embarking on a very long flight

Sitting in my preferred manner, solitary, I noticed a familiar figure a few tables down., sitting in an equally solitary manner. I was certain that it was Louis Giambalvo, a character actor, with no really great roles in his repretoire, but still one of my favorites.

I finally summoned up my courage and walked over to his table.

When I said, “Mr. Giambalvo”, he looked like he was going to jump out of his skin, maybe expecting that I was some sort of Mafia hit man, he having played to comedic perfection a Mafia boss in Weekend at Bernie’s

He clearly wasn’t accustomed to being recognized.

I immediately sensed his unease and simply told him “I’ve always enjoyed your work” and then returned to my solitude.

I did not shoot him in the back of the head.

Of course, Giambalvo appeared with Ken Howard in The White Shadow, who himself years later would have a recurring role in 30 Rock. Those are both pretty mainstream bits of information, hardly qualifying as trivia.

By now, you’ve probably got it figured out. 30 Rock is produced by Lorne Michaels who was the producer of SNL back when John Belushi was everyone’s Monday morning chatter topic.

And yes, John Belushi starred in Animal House in which a very young Kevin Bacon had a small role.

Now on to what the blog is all about.

As opposed to all respectable financial bloggers who are probably dissecting and analyzing the various outcomes following congressional votes, I could care less. On this Sunday evening while everyone else is waiting to see what further childish games our elected officials will play with our economic future, my thoughts are elsewehere.

No debt ceiling for me, only death sealing the clear connection that is waiting to be discovered.

For today I learned of the deaths of Howard Stein and Robert Ettinger, two totally unrelated individuals who walked entirely different paths in life, yet are extraordinarily connected.

In my mind, anyway.

More amazingly, they both existed in non-concentric paths before Kevin Bacon could play much of a role.

Robert Ettinger, who’d better be sitting on ice right now, was the mastermind behind cryogenic preservation of people and pets. The stuff of science fiction, but more importantly the stuff behind the premises of Woody Allen’s “Sleeper” and Mike Myers’ “Austin Powers”.

I can’t imagine what my life would have been like without “Sleeper”. So may great jokes, premises and sight gags. Since it takes place a couple of hundred years in the future, it’s still not even remotely dated.

Thank you Robert Ettinger, although I’ve never understood why people tell me that I remind them of Woody Allen. Most of the time the reaction that I get is eerily similar to that of Grammy Hall when she met her first Jew.

I do love ice pops, but I’m not really keen on becoming one.

But that brings us to Howard Stern, considered by many to be the master-mind behind the no-load mutual fund and many innovations in the mutual fund industry. Somewhat of an anomaly, he was also a large backer of Eugene McCarthy in his 1968 Presidential bid.

Before he moved over to Dreyfus, the one time scion of the industry, he worked at Bache and Co.

I don’t know if they still exist, but I can still remember the check that was sent to Szelhamos back in the 1960’s or early  70’s representing his profitable sale of Gulf & Western warrants. Somewhere I must still have that check from Bache. It was off by an order of 100.

I think my initial reaction was to deposit it immediately and flee to Jersey.

Szelhamos knew better.

Szelhamos also sent in about $25 each week to pick up Dreyfus mutual fund shares. That was his ticket toward retirement. As far as that went, he didn’t know better.

Szelhamos worked until he was about 80.

Humor, finance. Almost as good a combination as peanut butter and chocolate. People and mutual funds? Not so much.

Years later, I don’t believe in many things. I certainly am not buying into a Ted Williams existence, nor do I want a Futurama kind of life. Coincidentally enough, that was the subject of the “Evolution” blog from just a couple of days ago.

But by now, you should know that I don’t really believe in coincidence, either.

So it’s with a swelled head that I say that the movement in stocks last week all served to bring my covered positions below their strike prices. In my totally egocentric way I’d like to think that was the pre-ordained direction, being part of an overarching series of connections that I totally anticipated.

The possibility that stocks may move upward Monday morning may not have too much of a meaning for those issues that still have 3 weeks to expire, but it does mean something for the ones that expired this past Friday.

For as we are getting closer to getting an agreement on the debt ceiling this Sunday evening, it appears that precisely the opposte of what everyone was predicting is likely to occur.

The conventional wisdom had been that upon an agreement there would be a market sell-off on the news.

Rather, as the children played and squabbled, the market went down and down.

If that agreeement comes, expect a bungee like snap. And the timing couldn’t be more perfect. Monday morning is my favorite time for stock price increases, as long as I’m not in a portfolio replacement mode. There’s no better time to sell call options than when prices are on the rebound.

Now I may be getting a wee bit ahead of myself as there’s still plenty of time for whoever owns a critical piece of the ball to threaten to take it and go home. That would create another in a series of equally predictable disconnects.

Even if the bungee bounce comes, as expected, the script then calls for a relatively quick return to reality as there will be some other nerve wracking event coming down the pike in short enough order.

You can count on that as much as you can count on a relationship of some sort with Kevin Bacon.

When it comes to investing the things that need to be avoided are those human emotions that are connected by their venality

Greed, fear and envy.

I don’t think “pomposity” is an emotion, but between now and the market open, after I climb out of the “Orgasmitron” I’ll be exercising that atitude fully prepared for precisely the opposite to occur.

As it turns out, the likelihood that the expected will occur is more like the 1 in a 1,000,000 phenomenon.

Given how unpredictable events and reactions really are I wouldn’t be completely surprised to discover that I am Kevin Bacon and have been quietly playing a solitary game of Seven Degrees of Separation from Louis Giambalvo.

 

 

 

 

 

I know.

For those readers still entombed in concrete operations, the answer is simple.

Money.

But that’s not what I mean. Sure, I mean money, but there are more reasons to take on various tasks in life and to do a credible job.

There’s passion, there’s commitment, there’s shame. And money.

Nice, so far I’ve thown mildly connected references to Piaget and Maslow all in a broken sentence or two.

I’ve never had any acting skills. It actually took me many years to get comfortable with public speaking. I once saw a professionally produced videotape of a presentation that I had made to a large audience who I couldn’t see because of the overwhelmingly bright stage lighting.

I was amazed at how flat the jokes fell and how many bizarre bodily movements I made. That videotape is entombed, as well.

Honestly, I had no idea tha I changed into pajamas during the presentation, but the videotape doesn’t lie.

My one true stage role was in 8th grade, performing in the Alfred Noyes classic poem, “The Highwayman”.

In that case, the problem was that I could see the audience.

I had the role of the horse. And instead of saying “Tlot, tlot”, I was supposed to stamp my feet in cadence as someone else recited the particular stanza.

Much like knowing when to buy and sell stocks, my timing wasn’t very good, but I swear, one more uptick and I’m unloading my Freddie Mac. Just want to cut those losses.

But for actors, there is a school that teaches going deeply into one’s self and looking for life experiences, immersion into character and asking the basic question, “What’s my motivation?”

I have no idea what depths Laurence Olivier may have plumbed to reach into Hamlet’s pain and his bond to Yorick, but it is undeniably powerful.

Years later I discovered that I loved harness horse racing, but I couldn’t pull that as yet unexperienced experience into my being as a 13 year old Yeshivah boy on stage. That is why it appeared as if Bess, the landlord’s daughter was trampled on that stage one cold Thursday afternoon in The Bronx.

Most days I sit around and watch alternating blasts of red and green numbers while listening to #CNBC in the background. Usually there’s something that I hear or read that just starts the thought process and that fuels the motivation. It’s almost as if the very process of existing is itself the muse.

Don’t worry. I don’t know what that means either.

But today, there was nothing. Sure, there were some well groomed House Republicans in very tightly bound shirts at the neckline, but there was nothing to really get the juices flowing.

As a sometime Pediatric Dentist, even the brief CNBC story about the average Tooth Fairy payment being reduced by nearly 15%, according to a Visa survey, didn’t get me overly immersed in thought or in a fit of indignant rage.

The paradox in that report is that many children don’t accept American Express for their Tooth Fairy payments due to the high transaction fees, yet Visa may offer credit limit constraints. Isn’t it better to let your parent assume greater levels of debt so that you can enjoy greater rewards right now.

Besides, there’s only so many teeth that you have to give. Your best days may already be behind you.

Yet, the shallow analysis of this all important story didn’t as much as stir me.

Errie, how that simple financial decision faced by the ntion’s children is so very similar to the dilemma facing our child-like elected officials. How do we balance spending cuts with revenue enhancements? How mucjh longer do we kick things down the road?

Then it came to me.

Actually, it came to my bank account first. You see, after all, it was about money.

Today, I received the first royalty payment for the Option to Profit book.

If I actually had a day job I would probably continue to take steps to secure that job, as the royalties weren’t earth shattering, but I don’t have a day job.

Initially, my motivation for stepping up my trading game was to dump the day job and that’s worked out pretty well, even when the market tends to get petulant. Today, in complete boredom, I bought some shares of Sprint, which got a huge earnings related hit today, but I can thank Option to Profit for making that possible.

I also sold $14 call options on the ProShares UltraShort Silver ETF, as silver took a big drop today.

Remember, they’re UltraShort. Down is good and as silver went down, the premiums on the options went up.

I don’t use the word “petulant” often, but this morning Ken Langone, formerly co-founder of Home Depot, a current holding, referred to President Obama as being such.

I like Home Depot and I like Ken Langone. I especially admired his outspoken ctiticism of then Attorney General Eliot Spitzer, with regard to his witch hunts of Dick Grasso and Hank Greenberg.

I don’t agree with Langone on very many things in terms of actual politics, but I do like his heartfelt and pragmatic approaches to issues.

Talk about motivation. Here is a billionaire devoting so much of his time, efforts and energy to advancing healthcare. That’s pretty nice. He certainly doesn’t need to do that. Years from now, people will look at the Langone Medical Center, part of NYU and have no clue that he toiled anonymously. To be fair, Langone actually seemed embarrassed with host Joe Kernen let the audience know that he was referring to the Langone center. And when confronted with being outted, Langone corrected the host by pointing out that his wife had first billing. As Bernie Marcus would say: “A Mensch”

While I really don’t agree with his assessment of the President, as eventually going down as the worst in history, he did have a very compelling assessment of the very positive role of wealthy people in our society, particularly in advancing education and the arts.

He also very clearly said that people of great wealth should pay higher taxes and shouldn’t avail themselves of such government programs as Social Security.

He’ll get a lot of hate mail on that one, but not from me. Partially because I don’t do that kind of thing and the other is that it was so refreshing to hear someone take a balanced approach to an issue that effects us all.

Anyway, that first royalty payment was a motivator to pound out some more tripe for the blog. After all, I can’t continue to fall back on yesterday’s fame, not if I want to sell books by the truckload.

Since I’m not greedy, even a Karmen Ghia would do just fine.Just load her up.

I decided not to really bother waiting for the upcoming congressional vote on the new iteration on what is being called the Boehner Plan.

With a divided Senate and House of Representatives and the threats being made of bill defeat or veto, it just pays to sit back and watch the brinksmanship from the comfort of the La-Z-Boy.

At the moment it appears that there is a new operational definition of what it means to have bipartisan support. It appears that both parties have borrowed a page from Ivory Soap’s old playbook.

As long as either party puts forth a bill that has only 99.44% of support from a single party, it is qualified to be referred to as a bipartisan bill. Within the Washington D.C. Beltway, the definition of “b-partisan” was formed by the same person that decided it was accurate to refer to Bradley International Airport in Connecticut as such because it had a single daily flight to Canada.

So the game will continue and August 2nd just approaches.

I’ll be on my way to South Carolina along with Sugar Momma and my day trader son to watch @PFCAcsMan graduate from his Army Basic Training. I won’t care too much about whether it’s all being taken down to the wire or not.

I don’t have much iun the way of debt, so I don’t care too much about the worst case scenarios regarding the nation’s credit rating.

Obviously I know that’s incredibly short sighted of me. But right now, my motivation is getting my family together after a 9 week separation.

Once that’s happened, I’ll be very happy, but I’ve committed myself to finding fault with at least one new thing each day.

I know of no better motivation than self-motivation, Yorick.