Author: TheAcsMan

There it was.

I had no idea, but someone was actually paying attention.

I looked up at the screen and there, high and tight, was my name, my Twitter handle and a Tweet that I had sent out regarding Dunkin Donuts, of recent IPO fame.

I won’t repeat it here, because that just cheapens it and we’re still working on an agreement over residuals.

Given how many Tweets I send out per unit of time over the past 3 months, it shouldn’t have been too surprising that one would show up someplace.

I’m more surprised that no one from the Department of Justice has showed up at my doorstep yet, as I worry that they may construe every Tweet as being something resembling truth.

In fact, though, another Tweet was flagged by CNN as being the best business Tweet of the day, along with a handful of other “bests” a month or so ago. Mine was “bestest”.

The difference was that this time my real name was used. I tend to think that will be a problem with my witness protection status, because absolutely everyone watches CNBC.

On Twitter, at least the small number of people that I follow, all blast CNBC. Yet they keep tuning in, as evidenced by the onging Tweeting commentary. It just proves that there really is no thing such as bad publcity.

Or it may prove that there are no good viewing alternatives now that Oprah is gone.

But I’m not letting that notoriety go to my head, although now potential readers of this blog will be required to undergo a screening process to see if they are  “blog worthy”. Coincidentally, the independent Board of Directors of Szelhamos Rules had already been mulling over that possibility and now seems a good time to put our new policy into effect. I have to thank Carl Icahn for that, but I’m not turning my back on him quite yet.

The sure cure for self-inflated sense of worth though, was today’s market action.

It’s always humbling to sit on a couple of the days’ biggest losers. In my case that would be Caterpillar and Riverbed Technolgies.

Although their blow was softened somewhat with the outstanding call options I had written, there wasn’t really much good news today. It’s not like there would have been much of a difference if the Titanic sunk in 3500 feet or water or 4000.

But before I get down too much on myself, that need to self-aggrandize takes hold again, and I marvel at the fact that right now I’m sitting on lots of options premiums and nearly every “hostage” stock of mine is near the money. Some of them will expire this Friday, while others will have 3 weeks to go.

Compared to the S&P 500, as good of a comparison index as I can find for myself, which is down 3.0% for the week, my portfolios are down 2.1%.

Notice, I didn’t use the adverb “only” to describe my loss. It’s still pretty bad and as I said earlier, humbling. Now I know exactly how Rupert Murdoch must have felt.

But if today was the Wednesday before the monthly options expiration I’d be feeling pretty good about myself. Instead of feeling like a fool, albeit less of a fool than the Index of Fools, I’d smugly be patting myself on the back for another investing job well done.

I wonder, in the name of self-denial, just how our elected officials are feeling about themselves. Since the bar is set fairly low on Capitol Hill, it should be fairly easy to outperform that index. I’m not much of a political junkie, but in the wake of any number of pledges that politicians are finding themselves signing, it’s not terribly easy to hedge your positions.

To do so, would make you a loser by most accounts, even though steadfastly holding onto ideological positions is the equivalent of group suicide or nuclear holocaust, where we all lose and don’t even get any Kool-Aid to show for our troubles.

Take Rudy Giuliania for instance. His positions on many issues have evolved, especially in the social arena, demonstrating that a thought process was at work, in a politician no less.To others though, it represented the completely unacceptable.

Selling out.

Imagine actually doing what the electorate wants. That’s novel. I know one guy that will never be elected again.

John Boehner must be spouting Latin, as he intones “Et tu, Cantor?” As he is getting squeezed from all sides he looks about ready to molt right out of his bronzed skin. Lterally and figuratively a shell of a man unless he pulls something miraculous out of his hat. Like his soul.

Not likely.

I think that Boehner is probably one guy who would be happy to let his fame and notoriety take a couple of days off. It’s at times like this that you’d just love to kill bin Laden again.

In the meantime as my suddenly found fame offered me no protection, the market just kept right at it. Losing nearly 200 ponts, its been a rough few days for nearly everyone. Even Apple and Google got slammed today. Up until a couple of days ago the party line was that the market would sell off on the news of a debt ceiling agreement.

Now like most predictions, that one is probably not likely to occur quite as planned. If somehow the dysfunctional and self-absorbed elected officials do pull this one out by the August 2nd date, there’s likely to be a rally.

Some will call it a relief rally. Some will call it the beginning of a new bull run. Some will call it a dead cat bounce and others will refer to it as a bear trap.

And those are just the experts.

That’s the beauty of the markets these days. Just like the sudden sell off that began this afternoon in the absence of any macro or micro-economic news. Nor was there some earth shattering international event, like bin Laden coming back to life.

Some blamed it on technical factors, with the S&P 500 dipping below a “critical support level”.

Now I’d like to think that with my new found fame I’d be far too important to be effected by such intangibles as a line and a curve. But that’s not the case. Even the original JP Morgan would occasionally get the sniffles.

As it turned out, my fame didn’t last much more than about 4 seconds and a handful of re-tweets and direct messages, there was no lasting love or respect.

Even Andy Warhol would have thought me a loser for not lasting the full 15 munutes.

But still, I had those 4 seconds.

Would I have traded it all for a 200 point up day and maybe a debt ceiling agreement?

Probably not.

That’s because today’s plunge will long be forgotten, maybe as early as tomorrow and there will be some other man made and completely preventable crisis coming down the pike for the markets to over-react toward.

But there’ll be at least one person remembering seeing his handiwork and 140 spaced based wit on TV, despite the fact that it wasn’t on COPS. Granted had it been on Tosh.0, the whole world would see that Tweet for all eternity

At least I still have a goal.

Oh, and there’s the doorbell. Just a couple of non-descript guys in black suits and dark glasses.

See you in 10 to 20 years with good behavior.

 

 

 

Although as a young man I read everything Kurt Vonnegut wrote, I was never much of a science fiction fan. Other than seeing the most recent Star Trek movie with a visiting relative I’ve never even seen an episode, even though the original series ran when I was in the heart of my television watching youth.

However, even though I ignored it during its original run, I’ve become a big fan of Futurama ever since its resurrection on Comedy Central and the introduction of new episodes after a lengthy absence.

Futurama has introduced me to science fiction, as well as lots of great concepts in physics and metaphysics. How many cartoons can do that for you? I loved The Flintstones, but I’m not really certain that it’s helped in any way to expand my outlook on life, although you do have to love the talking mini-pterydactyls inside every consumer appliance. That’s something that can never be outsourced.

Anyway, one recurring theme on Futurama is the ability to preserve human heads. Not only preserve them, hell, even Ted Williams could do that, but maintain them as living, thinking and talking entities.

The beauty of such a system is clear, but perhaps most useful is the repository of historical continuity that exists in each talking head.

As we look at the changing nature of the American dream and the jobs situation, to me it appears that we are evolving into a sutuation where physical labor is going to become less and less of our national character.

It appears that way because it already is that way.

Manufacturing has been going offshore for a couple of generations and our heavy industry just continues to take a beating.

Some states, like Texas, boast of job growth, but the Presidential wannabe taking credit neglects to mention that these are overwhelmingly dead end minimum wage jobs. Additionally, had his earlier talk of secession become reality, it’s doubtful that the United States Treasury would have sent TARP and QE funds to the new nation of RIck Perry’s creation.

The more recent manufacturing innovations in technology, computer chips a prime example, are being made all over the world. Solar panels? Have you ever heard of China?

Did you see the beating that legacy companies such as Boeing, 3M, Illinois Toolworks and AK Steel took in their shares prices today? It surely can’t change by tomorrow. (I can’t really find a good “sarcasm” font, so instead here’s a winking eye instead, as the allusion to cartoon characters just continues.)

What’s left for us in the United States?

Well, just for a moment, let’s forget about how the great minds in theoretical math and physics gave us Collaterilzed Debt Obligations and other financial derivatives. Instead of bemoaning the fact that we don’t produce anything anymore, let’s celbrate the wonderful ingenuity and the ability to make something out of nothing at all.

But that’s what we have been for a long time and have certainly further evolved.

Great minds.

Sure, we do need people to pump gas, construct buildings and perform various physical jobs, but we are increasingly becoming a nation that creates nothing but ideas.

Certainly, there are advantages to the preserved head form of life. Without the necessary equipment to procreate, the need for jobs will abate. No population growth means less demand for available jobs, which in turn leads to increased wages for those that haven’t yet evolved.

At some point, as the underclass, those with torsos and limbs becomes adequately wealthy and is able to avail themselves of the best opportunities to expand their minds, they too will evolve into the heads only class, leading to a further wage pressure. Someone has to change the fluid in our head jars.

From a social perspective, people like RIck Santorum would be torn. Sure, fewer abortions, but that would still be accompanied by fewer people upon whose shoulders the social security sytem could rely.

Did I mention that the preserved heads have no shoulders?

I spent 30 years working with my hands.

Not that there’s anything wrong with that, but then why are we not spending more of our research dollars to create a man-made evolutionary kingdom of Talking Heads.

Not the kind the you see on TV. There’s already plenty of hot air that contributes to our global warminjg. But the kind of Talking Heads that actually contribute to our continued evolution as an economic powerhouse.

On a personal level, I’m slowly making the transition. Now, I make my living using an index finger or two. All I need to do these days is type in a buy or sell order.

After all, it is a slow process, that’s the basis of evolution. I know that the technology already exists to be able to move a virtual mouse and point and click on a computer monitor.

I want that.

Just look at the efficiency of evolution.

I used to spend many hours in physical and mental labor. For many years the employment of others depended on whether I could game a system enough to justify our continued employment.

With the proceeds of those labors, whatever was left over after the basic necessities would be shipped off to my stock broker, who himself evolved into a financial advisor. He then prematurely devolved.

High fees, slow and inefficient  trade executon and a limited inventory of products.

Like the Big Bang, an antithesis to evolution I began my own trading career after having given up on it 20 years earlier.

The first things necessary were to abandon the outdated human characteristics and emotions of fear, regret and greed.

How else can you explain buying Freeport McMoRan on Monday at $55.50 and then selling a weekly option expiring this Friday with a $55 strike price for $1.41 premium.

Sure, you could call it stupidity.

But you’ll have to agree that there’s no greed involved, since I’m perfectly content to net $0.91 per share.

Unless of course you believe that 1.8% weekly ROI is greedy, because it sure isn’t stupid.

I used to have morbid fear and would overly intellectualize every trade I made back in the days before I turned the reigns over to a professional.

Evoluition can be wonderful.

And imagine, without a body to worry about, think how much more your investing income would stretch. That’s one less pair of Crocs for me.

For me, the evolutionary process took another step forward,as my oldest son informed me that he just received Option Level 2 approval for his new trading account.

He’s made a handful of trades and has clearly evolved beyond my old Buy and Hold days. I think his average holding period has been about 4 days, somewhat longer than his girlfriend tenure.

Of course, you do need arms and hands to be part of the “holding” class, so there still may be a flaw in my thinking.

But if anyone that can work out the details, it’s this head.

Can someone scratch my ears?

 

 

Everyone’s an economist these days.

I should probably include myself among the armchair experts. On the other hand, my nephew just graduated from University of Virginia as an economics major and my youngest son has declared as an economics major.

He will be returning from Army basic training in just a couple of weeks and then heading back to University of Maryland. My guess is that he will find that if he carries his Army issued rifle with him, his positions on the economy are much more likely to be accepted by his fellow students and perhaps even faculty.

Not that there’s anything wrong with healthy debate.

Since I live in the Washington D.C. area, I’m a little bit ambivalent about the entire debt ceiling and government shutdown debate, healthy or otherwise.

That’s because I can still remember how wonderful the commute into work was when the federal government was shut down 15 years ago. The roads were empty, reminiscent of the recent Californian Carmegeddon. Each day during the shut down restored an hour to my life in the form of less commuting.

These days, for the most part, my only commute is to the garage to retrieve rolls of toilet paper, so I don’t have quite the same incentive to see political stalemate continue. In fact, it seems as if there are lots of good reasons for all sides to come together and put an end to all of this talk about a credit downgrade for the United States.

Replace Clinton and Gingrich with Obama and Cantor, respectively, and not much has changed in the past 15 years except that Gingrich still appears to be the loser.

I know that Cantor isn’t really the Gingrich character this time around That falls to John Boehner, but it’s not really clear to me that Boehner is leading the Republican ship.

When I think of Eric Cantor I’m reminded of the Seinfeld episode when the convert to Judaism dentist insults Seinfeld as he tells jokes to him.

When asked if he was offended as a Jew, Seinfeld replied, “No, I’m offended as a comedian”.

I’m offended by Cantor because he doesn’t seem to have the semblance of thought processes.

As someone who is at least one blip away from cortical flat-lining, I’m offened that the lone Republican Jewish congressman could be so light between the ears, although he is far better groomed than I.

I don’t know about you, but among the things that I’m getting tired of is the everpresent appearance of the U.S. Debt Clock.

It’s not like it’s brand new. I’m not quite certain when it first made its appearance in Manhattan, but it was many years ago. Like most things that constantly seek to stimulate your senses, after a while the numbness sets in.

Perhaps the answer is to just not watch so much television or to simply change the channel.

The latter recommendation turned out to be ineffectual, as even Comedy Central’s presentation of “It’s Always Sunny in Phildadelphia” is now accompanied by the $58,000 per second movement of the clock’s digits.

Somehow, everything is funnier on Comedy Central. On C-SPAN it only seems like $40,000.

I’m also a little tired of the constant appearance of political figures as “Breaking News”. It makes me long for the days when regular programming was pre-empted by Parliament hearings into Murdoch shennanigans. At the very least they should be in fleeing cars on the Freeway” and doing their press conferences on the road. That’s where Fox News got it right.

At least we can credit the Murdochs for that innovation, and perhaps O.J., as well.

All talk on Sunday was how important it was to come to a debt crisis solution prior to the Asian markets opening.

Sure enough, no agreement and the US markets opened up on the down side.

Hey, that’s exactly what I was hoping for. After all, I needed to replace about 15% of my portfolio following assignment of JP Morgan, British Petroleum, QQQ and SPY.

Initially, as I mentioned on Friday, I was hoping to pick up shares of Caterpillar, Freeport McMoran and Praxair.

As it turned out I didn’t add Praxair, as it opened up, but I got the others, as well as repurchasing QQQ and JP Morgan.

And wouldn’t you know it, being a good boy, I got my second wish and the market turned up by 100 points from its opening low and I got the opportunity to sell call options on everything other than the Freeport shares. I just didn’t act quickly enough before it reversed its reversal.

And then late in the afternoon came the “Breaking News” again.

This time it was Majority Leader Reid giving us the bad news. There was no progress. In fact, he said the was backsliding and so the market took its cue and did the same.

Reid, at least in his public pronouncements has never learned to make his case on any subject.

Today was no different.

He passingly referred to ex-Secretary of Defense Gates’ opinion that the Department of Defense budget could be pared. That would have stood in sharp contrast to what was reported as a last minute Pentagon budget increase presented by house Republicans.

We’ve heard stories before how various armed services did not want certain weapon systems or technologies, but through the wonderful system of pork, those projects and contracts were pushed through by elected officials who only cared about being elected officials.

Reid should have hammered home the point.

For a guy puported to be an ex-boxer, he can’t put the opponent away.

It was hard to tell whether Reid was sleepy or severely depressed at the podium, but he only inspired pity. Perhaps it was my imagination, but he really looked like Droopy Dog moreso than ever.

Not a winning emotion, nor look. Also, a second rate cartoon character.

I suppose that we’ll have to keep looking at the Debt Clock a while longer. In the meantime I’m beginning to think that totaliarianism is the answer.

Those kind of governments always seem to work. No one is faulting Idi Amin for the Ugandan economy.

Maybe all it takes is a Treasury Secretary and Chairman of the Federal Reserve armed with rifles and passing out blindfolds.

I’m sure my son can teach them how to take aim.

A week or so ago I wrote a blog called “Which Way is Up“. Like most of my writing, it also was of a rambling nature, but also like most of my writing, there was a minimally cohesive theme.

I moaned about the fact that with the available investment instruments, sometimes it’s difficult to remember what it is exactly that you want. Buy or selling a stock is simplistic, but then you get into all of the derivative variations, the vast majority that I will never go near.

I’m a pretty bright guy, but still can never remember the difference between “strangles” and “straddles” and the other Kama Sutra positions. Actually, I think the “strangle and straddle” was a Brazilian Snuff Film from the 70’s.

Sometimes the message is pretty simple. There’s not much mistaking the “I Want You” message from a few generations ago. The aim was clear, as was the objective. The only downside to answering the call was death, but even that was pretty clear.

Today, the messages aren’t necessarily as clear, even though sometimes the end result can be financial death.

But do you remember the time, not to long ago when there was a broadly agreed upon moan from leading economists and government officials that we, as Americans werent saving enough?

Remember when all of those posters were trotted out comparing our savings rate compared to the rest of the economically civilized world?

I’m sure that retailers didn’t mind that we had a negative savings rate, because after all, if we weren’t saving, we were buying.

Not only were we buying, but we were buying in a way that was anything other than zero sum. During boom times, when both money and credit are readily available, not only do we buy, but we buy inefficiently. We aren’t price sensitive, we don’t wait until the end of an item’s useful life has come and we buy in a frivolous manner.

These days, when you buy an iPad, that means that while Apple prospers, some other company, such as Hewlett Packard suffers, because there are no discretionary spending dollars. Whatever is left over is going toward paying down debt or waiting for a heavily discounted sale.

Now, wouldn’t those economist and government officials like to see the newly adopted frugality and savings behavior just quietly go away?

And since the Supreme Court has decided that corporations are people, it should come as no surprise that corporate behavior mirrors societal behavior. Over the last couple of days there’s been so much talk about how much cash certain corporations are sitting upon. Of course Apple is way up there. With the speculation that Apple might buy Hulu for $2.5 Billion, someone reported that was Apples cash flow in less than 3 weeks.

Yikes.

Throw General Electric into the mix and we’re talking some real money.

Last July, USA Today, a newspaper not owned by The Murdochs, reported that U.S. companies were sitting on $837 Billion. In February 2011, President Obama put the figure at $2 Trillion, which is James Altucher’s projected market capitalization of Apple.

Who are you going to believe, an all color newspaper or the President of the United States?

Or a Harry Potter look-alike venture capitalist blogger from the Bronx?

I don’t know whether either of tthe above figures include cash being held overseas due to tax liabilities if transferred back to the US. No matter, you can get lots of stylish haircuts and cute glasses with that kind of money.

Understanding why the government hasn’t come up with a tax based incentive and performance monitored plan for companies to repatriate foreign held profits in order to benefit the USD economy is the topic for a different rant.

Byt why is the stock market continuing its rise despite the somnolent economy? Because corporate profits are great. But the reason they’re great is that they are just not spending money where it’s needed the most.

Companies are just not hiring. Simply balance sheet stuff. Increased productivity, fewer workers, even with lower revenues you can have improving margins.

See. Saving money is bad. That’s why I sleep on a concrete slab.

Although I know that it’s a good idea to keep investing cash around to take advantage of unexpected opportunities, I am typically 100% invested. I have a really hard time keeping cash uninvested. Of course, the problem with that is also that not every purchase is a bargain. Investing for the sake of investing, as I wrote in Feeding the Beast, can be deadly.

But that’s why these weekly options are so nice.

Now, I typically have a stream of new cash sitting in the account every Monday morning, instead of just on the Monday following the third Friday of the month.

This past Friday, that meant losing shares of JP Morgan, ProShares Mid-Cap, QQQ and SPY.

JP Morgan was a holding that I had successfully sold weekly options on 11 weeks in a row. Although it was sometimes assigned, I always bought it back within a day at an even lower price.

Ah, ecstasy.

So, I’m already salivating. hat money is as good as spent with an eye already on Praxair, which was assigned from me just last week, but suffered a 2% loss today, bringing it right back into my neighborhood.

It’s like riding a sine wave, not to be geeky. As soon as your flush wiuth cash on the top, I just projectile vomit it out and suck it all in again.

And that’s what corporations should be doing.

The financial industry let us down. Despite the TARP rescue, they did little to infuse cash into the system and lend at what would be bargain rates and bargain prices for land and labor. That lending would now have resulted in tangible jobs.

Jobs means salaries and salaries mean spending.

We don’t need no stinking savings. We need the Apples and GE’s pf the world to step it up and invest in jobs. Let them have the confidence trhat they have products that the consumers or industry desire and put people to work making them.

Once they’re back to work and flush with cash, what kind of behavior do you think Americans are going to revert to?

That’s what we should want.

Most days it’s relatively easy to get inspiration from some ridiculous event that inappropriately effects our lives, or more importantly, my life.

On days that the market has a slow, steady and sustained rise, it’s a little harder to get incensed about anything, I suppose, however, that on those days, I could outsource the blog to the kind of person that leaves the movie theater after having seen Bambi and complains about how inappropriate and psychologically damaging it was for their child to be exposed to Bambi’s mother’s death.

There’s always a black lining if you’re willing to look for it or create it.

But I wasn’t about to outsource anything, it’s not like this blog is paying the bills.

By the time the market came to its close, despite the quietude, I ended up having made another 11 trades, again most of them being call options sales. But when I looked back I realized that there was a unifying theme throughout the day.

Some things just don’t go together. 

Everyone knows about the standard oxymorons, like jumbo shrimp and superette. Please don’t take the image to the left as giving insight into my political leanings. It’s just there to illustrate the point that 50.1% of the 2000 electorate believed to be true. Even more in 2004.

Go figure.

Just in case you don’t get it, the operative word is not “left”.

Some other things are just a matter of taste and aren’t necessarily obvious.

To this day my Sugar Momma is revulsed by the thought of the vegetable quiche I made during our “courtship. At the time I didn’t know that she wasn’t a big fan of mushrooms, but there were plenty of onions, peppers and cucumbers to offset the funghi.

At the time, cucumbers seemed like a good idea to me, but now, in hindsight, her explanations of how they just don’t belong make a lot of sense.

She, on the other hand has thought nothing of adding broccoli to Chicken paprikas, a venerable Hungarian dish. Trust me, no Hungarian uses broccoli for anything, not even broccoli.

Then news came that the European Central Bank had decided that it would accept Greek collateral for the loans necessary to rescue the nation’s economy.

That was the initial stimulus for the initial market climb on top of an already good opening. For the likes of Bechtel and other international builders, like the bin Laden family, the prospects of erecting giant silos all across the European zone to store all of that feta was welcome news, as such large projects had dried up.

Then came news that threw cold water on the plan, as certain silo owners demurred on storing both feta cheese and lamb, as that was a clear violation of the Kosher laws. Meat and dairy do not go together. 

What kind of an uncivilized animal drinks a tall cool glass of milk with a hamburger?

I’ll tell you what kind. The kind that would eat a cheeseburger.

But it didn’t end there.

There was more talk of Carl Icahn and his bid for Clorox. He now seemed to be bidding against himself to take control of the company. If anything, the last 25 years indicates that Carl Icahn doesn’tt belong in ownership of any publicly traded company.

Of course, there’s also Buy and Hold, although I do have some new found respect for the concept. Mostly because a well know proponent, Eddy Elfenbein of Crossing Wall Street, who in addition to having a great investment record, may be alternatively the funniest and most insightful financial Tweeter I’ve found.

As long as I’m the tangential subject of favorite Tweeters, for pure cynicism and brutally honest self-deprecation mixed with stock and market insights, I go to someone named “Dasan“

Okay, back to topic at hand.

Then there are those things that shouldn’t go together, but really should.

Although I currently own neither of these, how appropriate and complete would a portfolio be if it had shares in Altria and Aetna? Talk about a natural hedge.

But what really caught my attention yesterday morning was listening to Senator Kent Conrad (D – North Dakota).

As a member of the “Gang of Six” which was recently rejoined by Senator Tom Coburn (R – Oklahoma). He was giving a rare optimistic report of potential bipartisan compromise on the deficit ceiling.

What struck me was a common theme. It seems that the only voices of reason in Washington D.C. come from lame ducks or retired elected officials. Conrad has let it be known that he’s done. Have you heard Allan Simpson recently? All of a sudden, his barbed wit is a tool for mocking both sides.

Amazing, once re-election is out of the picture, these guys actually think in terms of what’s right, not just what’s right for re-election.

For me, it just confirms that the most useless thing is a machine whose only function is to create copies of itself, with those copies also just having that singular skill. That’s precisely what nationally elected officials are, particularly members of the House of Representatives.

Seems that elected officials don’t belong in elective office.

I know how to get the broccoli out of paprikas, but I’m not sure how to tget the elected guy out of elective office.

Term limits? Coup d’etat?

Both so un-American.

Being an American, I did find the time to trade, since I really didn’t ponder these issues too long.

My faith in Riverbed Technologies would have been rewarded had I been quick enough. After being up to about $32.50, the shares turned on a dime and closed down another $0.75, so I didn’t get to sell options.

I did however buy back the Bank of America puts that were expiring today at a nice 3 day profit of 3%.

I had thought about selling July 29, 2011 $10 puts instead, but wouldn’t you know it,, the bid and ask prices weren’t going together. As Bank of America kept rising in price, the ask of the $10 out of the money put kept rising, while the bid, more appropriately kept falling. The spread was huge.

The market doesn’t always price to perfection, nor apply the mathematical relationships that should determine the premium price.

One Twitter follower, actually a favorite of mine, suggested that instead of buying stocks and selling calls, I should just sell puts, as the end result was the same and incurred less trading commissions

To my sense of thinking I discounted the commissions, since in blocks of 1000+ shares and 10+ options contracts per trade, the cost was less tha $0.02/share. Additionally, I could double dip and get dividends, as well.

His resposne was that the dividend is factored into the premium price

I agree, at least on a theoretical basis. But theory, common sense and application of theory don’t always go hand in hand.  It’s in the imperfection of the individual and the greed factor, that there are non-scripted opportunities.

Its own brand of oxymoronism.

Instead, I used the money to pick up shares of the ProShares VIX, which is really volatile and, therefore carries a nice options premium.

I also bought more of the ProShares Ultra Silver and sold those calls, as well.

The same with DuPont, Dow Chemical, Mosaic, Hasbro and Williams-Sonoma. Buy shares, then sell calls. Sometimes you buy them back and just sell them again.

Seems so natural doing things that do go together and living happily ever after in the forest.

 

 

 

 

 

 

So much of our lives are based on blind faith. Many years ago, someone told me that if we followed a purely rationale thought process, we would never make the key and truly important decisions in our lives. We would always find logical reasons to not follow through.

Despite what should have been a logical decision, our first child was conceived in his home. And you see, that worked out pretty well.

After trading hours on Tuesday word came out that RIverbed Technology’s earnings, despite record numbers, were disappointing. I watched it go down by about $9, but didn’t have the kind of severe gut wrenching reaction as others may have had.

The last time I owned it was about 2 months ago and subsequently lost it to assignment.

What else is new?

But as I mentioned in yesterday’s blog, RIverbed Technology has been one of my all time very favorite stocks, as it consistently has offered a 4-6% options premium for its near the money options strikes.

I’ve held and lost my shares over and over the past few years and never moaned about the loss when shares went higher, even beyond the option premium that I received. Knowing that I, like most people, tend not to sell their shares at the top, those “lost” profits would have been unrealized anyway.

I wanted to pick up shares again last month or the month before on the first day of trading for the new options cycle but as I recall, shares popped by $2 or so. It just wasn’t in the cards.There wasn’t too much reason to chase after it. I may have loved the shares. but I had some dignity.

As I waited for RIverbed to return to a more reasonable $34 range, it just kept going higher and higher.

But I had faith it would return to the neighborhood in which we both felt comfortable.

Blind Faith, actually. The phrase itself suddenly seems repetitive.

I suppose that I could have checked the charts to reinforce the belief, but I didn’t have to. My faith was reinforced with memories and the knowledge that Newton got it right 400 years ago.

I suppose that I also had faith that the Laws of Physics are inviolable.

So the prospects of a bargain share price come the morning, I was ready to pounce on new shares. Despite not bothering to get too much detail about the earnings and guidance, I had faith that Riverbed would lead me back again to The Promised Land.

For starters, I also had faith that I would still be of sound mind and body, come the morning. Based upon my current status, that would be an increase of one.

What I had in faith though,  I lacked in funds.

I eagerly awaited the opening bell, but there was just one additional problem.

I had to take my visiting niece from California to the airport for the next leg of her trip. She was off to Florida and was excited about going to Disney World, despite the fact that she lives within 30 minutes of Disney Land.

It’s like getting excited about seeing a Dominos Pizza place when you cross the border into West Virginia.

Anyway, we were on the road at the opening bell.

I took my Droid phone, rationalized that I wasn’t really texting while driving and instead attempted to trade on the E*Trade Droid platform.

To get the funds, I broke cardinal rules in addition to driving laws,  I suppose. I sold my shares of McKesson that I had only recently purchased. The dividend that I captured offset the capital loss, but otherwise it was a wasted two weeks of holding.

But I couldn’t keep my eyes on the road and get my too fat fingers to negotiate the keyboard well enough to put in a limit order, so I just succumbed to my need to trade and placed a market order. Not only did I take a loss, but there went the other cardinal rule.

Market order. Ugh!

But I had faith that it would work out well, and it did. I actually sold shares at the high for the day. How that happened I have no idea, but the shares may have gone to the same guy who put in a market order for Zillow upon its IPO and paid $60, shortly before the $20 issue price roared to $43.

Or depending on your perspective, plunged to $43.

Still, it didn’t turn out badly for me.

Then I did the same with my Riverbed purchase, although I did so from another lane, not really having the memory of moving over.

But I had faith that I wouldn’t drive into the guard rail.

I told my niece not to do as I do.

I wasn’t referring to the texting or trading while driving, though.

I was referring to placing market orders. Really, faith can only take you so far.

By the time we got to the airport, I placed an additional Buy order for Riverbed, this time at a limit price and the resulting average price of $32.02 made me happy.

I like my purchase prices to be very close to strike prices for reasons that seem obvious to me.

Once she was safely through security I got my quick market summary and saw that Textron was up big. I mentioned Textron in Tuesday’s blog as well. Together with Riverbed, Textron and a few others have been great to me with the options premiums spun off.

This time I decided to have faith that when I returned home 30 minutes later, the price would still be there for a good options sale.

I did sell options on a piece of my Textron holdings the day before, which made up about 7% of my combined portfolios. I often do that if I have different priced lots and in the case of Textron, I did, as I averaged down my cost last month.

Faith was rewarded, because Textron went even higher and I changed my plans, instead selling the August $25 options, rather than the $24’s.

Even better, my faith that Bank America would cling to its $10 level seemed to have been rewarded. I sold $10 in the money puts expiring this Friday. The strange thing is that I often sweat the small things way out of proportion. I get more nervous thinking about a quarter in a slot machine than the prospects of looking at a single day’s paper loss of $100,000.

Both have happened. The difference being that I never was able to recover the quarter.

If my Bank of America puts were assigned, they would represent just a very small fraction of the overall portfolio, yet I found myself checking Bank of America’s share price even more than that of Riverhead, which now represented about 3% of my assets.

Clearly, however, I didn’t have that much faith in RIverbed, since my typical holding is about 7%. I’m not trying to draw any parallels to Moses here, but his faith was sometimes lukewarm and look what happened to him.

Could you imagine being left to dig your own grave in suburban Egypt? Coincidentally, I have a plot picked out adjacent to a Dominos in West Virginia.

It’s my sincere hope that my lack of complete faith will see a triumphant rise in shares of Riverbed, making me wish that I had full and unquestioning faith in the purchase of its shares.

That’ll teach me.

Here’s to a vengeful God.

 

I’m a big believer in personal hygiene.

I know that it takes some courage to come right out and say that, but it needed to be said.

Unfortunately, sometimes time seems to fly and it’s only when I see the flies circling about me do I realize what’s been neglected.

In the winter, when no flies are to be had, I usually get the message when Laszlo refuses to lick me.

If you’re not a regular reader of this blog, Laszlo is my personal assistant.

Most mornings I’m usually up and esconced in my La-Z-Boy sometime between 6 and 7 AM after having checked into FourSquare. Coffee made, sipping slowly and studying the pre-open mood and scouring the New York Times.

Of course, given my professional education and training, I do brush my teeth before heading to my “office”. I felt that needed to be said, as well.

Both yesterday and today it was a simple matter to break away from trading in order to exercise personal hygiene.

I love big moves, up or down, especially once they show signs of stability. That’s when it’s safe to move away from the monitor and TV screen.

Yesterday, however, I could have taken a very extended shower and perhaps had a kidney removed as well, as CNBC coverage of the Murdoch’s appearance before the British Parliament committee hearing just went on for an insufferable amount of time.

But CNBC wasn’t alone. Bloomberg, MSNBC FOX News, FOX Biz, CNN, Home Shopping Network, Comedy Central, The Sci-Fi Channel and even a C-SPAN channel all devoted themselves to the Britsh equivalent of gavel to gavel coverage.

Well, at least Nancy Grace went on unencumbered. For a while, I thought maybe one of the Murdochs had perhaps vanished and she was trying to find the truth. As it turned out,  just a pie went missing off the HLN sill.

After a major flurry of trades in the first 30 minutes of the morning’s session, I was able to sell calls on lots of my positions as the market opened high and just went even higher.

At that point and then faced when the droning sound of various United Kingdom accents, it was safe to shower.

Back in the days that I travelled quite a bit, I always thought that I did my best thinking while en-route.When driving, I’d often lose track of where I was. When flying, I’d forget to disembark if there some relly good ideas percolating.

These days I rarely travel, so instead I try to get my best thinking in while in the shower.

For some reason I was reminded of a friend from long ago who used to refer to his morning routine as “Shit, shower, shampoo and shave.” I did try convincing him that the “it’s all the same drain, dude” theory didn’t really apply, but to no avail, I believe.

For some reason, I continue to believe that there was one more act in that group and for the life of me, I just can’t recall. That has made me think that I’ve been omitting some inportant act of personal hygiene for the past 30 years.

Did I mention that I have no friends?

What I didn’t expect after returning to my perch was how dirty I would feel listening to the Murdochs try and  relieve themselves of responsibility or advanced knowledge of the cellphone hacking charges

When Rupert Murdoch ascribed responsibility to his subordinates or their subordinates, I was fully expecting him to continue down the line until he finally arrived at the people whose cell phone accounts had been hacked. It doesn’t take too much of a stretch to blame them for not using something other than the default password.

I mean, after all, for how many centuries did the plea that the rape victim was dressed seductively help to exonerate the accused?

How I would have love to have heard the word “mis-remembered”, but I guess that’s a  uniquely steroid induced American word.

What really amazed me was the initial reaction of the huckster that tried to “pie” the elder Murdoch. For the first few moments neither the small portion of the Twittersphere that I follow, nor the media seemed to understand exactly what a “foam filled plate” signified.

In fact, as late as 4:15 PM, Maria Bartiromo still referred to it in that manner.

Maria, darling. He was “pied”.

The pie in the face used to be a universally recognized comedy staple and statement of political beliefs. In the early part of this century it was the symbol of the Teddy Roosevelt’s Bull Moose Party, except they were real whipped cream pies and Roosevelt devoured them..

Apparently, with our lives taken over by electronics and social media, where human contact is ever diminishing, the old pie in the face has lost its rightfful place in our coollective experience.

With wife Wendi coming to Murdoch’s defense, the hearings went on after a brief delay, with Murdoch only needing to shed his suit jacket.

Although most every native born Brit is expected to carry a Shepard’s Pie at all times, it’s hard to believe how a shaving cream pie could have escaped detection by security personnel in Parliament.

So of course after listening to all of the tripe, it was time for yet another shower.

What was really fascinating was that after listening to Murdoch the flies came back, but this time they circled counter-clockwise.

When I came back, I was rewarded for the decision earlier in the day to purchase more shares of the ProShares Ultrashort Silver ETF’s.

Apparently, after President Obama’s statement that the “Gang of Six” seemed to be coming to some agreement, precious metals decided to reverse course and give up those last few days worth of gains.

I also purchased more shares of Lowe’s and just as quickly sold those calls, in addition to selling calls on the ETF’s.

After the close, all eyes were on Apple’s earnings report. As usual, they blew away their perennially under-reported guidance numbers and eclipsed the $400 level for a short time.

My eyes though were on Riverbed Technolgy, one of my favorites, that I last held 2 months ago. I have made more money selling calls on Riverbed than on any stock, other than Sallie Mae, Goldman Sachs, Textron, Rio Tinto and JP Morgan.

Okay, there may have been a few others, as well, but I got tired of checking it out.

Regardless, over the past 4 years or so, Riverbed Technology has spun off about $25,000 in premiums.

Given that it is earnings season, it was now their turn. Despite a 72% surge in earnings and record margins, Riverbed lost 25% in the after hours because it “missed on top line growth analyst expectations.”

I have no idea what that even means, but as  “Chico Escuela” used to say “Ribberbed been berry berry good to me”, so after it’s stink wears off, I plan to purchase more shares with proceeds from any assigned weekly contracts.

Then, we can get rid of our stink together.

If it means getting good companies at good prices, I will exercise personal hygiene on a predictable and regular basis. But its funny how it takes a stinker of a price drop to make something attractive again.

Maybe I need to rethink my own personal hygiene schedule and take a lead from Riverbed.

Noseclips anyone?

 

 

 

Listening to Treasury Secretary Tim Geithner during his interview yesterday left me wondering what kind of emotions to have.

Perhaps in a similar vein, my dog Laszlo may be going through an identical dilemma, but he’s probably dealing with it in a more mature fashion, because in his case, there was no money involved.

Only casings.

While Sugar Momma was in New York City this weekend with our visiting California niece, I threw all cholesterol caution to the wind and purchased some Nathan’s Hot Dogs and their frozen french fry counterpart from the supermarket. Without a doubt, had I succumbed to a cholesterol chunk lodging in a coronary artery, that market would be held as an accomplice to my death.

Casey Anthony made not have been so clear cut, but no jury would let Harris Teeter get away with the role they played.

Amazingly, the fries tasted Coney Island authentic, although I don’t know if that could also be said had I baked them. Listen, I said “ALL” caution to the wind, although I did use canola oil in the spirit of compromise.

Unfortunately, that spirit can’t seem to migrate 20 miles or so down the road as we approach that August 2nd debt ceiling deadline.

I probably should have invited Eric Cenator over for dinner. I would have also broken out a new box of wine for the occasion.

But I wasn’t the only one reveling this weekend.

Laszlo, our long haired miniature dachshund got to enjoy cannibalism as he had his first ever wiener. That’s right. The wiener dog ate a wiener.

Usually a picky eater, he went wild, devouring what seemed to be his body weight in hot dogs on two successive nights.

He clearly enjoyed his repast, but his digestive system didn’t and it looks as if we may have to burn some carpets.

My guess is that if faced with the hot dog temptation again, Laszlo would choose to forget the distress and remember the joy. I don’t think he would spend too much time dealing with the emotional extremes or the consequences of his actions.

It’s like the time I had unprotected sex with the Angolan prostitute after we finished passing the needle.

So when Tim Geithner very clearly stated that the aims of the US banks were counter to the well being of our economic system at first I was ecstatic to hear that level of forthright thought. No one could accuse him of class warfare or pitting Main Street versus Wall Street on this one. After all, he was Chairman of the New York Federal Reserve. It’s not like he didn’t know what banks were all about.

I’m not one of those people who believes that bankers are evil. I’ve been very happy to own JP Morgan, Goldman Sachs and others. Alright, not so happy with Goldman at the moment.

I don’t even think credit card issuers are evil, also having been very happy to own Visa and MasterCard.

I have also owned Altria and Philip Morris, even though I think lung cancer is evil.

But you do have to believe that there were some excesses that got us to the abyss and you also have to believe that despite the infusion of liquidity through TARP, QE1 and QE2, the mainstream financial systems may not have done very much to help us climb out of that crater, although with just 6,000 more ThankYou points I can get a door placed on our guest bathroom.

I was also pleased to see that the market was opening down, perhaps in reaction to the Secretary’s opinions. Happy, because I did have to replenish about 35% my portfolio after assignments and it appeared that there were some good prices to be had.

In fact, I was able to repurchase shares of Sallie Mae, Williams Sonoma, ProShares Mid-Cap 400, Rio Tinto and Transocean at prices lower than I had to release them to assignment

I also thought that I got good prices on my purchases of British Petroleum, Mosaic, JP Morgan, Hasbro, ProShares Ultra Silver, ProShares SPDR S&P 500.

But then it seem that the market started to do what Laszlo did. It started to try and digest Geithner’s words.

That process wasn’t very pretty, as the Dow slumped another 80 points from where I had made the majority of my purchases.

I didn’t see what the floor of the NYSE looked like, but I doubt that it is carpeted.

Good thing.

Normally, I like to sell my call options soon after my share purchase, although I try to wait for a down pattern to shift gears before making those sales. That’s probably greed coming into the equation, but I prefer to think of it as optimism.

That wasn’t going to be the case yesterday. Although by the close the market had cut its loss by almost 50% from the days’ low I still didn’t find the opportunity to cash in, possibly due to the fact that I also fell to sleep during the extended period of boredom that gripped the market at about noon.

As I went to the New York Times to see their take on the day, they ascribed the market’s fall to the European debt crisis. Not a single mention of Geithner.

The lack of credit for his market moving words was consistent with the theme earlier in the day on CNBC when Geithner’s influence on Congressional members relating to the debt ceiling issue was being downplayed.

All while lauding his skills and deft.

That’s probably one way of dealing with mixed emotions. On the one hand he’s situationally impotent to effect change of opinion, but on the other hand, he’s the best of all impotent Treasury Secretaries.

I hope that he’s not overly distressed.

I do know one thing that will make him feel better.

A Nathan’s Hot Dog.

At least for a while, until the next crisis hits.

 

Special thanks to Josh Brown (Reformed Broker) for reminding us that February 3rd was the anniversary of when the music died.
Sometimes I think I’m like that kid in “The Sixth Sense”.
“I see connections”. That’s not quite as spooky as seeing dead people, but just the same, some of the connections can be pretty tenuous and call reason into question.

In this case, though, the connection happens to be to a dead person who now appears very much alive, as Natalie King Cole has released paternal DNA testing indicating that Buddy Holly was her biological father and will soon be releasing a music video duet of “Oh Boy”.
But what in the world does Buddy Holly have to do with stocks, investing or the markets? So little, that if I didn’t bang out this blog right now, the moment the idea popped into my head, there is no reasonable way that I would remember the concept or connection 3 minutes from now.
It all started with a simple Tweet from Josh Brown, author of The Reformed Broker website.
I have no connection with him, in fact, I think he may have even blocked me from posting to his Twitter account, due to our onetime irreconciliable differences over Darfur.
But he pointed out a great Buddy Holly tribute album with lots of very impressive contributing artists. How could you not want a Buddy Holly song covered by Cee Lo Green?
Being who I am, I scanned the list of artists with one filter in mind, but the search turned up nothing. Maybe he was still with the rest of us sitting a very extending Shiva for Clarence Clemons.
That prompted me to dust off a couple of 35 year old concert venue renditions of Buddy Holly songs by Bruce Springsteen and then caused me to allegedely post links to them on this site.
I say “allegedly” because it may be against the law to have done something like that. Despite great admiration for both Springsteen and Holly, an equally prestigeous named law firm might pursue me for something.
Allegedly. Good luck finding them.
Anyway, Buddy Holly was truly an amazing guy. A walking and talking cultural contra-indication, he was a Texas Boy in the 50’s, playing to racially mixed audiences and performing with musicians who couldn’t get in the front door in many parts of the country. Interestingly, The Big Bopper also couldn’t get in because of his girth.
The fact that his wife’s name and that of my Sugar Momma are the same played no role in the strength of the connection.
Another of my favorites, Don McLean paid Buddy Holly homage, at the expense of Elvis. Entirely coincidentally, the blog “The First Time” from just a few days ago featured Roberta Flack, whose own song “Killing Him Softly” was a tribute to Don McLean.
As Kurt Vonnegut used to write, “And so it goes”.
Had I not seen Don McLean in concert the night before the SAT’s, maybe I would have had three Harvard degrees.That undergraduate degree would have taught me to never begin sentences with either the word “But” or “And”.
No regrets, though, as that is a recurring investing theme of mine.
I say that after having just lost Google to assignment, far below its Friday close. And then there was Visa and before that Green Mountain Coffee Roasters.
Okay, maybe some small regrets. Unfortunately, my vanishing memory banks can’t seem to erase those memories.
Buddy Holly showed that there were lots of different ways to break out of the stereotypical mold and create a new far-sighted and visionary path.
He also helped re-invent an entire musical genre, much like I will need to recreate my portfolio today, as nearly 40% has to be replaced due to assignment.
I didn’t need a plane crash to realize that there were alternatives to buy and hold, although, sometime this week, I will pay some tribute to a Buy and Hold guy (if I can remember).
It did, however, take the untimely death of my financial adviser, who when we first started our relationship, was still known as a “stock broker”. I discuss him at length in the Option to Profit book, which I obviously plug at every opportunity.
Today, I will be figuring out how to redeploy about 40% of my portfolio, following assignments of Freeport McMoran, Google, Halliburton, Sallie Mae, Rio Tinto, Transocean and maybe a few others.
I will likely buy back Sallie Mae, Transocean and Rio Tinto and follow through with the recommendations that I Tweeted on Friday afternoon regarding Sunoco and Time Warner, in addition to whatever else remains in or is added to the portfolio.
Of course, I’ll look to sell call options, always being satisfied in the 2-4% monthly gain per stock. Dividends, small capital gains and options premiums, whatever it takes to scratch out a respectable living.
In a way, it’s like the small venues that Buddy Holly played, because in his barely year of fame, he hadn’t yet gotten to the big times, which for Rock and Roll, hadn’t really come of age yet anyway.
Or as I like to look at opportunity costs, “You didn’t miss them anyway”.
He was obviously a risk taker and I am slowly getting into that frame of mind, at a time when the financial guys are saying that those of my age should “slow down”.
Anyway, I just read a short article that seemed to say that approaching retirement only 25% of holdings should be in equities and the rest in annuities.
Can you say “WTF” on the internet?
Would Buddy Holly put his money into annuities? Elvis maybe. The Jester? Never.
Screw annuities. Just to slow down that aging process and as a thumb in the eye of those thinking that I should be slowing down, I’ve started selling more and more put contracts. Even though I’ve done that for a few years now, as part of my less than 5% speculative piece, it was always with very low cost issues, like Citibank, Sirius and YRCW. Now I’m branching out, slowly working may way up the price chain with Harbin Energy, Yahoo and Spreadtrum Communications recently. Maybe Google next?
I don’t think so. I may see connections, but I’m not a lunatic.
But it is fun. It’s not what I’m supposed to be doing at this age, but it is all a frame of mind. And besides, that frame of mind is both figurative and literal. I love wearing the big glasses and checkered jacket. Probably the only person who will see me in my lucky trading garb will be Sugar Momma and the UPS guy.
Sugar Momma has been looking askance at me lately anyway as the last 3 or 4 texts I’ve sent her have mistakenly included the word “tit”, instead of “it”. Proof reading was never one of my strong suits, but coming on the heels of the blog entry, “How my WIfe’s Bra Saved us Money“, now she’s not so certain that those were simple auto-spell mistakes.
Although the UPS guy has learned not to ask me questions, I’m sure he’ll be able to hear the Buddy Holly tunes that will be streaming today and he’ll probably say something to the effect of “Man that’s so loud, I can barely even hear your annoying wiener dog barking”.
That was the whole point.
Today, as we start another options cycle, I’ll be replaying “That’ll be the day the Bear Market Died” all day long and thinking of all the connections that are so obviously there.
Don’t you see them?
 
 
 
 

Szelhamos used to have a saying whenever he assessed a project that he had undertaken:

“It’s good enough” was the typical comment as he surveyed the fruits of his labor.

Of course, if you were paying for those fruits you probably wouldn’t want to hear that sort of statement.

He had a friend who was a house painter who used to tell the story of when he told his workmen in Hungarian that they were just going to do a quick sloppy job on one particular project, when the owner, apparently understanding Hungarian promptly showed the work crew the front door.

I remember when Szelhamos and I were trying to finish a small storage space in the basement. For some reason that I can’t recall, we didn’t include that in the rest of the professionally contracted basement project, which was a significant undertaking. That basement was actually larger than the entirety of our two story home in the Westchester suburb of New York City.

Of course, our end result was good enough. I doubt that it will be good enough for the next owners of this home.

Today I started thinking about just how important it actually is to be the very best in your area of expertise or business. You hear the phrase “best of breed” so often as the one one company in a sector that merits your investment consideration.

When news came out late yesterday afternoon that Borders, arguably the best in the business of book peddling was now likely to liquidate, it occured to me that being the best in a dying business offers no solace.

The fact that both Borders and Blockbuster used the same gimmick of a free Buggy Whip with every purchase or rental probably should have sent that message earlier.

I’m just not certain how Merril Lynch is going to work those into a meaningful promotion for its dying business.

In a way, this thought is a little bit in keeping with yesterday’s blog “Remember Report Cards”.

What I didn’t mention in that blog article was something that I learned from my oldest son, who at one point of his early college career had a GPA that if multiplied by 100 would give you an  IQ that might qualify you to wear a protective helmet 24/7.

I’ll give you a moment to digest that one.

What he taught me was that unless you were planning on going to graduate or professional school, grades really didn’t matter.

I’ll never know how true that really is, as he completely turned it around in the latter half of his college years and now only has to wear the helmet during waking and sleeping hours.

As a side note, he has done quite well for himself in his first few post-college years. Working hard, having fun, making money and joining the investor class.

So good enough?

As I look at today’s upcoming  end to the July options cycle, on the heels of Google’s blow out earnings numbers yesterday, I’ll be missing out on what may be a $50 climb in Google, as my call options will see shares taken away from me at $520.

Should I have tried to be the very best and get the most out of that and all investments?

Uh duh. Of course.

There’s no question that there’s an audience for a Home Run Hitting Contest, but there’s not much audience for a Scratch Singles Show.

If you owned unhedged shares of Google, you just hit a home run.

Otherwise, if you’re like me, the third base coach just tackled you as you rounded first base.

But I don’t have much in the way of regrets.

Tomorrow will end and once again I’ll do the final “is it good enough” calculation.

That’s the angst filled calculation that I do to see what my bottom line would have been had I not sold call options on my holdings.

I’m not sure why it continues to be angst filled, especially since most every month I come oit ahead. Not only do I come out ahead, but the money represents realized profits, as opposed to theoretical profits that assume that I would have been smart enough to take profits on the stocks, as opposed to the typical “let it ride” mentality of most investors.

Listen, I know who I am. Otherwise, I would have sold Google back in 2007 when it had reached $700.

One of the nice things about selling call options is that it creates a discipline of selling and forcing yourself to take profits.

It’s akin to admitting that lesser profits are “good enough”.

And they really are, especially if those lesser profits come on a  really frequent basis.

The New York Mets used to have a powerful home run hitter, Dave Kingman. Back in the 70’s or 80’s, he towered above other players. When he hit a home run it was really a marvel, but really accounted for nothing. One dubious record Kingman had, among others, was his home runs to runs scored ratio.

Worst ratio ever!

In fact, Kingman, purely for purpose of exaggeration, was possibly the best homerun hitter of the era and had some of the longest clouts ever recorded, ultimately became the first player ever with more than 400 home runs to fall off the Hall of Fame ballot on after his very first year of eligibility.

Given those highlights, I’d rather take it down a notch or two and be Lee Mazzzilli. Broad repertoire, nothing terribly flashy and ended up with a World Series ring.

Kingman ended dressing a rat up and placing it into a shoebox he gave to a women reporter. He was trying to send some kind of a message, but unfortunately severed horse heads were out of season.

I’m resigned to the fact that I’ll never be the best. But I’ve also come to understand that “good enough” can be good enough if you can just keep doing it year after year.

Mediocrity isn’t really bad as long as it’s consistent. Hitting a home run is great, but not at the cost of striking out in a 3 to 1 ratio. Just look at the high flier funds and see where they stand in the subsequent years

Remember when Fidelity Magellen was the very best? How about when it was the very worst? I’m not much of a mutual fund person, but over the long term, it was the Equity Incomes funds of the world that lived to see another day.

When today is over, I’ll look at all of my shares that are assigned and do the calulation. In Google’s case I’ll bid them farewell until the next time that we meet. Probably in the neighborhood of $510

As it will turn out I purchased this current lot of shares on June 13 at $507.39. I will give it up for adoption to a new owner for just $520.  I also received another $11.01 in options premiums. So for the one month of ownership or rental of those shares, my return was 5%

I’m really happy with that.

It’s good enough.