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There was no reason for me to think that while on a cab ride going through the heart of Downtown Nashville on Tuesday, that Dobie Gray would breathe his last breathes on that same day and in that same city.

But that’s exactly what happened on that cool and damp day as I went past the famous Ryman Auditorium and saw endless pedestrians with cowboy hats and guitar cases probably sharing the same hopes and dreams, but unlikely to ever find their way into the major leagues of obituary pages, The New York Times.

Other than introducing the song “The In Crowd”, which was a bigger hit when Ramsey Lewis covered it, you may know him for his continually popular “Drift Away.”

I don’t really know him from any of his other works, but I found it poignant when after today’s closing bell, where the market dropped an additional 100 points in the last 45 minutes, Bob Pisani on CNBC referred to the market as just having “drifted away.”

Maybe Dobie was on his mind.

I’ve been a Bruce Springsteen fan for nearly 40 years and have seen him in concert a number of times and cities over that time. Along with others, I grieved when the Big Man died, but it was clear at a concert in Baltimore a few years ago that the body was a shell, while the talent and dirve were undying.

Dobie Gray just quietly drifted away.

Springsteen is an original and rarely covers other artists.

When he does it’s an indelible stamp for those that typically need no such approval or recognition.

Bob Dylan, Buddy Holly, Elvis and Pete Seeger, of course come to mind.

And Dobie Gray. 

Covering an artists work can be interpreted in two different ways.

For some, it is a sign of laziness and lack of creativity. The fear of relying on your own talents to please the ultimate judges who decide your professional fate. It is often a sign of low confidence and playing it safely.

Or, performing a cover can be the ultimate sign of respect that one artist can pay to another.

Although the cynics will also say that performing a cover version can also be the ultimate expression of self-importance as someone tries to put their own spin on a classic. It also may be an expression of opportunism, as I doubt that Ramsey Lewis covered The In Crowd as a tribute to a then small player, Dobie Gray.

Sometimes you just know a good thing when it comes along and you have to act.

But I’m not the cynical kind, unless you’re talking about life and the people who populate the environment in which the world exists.

No doubt that in Springsteen’s case he didn’t really need to draw on anyone else’s body of work. But when he did, they were doozies. Always respectful and always faithful to the vision of the artist honored.

As with Dobie Gray.

In much the same vein, I know that my approach to investing and trying to make my portfolio grow is the ultimate in laziness.

I buy the same stocks, over and over again. I call the list of stocks that I choose from my list of “Old Reliables”. No doubt that each of them was at some point put on my radar screen by someone on TV.

In all likelihood, I then followed and watched for cyclicality and the size of the reward for selling options.

In the case of Ricky Nelson, who put out the hit “Garden Party” in response to the booing he received at a concert in Madison Square Garden where he didn’t play the “old reliables” and got booed, I also only have to please myself.

No, I’m not talking about some kind of investing self-gratification, but I am talking about investment and gratification. The singles gratify me, even if they come at the expense of the homers.

I gave up on trying to be creative. Not only do I have a bad voice, but I can only barely play the accordian, so I know that I won’t be filling any auditoria on my own.

I gave also up on trying to pick stocks and certainly gave up on trying to time purchases to maximize profits.

I recognized, before it was too late, that I was never going to be anything but a cover artist.

Like some Elvis impersonator, I make believe that I know what I’m doing, but in reality, I don’t.

I knw that and so do you.

I don’t really understand fundamental analysis and that probably explains why I don’t have the patience to even attempt to learn. I probably am subconsciously avoiding putting myself into the situation where I would have to admit that “I just don’t get it.”

Except for the fact that I’m fully and consciously now aware of that denial and avoidance strategy.

But like that aging Elvis impersonator, you can make a comfortable, maybe even a very comfortable living without ever coming up with a single original thought.

So I just copy what I’ve done before and then hedge those totally creative lacking decisions by, wouldn’t you know it. covering.

I cover myself and my holdings because I know what my audience wants.

Sugar Momma and I are that audience and like that immortalized Garden crowd of a generation ago, we want safety but we don’t want boredom.

There’s not much respectful about what I do. It’s predominantly laziness and trying to sense opportunities.

Most of the time those opportunities are just the taken from the sense that everything you see, at least when it comes to the shares of solid companies are just part of a trip up or down a sine curve.

I say “solid companies” because I don’t like to think about micro-economic or industry specific issues. I certainly don’t want to get involved in company specific issues.

Except….

Except when there’s an opportunity. Oh Ramsey Lewis, how you’ve molded me.

I look at opportuinities as being on the speculative spectrum and with speculation comes undue risk, which more often than not dwarfs the chance of reward.

I prefer probability over possibility.

Most of the time.

But lately, there’s been opportunity whenever a Chinese company gets maligned. At least when the darts are being flung by Muddy Waters.

In those cases, there’s been nice opportunity, such as very recently with Focus Media to take positions after the big price hits have occured and the  s**t has cleared the fan.

Even when the accusations may prove to be acuirate, there seems to be a calming period when there’s opportunity to sell puts or buy shares and write covered calls. Just like Ramsey Lewis did, sometimes you take advantage of a good thing when it comes along.

I’m not proud. I don’t mind saying that I know nothing of Focus Media, did no independent research and have no real strategy. I would be happy to toss it out next week, when the options cycle ends.

In the case of Focus Media, which was up today to $21.50, despite the 200 point plunge, I sold puts at $15 and $16, back when the stock was at $16, barely 10 days ago. Since then, I also picked up shares at $20.71 and sold $20 calls.

Wow. That’s all over the place.

Maybe the lack of coherency is a sign of creativity or maybe it’s just a sign of situational opportunism.

Either way, I’m covered.

Today’s drastic drop in the market was related to a slew of disappointments with regard to reaching financial, fiscal and policy agreements by the members of the EU.

Then, a slew of all new and unrecognizable acronyms hit the same fan that everyone had thought the s**t had  already cleared.

But in the meantime, I’m looking at the possibility of buying back some of those shares that were assigned from me just a few days ago, this coming monday.

The shares that drifted away may be drifting back. Too bad Dobie Gray never found the opportunity to record that obvious follow-up tune.

The best part about all of this is that I did nothing. Talk about laziness. I respect the art of laziness as I spend my day resting in the aptly named La-Z-Boy and let the Dobie Grays of the world do the hard work while leaving a legacy behind for the less talented and knowing, as myself, to avail.

As I listen to someone talking about things “going more pear shaped,” it continues to crystallize.

At this point, I’m even too lazy to Google that expression.

 I increasingly realize that I need to stay lazy and avoid cluttering my mind with confounders. I can’t compete with those that are actually trying to move forward. I’ll just happily thrive in their wake and smile on their way down and again when they bob back up.

I’ll stick with the tried and tested lazy man’s way.

Thank you to the Dobie Grays of the world. You’re appreciated for having paved the way.

And for “The Dobie Gray,” you gave the world one of its most hummable songs, which is just the lazy way for us untalented sorts to make it our own.

 

 

I grew up in a household where in my early years English was decidedly a second language.

Even as my parents quickly became fluent in speaking and reading the language of their adopted country, one thing that they didn’t adopt was the use of classically American idiomatic expressions.

Although I’m certain that most such expressions have their counterparts in other cultures, our household, at the very least was idiomatically deprived. Adages were never tossed about as part of casual conversation, nor were parables frequently used to teach life lessons.

Well, other than the obvious “Never let a Cossack into your home while your daughters are there alone.”

In fact, while I did quite well on the SAT exams, I’m certain that what kept me from having an asterisk next to my name was the fact that deciphering the meanings of such expressions as part of a multiple choice exam was somehing beyond my naturalized ability.

The exam was just culturally biased against me and probably even against those that did the actual marauding, raping and pillaging. Those poor Cossacks never stood a chance.

Over the years, though, I’ve learned some of the very basics, although I don’t seek to apply them under any circumstances, except maybe to illustrate a point, almost like what an idiom tries to do.

Silver Lining? Got it, every cloud has one.

Don’t s**t where you sleep? Got that one too. Damn good advice.

But last week I was following a path opposite that advised by another popular expression: “Don’t cry over spilled milk.”

I suppose that in the affluence of America that certainly holds true, but how could you even think to say that in parts of Bangladhesh? Or how can you even remotely suggest that to someone who’s let stock profits disappear into someone else’s pockets?

For them, it’s the end of the world as they know it.

But I get it. It’s done. It’s over. Move on. Sunk costs, etc.

But there I was last week moaning the losses of some favorite stocks as they closed above the strike prices at which I sold their call contracts.

One, which I only passingly mentioned over the past few days was Halliburton.

Halliburton, like my other favorites is such, because it predictably spins off a nice options premium. Unfortunately, it’s not one of my triple threat stocks because it has only a pathetic dividend.

It has the attractive premium because if you’re the type that worries about paper losses, you’ll need the money for antacids. It’s just a little volatile and reacts to news, rumors and politically shifting winds.

You need to have a bit of extra stomach lining when you own Halliburton. You also have to ignore its close association with lots of bad things over the years that may make you question the morality of investing in such a company.

I don’t have those kind of qualms, so Cheney, I’m talking to you. In fact, as much as I love New Orleans, making it a regular vacation spot, I applaud the Food Industry portion of Halliburton for its much maligned effort to engineer self frying fish in the Gulf of Mexico.

After all, that seemed like the natural extension and transfer of volatility from the stock to the fish.

When it comes to Halliburton, “What you don’t know won’t hurt you.”

There’s an adage for every situation.

While busy moaning, a funny thing happened. In fact, it was the sort of thing that I always count on happening and welcome with open arms.

Like now.

Jut 3 days after losing my Halliburton shares at $35 for a final options premium of only $0.28, bringing the total 3 months’ premium to $4.56 in addition to that pathetic dividend, it was time to stop moaning and do something.

That something was to snap up shares of Halliburton as it had come down to $33.50 from more than $37.

Although I did shed some metaphorical tears deep down I knew that I would never have taken profits with Halliburton at $37. I never would have sold my shares because you can’t completely escape your human nature, despite the discipline that you seek to impose.

That’s reasonably logical to assume and as we all know logic is  “the opium of the people.”

With the need to moan and feel badly about a lost opportunity that was never really lost, only repackaged, it was time to moan about another boring day in the markets.

And it really was a boring trading session for most of the day until the final 20 minutes.

That was when a rumor came out of Japan that the through the efforts of the G-20 the IMF was going to be able to float $600 Billion to the EU as part of a lending facility. Of course that would be done through the ECB.

Got it? G-20, IMF, EU and ECB. Not as catchy an idiom as the others, but still obvious in its intent.

Seeking to dispel the thought that there was even an opportunity to be “looking a gift horse in the mouth”, the IMF then denied the rumor and the market which had added 80 points in a couple of minutes then shed half of those in the final two minutes of trading.

Honestly? I don’t know what a gift horse is and none of this really effected me or my shares.

During the course of the day I did have the opportunity to make a few trades, but they seemed to follow in my recent usual pattern.

That pattern, which is one that I’m not very happy about, is to sell call options literally minutes before the underlying stock takes a sharp move upward.

Why would I do that?

Because I’m an idiot who can’t tell the future, even when its only a minute ahead.

Today, it was my turn to sell weekly calls on Goldman Sachs and the beleagured Netflix.

The same happened last week with Green Mountain, Caterpillar, JP Morgan and Halliburton.

There may have been some others, but my mind is beginning to shut down as it needs to make room for more idioms.

Over the past few years I’ve done pretty well trying to collect small option premiums, that I refer to as crumbs, just a couple of days before expiration.

Now, with the growth of weekly options, I do that sort of thing much more than ever. Although there were always instances in which I might have regretted one of those crumb picking expeditions, by and large its been a good strategy..

That is until the milk starting spilling.

All of this is pretty ironic since the primary site from which I sell the Option to Profit book is called Milking Stocks.

With all of the economic uncertainty in Europe it truly amazes me that markets would go up on Fridays and traders would stay long into the weekend.

But see, that’s where logic is misleading.

The problem is taking the contrarian approach would lead you to believe that Fridays would represent opportunities to sell off, and therefore, good opportunities to sell call contracts in anticipation.

But logic would tell you the same.

The intersection of logic and contrarianism can’t exist and they certainly can’t be the same.

Given a recent factoid that I posted last week regarding the decided overall downward bias on Mondays, over the past 6 months, traders still stay long and instead of my crumb picking sold options expiring worthless on Friday, they’re saying goodbye to my portfolio as they transition into some nameless and faceless portfolio.

But there I go. Moaning again.

You don’t have to be lactose intolerant to know that neither the spilling of the milk nor the crying over it are worthwhile endeavors.

In the meantime, every talking head is once again warning of a melt up in stock prices.

Logic or contrarian approach? Which to apply to the consensus opinion?

I’m going to stick with the contrary approach and will look to sell other holdings into any strength that may pop up on Thursday.

I may not be able to “tell a book by its cover,” but I do know that sooner or later I’m bound to guess right.and maybe start to “milk  it for all it’s worth” once again.

 

I’ve already made my wishes pretty clear.

After seeing the latest George Clooney movie, “The Descendants”, I definitely don’t want the plug to stay in the wall whenever that time comes along, as it most certainly will.

Nor do I want my loved ones tearing me a new one as I helplessly lay comatose in an overpriced hospital room if (when) by chance they discover some dark secret about me that will occur sometime in the distant future.

Or while I was 500 miles away from home today.

It seemed funny in the movie, but I think that would mar the legacy that I’m actively trying to fabricate.

So, in the event that the documents I’ve previously completed in response to the certainty of the former occuring  are misplaced, let today’s blog serve as a legal document as to my intentions.

Pull the plug. Let me go.

But I don’t think that I need to worry about anyone forgetting what my wishes were.

Although letting go is so hard, one of my sons has already given indication that he’s ready to pull as and when needed.

Even going so far as to smother me, if necessary.

On a day like Tuesday when I was up in the air enroute to a meeting, there was very little, if any evidence on Twitter or elsewhere on-line that I was engaged in any cognitive activity. Based on my usual level of activity, Tuesday was if I had flatlined, with only an occasional spasm reminiscent of a neurovascular bundle firing one last time in a headless chicken..

If I neglect to tell my oldest son of such travel plans, he takes my on-line silence as a sign of my death or irreversible incapacity and immediately begins making plans for the reallocation of my portfolio under his watchful eye.

But when the time does come, I know that I’ll be able to count on him, regardless of how difficult or painful the decision may be. However, he is the son that I’ve also had to school of the definition of “terminal illness,” so as no to be confused with a “sinus headache.”

Sometimes it’s not really your time.

This past Friday I wrote about the possibility of taking a loss on my options contracts in Green Mountain Coffee Roasters following the stock’s short term irrational move upward and the looming contract expiration later that same day.

Faced with the crisis of the loss of a loved one, the underlying shares, sometimes you begin to dabble in irrational thoughts that go counter to the rules of nature. After a while, the dignified thing to do is to stop resuscitative efforts and go on.

When it’s your time you keep your option contract premiums and just let the stock go.

But I just didn’t want to lose my shares. I wasn’t ready for the inevitable. I was even willing to take a loss on the option contracts despite knowing that Green Mountain could just as easily choose to succumb to the improper accounting allegations and take me into the crypt along with it.

I thought about the good times I had with Green Mountain in the past, having first bought shares at about $28 probably a year or so ago.

In the meantime we found ourselves frolicking through the lush fields of green that were lined by all of those option premiums. Occasionally we’d lose sight of one another as someone else would come along and exercise their right to take my shares from me, but somehow we always got back together.

And it was always good.

But lately, Green Mountain was becoming unrecognizable to me.

I’d been there before, though. I thought back to some of the other stocks whose plugs I had pulled without even the slightest thought.

Hewlett Packard, Dell Computer and others sharing one predominant characteristic..

In all of the previous cases the decisions weren’t so difficult once I realized that technology stocks and I were never meant to be together. I should have realized that much sooner, as an early venture into the fledgling, but poorly conceived Putnam Information Sciences mutual fund nearly 30 years ago proved to be a poor decision.

“Technology is the next big thing,” or so they said.

With those I never looked back, never thought about sacrificing the options profits for the parent stock.

But I’d professed my love for Green Mountain in front of an audience of dozens.

Or thousands, as I’m not realy certain how many people actually watch Bloomberg Rewind.

I do, but then again, I also anthropromorphize stocks, so maybe I’m not the best one to set an example.

Although I did the right thing, or at least believe I did, the truth is that I couldn’t do without my Green Mountain.

Not the coffee. That’s pretty insipid.

But I repurchased the shares that I’d just lost and proving that I’m incapable of learning from my unfortunate recent journey, went and sold in the money call options on my repurchased shares.

It’s like putting the plug right back in, just to have a chance to pull it again.

Strange, but I could never understand people whose pet had just passed and then immediately went out and got an identical pet as  a replacement for their beloved friend.

Yet, no such thoughts over stocks, despite the tendency to anthropromorphize.

In fact, I’m more than happy to see some shares go with no greater joy than to get them back in the fold as quickly as possible.

Today, while waiting for the plane’s door to be shut at 9:50 AM, I was able to pick up shares of Deere and then do the obligatory thing and sell calls on those shares.

Unfortunately, and yet again, now for the 8th time in about a month, I’ve been aboard a Southwest Airlines jet that wasn’t equipped with Wi-Fi.

But, as it turned out, not too much happened in the 90 minutes that I was cut off from my version of civilization. I really missed nothing other than the chance to not be overly concerned about missing something potentially important.

Upon landing, I picked up some additional shares of Textron, and, you guessed it, sold some call options.

As I think about, my reflexive sale of call options is the ultimate endorsement of pulling the plug.

Most knowledgeable about investor psychology will tell you that the single most difficult thing for an investor to do is to sell shares. Not because it’s so hard to let go, but because greed intervenes and sends the message that whatever profits are available are but a mere pittance of what could be on the table if you only had the cajones.

But by selling calls, especially in the absence of any emotion surrounding their exercise, the decision to sell is made for you as circumstances unfold. It’s the equivalent of Advanced Directives for the investor.

What more of a natural way to see the life of a holding run its course?

No need for controversy, no discussion regarding ethics.

Just a very simpel transaction.

We all know that we’ll all go down that same path, so why not do it in an non-impasioned fashion and maintaining dignity for all?

So for me, there’ll be nor more angst like that which I just went through.

Just as “Ashes to Ashes and dust to dust..” has real meaning, so too should every stock have a life cycle that runs its course without extraordinary intervention.

In the meantimes, believe me, it’s just a sinus headache.

 

 

It’s so hard to balance the emotional side from the rational side in all aspects of life.

Although I often write and talk about setting aside human tendencies like fear, greed and envy when it comes to investing, it’s so much easier to say than it is to practice.

Life itself is no different.

The other day I posted a comment on James Altucher’s blog. If you haven’t read the Altucher Confidential, you really should take a look. He writes in an entertaining way and addresses universal emotions and trials by recounting his own life experiences.

However, in response to the comment, I received a reply that was interesting, to say the least and was the impetus for today’s theme.

My initial comment was in response to Altucher’s recommendation to author wannabes to consider the route of self-publishing.

Once, self-publishing was only for the wealthy, those not minding to waste their money and the delusional.

These days, it’s a reasonable way to put out a product. Success is limited only by marketing efforts and ingenuity.

Speaking of which, take a look at an 11 year old’s contibution to the theatrical marketing efforts of Option to Profit. We’re still open to suggestions as to who to cast as the protagonist in the film version.

Obviously, having gone that route and increasingly happy with the results, I responded with my own experiences and as is often the case, in an attempt to increase readership of this blog and to spur book sales, I left a link to this site.

Thank you, James.

The response to my comment was:

“Hey AcsMan, just some constructive criticism for your blog. I tried to look around but I couldn’t stand it as it was just too full of google ads and irrelevant tag clouds…”

My initial reaction was, “it’s TheAcsMan. Only my parents call me AcsMan.”

Given that I am a dyed in the wool capitalist, I do use pay per click ads on my blog, but there’s only a single such ad on the home page and two ads on subsequent pages.

Not overly obtrusive or greedy.

Ever since using the ads as a source of revenue, the little waif that I’d taken in for humanitarian purposes, in addition to cheap labor, now gets two helpings of gruel daily.

What caught my attention though was the juxtaposition of the rational offer of constructive criticism together with the emotional comment  “…I couldn’t stand it…”

There was an imbalance in those thoughts that offended the rational portion of my brain and initially made me disinclined to even consider the overall message.

The emotional part of my brain doesn’t take kindly even to constructive criticism, but the essence of the unsolicited observation was correct.

In addition to the Google pay per click ads, a contextual text ad program was loaded a few days prior.

That revenue tool places annoying green underlines all over the text with links to largely irrelevant ads.

He was right. I couldn’t stand it either, but saying so sounded so much more refined coming from me.

It did look cheesey and was very distracting.

My words. Not his.

So the rational part of me removed those links, depite their proven ability to generate revenue and now Little Timmy will die.

As it turned out, the criticism was constructive and I’ve made the bearer an unpaid design consultant. Had the ads remained, I probably would have paid very handsomely.

But that core concept of rational versus emotional carried through to the first trading day of the week.

As writing today’s post, I came across a Tweet from one of my favorites, SellPuts. I’ve mentioned him before. He fits into the category of people that Tweet, yet I have no clue of what is being said, as I know knothing of fundamental chart analysis.

But SellPuts is entertaining and impassioned. I would guess that if you knew anything about technical analysis he would really be worth following, not only on Twitter, but on his website, as well.

Anyway, his 140 space or less piece of rational wisdom was “trade what you see not what you think.”

Perfectly said, although his usual stuff has more emotion attached.

Last week defied rational thought.

This week opened the same, although the rally faded by mid afternoon, as it did on Friday

I was faced with a bundle of cash sitting in my account as 30% of my portfolio was assigned following irrational moves in such holdings as Green Mountain Coffee Roasters, Caterpillar and others.

Normally, I can’t sit for more than a few minutes with the cash burning in my pockets.

Despite knowing better I tend to be like a drunken sailor on shore leave and buy everything in sight, even in the face of a rally.

That’s not rational. I know it. I know that there’s a need to “Exercise Restraint to Prevent Premature Speculation,” but again. like all things emotional, it’s harder to do than to say.

Today, though, the rational side seemed to be in place and functioning much better than the portion of me that would be afraid of letting a rally slip away from me.

Remember the dangers of falling prey to the FOMO?”

But I was restrained.

I also tried to defer to my rational side in thinking that despite more talk about a melt up, it wasn’t going to happen this week.

So instead of furtively squandering the money, I sold calls a bit more deep in the money than usual in order to lock up some nice premiums, in anticipation of a fade in the underlying stocks.

The same anticipation that proved to be wrong last week.

Now part of that, though, was based a little on envy, since last month was my best ever for generating options premium income and thus far, after 2 weeks, the December cycle is middling.

Envy is a lot like FOMO, but I was really envious of November’s options premiums.

Along the way, I did find the time to buy shares or add to existing positions, but even those saw me sell deeper in the money calls than usual.

I picked up additional shares of Netflix, Mosaic, Sallie Mae and ProShares UltraSilver ETF and quickly sold calls.

I also opened up a sizeable position in Alcoa, despite today’s negative analyst comments and sold a combination of weekly calls and December 2011 calls. The prospect of a 2% premium for a single week appealed to both the emotional and rational brains.

The truly irrational side of me bought shares in Focus Media, to complement the puts that I had previously sold, as Muddy Waters does nothing to erase doubts about its recent activities.

And of course I sold the calls.

Despite the restraint, there still turned out to be too many trades to recount them all, as if you really cared. But if you do, just go to the Portfolio Transaction page.

Going into the last hour of the trading day, the market’s gains were mostly gone and I still had spending money.

Best of all, silver was beginning to look as if it was ready to give up the Ghost, having turned its early day gain around to a substanial loss.

That followed a disappointing week when silver did nothing but climb and I watched my short leveraged ETF fall.

Even worse, I’d prematurely bought back my calls, thereby returning a portion of the rich premiums.

I decided to be a spectator for the final hour.

At that point actual news began filtering in and was ultimately responsible for the reversal of the market’s fortune. WIth all of the component Euro nations being put on credit watch by Standard and Poors, there was less joy in Mudville, but more joy on my La-Z-Boy.

It wasn’t quite like seeing a roadside deer, but I was happy to relax after churning out 24 trades for the day.

What makes me especially happy, if I can delay jury duty for yet another day, is that there may be some bargains to be had tomorrow and I still have cash.

That almost never happens.

The emotional side of me is chomping at the bit at the prospect of actually timing it like that.

The rational side is beginning to warm to the emotions of the moment and is likely to cede all control if the market takes a breather and then some tomorrow

Hell, we may even be able to make .enough to feed Timmy anyway.

Screw those obnoxious green underlined words. We didn’t need them anyway.

And from both sides of my brain, a special thank you to DannyBoy990. 

 

There comes a time in all of our lives when we’ve behaved in one of those really annoying Holier than Thou” kind of ways.

People who do so on a regular basis, and I include myself in that category, come in various shapes, sizes and flavors. The world of faith, that of politics and certainly the world of finance have all seen their fair share of characters espousing the kinds of attitudes that have most people praying for someone to be taken down a notch or two.

Jerry Fallwell, John Edwards and Bernie Madoff come to mind very quickly.

There are so many more of the one time high flying, but then fallen angels, than I could possibly ever fit into the pages of this blog.

But in America our fallen stars can recover and become rehabilitated so quickly. Probably no  nation in the world practices the concept of foregiveness as well as we do in America.

Either that, or our collective short term memory has taken a really big hit from way too many ganja hits over the years. 

How else do you explain the phenomenon of Newt Gingrich?

Along with the late Henry Hyde (R – Illinois), no two were more vocal and critical of Bill Clinton when his literal and figurative peccaddillloes came to light.

Hyde trumped them all by having a ‘baby momma” hidden from the public’s views for all those years, although Gingrich wasn’t far behind.

Gandhi was reported to have said “I like your Christ, but I do not like your Christians.”

Of course, these days, that quote would be artisitically toyed with a bit by the likes of Jon Stewart to something like “I like Christ, but Christians? Eh, not so much.”

He then would be castigated by someone who shouldn’t be throwing stones from inside a glass broadcast booth (On FOX).

But I stray.

As always, this is about me.

I feel a need to testify as I’ve been moved by the spirit.

At least the spirit in the profits I may have left on the table this past week.

Admittedly, last week didn’t turn out that badly for me. While the S&P 500 was up by 7.4%, I lagged by only 0.2%, having had a good day on Friday, when the market gave all 150 points back.

But it was more of a case of what could have been.

Over the years I’d been fairly immune from making stupid trades. Especially the kind that I describing as picking crumbs, when I try to squeeze out any last bits of option sale related income.

But not this week.

And I feel a need to cleanse myself and confess my sins. By so doing, I also feel a need to testify in the name of profits.

Not prophets.

Profits.

This past week I started by doubting all thouse dismissing Monday’s 300 point run up as nothing more than a “dead cat bounce.” The chorus was too uniform to be true. The devil’s cacophony always overwhelms the sweetly melodius hymns of the angels in the battle for our souls.

As it turns out, I was right about that, but not right about which way to go when the chorus changed its tune.

By mid-week the chorus was calling for a melt-up in stock prices.

Having no faith in the powers of the voices that be, my sinful self opted to go counter to the wave and sold calls on whatever I could that would be expiring on Friday.

Just an example of my personal greed trying to take advantage of the leveraged greed of call option buyers.

By Wednesday I’d sold calls on Green Mountain Coffee Roasters, Caterpillar, Hallliburton and Freeport McMoRan.

For sake of brevity, I’ll leave out those sales for which I have no regrets.

Actually, if I really wanted to be brief I would have done it the other way around, but the backspace button is such an onerous chore.

Of course, those shares that I mentioned just rode the wave and then some.

As the market decided to go with the good employment numbers on Friday and the market took off, I just knew that the wave would ebb.

I also just knew that the meteoric rise in Silver prices would reverse.

So with the confidence that only a “holier than though” trader could muster, I also sold calls on JP Morgan in the firm knowledge that my own brand of faith, that of the wisdom of TheAcsMan, would prevail.

To top it off, I also bought back all of my calls in the ProShares UltraShort Silver ETF, limiting options premium related profits in the supreme confidence that there were even more and bigger premiums in the world to come in a day or so.

But in a blast of truly divine contra-intervention, JP Morgan shares just took off, while the rest of the market began the fade that I so smugly knew would be happening.

Silver?

Oh yeah. It went up some more and in my case, up is bad.

When it was all said and done for the week and the last day of the trading week, I’d won one the battle, but lost the war. Although I had more right decisions and trades than not, it was the one that was not that sent me into reflection.

JP Morgan Chase.

Now, I’m no Gandhi. Lord knows the extra 2 inches necessary in that pair of pants will testify to that, but at least I could reflect.

Holier than thou? Richer than thou? Richer than the me that could have been?

No, maybe and no.

Among the things that I discuss in Option to Profit are the need to dismiss human emotilons of greed and fear. Since then, I’ve also added the need to banish the fear of mssing out.

The sale of last minute calls hoping to capture some extra crumbs worth of premiums is consistent with not being worried about missing out on the kind of totally unexpected gains that could materialize in just a second.

That’s exactly what happened with JP Morgan.

Earlier in the week itr had also happened with Caterpillar, as it went up more than 7% on a day that the Dow went up by just a bit less than 5%.

Now some in the chorus will chant that Caterpillar was unnecssarily beaten fdown in the days before that 490 point gain and that observation would be correct, but it’s certainly not a reason. It’s just an observation, as there were many stocks that were beaten down, but did not bounce back disproportionately.

Jesus wasn’t the only one crucified.

So I lament the loss of Caterpillar, as well, as the heretics exercise their right to take my shares.

But just as Henry Hyde, Tammy Faye Baker and others, the mighty all seem to fall. So too will Caterpillar.

Remember Ozymandias?

Of course you don’t. He never really existed, but Shelley used the mythical Ozymandias to make a point.

Actually, the reason you don’t remember is that no one reads Shelley and Ozymandias was actually another name for the historical Pharoah, Ramses.

But again, that damn backspace. So much easier to go forward than to linger in the past and try to correct those mistakes.

But just as some whose stars fade and never return, Caterpillar will do so and I’ll be there to welcome it back into the stable.

Of course, what would have been much easier and certainly more satisfying would be to use life’s backspace button and “Give me One More Chance.”

In all likelihood, using that backspace option would do nothing, because I wouldn’t have taken profits in my JP Morgan shares, anyway.

Like most investors, it’s easy to say that you need to banish “Greed.” but to do so is really pretty hard.

Ultimately, that’s what really seperates us from the animals. Our inability to learn from our mitakes is distinctive, as usually our mistakes don’t kill us.

We all seem to share the human tendency of not recognizing when it’s time to sell. Instead of selling JP Morgan shares at their peak, most of us will just watch it go back down as it retraces its ascent downward and will then watch it ascend again.

How sad that we keep making the same mistakes. But at least we live to see another day.

That’s what America is about.

Where else can you make the same mistakes, yet rise again, Newt? (Although I do consider him to be an animal.)

As with every Monday, there’s yet another chance to “Do it One More Time” and see whether the deathbed conversion will actually hold.

I’ve seen my personal Profit and Loss statement and I’ve felt the need to cleanse, but damn it, this is America and I get another shot for redemption, as well as another chance to fall and rise and fall again.

Linday Lohan and all of those who ever sang “Give Me One More Chance” would all be envious.

 

Happy Birthday to J. Bartholomew Pick
I’m a fairly boring guy. I don’t think I’ve ever initiated a social interaction in my life. Which works out well with my sedentary lifestyle that has me tethered to the La-Z-Boy, only occasionally reaching out for my keyboard and mouse.
The fact that La-Z-Boy stock surged today didn’t do much for me as I’ve never owned the stock, only the lifestyle.
Yet, despite immensely enjoying my sedentary lifestyle, today I learned that there are consequences. Seeing a family of field mice escape from my stomach folds while I was being measured by a tailor for pant alterations was embarrasing, but it’s not as if I’ll ever see that tailor again.
At least, not if Immigration and Naturalization arrives before next Tuesday, 5 PM.
The very idea that my elastic banded Jorts weren’t going to fit me for life hasn’t really caused my to rethink the physical aspect of sedentary life, just as long as that cognitive part keeps on moving.
However, that comfort and solitude promises to be disrupted as I’ve received my first ever notice to be called for jury duty.
Since I went to a high school that was focused on math and the sciences, that didn’t leave too much time for civics lessons. My guess is that a class mate of mine, David Viniar who has served as CFO of Goldman Sachs did find the time to take Civics classes in secret, because I’ve heard no one impugn his name or reputation over the past few difficult years over at Goldman.
But yeah, I know that it’s my responsibility. Yeah, yeah, I’ve heard it before.
Here’s the thing.
Not that I’m complaining, but the county that I live in has almost no meaningful crime.
Sure, if its your mailbox that’s been knocked over it’s pretty major. But if I’m going to do anything, whether it’s social or civic duty related, I want it to be exciting.
The one potentially exciting and seedy case that our local newspaper reports will be starting next week is one that I would have to recuse myself from, as the defendant used to attend cub scout meetings in our basement a dozen years ago. Sugar Momma was a Den Mother and my youngest son was in the troop.
Glad I have that excuse and won’t have to pull out any of the other excuses I’d prepared nor display any of the tics that I’ve been working on.
But that’s exactly why this week has been sort of maddening. We’ve had alternating days of real excitement in the markets punctuated by real snoozers. I want excitement all the time, unless it’s the one way excitement of falling off a metaphorical cliff.
Thursday was one of the snoozers, other than for the field mice discovery. I didn’t make a single trade and never even came close.
My hoped for drop in Silver prices never materialized, nor did falls in Visa or Green Mountain Coffee Roasters occur in response to my wishes.
Small drops in Halliburton and Caterpillar were only symbolic and won’t do anything to stave off those who are there to exercise their options.
In Green Mountain’s case, despite all of the controversy, I may end up doing something unusual tomorrow.
Controversy? It’s not even a Chinese company.
I’m on the hook to have my shares assigned at $52.50. For that particular lot of shares, that would represent a loss of $17 per share. That figure doesn’t take into account the additional lot that I bought after the big earnings related price plunge and subsequently had assigned to me with a small capital gain and a nice options premium.
More importantly, that loss doesn’t include $12.66 per share in cumulative option premiums since the position was opened 5 weeks ago. If you add the capital gain from the other lot and the $1.56/share options premium from using the Having a Child, Save a Life strategy the loss isn’t terribly onerous.
Although I can justify taking the loss on the underlying shares by taking advantage of the tax loss, the speculative side of me is saying that despite the bad press and accounting overhang, Green Mountain still has upside. To allow the shares to be exercised would eliminate the tax deduction in the event that I repurchsaed the shares with the terms of the wash sales rule.
Instead, I may end up closing out the options position by buying back the calls.
The upside? A tax loss on the options trade and the opportunity to continue holding shares for either capital gains or more option premiums.
The downside? A capital loss on the options trade and the potential for the bottom to fall out from underneath the shares.
See? That’s exciting
Sedentary, yes. But exciting.
In general, Monday tends to be a busy trading day for me as I add new positions to replace assigned shares and try to sell as many call options as possible.
Then Thursdays tend to be busy as well, as I look for any opportunities to squeeze pennies out of whatever positions remain unhedged. Those weekly options are just great for that kind of activity.
But not today and I don’t see much happening tomorrow, either. You would have been reasonable to think that China’s report of a decreased PMI, as a measure of industrial activity, for the first time since their hosting of the Olympics would have been a little reason to take profits.
Instead, we’ll just have to await official employment numbers tomorrow.
I hate to be curmudgeonly, and I certainly want to see people being able to find employment, but despite calls for a good number, I’m hoping that the market reacts negatively.
Or positively.
First of all, the numbers are always in arrears and are always subject to revision. Those revisions are consistent and sometimes significant.
Lately, there’s been much anectdotal evidence that “things are getting better.” That may be more meaningful than tomorrow’s report.
While the reporting of aged employment statistics may yield bad news, it’s sepia compared to 16 million colors, as far as snapshots go.
From my perspective, I usually like up Fridays if my sold options are out of the money and down Fridays if they’re in the money.
Tomorrow, I’m equally split.
On most Mondays that I’ve had lots of calls exercised I like to see a big downwrd move so that I can repurchase shares at less than the price at which they were assigned.
Again, I’m equally split.
I feel like a little kid having a tantrum, not really knowing what he wants.
Although my body does well with a paucity of activity, other than the insidiously developing midriff bulge, my brain begins to smoke when being torn in opposite directions.
Whereas the comparison of sepia to 16 million colors clearly favors the accuracy of the details contained in colors, my mind prefers black or white conditions.
Guilty or innocent?
Hmmm. Maybe this jury thing won’t be such a bad idea after all.
I wonder what model La-Z-Boys that have in the jury box?
 
 
 

I was up for no really good reason at about 4 AM, particularly since I don’t consider Laszlo the Dog’s barking at a phantom menace to be a good reason.

Probably more out of instinct than anything else I pulled up the Bloomberg Mobile app on my phone while waiting for Laszlo to protect us from the blowing leaves and saw that the US Futures Market was reasonably flat and the Asian markets were doing nothing special.

I went back to bed neither excited nor dreading the open, expecting yet another quiet day. Maybe the kind of day that I could find the time to complete my furniture repositioning tasks left over from the past two days.

Well, for the very same reasons that it’s hard to justify sneaking away to attend to personal hygiene needs, a lot can happen on the international scene.

China decided to loosen up its banks’ reserve requirements.

That apparently is a good thing as far as liquidity goes. Although Chinese companies may not like to abide by standard accounting principles, it does seem that basic economic laws apply, even in the People’s Republic.

As if that wouldn’t have been enough, the European Central Bank and our own Federal Reserve decided to coordinate action to allow foreign banks to access US dollars at lower cost.

What those ECB guys didn’t realize was that those American Airline Frequent Flier miles that were thrown in to clinch the deal were going to be close to worthless.

Score another one for “The Bernank.”

It was hard, though, to hear all of the cheering from the trading pits, what with the sound of Bernanke led chainsaws felling forests worth of lumber destined for the Treasury’s printing presses.

I like Bernanke and think that his calm guidance likely rescued us from the kind of economic travesty that our generation could not possibly endure.

Besides, tell me that Bernanke doesn’t look like a highly stylized and mythical lumberjack.

As it would turn out this would be one of those rare market days when there was no real attempt to sell into strength. The green just kept getting more green.

To my shock, I never once heard anyone refer to the nearly 500 point gain as resulting from “shorts covering their positions,” although with two minutes left to go until the final bell, Bob Pisani of CNBC commented on the light volume.

Of course that’s come to be expected, but what was a bit different was that Maria Bartiromo who made precisely the same observation on Monday, chided Pisani for his Grinch-like assessment.

Ha Ha.

As great as today was, after all what’s not to like about a bonus 500 points? But it was wasted on me, much like a box of fine wine.

I’m still a Manischewitz kind of guy.

Things being wasted on me has been a theme the past couple of days, although it hasn’t always proven to be accurate.

This past Thursday, for example, my kids had 3 tickets to the Ravens and 49ers football game. Since I’m not a huge football fan, I asked my kids if they didn’t want to take one of their friends instead, since my level of appreciation was likely low when compared to your usual football louts.

I really thought that those tickets were wasted on me.

But hearing what every parent would love to hear, they said they wanted to go with me to the game. The fact that it was unseasonably warm for a Thanksgiving evening gave me no real out, but as it turned out, not one bit of it was wasted.

We had a great time and it was a wonderful game and evening, although I still can’t remember why I have some biker chick’s name tattooed on my neck. The kids said I did it as a dare after downing a bottle of whipped cream Vodka.

Whatever. So I guess they’ll just have to bury me in the thieves and unholy section of the Jewish Cemetery.

Well rested and prepared for a nice trading day on Monday, I was noticing a steady stream of Tweets directed to me from a number of different people, each of whom had more followers than the typical spammer.

What made these Tweets interesting was that they believed that I had any clue of wnat they were talking about:

I may make about 1500 trades a year, but I have absolutely no ability or desire to engage in “Chart speak.” I see colors and occasionally dead people and have never hidden that fact.

Look, I’ve owned shares of Riverbed Technology for the better part of 4 years and still have no idea what they actually do.

Don’t really care.

“$GOOG Bullish Tri Star Candlestick Pattern…” I know Google, but the rest?

What the hell does that mean?

$SLM CCI is bullish” Again. Sallie Mae and I? Old friends, but what’s that you say?

Again, no clue.

And there were more from where those come from.

There’s also a very nice person who follows me on Twitter who is extremely polite and thoughtful. If I retweet one of his tweets or a link to his page, he sends me a “Thank You” direct message. Not the Anthony Weiner kind, but one that sincere and grateful. He also very graciously retweeted one of mine yesterday alerting readers of the migration of Szelhamos.com to its new home at TheAcsMan.com

Very nice. Right?

I’ve looked at his blog site, Chartsmarts, and he is clearly far more serious, organized, analytical and capable than am I.

If we went back about 10 years or so, I might be able to understand, or at least have the interest in understanding his passion and output.

I was never a very good one to actually pay attention and never really did well by listening or reading as a proxy for learning. I tended to be the sort that had to deconstruct things to be able to learn them. On rare occasion I’d actually successfully reconstruct what I’d demolished in the name of knowledge.

I still do that, but the problem is that I’m no longer able to retain what I’ve learned in my short term memory banks, so I do lots of deconstructing, but then lose interest in the reconstruction phase of the process.

A few years ago, realizing that to be the case and really wanting to learn PHP and MySQL (don’t ask me to explain), I actually bought one of the “…..for Idiots” books.

After a couple of chapters I threw in the towel.

I wish I had Chartsmarts’ skill, drive and good will. I follow very few people on Twitter. He’s one. Even though it’s wasted on me, there’s no reason for it to be wasted on you, so follow Douglas Busch

Now, what was really wasted on me was the last 500 points.

To some degree, that’s an exaggeration, but my holdings have underperformed the markets through these last 800 Dow points. 

While the S&P 500 has gone up 7.6% this week, I’m only up 6.6%. That still leaves me in the 1% group, so you needn’t worry.

Most of that, actually all of it and then some, is due to the marked underperformance of the ProShares UltraSilver the past 5 trading sessions or so, as silver has kept rising. In fact, today I was able to buy back all of the call positions that I’d sold this month in anticipation of another drop in silver prices and a rise in the leveraged short ETF.

Some of those marked the second such closing trade, so I’m not moaning about the past few trading sessions’ performance.

But as this 500 point surge came out of nowhere, I’ve been caught a little flat footed, having hedged about half of my existing positions and either already at prices close to their strikes or now comfortably in the money.

Did you foresee a $7 rise in Caterpillar today?

Me neither. My risk/reward on this most recent round of call writing on Caterpillar is nothing to write home about, but still, profit is profit.

Although Caterpillar has been very nice to me, especially due to having sold weekly options on a regular basis, today’s rise puts it will above my $92.50 strike at which shares will be assigned. Green Mountain Coffee Roasters, Visa and Halliburton may share the same fate after today’s surge.

What wasn’t lost on me was comparing the chorus cries of Monday’s “Dead Cat Bounce” to the same talking heads warning of a melt upward going forward.

Once again, as the chorus cries get louder, just this time in a different direction, it’s time to look back to the other and original direction.

The history of government intervention is often measured in days, as reflected by the equity markets, so I can’t get too excited about what it will bring us tomorrow or the day after.

Although I don’t see the melt up quite yet, hopefully today’s bold moves won’t be wasted, at least not on my account.

Maybe then, once we get all of these banking disaster stories out of the way, we can get back to our old habit of bouncing from one fundamentals report to the next and then conveniently forgetting yesterday’s earth shattering report to make way for today’s Andy Warhol like data release.

It’s been a shame wasting those.

I miss the old days.

 

 

Maybe its the fact that we just came off a 300 point climb.

Maybe it’s because its been nothing but rainy and dreary all day long, but despite what was looking like nearly a 100 point run up on Tuesday, I just wasn’t feeling it and couldn’t really get in the game today.

Maybe it was because Silver wasn’t exhibiting its recent paroxysmal and alternating direction behavior.

More than likely, though, my lack of enthusiasm today was probably strongly related to the fact that my portfolio under-performed the market all through the day.

That was thanks to Amazon, Netflix and Green Mountain Coffee Roasters, which, wouldn’t you know it, led the portfolios to out-perform the markets on Monday.

You can have Yin or you can have Yang, but not both, unless their conjoined twins, in which case they might be more appropriately referred to as “Siamese.”

Whatever the root cause, I was antsy.

Not only was I not feeling it, but it may have been contagious.

The news that the parent of American Airlines was going into bankruptcy wasn’t terribly interesting, either. The only thought that occured to me was that at its closing stock price, it would take about 25 shares of AMR to purchase an in-flight alcoholic beverage.

Even in boredom I amuse myself, but no such luck with AMR shareholders. I suppose they just weren’t feeling it.

I rarely venture from my perch on the La-Z-Boy during the course of the day, but today was different.

Yesterday, despite having only made about 8 trades, I remained transfixed. So much so that despite the fact that our home was in a shambles from having the first phase of new carpet placement done during the day, I let the mess wait until after the closing bell.

Today, I had just two tasks assigned by Sugar Momma. My usual approach and strategy whenever I’ve been given chores is to work like a whirling dervish once the closing bell occurs. That typically gives me 90 minutes to get everything done.

The tasks today ranged from standard to complex. I had to start restoring order by returning furiture to their rightful spots in time for Christmas holiday guests. That was standard and required only brawn, of which despite being in short supply, can be accomplished by using simple laws of mechanics.

I also had to make some sense of our mismatched collection of Rubbermaid and Ziploc containers and lids.

I have every bit as difficult time doing the latter task as I do trying to match socks.That task fell into the “complex” category as it required a combination of visual identification and pattern matching.

Ever since I went to the all Crocs all the time wardrobe, socks haven’t been part of the equation. I wondered why the same couldn’t be done with plastic containers.

Damn, how many different subtlleties in shape can a quart container take? And why don’t they emboss both the container and the lid with useful information?

With my sights set on the 4 PM bell the market quietude led to boredom setting in.

I made a single trade trying to take advantage of some intraday strength in Halliburton by selling calls expiring this Friday.

If Sugar Momma knew that was the extent of my trading activity today she wpould probably exhort me to find a real job, but I feel comfortable knowing that all readers of the blog had to sign non-disclosure agreements.

Crazy? Like a fox.

Although it’s a very small liability, the only thing that really kept my interest during the trading day was the continuing story regarding the CHinese company, Focus Media.

Following a scathing report, by who else but Muddy Waters, their stock had taken a significant hit. As I noted on Monday, I took that as a cue to sell puts on teh shares. My only equivocation was that unlike Harbin Energy and Spreadtrum Communications that had likewise been excoriated, Focus Media wasn’t listing weekly options contracts.

But then I realized that my life expectancy probably didn’t warrant tooking 3 weeks into the future, so I bit.

Carson Block, the head guy at Muddy Waters was the scheduled guest on CNBC’s Street Signs. Admittedly, I’d expected that given the deserved bad reputation Chinese companies have had with regard to accounting and business practices that the hosts were going to ask questions that would simply reaffirm the basic hypothesis that there was something amiss.

But no.

Block was hit by probing questions from the hosting crew of Brian Sullivan, Mandy Drury and Herb Greenberg.

Block faltered. He was tentative in his answers, perhaps using the same law firm that’s representing Jerry Sandusky of Penn State.

He wasn’t feeling it.

In less time than it took for Green Mountain to shed 20 points a couple of weeks ago, Focus Media, trading at about $16 following a $1 intra-day loss, erased all of that during the course of the segment and closed the day higher.

Well, at least that was interesting, but from my perspective, as far as my portfolio went, wasn’t very substantive.

And so I started with my chores while the market was still in full swing.

Uncharacteristically, I felt  no longing today. There just wasn’t anything around to incite interest.

Not even that new retail metric unveiled by Dana Telsey, the ubiquitous retail analyst.

Last year we were blown away by the concept of aerial monitoring of parking lot capacity as well as the ensuing debate as to whether or not access to that kind of information constituted unfair advantage.

And yes, we’ve all heard about the store watchers looking at the size of shopping bags as a proxy for shoping activity.

But this one? Pure inspired genius. The Mall Toilet Paper Index.

Imagine having spotters continually monitoring the volume and quantity of toilet paper used as a measure of jhow long consumers are spending at the mall and how long they are commited to remaining there.

Personally, I would hire DIck Bove, Bank analyst for Rochdale Securities to camp out in the mall restrooms, although that may offend the flies.

Following his response the other day that Bank of America would be his buy recommendation in that sector, BofA stood poised to break the wrong side of $5.

Thus far, no one from Bank of America has returned my call regarding my strategy to help them deal with the financial morass and recent bad publicity.

I advised that they institute a new monthly fee on their basic checking acount, charging customers a single share of Bank of America stock each month. In all likelihood that will be somewhere south of $5.

Win – Win.

Maybe the fine people at Bank of America weren’t feeling it, either.

The only other bit of news today it capture much of my interest either, but it ran counter to my general theme of the day.

Rumors swirled that Herman Cain was reconsidering his bid for the GOP Presidential nomination.

Following accusations made by a seemingly credible woman regarding an alleged 13 year affair, it seems that Cain may have been feeling it.

I can’t even get away with occasionally pumping super unleaded gas and this guy gets away with 13 years of pumping….

Never mind.

But wuth this day now behind us, I have every confidence that tomorrow will be different.

I can just feel it.

 

There’s a saying that if you put 2 Jewish people together in a room you’ll get 3 different opinions.

I’m allowed to say that. Sometimes you get a free pass.

The same has probably been said for other ethnicities, cultures and religions, but other than Hungarian, I’d be ill at ease to use that saying for any other group. Years ago, when I was still in grade school, there was a funny joke book called “Race Riots.” It was a collection of ethnic and religious jokes and was really pretty funny.

So funny and so popular, that there was even a Race Riots II, focusing on the lesser known and under-stereotyped groups, such as Angolans.

I didn’t mind telling those jokes and others didn’t mind laughing, although subconsciously I may have tailored the joke set for the audience, just like when Jeff Foxworthy performs for the Johns Hopkins Applied Physics Laboratory.

Race Riots actually even had a chapter on Hungarians that wasn’t very funny. At least that was my informed opinion. I also knew lots of Hungarians and they didn’t see the humor in those jokes either, but they loved the Polish jokes.

So true. So true.

These days I still think that those kind of jokes are funny, but I would never admit to that, because when it comes to that area of discourse, opinions don’t really matter.

About 5 years ago there was a great piece on Jon Stewart’s “The Daily Show” that highlighted the last two known remaining Jews in Afghanistan.

They lived together under the same roof in an old synagogue, but hated one another. They couldn’t find agreement on any topic, although my guess is that there weren’t too many different topics out there for discussion. By all accounts, though, they were each very opinionated.

There must be a joke in there somewhere, but you’re not likely to get anyone to write one when there are only 2 people in the whole world to poke fun at. By the same token, however, I was the only Jewish kid in my neighborhood and was routinely beaten up by the only 2 Chinese kids in the neighborhood.

In my opinion they should not have beaten me up on a regular basis, but in their humble opinion the black kids shouln’t have been beating up the only two Chinese kids in the neighborhood.

There’s was just an early form of “paying it forward.”

In hindsight that’s funny.

There was certainly no shortage of talking heads today putting their two cents in about what today’s 300 point gain really meant.

I like opinions, after all, that’s the essence of a free society. But what I don’t like are “humble opinions” or especially those who preface their humble opinions with the words “in my”. Don’t get me started with the “IMHO” group of people.

Of course mixed in with the opinions was the obligatory “light volume” comment, although that’s more observational than opinion and is often just an excuse to explain why their clients didn’t participate in a meaningless rally.

Since I don’t care whether there’s tons of white powder over my trading profits, I certainly wouldn’t care if they came on light volume.

IMHO.

The prevailing opinion on Monday was that this was some sort of a “dead cat bounce” or a bull rally in a bear market. Again, this is code talk for “I’m not in it to win it, today.”

The talking head that referred to this as a bull rally in a bear market then went on to say that he wasn’t certain that this was a bear market.

To be confused, you actually have to listen. That’s why you have to shake your head when a talking head insists that the market only trades on fundamentals.

In my humble opinion, that guy doesn’t know what he’s talking about. These days the market wouldn’t know a fundamental even if you bit it on its asset.

Then there was divided opinion over what fueled the rally.

You had your Euro-centric school of thought people and you had your “This was the best Black Friday weekend ever” crowd.

The Euro-centric school was elated over the rumor that the EU nations were reportedly closing in on some sort of deal to tackle debt. This, if the past is any indication, would lead to a nearly equal, but opposite movement when that rumor or deal falls short or some other complicating factor arises.

Think Finland.

The retail sales crowd seems to say the same thing every year and then starts to question the meaning of having an overly successful Black Friday through Cyber Monday period.

How many years in a row will we have to watch the give and take of concerns related to cannibalism of sales for the rest of the holiday period, or the stream of data indicating the the remaining sales days between Cyber Monday and Christmas fell short of expectations.

Those thoughts are then typically followed up by revised data that’s released sometime near New Years and those data sets always seem to indicate that sales were actually better than previously reported.

Whew.

The thing about analyst opinions is that they’re subject to interpretation, but that’s understandable.

So too is it understandable that both the written and spoken words could be subject to interpretation, especially when rendered in a foreign language.

But that wasn’t the case on Monday when a piece written by Eric Jackson of Forbes Magazine for the Chinese Wall Street Journal somehow didn’t lose anything in the translation. Instead, it added to the translation, starting a rumor that Muddy Waters, that efficient Chinese stock price disinflation research firm, was planning a report on SINA.

In the past I’ve benefitted from such reports, Harbin Energy, Spreadtrum Communications come to mind. Both taking mighty hits as significant questions were raised about their accounting practices.

Having an opinion on those shares was irrelevant to me. I just waited for the big hits and then sold out of the money puts, much to my delight, as they both recovered from their acute hits.

Jackson said nothing about SINA, but someone just added his humble opinion into the translation.

In the meantime, the concern over another Chinese company, Focus Media was enough to send those shares into another day of tailspins and enough to get me to sell puts.

It’s my evil speculative side that makes me do those things. It’s usually well under control, but just like the craving for crack and hookers, it sometimes is pre-eminent. I have no clue what business Focus Media is engaged in, although I can venture a weak guess.

But again, irrelevant.

At any rate, Jackson’s reporting turned into an opinion, which turned into a rumor, which was then denied.

Sort of the way all of our EU news gets transmitted and with the same results.

I tend to be a very opinionated person. Not Perez Hilton opinionated, but enough so to get me to write daily, albeit without the use of a translator.

My opinions are usually either worthless or very poorly timed.

But having that contrarian tendency I could only believe that today’s 300 point rally would be something other than the quick and uninspired bounce that was the prevailing thought.

Unfortunately, that contrarian side has to deal with my pragmatic side.

In my own personal Afghani synsagogue, despite the belief that today’s move wasn’t a terminal event, I still sold whatever calls I could reasonably get a fair price upon. So I rented out Freeport McMoRan, Caterpillar, Visa, Amazon, Netflix and DuPont. I would have done more, but there were still some sizeable paper losses to overcome before so willingly giving up a share in any future profits.

To my disappointment, despite ProShares UltraShort Silver taking a big hit today, their call options didn’t move enough for me to repurchase them in order to await yet another opportunity to sell them.

As the market was getting to be somewhat boring, I took the opportunity to look at those ProShares UltraShort Silver ETF holdings which have grown to about 10% of my portfolio by slow and steady acquisition since mid-July. I even added on more shares today.

Despite a paper loss of about $5,000 they’ve spun off $30,000 of realized premiums. Had greed not gotten in the way, this would not have been the first time that all of my shares were hedged. I gave up additional option premiums for the fear of missing out on share appreciation.

FOMO. Stupid me.

And that’s a humble opinion we can all agree upon.

 

I’ll be the first to tell you that literary references are pretty much wasted on me.

I’m very shallow, poorly read and have little motivation to change my ways, much to the  dismay of Sugar Momma, who these days is happy just to see me change my socks.

She’s pretty much given up on all of the rest, although occcasionally I will agree to see a movie based on a piece of literature, as long as it stars Seth Rogen or Rob Schneider. I may no longer be fully malleable, but I am open to suggestion before I roll my eyeballs.

So no one is more surprised than me that what is considered a literary masterpiece would help to coalsesce some of the thoughts that I had during this very nice Thanksgiving holiday.

Pride and Prejudice.

First of all, it was exceedingly nice Thanksgiving because there was no trading on Thursday, Saturday nor Sunday. Normally, I love any day that the market is open for business, but we all needed a break. What few hours of trading that we did have on Friday, despite coming off 100+ points from the intra-day high, resulted in a mere 25 point loss.

If that’s not a profitable trading session, then I don’t know what is.

Having had a wonderful Thanksgiving Day dinner with family and friends, my two sons and I headed for the Baltimore Ravens and San Francisco 49ers football game that evening.

I’m not much of a football fan, but I was even decked out in a Ray Lewis jersey, as were approximately 20,000 others, although none approached my inherent talent of frightening opponents with a mere sneer.

Since my kids are the social animal that I am not, it was very easy for them to get into the surrounding tailgate culture once we arrived at the off stadium parking lot.

Do I have to remind you that Pride and Prejudice examines the role of environment on behavior?

I was more of an observer.

Among the many things that I noticed at my first tailgate venture was that blue jeans come in a very wide range of waist sizes.

Realizing that there was really no substantive way to turn that observation into a tangible asset, I followed the lead and downed some whipped cream vodka and Baltimore’s best, National Bohemian, also known as Natty Boh beer.

By then, we were ready to enter yet another environment, this one much more highly structured and with highly codified terms of conduct..

The stadium.

But before we went to find our seats, both sons had to go to the Boardwalk Fries concession stand. But not to order anything, although we’d done that plenty of times before, but instead to look and see if Joe D, the co-owner was in house.

Sure enough. He was. Despite the fact that he presided over more than 100 Boardwalk Fries locations, he was right there in the middle of it all, together with his son Joey D and lots of others.

It’s been nearly 5 years, but both kids worked the Boardwalk Fries location in Raven’s Stadium to help raise money for their Fraternity. It was a good relationship. The fraternity brothers hustled a good product and Boardwalk Fries helped to support their fundraising efforts.

The work was also difficult.

But 5 years later both kids sought Joe D out because of good memories of a man that even a wizened set of eyes would recognize as someone who was commited to his product and its quality.

Why else would he leave a comfortable home on Thanksgiving evening to spend it behind a spattering fryolator and frequently unruly stadium customers?

Why? To oversee every aspect of the operation and to make certain that everything was up to the Boardwalk Fries standard, although truth be told, a bunch of happily inebriated football fans aren’t that likely to notice very much.

Boardwalk Fries isn’t exactly a household name. It’s not Amazon, nor is it Apple. But Joe D is Steve Jobs and he is Jeff Bezos. It’s actually repugnant to me to cite a book in my blog, much less two books. But Im certain by now Joe D has put in the requisite 10,000 hours that Malcolm Gladwell defined in “Outliers” as distinguishing the really greats from the schlubs of the world.

They spotted and then called out to Joe D.

He saw the kids and came out from behind the cook area to speak to them. Hugs, sharing memories and stories. The guys eyes actually twinkled.

They really did. And then there were several rounds of hand shakes. You really felt that this guy sincerely cared.

We didn’t buy any fries, after all we were still stuffed, but my family loves a good french fry and still has fond memories of the fries Szelhamos made late in his life, when we were all stunned to learn that he could actually cook.

Joe D seemed to have something that you just don’t seem to see that often. Maybe its just the wizened me talking now, but his pride in his product and business was so blatant. He didn’t have Jobs’ aura or Bezos’ laugh, but he did.

Pride and Prejudice tells a story of development of character and morality.

After watching a great game and a home team win, we came home to enjoy a few days together.

On Friday I had the opportunity to make about 5 or 6 call sales for that day’s expiration, using Green Mountain Coffee Roasters, Amazon, Caterpillar, Freeport McMoRan and Mosaic to pick up a few pennies for my troubles and stresses of the past week’s trading.

Once the market closed I stumbled upon Josh Brown’s posting “How do you have so much Time to Blog” on his site “The Reformed Broker“. It was yet another insightful post, but this one really struck a chord with me.

I would actually tell you to follow him on Twitter, but for some inexplicable reason he has me blocked.

Why, Josh, Why. Could Buddy Holly not bring us together?:

Anyway, among the things that he wrote about were his bygone days as a retail stockbroker.

I’ve written on many occasions that I was very fortunate to have worked with a wonderful broker. I really believed that he sought to protect and nurture my interests. We were at the same stage of life as we began a 25 year investing relationship.

Over the years I’d also had some highly contrasting experiences when infidelity resulted in trying some hot young broker or two, just for the thrill of it all. But when my trusted broker so unexpectedly passed away, there wasn’t much to think about. I didn’t think that it would be likely to find another “Bob”. Instead, I thought that it was far more likely that I would find, what Josh Brown so eloquently self-referred to as “a jerkoff retail stockbroker.”

Character and morality.

But it really went beyond that. The brokerage itself had no pride. It’s hard not to be a jerkoff retail broker when you work for a jerkoff retail brokearge house.

Environment.

Bob had pride, but despite the great example that he had set, I was left with a very deep prejudice against ever using a retail broker again.

Steve Jobs and Jeff Bezos obviously had more than pride. They had a great products, business models and vision.

Most of all, they weren’t products of their environments. Instead, they helped to create all new environments. Look, they even refer to Apple as its own “eco-system.” Jobs idea of design was to make it part of its environment while still standing out from its environment.

Amazon is creating a fusion between physical goods and the eponymous cloud. Someday, if Bezos has anything to say about it, that 65 inch 3D LED you just bought won’t even take up space in your media room. It’ll just be somewhere in the cloud, along with your music, milk, burial plots and books.

As I think a bit about Joe D, Jobs, Bezos, Bob and Josh Brown, in addition to the un-named brokers that I referred to, I’m increasingly convinced that every investor needs to take pride in his portfolio and trading acumen. Regardless of what environment helped to form you, what is the chance that environment will put forward someone to take the same level of pride in your portfolio that you can?

Joe D hasn’t turned it over. Maybe someday it will be Joey D who has the same level of pride and commitment. For all I know, he may already have it, but why put Joe D’s talents aside?

Even when not slinging fries he’s slinging life lessons.

Monday is the start of yet another week. This one is being framed by speculation that Germany may leave the EU, the Euro may crumble and that french fries may contain more saturated fats than is recommended.

I choose to be aware of all of those possibilities but to act accordingly.

In this case, “accordingly” means in prejudice to conventional wisdom.