Category: Uncategorized

 

 

With Eddie Murphy being back in the news following the announcement that he will be hosting the next Academy Awards, I was reminded of a vintage sketch he did on Saturday Night Live many years ago. (Regular readers will note this is the second time this week I’ve reached for an ancient SNL citation)

Going undercover as a “white person” he discovered the secret society, along with all of its perks, that was hidden from people of color.

The bottom line was that even with “white people problems,” life’s not that bad, I want in.

As I listen to the daily description of the over-riding trading strategy manifesting itself as either being “Safety trade off”, “Risk on” or “Risk off”, I wonder where those decisions are being made.

The various “talking heads” say it with such a cavalier attitude that I get the impression that there is some secret cabal meeting where the Stock Market Direction of the Day Committee gets together and decides where things will be headed.

 

I’d like to be on that committee, despite the fact that I generally agree with Groucho Marx’s observation that he wouldn’t want to join any club that would have him as a member. I’m perfectly willing to use any leftover white pancake powder that Eddie Murphy doesn’t need. I’d even wear one of those powdered wigs, but will not wear one of his skin tight red leather suits.

You have to draw the line somewhere, even though I don’t do charts.

As I look through my resume, which is chock full of worthless committee assignments, this one I would gladly be part of, not that Radiation Safety isn’t vitally important to vital organs.

At least a memo. Send me a memo, preferably a day or two in advance. That way I could instead look through my portfolio and not see a list of worthless or non-performing holdings. Besides, I’ve made my position on Insider Trading pretty clear.

No one gets hurt.

The existence of such a committee is clearly patterned after the London Gold Market Fixing Ltd. committee which meets twice daily in London to set the morning and afternoon price of gold.

The difference is that we all know about that committee. Membership is tightly controlled, but it’s proceedings are publicly divulged.

Interestingly, as the London Gold Market Fixing Ltd. Committee meets twice daily, physically present members may pause proceedings by placing a Union Flag atop their desk, whereas telephone members simply say the word “Flag” to pause the proceedings.

Very typically civilized and orderly as is the rest of the days’ precious metals trading.

In the case of Carol Bartz, who was fired via a telephone call from the Yahoo! Board on Tuesday, I don’t know if she had a flag to use. My guess is that if there was a transcript of that phone call, some flags would be raised if I tried to reprint what would likley have been a salty conversation, given her past penchant for profanity.

Whereas many feel that such a firing over the telephone is quite distasteful, I look at it as being symbolic.

Maybe its actually “emblematic”, but I’m certainly not going to use what little remains of Yahoo! Search to figure out which word is best suited for use.

Oh. Nothing remains?

The manner of Bartz’s firing is actually very much similar to the way the CEO of Borders informed employees of the demise of the bookstore chain.

He did it my e-mail. Maybe if he would have used paper and the printed word and convinced more people to do the same, Borders would still be selling books.

You would think that Yahoo! could have come up with a much more technologically savvy way to inform Bartz.

Personally, knowing that every person of stature “Googles” themselves, that would have been a good way to deliver the news.

The fact that “Google” is a verb, while “Yahoo!” not so much, tells the tale. Instead, Yahoo is a noun and not a very flattering one, unless you take pride in being rude, noisy or violent. Maybe profane, too.

In the meantime, the other big news of the day happened at the beleagured Bank of America.

Despite great performance at its Wealth Managment division headed by Sally Krawcheck, she’s now ex-BofA, as she is ex-Citi.

Here too, though, it’s clear that a memo hasn’t been received.

In this case, its for all of those who are showing their support for CEO Moynihan.

Those supporters should know that it’s no longer acceptable to use the excuse “he inherited this mess” in defense of someone who assumed leadership in January 2009. If you buy that line of thinking, either Angelo Mozilo has been elevated to George W. Bush status or the other way around.

Seems that you can’t decry that defense when applied to President Obama and then turn around and use it for Moynihan. But then, those silly Wall STreet types never think that anyone is listening and taking notes.

I keep the memos.

That memo might have been best delivered in the foreclosure notice that was actually filed against a Bank of America branch in Florida.

Today’s secret memo clearly set a signal to put the risk back on, despite the fact that it’s hard to understand how you can refer to prices now being of “value”, yet refer to the actions taken to secure value as being “risk on”.

Whatever.

Today as we just picked up from the last hour of Tuesday’s trading the climb in prices never looked back.

I took the opportunity to sell weekly call options on Halliburton, Freeport McMoran and Sunoco. I also had the opportunity to sell a September Bank of New York call option on the shares I picked up this past Friday.

With still a week to go for this month’s options cycle I find my performance to be well below last month, which was the second best I’d ever had with regard to premiums collected.

Not too surprisingly, when stock prices go down, as they did in the past month, I’m not as aggressivie in selling those calls, as I do like to  recoup unrealized capital losses. Luckily, that’s been the case.There’s a trime for income and ther’s a time for trading profits.

I think that was a song by The Byrds.

As the day came to an end with the Dow up 275 points and gold down nearly $60 the view on “The Street” was summed up by the exchanges “Streetwalker”.

According to CBC’s Bob Pisani, we should stop using the phrases “risk on” and “risk off”.

Ah, finally a man who is against the secretive mechanics of the markets. A man who believes that we should all drink from the same deep cup of wine.

His reasoning was so crysta clear and to the point.

“Risk on and risk off are QE2 phrases”.

Huh? What? What does that even mean? Why do they keep changing the code every day?

I’m sure that won’t be the last memo I’ll miss.

 

 

 

 

 

Invest like TheAcsMan

Option to Profit is available as either an eBook or 300+ paperback. Take a humorous look at a serious topic and learn how to make your portfolio finally go to work for you in bull and bear market environments.

See a sneak preview of Chapter 1.  hoco blogs

More about the book and purchase options. Scroll down and read the Szelhamos Rules blog, updated every weekday.

Find  OTP Book at Amazon, B&N or now you can also Order direct  from publisher. Use 10% Discount Code P4S2ZD8H

 

  

 

The original Szelhamos Rules ran for precisely 1 year, from February 2007 – February 2008. This article originally appeared March 27, 2007. It is reprinted here in honor of Dick Parsons’ appearance on CNBC this morning and the ouster of Sally Krawcheck from Bank of America

 

What do India, Buffalo, Cincinnati and northern New Jersey have in common? Here’s a hint. They are the antithesis of London, Hong Kong and New York.

Citibank, or as it is now known, CitiGroup, announced that it is laying off 10,000 people and re-assigning another 14,000 +.

Do you remember the old Citibank slogan? “The Citi never sleeps? Apparently, the slogan was true. But there was a steep price to be paid. Why didn’t Citi ever sleep? Because it always kept its lights on in such high electricity cost sites as London, Hong Kong and New York. With the worldwide cost of energy soaring, it was only a matter of time until the venerable Citi put on a sweater, turned the thermostat down, lights off and fired 10,000 employees.

The much beleagured Citigroup Chairman, Charles Prince, has decided that the Citi must sleep. So he has ordered that the lights be turned out, at least in those costly cities. And 10,000 people will now be able to get some rest.

As for those other 14,000 that are going to be relocated, they won’t be sleeping. Scientific evidence seems to indicate that the lack of sleep in low cost of living areas has no detrimental effect on health. And like any good employer in a capitalist society, Citi wants what’s best for its employees. So now, they won’t be sleeping in affordable sections of India, Buffalo, Cincinnati and northern New Jersey. Did you ever think that the latter three would ever be in the same league as a third world nation?

So say “hello” to India, Buffalo, Cincinnati and northern New Jersey. If you’ve ever been to Hong Kong, you’ll be amazed at how similar it is to Buffalo. That should be an easy relocation. I feel badly, though, for those Hong Kong people being relocated to Cincinnati. Talk about culture shock. Do you know how hard it will be to get good fresh pickled eel? They may have to cross over into Kentucky.

But I know what you’re asking. How does this news effect me? Pretty straightforward. Your life as a customer in need of assistance, will be miserable. If you think the accent of your customer service rep in India was tough to handle, just wait until you hear the northern Jersey accents. You’ll be pining for the old days.

Over the years I’ve been looking for good reasons to buy some Citi. Until today, I hadn’t found any. As Citi kept getting bigger and bigger, it seemed to lose its way. Jim Cramer is very blunt about Citi. He thinks the only way for the stock to appreciate is for Prince to go, The chorus is getting louder.

So today comes the big announcement. Even in today’s down market, the news would have ordinarily been met with enthusiasm. As it turned out, Citi under-performed today’s market. What will Prince need to do next to keep his head off the chopping block? He’s obviously going to strategize like it’s 1999. But whatever else, it’s probably too late. So as it turned out, I still haven’t found a compelling reason to make the purchase. But it’s coming sooner, rather than later.

So Citi didn’t help things today, but at least it’s not involved with sub-prime, at least not as far as we know. But in just a second degree of separation, the market wasn’t very good today, with homebuilders, yet again, dragging everyone down. Put this into short term context, though. Yesterday, after all, was actually a great day. After 5 straight up days, we were poised to slide. Down over 100 points, the rebound returned us to a loss of just 11 points. How great was that?

So today, with no real news, just more dwelling on the housing numbers, the market didn’t do much of anything. No conviction or just a case of taking a breather. I doubt the latter. Traders are just waiting for the slightest positive hints to take us to the next level. But they are nervous.

On a personal note, despite the qualms about trading UNH for Altria, on day one it’s looking like a really good move, especially with UNH down $1.20 from where I sold it and the Altria (when issued) up $0.42 from its purchase price. I’m glad that when I get my life insurance premium quotes they don’t ask me whether I’m a smoker, by proxy.

And did you see NYSE today? It continues on its climb back toward its high. I’ve been holding off selling call options, because I felt that it’s stock price was too low and the stock would still be heading up. In the after hours, thanks to some very positive comments by Jim Cramer, NYSE doubled its regular trading gain, closing in on $96. Once it gets to 100, it will be time to sell April $105 or more likely, May $110 call options.

While the market continues to look poised to move up once it completely digests this sub-prime stuff, I am actually wondering what Citi’s move portends in the long term.

In the past few years, the economy has been adding jobs. We’re a little removed from some of the misery a few years ago when it seemed that each week a new and ever larger layoff was announced. We were getting used to companies announcing one huge layoff after another. It’s hard to know whether the relative calm of the past few years has been because companies are now lean and mean, or because business has been good.

The consistently increasing monthly productivity numbers might seem to indicate that both are true. Perhaps there was a causal relationship. But its been calm lately, that is, until today. No numbers were given on the proportion of Citi layoffs in the United States. You would think that with the past outcry over outsourcing, if jobs were being relocated to the US, CitiGroup would trumpet that fact. So who knows?

It’s time to turn the light back on CitiGroup to help clarify what their announcement really means for all of us. Or as is said when the lights go off for the night, “Good night sweet Prince, good night”.

 

Note: The original version of this article did not include the graphic “Sad Citi”

 

 

Invest like TheAcsMan

Option to Profit is available as either an eBook or 300+ paperback. Take a humorous look at a serious topic and learn how to make your portfolio finally go to work for you in bull and bear market environments.

See a sneak preview of Chapter 1.  hoco blogs

More about the book and purchase options. Scroll down and read the Szelhamos Rules blog, updated every weekday.

Find  OTP Book at Amazon, B&N or now you can also Order direct  from publisher. Use 10% Discount Code P4S2ZD8H

 

  

There are lots of things that I’m not very good at.

One, apparently, is the inability to not end an opening sentence with a preposition.

I’m also continually reminded that I don’t clean countertops very well, although it’s still not clear whether I can’t master the process or am just disinterested in the proocess.

I also tend to use multiple negatives in the same sentence.

But the one thing that bothers me is my inability to understand idiomatic expressions. That weakness haunted me back in my SAT days.

Math? No problem. Same with reading comprehension, analogies, synonyms and antonyms. I was even able to keep those prepositions and negatives in check when it really counted. But once you started throwing those idioms at me I was at a loss.

Fortunately, I think that idiom interpretation held a relative weighting role similar to the traditionally recommended place of gold in your portfolio, so it probably didn’t contribute to the final score all that much.

I don’t do well with adages, either.

I do understand the expression “All that glitters is not gold” in that there are either other things that actually glitter, or perhaps there are other things that have the ability to entice.

I guess it could also mean that just because something glitters doesn’t make it valuable, but that’s the least likely one that I think of when I hear the expression.

So using my contraindicatoromometer, that would have to be the correct answer.

And then there’s that silver lining thing.

Did the Rwandan carnage really have a silver lining? The Killing Fields of Cambodia? Does there really have to be something good that underlies everything that is so clearly bad?

Is there anything good about rhetorical questions?

The fact that every cloud is said to have a silver lining is akin to “beauty is only skin deep”. The stuff that’s hidden and out of the way, weither a lining or deeply rooted beauty is totally irrelevant.

If it can’t be seen it doesn’t exist.

That expression is not likly to need any deep analysis. The correct answer is “all of the above”.

These days everyone is touting gold. I’m not, but everyone else seems to be doing so.

What’s funny is that it also seems that all of the commercials for buying your old gold and all of the hype about gold parties seem to have died down.

I don’t know whether that’s due to people realizing they were getting less than bottom dollar for their old gold or the fact that market has already been tapped out at the significantly lower prices of the recent past.

I don’t know anything about gold. Yeah, in the early days of my previous life I had played with casting gold using the ancient lost wax technique, even designed our wedding bands, but that’s about it. When it comes to gold as an investment or as a hedge, I’ve got no opinion.

In general. But these aren’t general times.

These days, you can cast yourself into one of two camps, more clearly defined than The Bloods and The Crips.

You’re either a “Glitterati” or a “Fundamentalist”.

I did purchase 10 gold coins for my 2 kids a few years ago as college graduation gifts, never thinking that their value would double. At least not in my lifetime. So call me a Glitterati, but I did so with no conviction.

Despite the fact that my oldest son, thus far the only one to receive his gift had sold three of those coins at about $1500/oz and reinvested in S&P 500 ETF’s, I still believe that was a rational trade, mostly because my mantra is “no regrets”.

I don’t know if that’s his mantra, too. Based on some of his college and young adult party pictures I’d say “no regrets” is his mantra for daily life, but I’m not certain that extends into his investing philosophy.

It’s funny how your approach to money changes when it’s your money that’s at stake.

Other than that one time foray into the metal itself, somewhere I have a nearly 40 year old silver bar. I think it may have been 25 ounces and I think it was at about $4/oz. But then again, I really have no clue where it is. What I do know is that I fared better than the Hunt Brothers, who even if they had held onto the silver they had purchased in an attempt to corner the market, still wouldn’t have reached a breakeven.

And that’s despite using 1979 dollars.

So as gold and silver have been on this upward tear, for people like me and by which I mean anyone with a shred of rational thought, would assume that their prices were primed to drop.

Last week that one day $100 drop seemed to be the start of a well deserved return to normalcy and perhaps a return of the stock market to more sane intra-day movements.

Wrong and wrong.

Down $100. No problem, just go up $150 and then some for good measure.

Now, I do have to admit that I have been slowly accumulating shares of the ProShares Silver Ultrashort ETF.

I first started doing that when those shares were at $17. They subsequently moved up to about $21, as silver fell to $32 or so, per ounce.

Since I hedge just about everything, I was more than happy to pocket a very healthy option speculative and volatility driven premium and give up my shares.

Since then, though, silver too has been on an unabated upward climb and I’ve again started accumulating shares.

I’ve done so always in the belief that silver would join gold and return to its senses.

It hasn’t and neither have investors, or speculators, whatever you want to call them.

Tuesday, after about a 300 point early day drop in the Dow Jones and a $25 rise in gold’s price, some sense of normalcy returned. Obviously, on the basis of 3 hours worth of sane behavior, I feel comfortable projecting the next 10 years into the future of the markets.

The Dow finished down just 100 points and gold lost about $25 in just a couple of minutes.

While it showed as much as a $9 loss, it did end the day up $4. Silver on the other hand was down all day long, but came off of its lows for the session.

I suppose that Ron Paul, probably still seething over the Tulip Bulb Crash, is happily telling everyone who shows the least interest in listening that he told them so.

I can’t blame him if he were to do that, especially since he should get his moment in the sun after 40 years of trying to spread that message that has clearly been a losing proposition for the vast majority of that time.

These days stocks are clearly not the ones with glitter. It’s certainly not real estate or European bonds, either.

Although I’ve never been one to pay too much attention to price charts, I’m having a hard time understanding why people don’t look at a chart of gold or silver and apply the same kind of cautionary notes that they would if they saw a stock or index demonstrate the same upward climb.

That cautionary note is called “gravity”.

I do understand the perspective of the crumbling world economy being thrown into the mix as perhaps being the reason given for the available support of a continued climb. But I’m old enough to remember we’ve had lousy financial periods over the past 30 years and nowhere near the same reaction in metals.

Granted, the Russian economy of the 90’s was not precisely of the same weight as the European Union of today, but that would have been a great time for gold to rocket. At least the European Union of today has some banking and financial standards and the existence of some relatively healthy members who are willing to prop up the union.

On the other hand, it’s hard to say with any kind of certainty that Russia of today still has any banking standards. Can you imagine the devastation that would have occured back in 1998? And yet, gold did nothing and the stock markets, fueled by technology soared.

I wish that people would have the same sense and sensibility that I have when it comes to the emotions that surround this glittering stuff. Although I did take a pick and shovel with me as I paid a brief visit to the cemetery the other day, common sense eventually took hold after I had broken into a third crypt.

That’s when I remembered that I just wasn’t cut out to be a Glitterati and was no longer a practicing necrodontist. I needed to focus back on Fundamentalist concepts, instead.

The one thing you can say about the fundamentals is that they definitely do not glitter. They’re boring, but at least no one is going to be blaring on my TV suggesting that I go through my old drawers for unwanted fundamentals.

And no, there will never be any alcohol fueled “fundamentals parties” with my many fundamentalist friends.

That would just be weird.

 

 

Invest like TheAcsMan

Option to Profit is available as either an eBook or 300+ paperback. Take a humorous look at a serious topic and learn how to make your portfolio finally go to work for you in bull and bear market environments.

See a sneak preview of Chapter 1.  hoco blogs

More about the book and purchase options. Scroll down and read the Szelhamos Rules blog, updated every weekday.

Find  OTP Book at Amazon, B&N or now you can also Order direct  from publisher. Use 10% Discount Code P4S2ZD8H

 

  

Check out Recent PortfolioTransactions

 

 

I used to really dislike three day weekends.

Since my only hobby is watching the CNBC ticker, I feel a real void on days when the markets are closed. As if Saturdays and Sundays aren’t bad enough, the third day makes it truly insufferable.

I certainly don’t dispute the need to have national holidays nor do I dispute the specific events or concepts that we honor, but so much is lacking on those days.

For example, even inveterate viewers can stand to watch “Enron: The Smartest Guys in the Room” only so many times as CNBC seeks to fill the air on the holiday schedule. Admittedly, though, I could watch the “Marijuana USA” special on an endless loop, as long as someone lets in the medicinal delivery guy when he knocks.

A few weeks ago, as Hurricane Irene was threatening to blow the roof off of the northeast, CNBC broadcast live on Sunday, a day normally reserved for broadcasting its public service imformercials. I’m not certain why I have MediaBistro.com bookmarked in my browser, but they showed a photo of the CNBC air mattresses after their deployment, to show just how seriously they were taking their commitment to breaking news.

Had Hurricane Irene posed a threat only to Florida or North Carolina viewers would still be able to learn about the many purchase opportunities available for their kitchen rotisserie. However, since Irene was headed for the northeast, the only part of our nation deserving of weekend coverage, that gratification had to be delayed.

Any other part of the nation and MediaBistro.com would have posted photos of CNBC hammocks.

Well, here I was, Labor Day and me without a job, by choice. What to do? What to do? Mind you, back when I was working, Labor Day and all 3 day weekends were a welcome event.

Today was Sugar Momma’s turn to take her visiting brother to the movies and they’ve left to see “The Smurfs Movie” prior to his departure for home tomorrow.

Me she sent to see “Rise of the Planet of the Apes” with him the other day. In the recent past, he and I had seen such delights as “Yogi Bear”, “Alvin and the Chipmuks” and “Marmaduke”. I don’t know why I listened to her this time, as I didn’t follow her advice last year to take him to see “Inception”. This time  I wanted to see the Smurfs, but will bide my time for appropriate revenge. That threat is probably empty as I still haven’t devised my revenge for the time she made me place a “to go” telephone order, that took about 20 minutes to complete, at a new Japanese restaurant where the staff didn’t speak anything resembling English.

That was 26 years ago. There’ll be hell to pay.

So that left me home alone with Laszlo the Dog and I was scratching my head and his back over a topic for today’s blog.

The most difficult blog of the week is always the first, as boredom and slow news days don’t lend themselves well to an interesting topic. The biggest story, the absence of Jerry Lewis from the traditional Labor Day Muscular Dystrophy Association Telethon wasn’t a real story, since the news was released months ago. Besides, despite the lack of transparency over the surprising decision, everyone, including Jerry Lewis, seemed to be focused on the main event rather than the behind the scenes drama.

Even the Twitter stream was slowing, but then again, I only follow 29 people and they seemed to be taking the day off bidding an official goodbye to yet another summer.

But there she was, Jane Wells.

Second time this week she provided topic inspiration and guidance. You can always count on her, even though if she ever ascends to elective office in the “Draft Jane Wells for President” movement,  she may ban corked bottles of wine.

I’d like to see her struggle with an screw top bottle of Australian wine and see how long it takes to realize that “righty loosey, lefty tighty”. Besides, is America really ready for a “Wine Party” candidate?

This time she tweeted that CNBC was live with European market coverage.

That can’t be good.

I tried to tune into CNBC, but the Hammacher-Schlemmer Artificial Intelligence Remote Control seemed to know that was a likely error and instead suggested that I watch CNN on this market holiday.

So I had to try and figure out what the various buttons on the TV and cable box actually did and eventually found the proper sequence of clicks to summon up CNBC.

Do you see why I don’t like these 3 day weekends?

As it turned out the market equivalent of a hurricane hit Europe, with the FTSE 100 faring best, down only 3% for the day. You don’t want to know how the DAX did, but let’s say it dropped the equivalent of the savings afforded by one of those tax free shopping days.

The only thing in this financial natural disaster missing was video of George W. Bush patting the back of the Bank of Greece CEO and saying “Heckuva good job, Brownieopoulis”.

As it turned out, the Enron documentary was being pre-empted by a group of people with decidedly British accents, yet unaccompanied by sub-titles. There was a banger filled rotisserie grill in the background and I imagine air mattresses, as well, although there’s a very good chance that the British do not celebrate our Labor Day.

Sorry, Labour.

Luckily, numbers,charts and graphs are reasonably universal, as are the colors red and green.

Oh, I’m sorry again. Colours.

Conventional wisdom had it that following the terrible open in US trading on Friday, the market would recover much of that loss by the second or third hour of trading.

No one was more surprised than me that the conventional wisdom turned out to not be correct.

But I do have to admit that I fully expected, in the absence of any earth or market shattering news, our Tuesday trading to be positive.

Now, it’s not looking quite as good.

In hindsight, it’s unfortunate that the sell-off on Friday, taking a number of my holdings that were hedged by weekly options, ended up with them being slightly out of the money. As much as I enjoy being able to repurchase those shares on the next trading aday at a price lower than was assigned, that won’t likely be happening on Tuesday.

Only some of my Freeport McMoRan shares will be assigned, and there’s never any telling where those will trade, as they don’t particularly follow the market trend with any regularity.

At this point, it’s barely noon on Monday, the European markets are closed and the US futures are pointing down over 200 points.

Live CNBC coverage has now ceased, there’s still about 20 hours before our markets open and it promises to be a slow remainder of the day.

Who knows, between now and then some unforeseen good news may pop-up, like maybe capturing and killing bin Laden again.

Short of that it’s hard to see any good news offsetting those bad signs.

At least I got my CNBC fix today and have an idea of what to expect tomorrow.

As it stands, we don’t have anymore 3 day weekends for a while, but there will be another Sunday coming up next week.

From now on, I’ll be using CNBC as my guide for breaking weekend and holiday news. If there’s no Magic Bullet slicing and dicing its way through the weekend, take cover, it’s just not a very good sign.

 

 

 

 

 

Invest like TheAcsMan

Option to Profit is available as either an eBook or 300+ paperback. Take a humorous look at a serious topic and learn how to make your portfolio finally go to work for you in bull and bear market environments.

See a sneak preview of Chapter 1.  hoco blogs

More about the book and purchase options. Scroll down and read the Szelhamos Rules blog, updated every weekday.

Find  OTP Book at Amazon, B&N or now you can also Order direct  from publisher. Use 10% Discount Code P4S2ZD8H

 

  

 

How many times do you find yourself doing a double take when you see or hear something that appears incongruous?

For example, when a really stupid question comes out of the mouth of someone who is supposed to be smart, presumably by virtue of their status in life, during congressional committee questioning of Ben Bernanke.

Chaffetz said what? I still have a hard time understanding how Bernanke doesn’t at least roll his eyeballs, although there is evidence that suggests he dons ocular prostheses during testimony. He probably has to think of dying puppies to keep from laughing.

For the rest of us the real world offers some very tangible examples of opposites and how we react to them.

Jane Wells, of CNBC fame, Tweeted about the guy in Starbucks who was munching on an Arby’s meal, while glomming the free Wi-Fi. She didn’t describe her response, but I don’t think she would mind being spotted rolling her eyeballs.If I were to guess, I would let the entire portfolio ride on her spitting out iced mocha in spasms of laughter.

Guaranteed that you’ll never see Starbucks blend being served in an Arby’s. I’m still afraid to find out what actually constitutes their Horsie Sauce. Although if Jane Wells was actually spitting out iced mocha, you may never find her in a Starbucks again, either.

If you’re a male you’ve probably asked the question “What does she see in him?” on more than one occasion.

In this regard, men and women aren’t really from different parts of the solar system, as women are equally likely to ask “What does he see in her?”

Szelhamos’ usual answer to this kind of oddity was typically “He/She must be good in (the) bed”. Szelhamos always interposed the word “the” before every noun. Attempting to train dictation software to comprehend his reading of passages and understand his accent caused several CPUs to fry in their attempts.

But keen observers of human behavior will probably venture to answer “money” and “sex”, respectively.

If you’re Ron Paul, the correct answers of course would be “gold” and “sex for gold”, respectively.

If you’re Jason Cheffetz the answers provided would likely be “tuna fish and “Jumbalaya”.

While the saying “opposites attract” has near universal appeal and seemingly offers the potential to level the playing field, opposites still elicit the double take. Most studies seem to agree that marriages that begin with the “opposites attract” foundation don’t do terribly well in the longterm.

My brother-in-law who is now visiting us from California for one of his semi-annual visits is very similar to me in some regards and very different in others. He is developmentally disabled and functions on a 4-5 year old level, greatly enjoying cartoons and movies.

In that regard, we are very similar.

My wife, who is his guardian suggested that on his first day with us, which was today, he and I go to see a movie. She suggested “Rise of the Planet of the Apes”, as she recalled that he had enjoyed the series in his younger years.

Against my best judgment, I agreed.

I wanted to see The Smurfs” movie. I recall having enjoyed them during my early adulthood.

In regard to today’s movie choices we were very different.

Usually, when he and I go to the movies no one sits near us, as it’s somewhat unusual to see two grown men, one of whom qualifies for a senior’s discount, at “Yogi Bear” or “Marmaduke” in the middle of the day. Not only should mothers not let their children grow up to be cowboys, but they shouldn’t let them sit anywhere near adult men at children’s movies, especially if they carry velvet painting supplies.

I suppose that’s he and I are already an odd pairing, but at least it’s legal and not really Date Line worthy, unless Chris Hansen is really getting deperate.

Despite generally good critic and consumer reviews, I thought the movie was horrendous. I know that much of the action was computer generated, but I would have felt better if there was a disclaimer that “No humans were harmed in the making of this film”, as the movie, based on the true story of when apes conquered San Francisco did have some edgy moments.

Naming the protagonist Harvey Banana was a bit heavy handed, though.

For me the oddity of this movie was James Franco. The pairing was the near romantic and deeply caring relationship he had with a monkey (for purists, it was an ape). That’s what I call an odd pairing, although they may have been of the same religion.

I’m certainly not opposed to inter-species marriage, but I still have strong feelings about inter-faith relationships.

My God is a confused and vengeful God.

Stoner? Yes, by all means, get Franco for that role. Amorous monkey man slash research scientist, I don’t know, maybe Jim Carrey, if Olivier is still dead.

What made suffering through this movie even worse was that we saw it at the height of the day’s trading. I hate missing the last hour of trading, because as you must know if you watch enough CNBC, “It’s the most important hour of the trading day”, along with a good breakfast.

I did manage, however, to get a couple of trades through earlier in the day and they were their own odd pairing.

A few months ago I had sold puts on Spreadtrum Communications. I did so after Muddy Waters came out with a report that cast some significant aspersions on their accounting and may have referred to the Spreadtrum CEO as having been the bastard child of a kimono dragon and capitalist lackey.

On that day Spreadtrum got pummeled and I sold puts in a rare display of speculative play.

The shares quickly reversed course and I kept selling even more puts at higher and higher prices, just taking in all of those nice premiums associated with its volatile trading.

One of those lots, at $17 got assigned, whereas the $8, $12 and $15 just lined my pocket with their premiums

In the 6 weeks that I’d held the position I did sell some calls, eking out about another $1 of premium, but nothing compared to the glory of unassigned puts after panic had set in and then subsided.

But for some inexplicable reason, maybe related to a Motley Fool posting a couple of days ago, shares shot up 10%, past $19 today.

I decided to just take profits, not thinking that it was worth selling calls any longer. Besides, this little speculative play had done quite nicely and for me had now run its full course.

Knowing that I can’t keep cash in my pocket very long, I just had to get some nice hot and exciting stock to take its place in my speculative corner of the portfolio.

Since I like the word “inexplicable”, I’ll use it again to describe my purchase of Dow Chemical with the proceeds.

Inexplicable is certainly a good way to describe that odd pairing. Spreadtrum Communications and Dow Chemical. Whereas Spreadtrum is hardly the steward of responsible investing, Dow Chemical doesn’t exactly have a frivolous entry in its balance sheet. It would never even consider the possibility of sneaking Arby’s into the Boardroom  even if there was a chance of sitting in one of those comfy chairs and getting free herbicide samples.

Spreadtrum and Dow are probably as infrequently mentioned in a pairing as “Jason Cheffetz” and “highly intelligent steward of the public good” are uttered together.

In the meantime, I need to get to the ATM and flash that wad around at the mall for our next theatrical outing

This time, I took out enough money for both of us to look pretty good.

I’d do anything for my brother-in-law, as long as it never involves monkeys again.

 

 

 

 

Invest like TheAcsMan

Option to Profit is available as either an eBook or 300+ paperback. Take a humorous look at a serious topic and learn how to make your portfolio finally go to work for you in bull and bear market environments.

See a sneak preview of Chapter 1.  hoco blogs

More about the book and purchase options. Scroll down and read the Szelhamos Rules blog, updated every weekday.

Find  OTP Book at Amazon, B&N or now you can also Order direct  from publisher. Use 10% Discount Code P4S2ZD8H

 

  

 

Back in 1978, when Saturday Night Live was still in its infancy, Weekend Update covered the death of Pope John Paul I in its own special way.

Occuring barely 30 days after the death of Pope Paul VI, the immediate response after reading the “breaking news” was “We did this story a month ago”. It marked Bill Murray’s first appearance as co-anchor along with Jane Curtin.

With that kind of trivia, I could end today’s blog right now and still feel highly satisfied.

But wait, if you read more…..

Ah, memories. Too bad I can’t remember where we keep the toilet paper.

With today’s news that the Department of Justice was seeking to block AT&T’s deal with Deutsche Telecom to buy T-Mobile, for a mere $39 billion, it once again seems as if we’d just done that story.

The saga of AT&T is fascinating since the break-up in the early 80’s and its subsequent reconstruction through take-over, merger, buyouts. You name it, they’ve done it. Somehow, Quest and Verizon have maintained their independence as AT&T just reconstituted itself bit by bit.

This morning, its CEO, Randall Stephenson was on CNBC hours before the DOJ announcement, which itself came minutes after President Obama’s brief announcement regarding adressing Congress on jobs and the economy.

As time passes, I find myself believing less and less in the concept of “coincidence”.

The irony of the Department of Justice announcement is that it potentially jeopardizes job repatriation which AT&T had promised, but that others had questioned.

A case of one hand giveth?

The fact that the Communication Workers of America labor union was in favor of the T-Mobile buyout makes everything curious if the net result would be a loss of jobs.

According to Stephenson, the union was in favor because they recognized the deal would bring more investment and more jobs. That’s the same union that just uncharacteristically caved in to Verizon and went back to work without an agreement.

Eric Jackson, of Forbes Magazine, actually helped finish Spehenson’s partially correct answer in response to a question I posed to him on Twitter. Amazingly, Twitter, the great creator of an egalitarian society allows anyone the opportunity to communicate with anyone else, even people of stature. How else could someone like me have ongoing discourse with Idi Amin?

As it turns out, the deal, which may or may not actually bring more jobs, does present the opportunity to increase CWA’s roster of union members by encircling T-Mobile’s work force.

No matter whose spin you choose to believe, there’s enough healthy cynicism to satisfy everyone.

So in honor of Jackson’s contribution to my knowledge data base, I wanted to put the AT&T legal saga in a perspective that we both might appreciate. 

In 1974, a full seven years after the original REO Speedwagon formed, the DOJ filed an anti-trust lawsuit against AT&T. Finally in 1984, at the very height of REO Speedwagon’s popularity, the divestiture took place resulting in what were called “The Baby Bells”. The make-up of both AT&T and REO Speedwagon has varied greatly over the years representing business opportunities and creative differences, respectively.

There are lots of things in life that I don’t understand. Advancing age has afforded me the luxury of admitting that fact since I no longer care what other people think.

But Jackson really put it succinctly, in the form of a Twitter hashtag: #selfinterestaliveandwellinAmerica

He is much more pragmatic than I am, because in my cynical mode, I thought that the CWA support was due to #FearAndLoathingOfVerizon and the belief that the enemy of my enemy is my friend. From labor’s perspective, going back to work was like making a deal with the devil, but without the deal.

What really fascinates me is the talk of a $3 billion cost to AT&T if the deal doesn’t go through. Not only that, but there are reports that AT&T would also have to forfeit some spectrum to Deutsche Telecom.

If these are all true, I understand US companies being out-maneuvered by Chinese companies, hell even North Korean negotiators, but I just can’t see how they could have been bested by a European company.

I have no basis for believing that other than stereotyped notions that are deeply ingrained within.

Great. Those things I can remember.

I would probably also wonder whether my legal representatives were double agents.

When I buy a house, my contract always has the contingency that makes the sale subject to an inspection. There may even be some other escape clauses, as well, such as the presence of a counter-clockwise spin of thetoilet flush.

It seems that someone at AT&T should have considered the possibility that DOJ might take exception to the creation of an oligopoly, as the merger would shrink us down to just 3 major cell carriers (Read Eric Jackson’s Forbes article).

Seems that would have been less likely during the Bush administration when for all intents and purposes mergers were like the Wild, Wild West. But the climate is different these days.

Three billion is a pretty big leap of faith to make.

But now the fun begins.

There’s been lots of speculation about how political self interest will kick in in the hallowed halls of Congress, especially when jobs may be at risk in someone’s district. We all know that any representative would sell the interests of the nation down the river if it meant re-election.

Since AT&T said that the benefits of the deal would be increased jobs and technological innovation, the inference being that just the opposite would occur if the deal was blocked.

No one wants to see either of those events occur.

But wait a second, it’s unlikely that AT&T would hold its commitment to technology as hostage, particularly since that would be akin to suicide in a very competitive landscape, I think that has to be discounted in its entirety.

Further, the skepticism regarding increasing jobs is probably warranted, as workforce redundancy can’t be allowed. Besides, what better way to improve margins than by makes cuts in your most expensive cost center?

But for AT&T, this can end up being a win – win situation.

Faced with losing $3 billion and valuable spectrum property, AT&T could make a highly signifcant improvement to its public face by guaranteeing across the board job increases, amounting to, shall we say $3,000,000,000 for some defined period of time.

At that point, whatever objections Sprint and Verizon might have to the deal have would be laughed at as being counter to the interests of the nation. That sort of thing may go unnoticed for politicians but not for “greedy capitalist” institutions.

As far as I’m concerned, I got rid of both Verizon and AT&T a few months after the market started its recovery from its 2009 bottom. At that time I moved almost entirely into accidental high yielders, to quote Jim Cramer.

I do own some Sprint, but that doesn’t count, since I never would have purchased shares of a sub $5 stock with real money. Instead, I bought those last month with royalty payments from Option to Profit sales.

The funny thing is that when news does come out everyone looks for second and third derivative trades.

When the original deal was announced, American Tower got slammed because the consensus was that there was overlap in AT&T and T-Mobile tower contracts.

I bought AMT at the time, sold some calls and held onto shares for just a brief time as the share price quickly recovered. It was a very good trade for me and if I could get that kind of annualized ROI for a year, I could have retired 20 years ago.

Today, American Tower moved up on the news. Guess what it’s likely to do in a couple of days?

I rarely deal with put options, but this seems like a good time.

Whoever said the market discounts the future needs to redefine the time frame from the widely accepted 6 months to about 6 minutes.

But back to AT&T.

In the first iteration of the DOJ vs AT&T, it took 8 years for an agreement to be reached and then a bit more than a year to effect the break-up. By the time the Baby Bells were in ascendancy REO Speedwagon was in descendancy.

Nearly 30 years ago, when all of this was happening, technology was moving relatively slowly. Not too much happened in the 10 year period from start to finish. It’s hard to believe, but portable phones were an oddity back then. Forget cell phones as we know them. Have you seen episodes of Seinfeld recently?

But what would happen if AT&T was in another drawn out 10 year process? How would that effect its strategies or reluctance to enter into certain ventures?

What impact would a muted AT&T have on the national economy?

I don’t know the answer to any of these. In fact, if it weren’t for Eric Jackson, I’d have no clue regarding CWA’s real motives.

But this time around, as we go through a second round of DOJ action, I think we need to let AT&T move forward and prepare ourselves for the eventual third round of DOJ versus AT&T.

I’m hoping to have front row seats for the battle of 2048 and seeing how President McCain, who made his own deal with the devil, handles that one.

 

 

Invest like TheAcsMan

Option to Profit is available as either an eBook or 300+ paperback. Take a humorous look at a serious topic and learn how to make your portfolio finally go to work for you in bull and bear market environments.

See a sneak preview of Chapter 1.  hoco blogs

More about the book and purchase options. Scroll down and read the Szelhamos Rules blog, updated every weekday.

Find  OTP Book at Amazon, B&N or now you can also Order direct  from publisher. Use 10% Discount Code P4S2ZD8H

 

  

 

I rarely write about local events even though my world these days revolves around an area of about 50 square feet, maybe more, if you include the TV’s remote control range. If La-Z-Boy could design an in chamode model I could get that range even tighter.

Fortunately that tight range is by choice as the only tether I have is to the TV, but if I wanted or in a pinch, the only programming that mattered during the day could easily be streamed thanks to E*Trade and CNBC.

I did need to go out the other day to have a repair done on our car after a break-in attempt in the District of Columbia.

Funny thing was that they really didn’t need to smash the window, since I keep my full sized body bong secured to the roof rack for easy access.

In case Howard County police are reading this blog, I’m not being serious. The break-in occured in Laurel, but on the Prince George’s side.

In case PG County police are reading this, it was in the Ann Arundel County piece of Laurel.

And so on.

Without going into too much detail, I wasn’t terribly happy with what I thought was an inadvertent problem caused during the repair process. I tend to be fairly low maintenance and am not one prone to complaints, but I am wary of and will speak out against irresponsible behavior directed at me, as a consumer.

Sometimes “speaking out” means raising the questions rather than a ruckus. I wasn’t trying to be a villain and I didn’t think that there were villains stacked up against me. Just people seeking to mutually protect their interests in the name of justice

Since I’m nearing one of those standard retirement ages and haven’t really perpetuated any scams (yet), I’m not really likely to start along that path in life at this point, especially with a local business in a small town.

Of course, there’s really no reason for the people at Win Kelly Chevrolet to know that, as I’m certain that they see their fair share of complainers, maybe even scammers, dealing in an industry that probably has a fair amount of consumer mistrust as the baseline.

Look at all of the people that tried to blame Toyota for what proved to be a non-existent electrical problem.

Long story short, they took every effort to make me, as a customer feel satisfied with the outcome. There were no threats, no yelling, just reasoned discourse from both perspectives. Had they decided to take a different approach or come to a different decision I would have been upset and would have just gone elsewhere for the required service.

And that would have been the end of it.

Instead, they chose to treat me, the customer, in a way that represented an investment in the future. They decided that there was no need for a villain on either side of the tale and were likely more forgiving and understanding than I would have been.

What they did was to create a future customer and a fair amount of good will. I mean, after all, here I am, impressed enough to be writing about them (Helen, Mark and Lyle)

Why doesn’t this happen in the markets?

Why is there always a need to find and identify a villain when things don’t go our way?

In the few years that I’ve been actively involved with managing my own portfolio there seems to be a villain each day the market goes down and an uber-villain when there is a downward trend. Granted, when the market does go up in a significant manner, it’s equally common to try and identify  the root cause, but human nature being what it is, the fervor in pursuit of that cause is much less

Most recently, the villain has been Highy Frequency Trading. Someday, I’ll probably write a blog about that along the same lines as “Why Insider Trading is a Victimless Crime.”

Market goes down? Blame it on leveraged ETF’s.

How about the uptick rule?

Short sellers. Don’t forget the short sellers. It’s amazing that Overstock.com is still around given the conspiracy led by short sellers to see it implode. Hedge funds, too.

Whatever happened to the Yen Carry Trade. I still don’t even know what that means, but that was a biggie about 4 years ago, or so. 400 point drop? Japanese Yen Carry trade. Up 175 the next day? Uh, something else.

Almost forgot about algorithms.

Now, probably the most unexpectedly designated villain is Alan Greenspan who obviously pulled the wool over everyone’s eyes for 19 years. As soon as he left the Federal Reserve it was decided that his policies were responsible for what ultimately became the housing bubble and banking crisis, maybe the Cambodian Killing Fields, as well.

That’s why you should never take vacation from work. Someone is bound to discover that you’re totally unnecessary. Remember Mel Brooks’ great line from Blazing Saddles? “We have to protect our phony baloney jobs, Gentlemen”.

What really amazes me is how any  of these could be identified as an endemic problem, yet suddenly become irrelevent the very next day.

Having a villain to point a finger at is very comforting. The United States is used to being blamed for all of the world’s woes. Every despot throughout the history of the world has known that an external villain must always be identified so that the poor “Schlubs” can be distracted from finding out the truth.

Whoever said “The truth shall set you free” probably knew what he was talking about.

Again, it’s the Mel Brooks concept at play. It really does have near universal application.

In that regard, it will truly be amazing to watch the evolution of the “Arab Spring”. After 60+ years of being fed a single line people may get to see that the enemy was actually within, unless of course the new governments sense a tenuous grip on power. In that case, it’s same old, same old.

As investors or traders, there’s no doubt that introspection is called for, rather than always seeking to place blame elsewhere when things don’t go as had been hoped.

Not having a unifying strategy or even worse, not following your strategies, is a good first place to begin the soul searching.

One of my favorite Tweeters is Eddy Elfenbein, who runs the Crossing Wall Sreet site. He is a buy and hold investor and has an exemplary record, one that is fully transparent. He’s also great with market and economic statistics and is funny, to boot. That’s not easy to do in the context of 140 spaces, even more difficult when 13 of those spaces are taken up by his name.

Yesterday he Tweeted “The sound investing rule that I most often break is that I get frustrated when a stock rallies right after I sell it. So hate that.”

Feelings and emotions are the bane of investing. The real villains are greed, fear and envy. Add frustration and regret to those.

In yesterday’s blog I wrote about some rules of my own that I sometimes consciously break because I have a hard time resisting the temptation that presents itself when there are idle funds in the account.

I was partially successful in breaking old habits on Monday but just couldn’t wait to burn through my cash today.

I continued with my energy theme and bought shares in British Petroleum, Transocean and Chesapeake Energy, as well as picking up additional shares of Riverbed Technology.

Boy, talk about villains. Take yesterday’s Halliburton and mix that with a little BP and Transocean and we’re talking some heavy evil, except for the fact that they’ve been very profitable for me in the past year.

With the exception of RVBD, I got them all at better prices than I would have yesterday, but I actually used the proceeds from call options sales to pick up the Riverbed shares and then used those proceeds to pick up more ProShares Ultrashort Silver ETF shares.

Of course, I still partially fell back into my bad habit of falling victim to my short term pessimism.

Once again, though, I’ll call it a partial victory, as I waited for the prices in today’s newly purchased issues to rebound before selling my calls.

I only blame myself for not waiting longer as the market did an almost 200 point turnaround that would have netted me even better premiums. As it was, before you knew it, the market finished up by only 20 points after a final hour drop of 70.

I was wondering who the talking heads would blame the last hour fade on but instead had to go and pick up my car.

After dropping off the loaner and driving off in my well cared for car I felt good about the dealership and the market’s close, despite the rocky paths taken.

As famed, but now long dead Pogo had said, “We have met the enemy and he is us”.

 

 

 

 

Invest like TheAcsMan

Option to Profit is available as either an eBook or 300+ paperback. Take a humorous look at a serious topic and learn how to make your portfolio finally go to work for you in bull and bear market environments.

See a sneak preview of Chapter 1. hocoblogs@@@

More about the book and purchase options. Scroll down and read the Szelhamos Rules blog, updated every weekday.

Find  OTP Book at Amazon, B&N or now you can also Order direct  from publisher. Use 10% Discount Code P4S2ZD8H

 

  

I’m getting better at exercising restraint.

In some areas, anyway.

When I learned about a year ago that my cholesterol levels were high enough to supply my family and successive generations with lifetime supplies of Crisco, I radically changed my diet.

Much less red meat, very little fried food and almost no fast food.

Although I must admit that watching the making of fried chicken in the recent period piece movie “The Help”, did make me want to rethink my re-thought ways.

I do miss the delicious ooze coming from my pores, as it was also eminently spreadable, but I tell myself that it is all worth it.

In some other areas, I’ve not been as disciplined.

For example, on Sunday, CNBC, instead of offering their infomercial programming had live coverage of Hurricane Irene.

I just couldn’t resist watching. I wish I had the restraint necessary to just turn the TV off, even though gluing myself to the screen was potentially jeapordous to my marriage.

I found myself hoping for the power outage that never came. That would have also given me another excuse for not using the treadmill for a 1,276th successive day.

Fortunately, at some point CNBC decided that Irene was for the most part, much ado about nothing, and regained its business senses and went back to its regular weekend schedule pimping itself to the highest bidder.

While it was doing live broadcasting, I thought that CNBC management missed a great opportunity to take advantage of obvious synergies. They really should have considered having on-air personality Brian Sullivan presenting while on a BowFlex or perhaps while whipping up a rotisserie chicken in no time at all.

Or both.

Over the weekend I had done my homework. Knowing that there would be cash in the accounts due to assignment of shares, I had made a list of stocks that I was ready to buy as soon as the market opened Monday morning.

Now, I like up markets as much as the next guy who isn’t short, but on days that I have cash, I’d rather see moderating prices. I really don’t like chasing stocks, even though that brings the best options premiums.

So I was disappointed to see that the overseas markets were posting 1% and higher gains on Sunday evening and that our futures markets were opening with an upward pop.

The real problem is that despite the fact that I know that what goes up must come down, I’m like a little kid as soon as I get some cash.

I just have to spend it. Now. I have to spend it now.

The funny thing is that only applies to stocks. Otherwise, I’m not much of a consumer, neither of goods or services. If the economy is waiting on me to change my spending habits it had better stop holding its breath.

But when it comes to stocks it’s a totally different story.

Take last month, for instance, when I received my first royalty payment for the Option to Profit book.

Normally, if I buy shares, I like to buy in large enough volume that selling call options on the shares will be worthwhile. Additionally, I typically like each position to represent somewhere between 5-10% of my total portfolio value. I’m also not a fan of perenially low priced shares.

But what did I do with my suddenly found cash position?

Sure, I invested it, but how?

Since it wasn’t enough to pick up my usual sized lot, instead I bought shares in Sprint.

Sprint!

Granted, that allowed me to get enough shares to sell enough call contracts, but Sprint?

That went counter to everything I stood for other than the need to clean my pockets of cash.

Even when prices are going up I’ve always had a really hard time resisting the urge to buy. Despite the fact that I have a long list of rules to follow when buying and selling, the need to resist the urge is something that I’ve never been able to do. Buying high and selling low is not on my list of trading guidelines.

Unfortunately, that also means that when opportunities do present themselves, such as after a nice downward move, I’m usually fully invested and am not in a position to take advantage of bargains.

Well, I did have my list of stocks all set and ready to go this morning.

Halliburton, Chesapeake Energy, Goldman Sachs, Transocean, British Petroleum and ProShares Ultrashort Silver ETF.

But everyone of them just followed the cue set by the pre-open futures.

Being the short term pessimist that I am, I fully expected the 100 point advance to retreat. Then I expected the same of the 150 and 200 point advances.

But somehow I resisted parting with the cash.

Well, not entirely.

I did pick up shares of Halliburton after it had fallen from having been up about $1 to just $0.40. I was able to do the same for shares of Freeport McMoRan and ProShares QQQ, which wasn’t on my original list.

Those opportunities didn’t last too long and my second series of urges hit, in that I just had to sell options right away.

That’s also the pessimist in me coming out. Since my expectation is that prices are going to drop, I want to make certain that I get the insurance premium before the opportunity is lost.

And so I did sell weekly options on those three newly purchased positions just in time to see another 100 points added to the Dow and lost additional capital gains opportunities in the underlying stocks.

As always, should have waited.

Just a case of “Premature Speculation”.

I’m not really embarrassed by it happening. I just get so excited. But I still wish it wouldn’t happen.

Especially as I’m getting older, I can’t click the submit button on cue as I used to be able to do in my prime, which probably occured in a different lifetime.

By the time the trading day ended, incredibly the market not only kept its gains, but closed at its highs. Always necessary to attribute the unattributanble to something, today the “Raison d’etre” was some nebulous news on the Greek banking scene and perhaps some relief over the relatively mild impact of Hurricane Irene.

Of course, had the market gone down, the reasons given would have been disappointment over the Greek banking merger and the hurricane related costs being discounted on Friday by the meteorologically enhanced trading algorithms of the High Frequency Traders.

Still, when it was all said and done, I felt great.

Despite battling with the ever-present “FOMO”, fear of missing out, I watched the market’s unabated move toward its 250 point gain and was still left with half of my cash still in hand. I was able to exercise some modicum of restraint, yet still felt like a trader.

I could hold my head up high, with an angle to the horizon of a young man.

Perhaps keeping things in hand is the solution to all things premature.

 

 

Invest like TheAcsMan

Option to Profit is available as either an eBook or 300+ paperback. Take a humorous look at a serious topic and learn how to make your portfolio finally go to work for you in bull and bear market environments.

See a sneak preview of Chapter 1.  hoco blogs

More about the book and purchase options. Scroll down and read the Szelhamos Rules blog, updated every weekday.

Find  OTP Book at Amazon, B&N or now you can also Order direct  from publisher. Use 10% Discount Code P4S2ZD8H

 

  

 

 

Tough times do call for tough decisions.

We first heard that from Standard and Poors back in April.

No one listened, although the markets were spooked for a few hours on that day until the realization came that expecting a working and communicative political system to be at the root of any solution to our growing debt was probably just a joke.

It was certainly unrealistic, even though it wasn’t that funny.

Then, 4 months later, perhaps as much as 20 months ahead of schedule, they made the tough decision to downgrade U.S. debt instruments.

So this past Friday, the much awaited Bernanke speech at the annual Kansas City Federal Reserve meeting in Jackson Hole could probably be distilled down to its very essence.

Tough times call for tough decisions.

The Chairman of the Federal Reserve re-iterated Standard and Poors’ “take home lesson”. A broken and dysfunctional political process would stand in the way of any solution to the economic issues that have been ailing us for these past few years. Not only would it stand in the way, but it has been.

In a nice Ivy League sort of way, the kindly gentleman from South Carolina, whose grandfather was described in the New York Times as having been a “Torah reader”, figuratively flipped Congress “the bird”.

Maybe literally, as well.

Either way, deservedly so.

With a somewhat surprising mid-afternoon market surge taking place well after Bernanke’s words, I found myself being assigned shares of Freeport McMoran, JP Morgan and Mosaic.

For the first time in 2 weeks I was being faced with the opportunity to pick up some new shares or add to existing positions at still “bargain” prices. Unless I missed a really explosive upside movement, as I did with Green Mountain Coffee Roasters, I never mind being assigned. There always seems to be plenty of new opportunities to pick up something and exploit the greed of those who would buy the call options I’m selling.

I like exploiting others.

At the moment, before the markets open, I have my sights set on shares of Halliburton, Lockheed, ProShares UltraShort Silver, Chesapeake Energy, Goldman Sachs and British Petroleum. Who knows, if JP Morgan or Freeport take an early hit, I might even buy those back.

But those will be easy decisions.

The tough decision facing me right now is what topic to focus on for this blog.

So many to choose from.

Of course, there’s always the opportunity to finely dissect Bernanke’s words, but they still haven’t fully understood his 2010 speech. I doubt that I’ll still be around pumping out this drivel a year from now. In fact, Bernanke himself may not be around in this capacity a year from now. Give or Take a few months.

There’s also lots of opportunity to exploit the weekend’s top story, Hurricane Irene.

Fortunately, other than a few ripped out trees in our neighborhood, we had no damage and kept our power throughout.

My Sugar Momma, who is a mental health specialist and is a volunteer member of the Red Cross Emergency Preparedness system spent some time at two different shelters that had been set up for the event, housing mostly Eastern European seasonal workers who were evacuated from Ocean City. Things were so well coordinated that she was able to come home to spend the night. Besides, for the evacuees, this was like vacation. There was no stress nor mental anguish for them. For once during their stay in America they weren’t being expolited. It was party time for them.

So, no Hurricane Irene storyline.

Finally, and I know that I spoke about Dick Cheney the other day in “It’s a Mad, Mad, Mad Cheney” blog entry, I just couldn’t resist one more go at it, especially after hearing his latest quote.

“Heads are going to explode in Washington”.

Based on his past hunting history, that comment may be literal, so I would stay away from open windows.

Reportedly, among the bombshells contained in his new memoir, “In My Time”, Cheney, the Vice-Preident who shot his hunting friend in the face and then exacted an apology from his pock faced friend, claims that General Colin Powell undermined the Presidency of George W. Bush.

Doing so wasn’t terribly difficult.

In fact, words, especially when uttered by George W. Bush, seemed to always undermine him somehow.

Now, I can’t be certain that General Powell never expressed his private opinions to others or expressed some concern with the quality of intelligence and the decisions made based on faulty intelligence. It is, though, hard to believe that a career soldier, a 4 star General, would do anything but follow the lead of his Commander-in-Chief.

Even so much as to be the fall guy for an Administration that had no credibility other than what resided in a well respected soldier.

On the other hand, Dick Cheney probably did more to undermine our Constitution than anyone since Jospeh McCarthy.

Although he is a hero to many and will take credit for the lack of domestic attacks sine 9/11, basing it on a trampling of civil rights, it’s very difficult to logically agree with Cheney since it is still an age old impossibility to disprove a negative.

No one will ever be able to prove that the lack of domestic attacks over the past 10 years has or hasn’t been related to enhanced interrogation, The Patriot Act or an impossibly large number of non-fatal heart attacks by a single individual.

I tired of the various comic routines focusing on Cheney a long, long time ago. At some point they just stopped being funny. Even though Joe Liberman has no shortage of detractors, what an incredible difference between two Vice-President wannabes. As a former Attorney General, I would have no doubt that Lieberman would have been an advocate for protecting human rights while protecting our borders.

Can’t prove that either, though.

But I will be thinking of Dick Cheney when the market opens in the morning.

I always do so when contemplating buying Halliburton shares, which incidentally, but not coincidentally,  goes ex-dividend on Tuesday. I love picking up shares right before their ex days and selling call options on them.

I remember all of the negative press going Halliburton’s way over the years, specifically due to Cheney’s tenure as CEO.

Years ago, I thought that I was going to go into business with a one-time mentor and friend, but the contract offered to me was really nothing to be excited about.

In fact, it was downright evil, unless you’re a big fan of indentured servitude.

Being the mentor that he was, he taught me one last thing.

Business is business and friendship is friendship. They’re two very different things.

We never did go into business, but we remained friends and he never shot me in the face.

And so it was with Dick Cheney, except for the shooting in the face part.

No, we’re not friends, but I didn’t let my dislike for his aura of evil get in the way of the business aspect of investing in Halliburton. I’ve always loved Halliburton and it’s treated me very well.

The lesson here is simply that “Profits are profits and disdain is disdain”.

We can agree that making money makes the tough decisions so much easier to make. Plus, you can use those profits to buy buckshot.

Now, one easy decision will come tomorrow. When it comes down to deciding whether to watch the Cheney interview or instead watch some Comedy Central re-run.

Any re-run.

When you get right down to it, Hurricane Irene, though it took lives, didn’t do anywhere near the damage that was expected. Bernanke, for however things work out for us in this economy, is above all, benevolent.

Cheney? Not so much on either account.

But in a spirit of compromise, I’ve positioned my La-Z-Boy directly under the leaking roof and will yell out all of my PIN passwords while enjoying “It’s Always Sunny in Philadelphia” episode for the 30th time.

 

 

 

Invest like TheAcsMan

Option to Profit is available as either an eBook or 300+ paperback. Take a humorous look at a serious topic and learn how to make your portfolio finally go to work for you in bull and bear market environments.

See a sneak preview of Chapter 1.  hoco blogs

More about the book and purchase options. Scroll down and read the Szelhamos Rules blog, updated every weekday.

Find  OTP Book at Amazon, B&N or now you can also Order direct  from publisher. Use 10% Discount Code P4S2ZD8H

 

  

 

Earthquake? Check

Hurricane? Check

100 Year Flood? Check, check.

Drought? check

What’s next? Locusts?

Well, we don’t have locusts where I am, but we do have stink bugs. A few years ago, ciccadas were substituted for locusts and were very successful in disgusting all of us.

So far, this years’ stink bug invasion is much milder than their first appearance last year, but they’re back. Despite the general agreement that there are no good consumer approaches to the management of these pests, that didn’t impede the sale of stink bug remedies at my local Costco. One such very nicely packaged product was prominently displayed at the entrance and despite an ungodly price, moved off those shelves with amazing speed.

Thursday evening we watched our dachshund, Laszlo, start fretting and barking at nothing in particular. He’s certainly more high strung than our past Golden Retriever Murray ever was, but this was even excessive by his own standards. After having gone through the absurdity of an earthquake in the mid-Atlantic, we wondered if he was sending the early warning signal of yet another rumble in the making.

Maybe completely coincidental, but Laszlo was very restless during the very early hours on Tuesday morning, Unless that were some imperceptible tremors, its not likely that he could have given us 12 hours advance notice. More likely, Laszlo was howling in response to some deer, who in turn may have been spooked by those same humanly imperceptible tremors in response to the frenzied forest rodents, and so on and so on.

Although my people tend to think of plagues as coming in a batch of ten at a time and ending with widespread death, I don’t think that there are that many more natural disasters to come this summer.

These days, it’s more the man made disasters that I worry about and it’s possible that those have Laszlo’s attention, as well.

Like many of us, Laszlo may be expressing his concern over Ben Bernanke’s upcoming comments from Jackson Hole.

Maybe he’s expressing some indignation over the sweetheart deals Warren Buffett is able to get from distressed banks and investment houses.

Maybe Laszlo was bemoaning that fact that the likes of Steve Jobs will not be seen again in his lifetime.

All of those concerns are valid and are the side benefits of using The New York Times as a potty training tool.

As an aside, Laszlo’s take on the “Arab Spring” is that it’s much ado about nothing. More of the same to come he believes. However, I’m not aware of his expertise in the international arena, despite the fact that he is a domestic news savant.

People being people, we either look for lessons from the past where none really exist, or we ignore the true lessons of the past. At the moment there’s lots of speculation over just what Bernanke will say.

Amazingly, although he is widely considered to be the most transparent of the Federal Reserve Chairman, there is still disagreement over what he said or meant at last years’ Jackson Hole Economic Policy Symposium, hosted by the Kansas City Federal Reserve

Yes, the same Kansas City Federal Reserve chaired by Herman Cain in the 90’s.

Did Bernanke actually  announce Federal Reserve policy regarding quantitative easing or did he merely allude to that option?

A year later and the experts are still arguing.

Now, with 500 point dailiy swings the norm, precious metals soaring, the European Union at a crossroads and American unemployment still at unprecedented levels the experts are expanding their arguments to include the impact of Bernanke’s as of yet unspoken words.

No doubt, but the Federal Reserve Chairman can still shake our world. With interest rates still at historic lows and talk that his quiver is empty, Bernanke seems to know how to make meaningful policy out of nothing at all.

In the absence of any obviously precipitating factors it safe to assume that yesterday’s sell-off, which did follow the previously established script of recent weeks, was just a defensive posture in anticipation of some unwelcome words from Jackson Hole.

Based on demonstrated ability to interpret Bernanke’s words, I suggest that traders wait a year or so before passing judgement and taking action. And when they are finally tready, they should scratch their heads and ask just one more time what he really meant.

Neither was there earth shaking news from Europe nor depressing newly released economic metrics for today’s downdraft.

In fact, there was good news.

Despite Wednesday evening’s 5% after hours drop in Apple after Jobs’ resignation announcement, it actually outperformed today’s market, as cooler investing heads prevailed. Tim Cook, his successor, is not exactly an unknown entity. Apple, even in the absence of its heart and soul will continue to create great wealth by virtue of creating great products. Think of how much Steve Jobs has helped circulate money through our economy. Music, movies, computers, communications all premium priced, all contributing to Apple’s profits and stock gains.

Whatever our deficit is at this very second, imagine where it would be without having had the benefit of Apple related tax revenues and capital gains.

On a personal level, think of the capital gains that got redistributed into our economy through increased shopping, investment and charitable giving.

Steve Jobs? A patriot.

More good news came from Warren Buffett’s $5 billion vote of confidence in Bank of America and in the US, in general.

Our history books talk of great American patriots. Future editions should include the name Warren Buffett. For so many people, their money is their life. Buffett may be roundly criticized for getting great terms on his investments in Goldman Sachs and Bank of America, but I shudder to think of how much deeper the abyss would have been without his willingness to sacrifice his wealth for the common good.

I rarely revise these blog postings, but the following is from an observation made by  Marek Fuchs, TheStreet.com media critic, who in a nice video clip parsed Bank of America/Buffett coverage.

His spot on observation was that Buffett was being analyzed through an inappropriate lens. The Wall Street Journal headline was that Buffett had made a cool $700 million in 30 minutes on his Bank of America investment, casting a predator light on Buffett, as if he was ready to cash in on his “paper profit”.

Maybe that’s what an under-taxed “hedgie” would have done, but Buffett is in it for the long run. Can you imagine what kind of harm would have befallen the market if Buffett took his “day trade” profits?

So, repeat. The man’s a patriot.

Only history will tell us how we should consider Ben Bernanke, whether we should utter his name in the same breath as Steve Jobs and Warren Buffett.

The once prisitine reputation of his predecessor, Alan Greenspan, has been a bit soiled, as he’s received at least some of the blame for our housing crisis and financial meltdown.

I think Bernanke will withstand that test better than Greenspan, but he certainly won’t have the opportunity to match Greenspan in years of service. EIther by choice or otherwise, he will find happier pastures.

In the meantime, I reserve patriot status for anyone that gets me a stink bug solution that will leave my family alive.

—————————————-

This blog entry was written a bit more than a month prior to Steve Jobs’ passing. See “Why I Owe Steve Jobs a Debt” for the indirect, but very tangible benefit that I derived from Steve Jobs and his Apple legacy

 

 

Invest like TheAcsMan

Option to Profit is available as either an eBook or 300+ paperback. Take a humorous look at a serious topic and learn how to make your portfolio finally go to work for you in bull and bear market environments.

See a sneak preview of Chapter 1.  hoco blogs

More about the book and purchase options. Scroll down and read the Szelhamos Rules blog, updated every weekday.

Find  OTP Book at Amazon, B&N or now you can also Order direct  from publisher. Use 10% Discount Code P4S2ZD8H