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When I left home Wednesday morning, for an unprecedented third consecutive day of honest work, I was resigned to once again being completely in the dark. Since I feel that I don’t have that much time left, I find myself having to get used to things much faster, so I am getting somewhat accustomed to being cut off from streaming news in record time.

Following that earthquake induced rally that was clearly a result of everyone forgetting to follow-up on the morning’s market rise with a spirit deflating plunge, as per the script,  I was happy to see the futures pointing to only a mild giveback. I combed my memory banks and really couldn’t find a recent example of how the market reacted to a mildly negative open. Lately its been a series of exaggerated up or down pre-market futures.

Granted, I didn’t look or think very hard. I’m sute there’s some kind of precedent.

By the time the work day ended the market had closed and that early morning drop gave way to a nice triple digit rally. That combination definitely hasn’t happened for a while, but complaints are definitely not in order. Those kind of surprises are pretty easy to deal with.

A quick glance through the New York Times online edition gave me no great insights into what moved the markets. I’m not certain why I even checked since in the absence of any concretely path altering news, the reasons given are always conjecture dressed up to be fact.

I did know that something was up with the precious metals. In fact what was up was that they were decidedly down. Since I own shares in the ProShares Silver Ultrashort ETF, I also follow Silver and Gold ETF’s just to have an idea of metal’s direction. What I didn’t realize was that the drop was over $100.

Maybe somebody actually considered James Altucher’s comment last week that gold was just a rock and realized that it is just a rock.

Someday, people will add where were you on the day of the great east coast earthquake andwhere were you when gold droped $100 to the classic OJ and JFK questions

Normally, with the kind of move that the UltraShort Silver shares showed today I would have sold calls into the strength of a 10% upward move, but I think that there’s still quite a bit more downside for the metals, especially Silver. Unfortunately, by not selling those calls I’m violating one of my cardinal rules by giving into greed.

Alright, so we’ve established that I can be greedy, but let’s just rationalize it by thinking that the decline in silver prices, when leveraged by the short ETF can help to nicely offset the paper losses from last month. Sometimes it has to be about the capital gains and not just the options income.

As it turned out, there really was no news. The Steve Jobs resignation had occured after the market close and wouldn’t be a potential factor until today’s open. The after hours drop in Apple paralleled the 5% drop in gold and who knows, may be the basis for tomorrow’s blog.

Add where were you when Jobs resigned for the second time to the list.

The only news that caught my interest was that regarding Dick Cheney, except that this time it wasn’t related to a new cardiac incident. That’s what made it news.

As soon as I heard the revelation contained in Dick Cheney’s upcoming book, “In My Time”, that he had drafted a resignation letter in the event that he suffered an incapacitating illness, I had visions.

Normally, my visions are limited to stock options I’d written expiring worthless as the stocks hovered just beneath their strike price. Vions, fantasies and dreams are all the same for me.

That’s a strange kind of dream. It’s not the kind of dream draped in deep imagery that could be used to rally people to greatness. I doubt that they’d be dedicating space on the National Mall to commemorate the life of a man behind that kind of dream. It certaily doesn’t reach for the unreachable. It just reaches for a consistently unlikely, yet possible, sequence of events. More like a  “I have a scheme” concept.

But this time I had a different series of images.

Imagine if the world had known that sitting in some secret vault was a resignation letter, that if released, would have resulted in Dick Cheney relinquishing his Vice Presidency.

Obviously, Dick Cheney changed the nature of that office and he had many supporters. But they’re not the ones in my vision. Instead, I see all of the 2004 and even 2008 hapless Presidential hopefuls running around in comedic fashion trying to find the location of that secret vault so that they could save the nation  by putting through the resignation of the individual so many so as evil personified.

Yes he was mad, and not in a good way.

Imagine a devious Dennis Kucinich trying to outmaneuver a roller derby-like Hillary Clinton for the next clue. I suppose that there would have been a few Republicans in that mix as well since the Vice-President was just a heartbeat away from the real thing. In my vision, Mitt Romney is breaking a sweat and there are some mis-placed hairs.

People always think about the impossible. Among those dreams are time travel. Some dream of going forward while other dream of going back. I suppose that either one would only be complete if you could book the round-trip.

Cheney, in his book, is reported to paint a sometimes unflattering picture of his less experienced boss, George W. Bush. I don’t know if he reads many books, but I’m guessing that Bush would probably like to climb into that time travel unit right now and release that resignation letter before Cheney ever gets the chance to steer him into what would turn out to be a series of misguided paths.

While there, I may ask him to place a few trades for me.

That’s more in keeping with the kind of visions and dreams dancing in my head.

 

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.

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You have to feel badly for Farrah Fawcett.

Not only did the one time sex goddess die of a very unsexy disease, anal cancer, but she had the misfortune to be overshadowed by the death of Michael Jackson on the very same day that her life came to an end.

Maybe because we had tired of the drawn out and highly public nature of her past few weeks or maybe because the King of Pop’s death was so unexpected, but Farrah barely even received a nod on the day of her passing.

Sometimes going under the radar is a good strategy, but given the well orchestrated and documented events during the final phases of her life, it would have been reasonable to believe that Farrah and her family wanted the very spotlight that should have been her birth right.

The news that surrounds your news can have significant impact on your news. Announcing great earnings does your shareholders no good if the day happens to be one of bad macro-economic news. Nothing like the impending collapse of a large European economy to put the damper on the earnings reports of companies that have nothing to do with the retirement age in Greece.

Similarly bad earnings can sometimes get fortuitouly overlooked on days that already have a significant downtrend in the overall market. There’s nothing like letting your bad news just get mixed in with everyone else’s bad news.

Think about how many politicians in the throes of some ethical crisis have had the pressure taken off because some other story has popped up.

Remember Gary Condit, the one time Colorado congressman, who had been implicated in the disappearance of his intern, Chandra Levy?

On August 23, 2011 following an interview with Connie Chung and revelations that Condit had an extramarital affair with a flight attendant, as well as with Chandra Levy, suspicions deepened and the noose seemed to be tightening around the Congressman’s neck. The very same congressman who was one of Bill Clinton’s biggest detractors during the Lewinsky period.

Well, wouldn’t you know it, but by September 12, 2001 no one was really interested in talking about Gary Condit. Of our 535 Congressman and Senators, there’s at least one that owed thanks to terrorist attackers.

Let’s look at today’s headlines.

Libyan rebels storm Gaddafi compound, Dow Jones finishes up 322 points and 5.8 earthquake hits east coast of the United States.

That’s a big news day. So big, in fact, the poor Colorado, which suffered its largest earthquake in over a century, in at a 5.3 magnitude, went totally unnoticed.

The Condit Phenomenon.

I happened to be one of many along the east coast that felt the tremors and at first shrugging it off as vibrations from construction, soon realized that it was anything but normal as the tabletop upon which I was working, despite being attached on one end to the wall, started bouncing wildly.

With the Dow up about 190 points at that time and having finally pulled off a few trades was loathe to leave the computer screen. But at some point common sense kicjked in and the screen of green was left behind with open trades awaiting to be executed.

Hated to leave them behind, but ……..

For me, Tuesday was an even more rare event than Monday, in that it marked the second day in a row that I was working. But as opposed to Monday, I was able to pull off a few trades. I purchased more shares of Freeport McMoran and also sold weekly calls in JP Morgan and Freeport McMoran in addition to Deere monthly calls, all into strength.

There really wasn’t much reason to believe that the market would do anything differently than to follow the script of the past few weeks. Those scripts came in two varieties. The market either opened strongly to the downside and stayed there or opened strongly to the upside and quickly gave it back.

Over those weeks I missed more opportunities than I’d like to admit to sell call options into strength and then close out the positions as prices fell.

So Tuesday seemed to be just another of those days that optimism would quickly give way to pessimism.

But the script got sidetracked.

Sometimes earthquakes in major metroplitan areas of the US will do that sort of thing. With everyone talking about the Quake of Eleven, someone forgot to tell the market that it was scheduled to reverse course before the closing bell. Maybe some of the remaining generations of floor traders wanted to make one last  stab at a major bull session before the big one hit.

No matter what the reason, it was nice to see all eyes off the markets and focused on something else. Fortunately, there were no reported casualties and only minor damage, so instead of grief we all just got to talk about the experience of havcing just experienced an earthquake.

So left unchecked, like some at an all you can eat buffett, the market just kept piling it on.

By the time I finally got back into the building and to the monitor, the trades were made.

Depite the market continuing it’s climb, I was happy to finally get some trades made.

I don’t know if I can draw any parallels for Farrah Fawcett. I’m not sure what she and her publicists could have done to prevent her script from being rewritten.

From where I sit today, I was very happy to see the script get thrown out, just like I tossed that Frarrah poster 35 years ago.

Time to Moon Walk on.

 

 

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

 

  

 

One thing that I don’t like about my internist is that he brings patients back to the examination rooms on time.

Normally, that would be the kind of criterion used when handing out high grades for healthcare providers, but I like sitting in the waiting room. So much so, that when I have appointments with him, I just show up extra early so that I can spend quality time in the waiting room.

No, it doesn’t have anything to do with a nurse or receptionist wearing unusually clingy or low cut blouses, it all has to do with the waiting room reading material.

I just love reading old issues of TIME magazine. Even though we have a subscription and I have the telephone app, there’s nothing like a badly dated issue to get my interest. Sometimes, if I  feel a need to have the issues on the end table all to myself, I’ll feign a real dry hacking cough so that others will keep their distance.

Nothing of a literary nature gets me as enthused as reading the bold predictions made by the world’s experts. Whether politics, the economy, social trends or technology, I just love seeing how often and consistently they’re wrong.

Reading the predictions of modern day futurists gives you a real respect and appreciation for Nostradamus.

It’s been more than 500 years since his death, yet nothing can come close to the gold standard, especially for the ability to choose just the right kick-ass hat for any occasion.

After all, predicting, whether the great financial wizards of our time really want to admit it, is what it’s all about. For all of their great insights and interpretations of propietary data, they’re just predicting and then hoping that our attention is diverted elsewhere when they end up missing the mark.

Take that gold standard, for instance.

Of those predicting that gold would go to $2000 per ounce see if you can come up with a single one that hasn’t been predicting that since 1980. No one in the last 30 years has developed any kind of following by predicting that gold would drop in price.

But who’s going to rain on the party. Right now, no one really wants to hear about all of the missed predictons, because we’re all in such awe of how they could have gotten it so right.

This time.

As any marketing genius will tell you, it’s not about the quality of your content, it’s all about making that content memorable. You’ll be much more likely to remember Reverend Camping for his recent prediction of the coming end to the world that you would be to remember the guy who predicted that it will be 74 and sunny in San Diego for the next eternity.

Obviously, being right is irrelevant in the long term, as long as you’re right, right now.

When I was younger, there was an obscure television show on Saturday evenings that would glue us to our sets. The clairvoyant was Maurice Woodruff and his show was entitled “Maurice Woodruff Predicts. Maybe it was his British accent, maybe it was the public acknowledgment of his homosexuality, long before it was fashionable, but everyone loved an entertaining predictor. This was also the era when Saturday evenings were filled with the likes of Vidal Sassoon and Alan Burke, so the pickings were pretty paltry.

But Woodruff was a good one, in that he would predict really outlandish things and often far ahead into the future that there was never going to be a likelihood of his predictions being remembered, much less proven wrong.

Somneone was bound to die before judgement day.

So just to be on the safe side and to protect himself from all of those who spitefully waited years to prove him wrong, Woodruff died, a relatively young man, from the heart attack he should have predicted, just a few short years after the demise of his US show.

I on the other hand, now older than Woodruff at the time of his demise, am ready to go on record and make a prediction about this Friday’s much anticipated speech by Ben Barnanke at the Kansas City Fed’s meeting in Jackson Hole.

A a reminder, last year, at the same venue, the market had just recently suffered a 16% drop, as we have just endured. It was at that time that Bernanke laid the framework for what came to be known as QE, or qualitative easing. Maybe it was quantiative easing. Does it matter? That set the market back on the right track.

Quantitative easing was much maligned, as was QE2 as the second round came to be called, but you could have predicted that one, as the cat calls came from the usual gang of reflex slingers.

Now everyone is waiting to see whether Bernanke will set the seeds for QE3.

Now the naysayers are saying that QE3 won’t be enough. In the past that didn’t want he fed buying American debt, now apparantly they want it, but more of it.

Who would have predicted?

Well what will it be?

So wait no more, because my bold prediction for that day is that Chairman Bernanke will stand by the podium dressed in a blue blazer, sporting a button down Oxford shirt and will be tieless. I am also getting a strong image that instead of a podium, the Chairman may deliver his message from the conference table.

I stake my predicting career on this one.

And I plan to put my money wehre my mouth is by stringing myself up with his unworn tie if something doesn’t give soon.

Too bad it didn’t occur to me to use my predictive talents for good during recent market sessins.

On this past Friday in the early trading I commented on Twitter that I had learned from Physics lab that even concrete bounced. That was an obtuse way of saying the market climb of the morning, as substantial as it was, wasn’t very meaningful.

But did I do anything about it? Did I sell into the strength in anticipation  of buying shares back at cheaper prices later in the session.

Of course not.

How about today. Same deal. 200 points up and then ending the day up just 37.

You could probably predict that the answer to that one is “No”.

And you’d be right, but granted, I had one of those rare days that I had to work, so I couldn’t avail myself of the trading screen without interruption. This time the call came early this morning. Since the person that I covered for reads this blog on occasion, I’ll not refer to him as a friend, but he suffered an unexpected back injury and I had to leave my perch for the day and tend the family business, since by comparison, I was able bodied.

By the way, I predicted that injury approximately 4 years ago.

As it turned out, the only trade I made all day was to sell August 26, ’11 calls on Mosaic into the early strength. I had planned on doing the same with others that had weekly options, but never got the chance, because by the time the ability to sit and trade arrived, the market had given it all away.

I could have predicted that would happen, but I couldn’t predict that it would happen so quickly, yet again.

But physics being what it is, hight predictable, each successive bounce of a piece of concrete should get smaller and smaller.

Who needs predictions when you have science?

For today, I’m searching our basement for just the right headgear to give me a leg up on this predictably unpredictable market.  Anything to bring me more into line with and perhaps channel my mentor Nostradamus.

I further predict that by tomorrow I’ll have absolutely no recollection of predicting anything for today and will just keep right on going in total ignoance of all of my past mis-steps.

Just like the experts.

 

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

 

  

 

It’s hard to say whether my short term memory lapses are taking center stage or whether I truly had never heard of the story of the “West Memphis Three”.

The latter seems strange to me because I am a news junkie. I don’t particularly care for history, but eventually current events change their nature and become parts of the annals of our collective existence.

At that point I no longer care.

Either I completely overlooked their 18 year old story or have completely forgotten the story. Either way, I need to be questioning something.

I’m not even remotely going to try and pass judgment on the three men convicted of murderering three young boys. They were just released from prison in some obtuse kind of plea bargain and appeared before the press. I didn’t bother reading about the events surrounding the case because now it is in the realm of history.

I don’t do history.

But I did watch the press conference the other day with a totally clean slate. Here were three young men who had spent half of their lives in prison and now they were sitting in front of cameras and reporters, clean cut and well spoken.

They were just beginning the process of being born again, except that they still have the burden of a lifetime of memories and possibly guilt and regrets.

It’s hard to run away from your mind even if you have some really deep seated pathology.

On the other hand, half a world away you can be reborn as often as you like for a mere $6. Buddhist priests in Thailand perform very popular rebirth ceremonies whereby an individual can shed their date of birth and start all over.

Why is that important? Because culturally the date of birth is tied to beliefs regarding luck and fortune. Don’t like your luck? Don’t like the way your life had been going, just pay your six bucks and lay down in a coffin . While you’re clutching some flowers and listening to priestly prayers a white silken cloth is draped and undraped over your uncovered casket. WIth each pass, a bit of the stench of your life is being removed.

Don’t care for you new date of birth? Hey, what’s another six?

Depending on your ability to sustain a sense of denial you may be able to run away from your past and memories.

I had my own sense of re-birth this past Friday, but it was unlike either of the two previous rebirths described. Instead, it was almost more like a Hindu vision of going back to a previous life. The kind of retrograde rebirth in recognition of a life poorly lived.

It all started as I became resigned to the fact that I would likely have no trading opportunities this past Friday. My Sugar Momma and I decided to take advantage of the opportunity and went out for a rare weekday afternoon movie.

We went to see “The Help”. Of course, I didn’t read the book and SM did.

Regardless of knowing the outcome or not, we both loved the movie, not just for the message and story of hope and determination, but also because we both enjoy period movies.

Here’s the problem. While the movie took place during 1963, one of the maids in the film was clearly using an Electrolux vacuum canister model that wasn’t available in the early sixtes.

I saw the flashback to my time as a door to door Electrolux salesman and immediately recognized the disticnctive blue color, but more importantly, the rectangular shape. If anything, a well healed southern family in 1963 would have their domestic help using a gray Model S. You know, the cylindrical canister.

Then I remembered. I didn’t really like that life. I didn’t want to be reborn as a vacuum cleaner salesman.

Imagine being a 50 year old career vacuum man and starting off each morning in a team meeting where you could always count on someone saying “Our vacuums really suck”. Even more sadly, laughing at those words day in and day out.

West Memphis Three judicial rebirth? Good.

Buddhist rebirth with profit motive? Doubly good.

Hindu rebirth, especially if leading to a lower form of life? Not so good.

Which now brings us to the Monday following the third Friday of every month.

From a purely option premiums perspective last month was one of the very best I’d ever had. I would love to live and relive that month over. That would be a great rebirth. To top it off, to have the memories remain intact would truly be something very special.

But those great premiums came at a price. I wasn’t assigned any shares, so I won’t have any funds in the portfolio to pick up any meaningful new shares at what I think are bargain prices.

That’s the part that I’d like to forget. The fact that all of my holdings closed under their strike prices.

Well under.

The nice thing about selling options, whether the monthly or weekly variety, is that at least they offer the chance for a new beginning. Granted, it costs more than $6 to exercise that right, especially since each stock has its own life, but I can certainly agree with the Thai believers in that the latter part of July and the first three weeks of August 2011 were very bad times to begin an investment’s life.

I have no clue what the future will hold, but I don’t think it’s as bad as a morning vacuum pep talk or even as bad as last month’s market.

I’m not likely to forget last month anytime soon, but it will become ancient history, just like 2008.

No matter what this new cycle will bring, it too will be over, maybe as early as this Friday for some holdings and no more than 4 weeks from now for the rest. That’s the kind of life cycle I can deal with. Maybe that’s why the last cycle was so insufferable. It was one of those damn 5 week options periods.

In the meantime with this month and rebirth to look forward to, I just need to make some room in my brain to deal with all of the new information.

Time for my monthly spring cleaning between the ears.

I think I’ll be tossing vacuums, justly or unjustly freed prisoners and last month aside. I’ll also be tossing every episode of every evening show on Comedy Central aside so I can just watch them again and find them funny all over again.

No memories and no regrets.

 

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The original Szelhamos Rules ran for precisely 1 year, from February 2007 – February 2008. This article originally appeared March 29, 2007. For Michael Dell update, read “How Much Bad News Can we Handle? (August 19, 2011)

Recent data seems to refute this old adage. After spending 5 or 6 years in college, many newly minted, diploma holding graduates are returning home. “Failure to Launch” was a reflection of a growing phenomenon around the country. For me however, the sight of Terry Bradshaw’s butt, has made that both a memorable and disturbing film. But the reality is that you can go back home. It’s cozy, it’s safe and it’s cheap. And everyone is doing it.

But in the world of business it’s not quite so clear that you can go back home. Steve Jobs and Charles Schwab did, and their company’s shareholders were elated to welcome them back. Apple Computer may just have well been named Jobs Computer, because there was only a rotten Apple during his absence. Even the threat of his departure, whether due to personal health or options related scandal, had depressed the stock price, and his returns to grace and health saw upward moves in Apple’s price.

In Charles Schwab’s case, the company was already called Charles Schwab. No need for renaming. But when he left, it lost focus. When he came back, Schwab, the company came back, better than ever. Among the discounters it is still able to command a premium for its services.

So they could go home. And everyone lived happily after after, that is, until they leave again. And someday Steve Jobs and Charles Schwab will pack up and go. Planned succession? Who could fill their shoes? John Scully?

But it’s not always that way. Remember Gateway Computer? It’s still around. It’s a $2 stock that every now and then gets speculative play because people think that it will return to its former glory. And why not? A couple of years ago it’s iconoclastic founder, the pony-tailed Ted Waites returned, to help rescue the company, that littered the landscape with its ubiquitous cow boxes in the mid-90’s. Gateway once had cachet, now it has some shelf space at Best Buy.

Well, you know what happened. I already told you it was a $2 stock. Buying out low quality maker eMachines didn’t do much for Gateway. Bringing the cow boxes out of pasture didn’t help much either. And so Ted Waites left again. He couldn’t go home. He never did learn to avoid the pastures while in sandals. That was his real downfall.

Why bring this up? Who really cares about Gateway? Although I still have my first PC, a Gateway P70, with a kicking 1 Gig hard drive, I really don’t think about Gateway. In fact, the only reason I still have the unit is that it is too heavy to take to the dump. There is nothing compelling about their machines, other than to bring back memories of the early post-IBM days when Gateway and Dell slugged it out for the hearts of the computer newbies.

But I do care about Dell. A few days ago I wrote that I was planning to make a sale of my Dell stock if it reached 25, which I was expecting, since the bad news was certainly behind us.

In my own mind, I may think that I’m pretty important, but I’m pretty sure that my disclosing my intentions didn’t send panic waves through the market for Dell stock. O, as it turned out, it was more bad news.

A couple of months ago, the famous founder, Michael Dell himself, stepped back up to the plate. Out was his hand picked CEO successor, whom he had wholeheartedly endorsed just weeks before. That’s always the kiss of death. The stock rallied on that news. The prodigal father was returning to rescue his child. Dell would go up, would go down, would show some brief upside trends on news. But Michael was back. He came back.

Now it’s never good news when you start the morning with an announcement that trading in Dell stock is halted. That was this morning’s news. It followed yesterday’s announcement that there may be a need to restate prior year’s’ earnings. Irregularities. How I hate that word, at least if it refers to a stock that I own. At my age, it’s very important to be regular.

Dell is a good example of how not to buy a stock. A while ago, after quarter after quarter of great earnings and guidance, Dell announced a disappointing quarter. The stock fell about 10% on that news. I though that was a great opportunity to buy into a great company, at a great price. Not !

Who knew that the house of cards was beginning to crumble. Those disappointing results may have been the first indication that you can’t hide irregularities forever. Manipulate as much as you want, but sooner or later the truth comes out. And so for the past 18 months or so, its been one delayed filing after another. That’s never good news. Yet Michael Dell stood by his man. After all, they did share an office.

In hindsight, with the continued delays, and the continued support of Michael Dell, there should have been alarms going off for me. But I kept confident. Secure in the fact that even while no longer running the company, Michael Dell would get this thing back on track.

He didn’t and he hasn’t. It’s hard too imagine that he didn’t know the depths of the problems at Dell. They still make a great product, albeit not price competitive, but a great product. In a household full of computers and laptops, our Dell is our top dog. But as a company, it’s broken, and Michael Dell should never have gone back home. Only time will tell what whether there was criminal activity or securities violations and now Michael Dell is back. If he knew the depths of the problems, his arrogance is mind boggling. The market wants results, not camouflage and not a soft shoe shuffle.

Maybe more disturbing is that if he didn’t know what was going on, what is he doing coming back? Stay away. How could he have been so removed? That’s very different from the departure of Jobs from Apple. If he was so removed and distanced from operations at Dell, how in the world could he be prepared to rescue them from this morass?

I hate selling on bad news. That’s why I didn’t panic last month. The difference is that ultimately, with a broad enough time frame, the market always recovers. Remember 1929?

You can’t say the same for companies. Remember Enron? Maybe Dell makes up a few cents, but it’s hard to see a return to its glory days. There’s lots of competition. Computers are commodities and are priced as such. Dell products are no bargains and you have to wait a few days to get yours. Americans want instant gratification, not a visit from the UPS guy.

Oh, and the SEC problems don’t help, either.

I have two solutions. Think private equity, if you can’t comply with the SEC.

So, Michael. Come. Visit. Have a nosh. But seriously, what were you thinking?

And my other solution?

It’s time to go before you end up on Best Buy’s shelves, next to your old friend, Ted.

 

NOTE:  The graphic appearing in this blog article did not appear in the original version

 

 

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

 

  

 

 

Today started off with terrible news, so it should have come as now surprise that the markets would react negatively, drastically and with unbridled violence.

The news that the beloved screen actor and martial arts expert, Jackie Chan, had died of a heart attack swept numerous social media sites, spreading across the globe, saddening fans and traders alike.

On the heels of Thursday’s U.S. market close, Friday should witness a bloodbath in the Asian markets once those markets open, as Chan was held to near diety status. Very fortuitously, the Arab markets are closed on Fridays, in respect of their Sabbath day. Chan is so revered there, in recognition of his early role in a little known Saudi backed film where he decapitated a young Moses, thereby causing the Exodus to never occur.

He is, in fact, held to such high regard within that demographic, that his image is not allowed to be shown in his movies.

Today’s report came several months after the most recent unsubstantiated rumor of Chan’s death, but the market, in its wisdom is never backward looking and ignored the news that the silver screen star was very much alive.

It’s not about accuracy. It’s about the moment. Revisions are routine and routinely ignored.

You could tell that there was obvious tension in the air as CNBC security was called in to separate Jim Cramer and Simon Hobbs from one another. It appeared as if Hobbs was trying to establish mutual consent on the adoption of Queensbury Rules, but the kid from Philadelphia was having none of that.

Although calmer heads eventually prevailed, it wasn’t so for the markets. They needed to vent.

Following the early sell-off came more bad news from Europe. Finland, a economic powerhouse of a country best known for having been usurped by the Soviet Union, joining Hungary as one of only two members of a dead language family and the home of the ubiquitous Nokia telephone, threw a wrench into the Greek bailout.

I would have also mentioned walrus blubber, but the previous sentence was already well past run-on status.

Just as they were getting ready to cross their T’s and dot their umlauts, Finland decided that they wanted collateral on the loans to Greece. On the surface, that wasn’t a problem. but then the FInnish Finance Minister was concerned that the Feta Greece was putting up had a expiration date that was unacceptable to the olfactory enhanced and sensitive Finns.

So our markets reacted accordingly as there was fear that the stink would spread across the European continent.

Oh yeah, and then there was that abysmal report from the Philadelphia Fed. The report showed contraction of factory activity to its lowest level since 2009. Anyone who has waited in line for a Philly Cheesesteak can attest to how long it now takes to shred the Cheese Whiz

But wait, isn’t that when we hit our last stock market bottom?

How great of a sign is that? Good enough to take the Dow from down 200 to down 500.

That good.

For those that remember The Haines Bottom, RIck Santelli reportedly called the bottom today. Somehow I missed that, but I did hear him call for $2200 gold, albeit, he warned of a precipitous correction. That would be bad news to come, but probably good news for others.

Today, all of the talk was about “risk-off” and the shift of money into gold. Given gold’s meteoric rise these past few hundred dollars, I still have a hard time seeing how that qualifies as a “risk-off” investment. I still can’t get James Altucher’s remark out of my mind. “It’s only a rock. It’s a rock”.

Real value resided in tulip bulbs. We all know that.

Those may be the most sane words I’ve ever heard uttered. The former. Not the latter.

Later in the day, with about an hour to go until the closing bell, trading was halted in Hewlett Packard.

More bad news.

HP had been another rumor source all day, as word leaked out that it was looking to spin off its PC business and then acquire an Enterprise company named “Autonomy”

Seriously, Autonomy is going to be acquired. Anything incongruous about that?

Well, HP pre-announced its earnings and the stock nose-dived. The fact that they pre-announced should not have come as a surprise to anyone, as HP has a habit of doing that regardless of the CEO du Jour.

What struck me as funny was a comment by Michael Dell.

Yes, that Michael Dell, who suggested that the name of the new HP PC spin-off might be “Compaq”.

Yeah, pretty funny, but Michael Dell is probably not in much of a position to fling stones. In fact, during the first iteration of Szelhamos Rules, he was the subject of “You Can Never Go Back Home“. Read it, especially in light of the warning in the very last line of that blog article.

Of course, if you owned Dell shares yesterday, you weren’t very happy, as Dell just reinvents their own personal bear market. Although after 16 quarters of earnings’ disappointments since Dell’s return, they must surely be approaching  Michael Dell’s objectives.

Truth be told, cutting off the “Dude, you’re getting a Dell” guy was like cutting Samson’s hair.

As I watch more erosion of my portfolio at least I was able to come up with a new strategy to make my funds last me through retirement.

Out of necessity comes invention. So I’ve decided to stop taking my hypertension medication. Not only does it soilve the primary problem, but it’s also a very cost-effective way to solve it.

The last bit of bad news still has me puzzled.

For some reason, much ado was made today about the President taking vacation. In fact Yesterday Donald Trump said that he “was told” that President Obama has now taken more vacation than any other President.

How convenient that he could spread that “news” but not take the blame, when its proven to be false. My guess is that he was probably the one who started the Jackie Chan rumor as a way of taking heat off of himself for publicly announcing his beautifully timed purchases of Citibank and Bank America.

Forget that President Obama has taken one third of the vacation time that his predecessor did during the same time period.

It was no accident that Will Ferrel, in a Saturday Night Live spoof, had George W. Bush referring to himself as “your President, 24/7. That’s 24 weeks a year. 7 hours a day.” Where’s there’s smoke, there’s fire.

But, you would think that the President’s opponents would greet his vacation as good news.

After all, if he is to be blamed for the economy and the rapid degradation of Feta cheese, it should be of great benefit to have him take his hands off that steering wheel.

As a fitting end to the trading day and as a unintentional salute to the new norm,  Maria Bartiromo said “The Dow Jones Index is off by over 500 points. Its worst loss in a week”.

In a week. Not 2 years, or whatever the previous standard was for time between disasters. Now 5 days seems like an eternity.

Using that new norm, my retirement funds should last at least another 2 weeks.

Now, finally, some good news.

 

 

 

For most of my professional life I worked fairly hard, never taking the typical route nor career plan, based on my education and training. Had I taken the typical route I could have retired long ago as I’ve always believed that there is a limit to how much anyone needs.

If my kids were younger and they would pose me with the question “Daddy, what do you do?”, I have no idea what I would say to them.

“Daddy sits on the La-Z-Boy. Sometimes Daddy presses the “ENTER” key on the keyboard. Then sometimes Daddy transfers money from Mr. E*Trade to Daddy’s bank so that I can buy cigarettes for you little cute boys to play with,” is how I envision my response would have been 15-20 years ago.

Although my kids knew what I did for a living when they were younger, there was really no reason for them to understand what I really did, especially since I also traveled quite a bit for work. Luckily, they didn’t ask many questions, oterwise I’d have to kill them.

That may seem harsh, but there’s a lot at stake.

Having a second family will do that. Since my Sugar Momma doesn’t read this blog, I can say that with reasonable impunity. Unfortunately, that second family didn’t come with many benefits, as all they did was pre-warm my rental car and make certain that I always got the same hotel suite each week, although at the time, that seemed pretty risque.

The best thing my other family ever did for me was making certain that when I arrived back home to pick uyp my car from the airport lot, it was always cleared of snow and ice. 

How sweet was that? I tell you the guys at the Key West International Airport Park and Fly were the best.

As many hours as I put in, they were still nowhere near the number of hours that Szelhamos toiled away. Although he was proud of the income that I was making I always felt somewhat guilty that I could make more in about  2 weeks than he could make in a full year. No one shovelled out his car, either, although in later years, it was actually his car that I left in the airport lot.

To use the 1964 TV barometer mentioned in previous blog posts, in a great year, Szelhamos could buy a new TV every week. 

During the 7 year phase that I flew twice a week and would see the same faces lined up in the Southwest queue I often wondered whether I should get one of those wrinkle free logo shirts. I often thought about creating the most bizarre little shirt pocket level logo and some oddball corporate slogan and web address. In hindsight, I can’t really understand why I never did so, other than the fact that it would have required some minimal effort.

I eschewed conversation so I never burst into spontaneous word exchange, but I was often on the receiving end. I guess I just have that kind of face or perhaps salesman have either a need to talk or just like to talk. EIther way the familiar faces would always ask me what I did and who I worked for.

I would just make careers up on the spot and at that time, my memory was pretty good, so that I would remember to whom I said what. Regardless of the story, I was always a lone wolf, never working for “The Man”.

On those occasional memory lapses, I clearly had just moved on to a new area of consulting expertise. Whenever someone asked me for a business card, I would tell them that I accepted new clients only by referral from exisiting clients that were on the approved list.

The inference was pretty clear. “You’re not on the list”.

There was no need for business cards. I almost felt like I was running my own personal Studio 54, except for a lot less drugs, sex and music. But I did get tiny bags of honey roasted peanuts and a complimentary soft drink.

Some of those guys even believed that my Southwest Airlines seat was designated First Class.

Which gets me to today.

My kids are grown. One is doing his own stock investing and, if the IPO market stays strong, will be well ahead of where I was at his age. In fact, I’d have to get a new indicator to replace the Color TV measure, as the Y axis couldn’t extend far enough to do service to my own earnings.

The other is in college and has both an entrepreneurial streak and a need to serve, as he just finished Army Basic Training and will be heading back for specialty training following the upcoming academic year. In itself, service is not a road to riches, but he will have many other interests to support his choices.

These days, I set a bad example for each of them, as I sit at home on most days my head askance staring at the monitor and my eyeballs awkwardly pivoted to also glimpse the TV. I’m afraid to look, but I think I’m getting La-Z-Boy sores on my backside.

What do you do, Daddy?

It’s almost embarrassing to say that I simply sit and wait for an opportunity.

On days that opportunity doesn’t come, we don’t eat, said the lion to his cubs. Of course, my cubs are moved out so that’s really not too much of a concern.

But before the shame and guilt gets too far along, there comes a day like yesterday, when driving my oldest son to his home, he asked me about this months’ options trading.

Unlike Sugar Momma, he reads the blog and knows that I’m in the hunt for a monthly options premium record, which I didn’t reach on Wednesday, either.

He’s stunned at how much is generated out of this La-Z-Boy, regardless of whether the market is up or down.

That also led him to  observe that he’d never met anyone at the stage and satus in life that I currently enjoy, who is driving around such a loud piece of shit car.

I smiled.

Mostly because I couldn’t hear him over the noise.

So Wednesday just turned out to be another in a series of big swings, all occuring in the absence of any kind of noise. Since I had sold in the money calls recently on Deere, I was happy to see it take an early price hit. Maybe it did so in sympathy will Dell’s disappointing earnings. Dell, Deere? DELL or DE, seriously, how much different could they be?

For me, not very, as I tend to stay reasonably agnostic as to industry or sector. SUre, I know what they both do, but don’t really care. I have experience with both and that’s all that counts. In Dell’s case, it is one of the few stocks that I’ve bought that didn’t make money for me, either through capital gains or options premiums.

I bought Dell about 4 years ago after its first ever disappointing earnings releae. Back then it was about $35 and I thought I had gotten a great price. After three months I got my first lesson in the meaning of  the expression “value trap”.

I swore that I would never but Dell again. I’m not a very forgiving fellow.

Deere on the other hand has rewarded me over and over, both on the stock and on the options premiums.

I know Deere will go back up. Dell? Maybe they should merge with Yahoo!. Then I’d only need to stay away from the single entity Ya-hell! instead of both of those dogs.

During the course of a typical month I find myself a;\lternating between hoping for up days and hoping for down days, all in the name of managing the covered calls and minimizing opportunity costs. With two days left in this options cycle I now am hoping for a sustained rise across the board. Most of my covered options are going to expire, so I’d love to see capital gains, at least on paper, complimenting the realized gains on the options premiums.

Next time, if my kids ask me what I do for a living, it’s probably reasonable to say that I sit around hoping for things to happen.

If only there was a Viagra-like solution, although looking at a screen filled with green just might have the same effect., except that I won’t need to seel medical attention after 8 hours.

If I’m lucky enough toi be around, I’d love to see the day that my own granchildren would ask their fathers the same question.

I hope that their answers are simple and to the point.

“I don’t really do much. I just watch stocks go up and down and cash in on other people’s greed, fera and envy”.

Now how sweet would that be?

 

 

 Trade like TheAcsMan

Option to Profit – Make your Portfolio Work for You.

Now available at Amazon and other retailers

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.

See a sneak preview of Chapter 1. 

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

Don’t like Amazon? Hate Barnes & Noble? Now you can also Order direct  from publisher. Use 10% Discount Code P4S2ZD8H

 

  

 

 

Life is filled with difficult decisions. Fortunately it is also filled with “no-brainers”.

I don’t live in one of those open primary states, so I won’t get a chance to vote against Rick Perry.

That’s probably a good thing for the nation, as my track record for voting in Presidential elections is pretty abysmal. Not the voting itself, I always exercise that civic duty, but rather the outcomes. SInce 1972, I’ve only correctly selected a winning candidate 3 times. Based on that kind of history, a vote against Perry, would likley indicate a Perry victory.

If you’re an astute reader, you would have known that’s not voting for Perry would have been one of life’s “no-brainer” decisions. Given that a scant two years ago he was spouting the merits of Texas secession from the Union, it’s a little difficult to fathom how he could be running for the Republican nomination for the Presidency of all 50 states.

The fascinating thing about that is if he had been successful in his original endeavor, we would now be making fun of Haley Barbour, Republican Governor of Mississippi, for basing his international expertise on being able to see the Independent States of Texas from his bedroom window.

Perry’s very recent rant on the Chairman of the Federal Reserve, Ben Bernanke, and suggestion that his “printing money” would likely be dealt with harshly back in Texas, indicates that Texas might have been a hostile neighbor under a Texas President Perry.

Amazing that Perry would call the “printing of money” treasonous, but not talk of secession. Although he did have a Sarah Palin moment and briefly referred to the action as “treacherous”.

Given how Perry appears to handle himself, I would think that he remains mired in “concrete operations”, probably thinking, incorrectly that Bernanke is usurping the authority of the Treasury to print money. Surely, you’ve noticed Geithner’s ink-stained thumbs. Presidential hopefuls need to have those kind of observational skills.

One has to wonder just how cowboy-like Perry would be behaving if he had not been Governor of Texas during the energy boom. My guess is that he should be kissing the feet of the Saudis, Iranian mullahs and Chavez. He should probably also give a wink and a nod to the money printers who showered Texas with the economic stimulus dollars that he was against, but happily accepted credit for when job creating projects got underway.

So, that’s not a difficult decision.

What I’m mulling now is my next step.

On the investing end, I am literally a single trade away from having my best options premium income month ever. I still have shares in ProShares UltraShort Silver, which I picked up yesterday, as well as some Goldman Sachs and PowerShares QQQ that do not have calls written upon them. At this point, I’m 0.4% away from that all time high, so There’s still a chance that in the remaining 3 days I can catch just the right premium.

That would be a good feeling, especially during this tumultuous option cycle.

Deciding whether to accept any price just for the sake of besting the previous “record month” is also a no-brainer.

Absolutely. How many records do you have?

But the real difficult decision revolves around my everyday life and how to deal with the volatility.

For example, during a 2 minute stretch in Tuesday’s trading, after the market had erased a triple digit loss, and was then down just 2 points, it proceeded to drop 75 points.

Root cause? What else. I was away from my La-Z-Boy perch.

They can see you through that TV monitor, you know.

So the big decision, and a difficult one it is, is whether to change my diet by significantly decreasing fiber, or getting a TV and computer monitor installed in the bathroom. So what if they can see through that monitor. I have no pride when it comes to protecting the portfolio.

If I were the kind that enjoyed puns, I could make a comment like “There’s nothing like placing a bid from the bidet”, but that would be as sophomoric as it would be heavenly.

On the flip side, you could be “getting your ask while wiping your ass”, but then that’s really stretching the bounds of civility.

Obviously, there are other alternatives. I’m certainly old and lazy enough for “Depends” or I could customize the La-Z-Boy.

Once again, I have no pride. After all, I write this blog.

I suppose it would be much easier if I had some algorithms to make the decisions for me.

What’s truly amazing is that now it looks as if we’re in an environment that one algorithm is likely to trip someone else’s algorithm into action. While some tripped algorithms maybe complimentary, others may act in contrast. In essence a single tripped algorithm is a simple yes or no decision, but the cascading algorithms may represent some rudimentary form of artificial intelligence, that kind that seems confused and results in bouncing around aimlessly.

As these software generated decisions are being made, I increasingly take comfort in the fact that I no longer need to make my own decisions. I can reasonably be assured that whatever unseen force caused the random “movement du jour” will be counter-balanced by some other unseen force at some point.

The need to depend less and less on brain activity appeals to me. All decisions would be devoid of thought in a perfect world. In fact, in a perfect world, there would be no need for decisions of any kind.

Based on my inability to negotiate a close in the bid-ask gap on some earlier trade attempts to break that all important monthly record, I know that such a perfect world doesn’t exist in the market place.

So today will be like any other day.

I’ve once again decided not to campaign fund raise for Rick Perry.

 

Option to Profit – Make your Portfolio Work for You.

Now available at Amazon and other retailers

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.

See a sneak preview of Chapter 1. 

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

Now you can Order direct  from publisher. Use 10% Discount Code P4S2ZD8H

 

  

 

My Sugar Momma keeps complaining that I tell the same stories over and over again.

My Sugar Momma keeps complaining that I tell the same stories over and over again.

Get the idea?

There are a lot of things that change after more than a quarter a century of marriage. Reflexive laughter at a spouse’s stories and jokes is but one of them. The others will be discussed in my adults only webpage section exclusively for annual plan paid subscribers. I don’t play blue for non-paying audiences.

So it should come as no surprise that the most difficult thing to do with a blog is to find inspiration and new material day in and day out. That’s especially true since I’ve made a habit of recycling stocks as I do stories. I rarely add a new one, maybe one new stock each month.

Thankfully, my short term memory is shot, so it’s always new and fresh, as are the stories and anecdotes. That also explains how I can watch Comedy Central. The only things that seem familiar are the nightly news stories and the market’s volatility.

Seen all of those before.

After all, why should I traipse into new territory? It’s not like I’ve been married to everyone for 25+ years. And why stray from the stocks that got you to the party? Do you really think I’m going to watch that new Paul Reiser sit-com? I didn’t even watch the one that ran for 10 years.

Today, my inspiration, for what it’s worth, came from Paul Kedrosky. I don’t really know if he has any discernible skills, but based on his Tweets, he is intellectually far flung, yet there seems to be a coherent and unifying thesis behind it all.

By the way, the annual plan subscribers will see the previous paragraph as : “Paul Kedrosky…..he is intellectually well hung…”, so there’s still time to sign up.

Borrowing from Rodney Dangerfield’s classic “Back to School” movie, as Sam Kinison is yelling the day’s lesson at him “Yeah, Kedrosky really has a unifying thesis. What that is, I have no clue”.

Even though I’ve now repeated the following phrase about a dozen times to myself and it still sounds derogatory, it’s not meant to be so. To me, “Kedrosky is like a Renaissance Man’s savant”. He may or may not have a readily identifiable and focused skill, but he is skilled across a broad canvases’ broad canvas..

Anyway, in a brief Twitter dialogue he used the phrase of today’s blog title. I asked for his permission and he said he had hundreds more. Actually, he said that he had hundreds more from where that came from, perhaps implying that they may have been purloined.

Look, have you ever seen the images that I use to illustrate the daily blog’s theme? Do you think I really care if it was purloined, borrowed or rendered?

“Wasted Optimism”. What a perfect expression.

I suppose that as an investor, or trader, everytime you purchase a stock and it fails to perform to your expectations, that becomes an instance of wasted optimism. Entrepreneurs and venture capitalists probably have boundless optimism and rarely look backward.

But I’d like to think that in his depth of thought, Kedrosky intended more.

Just 10 days ago you certainly would not have wasted your optimism by hoping that after an S&P downgrade of US debt the S&P 500 would be right back to its baseline.

That wouldn’t be optimism. That would be stupidity, or perhaps well placed contarianism. Regardless, you would have been considered certifiable and would have had a great deal of difficulty getting anyone to buy into your optimism. Imagine trying to transfer your enthusiasm to get retail customers to buy stocks at such a time.

A few days ago I characterized myself as a cynic and short term pessimist, but long term optimist.

I don’t really know what that means, but I’ve believed that for years, despite the lack of internal consistency.

When I was younger, after my first investing experience, I was convinced that I would be retired by age 30. That kind of short term optimism was unwarranted and didn’t really work out as I’d envisioned.

Now, my long term horizon and short term outlook are beginning to converge. Not because I’ve undergone some intrinsic change in outlook, but because the clock keeps ticking.

Now, I’d like to think that I can retire sometime before death. Even though I don’t work anymore, I look at the trading thing as my job. It would be great to hand that to my kids, once their parole officer finds them.

So in the meantime, I take my long term optimism and short term pessimism and just throw money at stocks and hope something makes sense. Long stocks, short calls. Long ultrashort ETF’s, short on their calls, Long volatility index, short the call. What was that unifying hypothesis?

Today, I had the luxury of some cash as my shares of Caterpillar and Freeport McMoran were assigned. On my wish list were Deere, Chesapeake Energy, Microsoft, Rio Tinto and something else that I can’t recall.

See the problem?

I am utterly convinced that by the time I meet my maker the market will have carried me to great riches. That’s the optimist in me, even though the outcome is predicated somewhat on my death. That part is a bit of a downer.

This week? Eh, not so much.Not entirely convinced we’re getting there without a stop, despite Monday’s glorious market.

Despite the nice sustained climb in the markets from mid-week last week and on, I purchased Deere, Chesepeake Energy and more Freeport McMoran in the morning with the expectation that they would go down by week’s end.

So with the optimistic sense that I was right about the pessimistic trend for the week, I sold a $75 option of Deere, purchased at $76 for $2.50 in the hope that it would be called away from me after trades close on Friday.

I did the same with Freeport, buying shares at $45.75 and selling the August $45 call option for $1.63. I did the same with Freeport last week. Same idea, maybe even the same shares in some sort of market recycling phenomenon, hopefully with the same outcome.

But in a show of short term optimism, I sold by Chesapeake calls at the $32 level, having picked up shares at $31.75 and receiving $0.60 for the contracts.

Go crazy.

I often think back to Alan Greenspan’s famous and oft repeated comment about “unbridled enthusiasm”.

No wait, that was Seinfeld. I think Greenspan said “irrational exuberance”. I always get the two confused. I think Greenspan was the guy with big ears and glasses. Seinfeld was the one married to Andrea Mitchell.

Both though make a statement about optimism. Llike calling someone a “savant” those statements may be disparaging, even if that’s not the intention.

My guess is that Greenspan meant to be disparaging. Seinfeld? Definitely disparaging.

Me? Again, not so much.

Optimism and pessimism are just parts of the sine curve that we keep cycling through in the markets. Lately, I hear many more people talking about “rho” or the correlation between events. Whether my optimism is well correlated with a rising market is irrelevant to me, as I am only optimistic that stocks will churn in one neighborhood, then move on to another neighborhood and just churn some more before moving on again and again.

Once you start getting so many people focusing on something, like correlation statistics, its bound to be passe. With everyone having their hands on the same data and interpreting it similarly that can only mean a decidedly opposite outcome.

Of that I’m certainly optimisitc. Long term. Short term.

And if I’m wrong, I won’t be next time around.

 

Option to Profit – Make your Portfolio Work for You.

Now available at Amazon and other retailers

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.

See a sneak preview of Chapter 1.  noco

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

Now you can Order direct  from publisher. Use 10% Discount Code P4S2ZD8H

 

  

 

Every time my kids, niece and nephew get together at our house, I have a deeply rooted need to snap a picture.

Always in the same location, always the same pose. My nephew and niece have learned how to position themselves so as to make it difficult for me to PhotoShop them out of the picture.

Seriously, why would I want to look at them everyday?

But they’re very bright and have long ago figured me out. They know that I’m not likely to do it if it takes too much energy, so they choose their positions carefully. They no longer sit next to one another at the ends. As a result, my PhotoShop skills have really waned due to disuse, whereas had I had the motivation I could have actually expanded those skills significantly.

One of their favorite sayings, always following some lack of common sense action of mine is “Uncle George, you went to Harvard?”

Jokes on them. I’m not really their uncle.

Although the dogs come and go, the kids stay the same, other than the fact that they’re not kids anymore, with the youngest soon to leave her teenage years behind. Sort of like an option’s expiration, only with a much better future.

What made me very happy yesterday, in adddition to the fact that it was the best picture ever in the series and only required a single take, was that my niece requested the photo opportunity. I didn’t have to beg, nor did I need to cajole and I was able to stop payment on the checks.

WIn – win, especially since my bank doesn’t assess me a stop payment fee.

It’s funny how, as you get older, you find yourself spouting the same aphorisms that your parents regaled you with when you were too young to appreciate any one else’s experience. In this case it’s how quickly time passes by.

Someday, I’ll probably assemble the shots taken over the years just to depress myself about the passage of time, but that would take motivation and effort, both in short supply. Instead, I’ll just stare at the gray hairs lining the floor after haircuts.

As quickly as those years seem to have gone, some other things tranpsire so painfully slowly.

Take August, for example. Although nearly each and everyday has been a rollercoaster ride, the kind that I never tire of, as long as the ups and downs are in equal measure, it has just crawled along.

Although the month was filled with happy and sad moments, a graduation and a funeral (I probably dont need to add, “respectively” here), the month still dragged entirely because it happened to be one of those 5 week options cycles.

Man I hate those.

I don’t mind the over-emphasis on the market’s down movements, but what I do mind is that extra week. I mind that even more than the grocery store “special” offering an extra 20% product  in the shampoo bottle, but having to pay 30% more.

Although we have just that one final week to go, I wish it would have ended already. Not to ease the pain, because that really hasn’t been too bad, but to get my hands on more options premiums. I can’t wait for the August contracts to expire. That’s still true even though since this past August still has a chance to be the best options premium month I’ve ever had.

Isn’t volatility wonderful?

With an additional week to sell some options, I’m within reach of my personal monthly best, without worry that an asterisk will need to be placed in my spreedsheet. Having shrivelled genitalia is a small price to pay for all of that income and since I use only generic steriods, my expenses are low.

It all goes to the bottom line.

Once the weekly contracts became more common, I really gravitated to them, now looking increasingly for those opportunities. Unfortunately, some of my favorite stocks, although highly liquid, such as Dow Chemical and DuPont, don’t yet have weekly options, whereas “drek” like Harbin Energy does.

So my trading still comes at a flurry on the first Monday and Tuesday of each cycle and then markedly slows down, other than for the few weeklies. Shares like Freeport McMoran, JP Morgan, Goldman Sachs and others keep the income rolling in through the month, but it’s still heavily concentrated to the cycle’s beginning,

On Monday, I’ll need to replace Caterpillar and Freeport McMoran. At the moment, I’m leaning toward Deere, Chesapeake Energy, Rio Tinto and maybe even Microsoft, which goes ex-dividend on Tuesday. If I’m able to get any of those at just the right prices, meaning right near a strike price, the near the money or in the money options premiums will take the month to new highs.

As I type away, the early reports are of positive opens in Australia and Singapore, but that doesn’t translate very well here, unless there’s something cataclysmic happening. Since most of my remaining August options are still out of the money I’d like to see a nice higher opening, even if it means paying a higher price for the items on my wish list.

As the September cycle approaches, I’m carefully looking at the more favorable premiums as the volatility has risen and wondering whether it’s time to adopt an earlier strategy.

Back during the market bottom in 2008 and 2009, I was actually selling out of the money calls, hoping to capture greater stock capital gains. I could do that since the options premiums, even for the out of the money positions were really very good, owing to that volatility. That strategy was right for the times, but was replaced by an in the money strategy as the market started on its sustained upward climb in 2009.

Given the options, and by that I mean choices, I think that I would rather not go back in time. Even though the grey hairs and the aging kids are making me increasingly forlorn, I think I’d rather stay gray. I’ve learned alot over the years and don’t think I’d want to tarade any of that back.

I think I’d also like to stay with the current in the money strategy. I like it at these higher levels.

The air is actually much better at 12,000 than it was at Dow 11,000 even though the premiums are much sweeter closer and closer to hell.

As the kids are getting older, I know that the photo opportunities are going to get less and less likely. Although I’m sure that if properly motivated I could computer age them appropriately on the exisitng photo collection, that’s probably not as likely to give me the same satisfaction as the real thing has over the years.

In the meantime, I’ll just have to get my satisfaction from knowing that with each month comes along a new option cycle and some great memories of cycles past

I just wish that time would go by much faster.

Did anyone say Daily Options? How about grandchildren?

 

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