Monthly Archives: May 2011

One good Mother’s Day tradition is that historically, the following Monday tends to be a good day in the markets. That’s certainly one type of tradition I’d like to keep going.

That’s especially true if my short call options are out of the money, which most of them are right now, with the notable exception of those on the Ultra-short Silver ETF.

Another tradition, but this time one that ended, was the annual embarrassment Osama Bin Laden would be subject to, as he had difficulty distinguishing between his daughters and wives.

It’s a good thing that we found him, otherwise we’d never know when this one would have come to an end.

We’d still be at the mercy of the Al-Qaeda propaganda machines.

Thank goodness we had the help of our Pakistani friends.

I never thought that I could commiserate with Bin Laden, but I feel for him. Tough problem, but glad to see that it’s resolved, in a mutually beneficial way.

On a downside however, with the attack on the Bin Laden Compound, I’ve lost 12 loyal Twitter followers.

What I really admire, though, is the ever forward marching presence of capitalism. The latest rumor is the Al-Qaeda will be funding a remake of the classic, “Gone With the Wind”, entitled “Sunk to the Bottom”. Reportedly, Leonardo DiCaprio has already signed on as a young Osama Bin Laden and James Cameron is commited to the project.

Only natural that these two should pair up again after already celebrating the sinking of the Titanic.

Given its difficulties in the markets these days, it’s also rumored that Goldman Sachs will be bankrolling the effort in an attempt to diversify their brightest and best.

More on that later.

With 2 weeks left to go in this options cycle, I’ve been looking for weekly options opportunities now that E*Trade has finally offered weekly options to its offerings.

I did sell some more BP options this morning after making a few cents on last week’s option contracts. This week, it also goes ex-dividend on Wednesday, so I’m hoping to double dip and then do it all again on the final week of the month.

As I look for opportunities, I’m struck by how moribund Goldman Sachs has been. The brightest guys in the room must be pretty embarrassed that they can’t even seem to get caught in an upwind draft and ride on the market’s coat-tails these days. I can almost envision an elderly and bent over Lloyd Blankfein with remote control in his hand looking at videotapes of himself during the golden years.

Very sad.

I don’t think that Blankfein, the Spiritual Leader of Goldman Sachs, has the same issues with his daughters, if any, and wives, if any.

I also don’t think that he’s in fear of Navy SEALS busting into his condo, but Bin Laden probably had a high comfort level, as well.

One thing we know for certain, neither Bin Laden nor Blankfein will be celebrating next Mother’s Day as the spiritual leaders of their organizations.

And the world will be safer.

The epic paradox, the statement by Pinocchio, “My nose will Grow now”, has always captured my attention.

By always, I mean ever since this morning when I tried to find an illustration for the”paradox” theme of today’s blog. I was actually considering using a mathemetical paradox that illustrates how 5 = 4, but I thought that would require far too much thinking for everyone involved.

That one really blows my mind and calls into question the very validity of certain mathematical operational theories.

Frankly, I couldn’t care less about Pinocchio, for all I know, he doesn’t even exist.

Why we spend so much time of that which doesn’t exist is beyond me.

But that is the essence of a paradox. It’s existence is outside of the universe of reality, yet somehow exists within that reality.

Spending so much time in the unreal reality can be very profitable, though. Just look at the trade in non-existent securities.

Welcome to the world of the short seller.

In many societies selling what you don’t own is a crime. There may even be a Commandment against that sort of thing.

While not a paradox, per se, philosphers and theologians have long asked why it seems that the wicked prosper while in this life.

Take the example of those selling sliver short. They own no silver, sell what they don’t own and are dancing all the way to the back.

Taking that to one further step of lunacy are the holders of the levearged short silver ETF. Now, admittedly, I’ve been one of those for about a week and am not complaining about being part of the paradox. Those shares are up 70% in 5 trading days.

Not only selling what you don’t own, the people selling the security may not even own the silver and then, just for kicks, let’s double the ante.

Instead of 2 times zero, the result is 2 times whatever.

I’m not saying that  this is wicked behavior, for I certainly like to think that I lead a reasonably virtuous life. Albeit a bit more wealthy than 5 days ago.

Short sellers have long been reviled. If the general population knew what a short seller  actually was, they would be right up there with lawyers for the top spot in the derogatory joke category.

Something’s missing, though.

Oh, yeah. The silver.

Also missing is the common sense that would realize that the raising of margin requirements would at the very least have a short term adverse effect on the commodity’s price. Especially in market fundamentals were already taking the price in a downward direction.

Also missing are all of the silver touters who were profiled on TV insisting the the price was still poised to move forward. They’ve been replaced by those that have insisted that they were well prepared for the inevitable bursting bubble.

Prepared, perhaps, but out of sight. These people seem to be very good at deconstructing prophecies. Simply evaluate present circumstances and work backward to see what position would have predicted the now known outcome and profess to have held the position.

Paradox, stupidity, blinded by greed. Take your pick, but it’s amazing how quickly the Bin Laden story has been displaced by another bursting bubble.

And no one is clamoring to see photos of the holes being blasted through silver or the pieces of paper that puport to have a right to silver, and then some.

  

What’s in the Szelhamos Portfolio?

Today is a perfect example of everything that’s right with the modern world.

Normally, I’m pretty much of a stay at home schlub. I’m not even sure if that’s really a Yiddish word or not, but I can’t describe myself as a stay at home dad, now that my kids are out of the house.

Fortunately, they haven’t figured out that a locksmith could help them get back in.

But that’s not the point.

Today is one of those days that I will be out of the house most all day. No, not because it’s Cinco de Mayo. I have no idea what that celebrates, except I know that it’s not something that I celebrate.

Although I may be a schlub, I do make most of our family income by trading, while I sit and stare at the computer and the TV screen. At least I’m not a worthless schlub and I have taken on more of the cooking chores, because I feel my Sugar Momma deserves some culinary delights.

But ever since we got Caller ID on the TV screen, I don’t even have to turn my head anymore. If only La-Z-Boy would finally put a chamode in their recliners, then I’d be really poised to suspend most voluntary body functions. At least until the closing bell.

Just to be clear, there are some things about the modern world that I don’t like. The very idea that there will never be another new episode of Green Acres starring the original cast is just inexcusable.

Yet somehow, we manage to go on.

I also miss some of my childhood candies, such as Bonomo Bars, that have had 50 years to make their return, but have not.

Although my teeth are probably grateful for that, the rest of me remembers the joys of trying to devour the razor sharp pieces.

But there’s no reason to dwell in the past, reliving such things as having Green Mountain Coffee shares exercised from me $25 ago.

Instead, let’s focus on what’s great about the modern world.

The fact that I could write this blog while stuck in traffic is one of the pretty cool things. Although when you enter into my state, you are greeted with traffic signs warning drivers aginst texting, it says nothing about blogging.

But better yet, during the day, even going from meeting to meeting, I’ll be able to make trades just by going to that wonderful Droid my sons convinced me to get.

I may, however, cut down on my superfluous Tweets tomorrow.  Luckily, they also convinced me that the unlimited data plan was worth it, because it has been.

One thing about the modern world, before I go on, that I don’t like, is the propensity to change the meanings of words. One prime example is “unlimited”, as in “unlimited data”. Putting a limit on  unlimited seems wrong. Although I do understand the concept of throttling. That’s just like continually getting smaller and smaller portions when you go to the “All you Can Eat” deals at Applebees.

Who knows what kind of mammal has ribs that small?

But still, the good outweighs the bad, especially since I don’t eat ribs.

Someday, this modern world will figure out a way to impant a cable TV receiving chip in my eyes so that I can always be connected, as I disconnect from the reality of the world that is trying to intrude on my preferred reality.

Not being glued to the screen robs the chance to get up to the second worthless news.

I also must admit, that in the 10 days or so that I’ve been on Twitter, I’ve grown to like the postings of a number of people, some of whom are really pretty funny. I will miss the constant real time updates, although I’ve pruned my “Following List” down by 50%.

Since I make it a strong rule to never use public restrooms, I’ll have some difficulty keeping up with the Tweets.

One thing that I really like about the modern world is how fast everything moves. Specifically, I love how fast the stock markets moved.

Without dealing in percentages, imagine how many years it would have taken to double the Dow Jones in the 1950’s. Imagine how long it used to take to recover from any kind of drop in prices. A generation is the answer, as that wa not a rhetorical question.

These days, you blink your eyes twice and your favorite stock has run through a couple of up and down cycles and then some.

I own shares in Mosaic, Rio Tinto and Freeport MacMoRan. Despite that heavy load, my portfolios are still well diversifed. But those stocks gyrate like wild, yet still manage to stay in a range.

Never would have happened that way when Arthur Burns was Chairman of the Federal Reserve.

Man that guy had great hair, but most will admit that things really picked up after a bald Volcker took the reins.

Since then, baldness has been the modern day version of hair.

My full headed mane speaks poorly of my keeping up with the times. I’ve been trying as hard as possible to increase my stress levels, thinking that may cause some exfoliation, but now that Bin Laden has started on his journey to meet his 72 virgins, I have less to worry about.

And it’s a good thing, because I’ve been spending too much time worrying about these past few down days.

I know that it will soon change course, but what if the new modern world end up just like the old times?

At least Green Acres would be back.

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Most mornings I’m up at 6:30 or so.

That gives me plenty of time to have coffee, read the New York Times and check on the pre-opening bell news.

For some inexplicable reason, I slept in this morning. But not only did I sleep in, I missed the opening bell for the first time in a couple of years.

As I’m hurriedly trying to make up for the time that can never be recovered, I’m not getting much inspiration. I haven’t, though, checked the Obituaries yet.

So far, the predominant coverage in the Times is the role and value of torture. I prefer, “harsh interrogation” methods.

Although I’ve been searching, I haven’t been able to find any derivitive trades off of torture. Those must all be privately held companies.

Torture, I suppose, comes in many forms.

The picture to the left is entitled “Chinese Torture”. That kind of torture may also come in the form of their IPO offerings. I believe that the ingenue pictured was a RenRen friend.

That’s why I’m so proud that I have no friends in my Facebook account.

But I have had my share of tortuous trades in the past.

Some of them were in companies that had the dubious distinction of being the largest percentage loser for its year.

I once owned L.F. Rothschild, a scion of investment banking.

Look that one up. It’s too painful to relive.

It is also painful to not have time to accept the fact that the market will be opening way down. That’s the problem with sleeping in. It was a little bit of  a shock to see that the market was down 100 points before I even had a chance to fire up the computer.

Much less have any coffee.

I did get one trade off so far. I bought back some Textron $26 call options. That’s the second time for that particular trade for the May 2011 cycle.

But as I watch those shares of ZSL, the leveraged silver short shares, I kick myself for having covered those shares, as well.

Missed opportunities can be tortuous as well, but still, I’m not likely to give up any valuable information.

My real concern this morning is that I’ve noticed a very substantial decrease in the number of new Osama Bin Laden jokes hitting the internet.

I’m not much of a historian, but I think that the last time he died, that marked a market top and sudden reversal in fortunes.

I may be wrong on that count, but I’m willing to stand by it, as I watch my own fortunes fall this morning.

At this point, as we approach noontime, and man, it’s great to not have to work, I’m still not getting the inspiration I need. There really doesn’t seem to be anything special about today. No unique character, no defining theme.

Sometimes it’s nice to have a moment of boredom intrude on the rapid fire lives we live.

I’ve decided that for today, I’m just going to sit back, continue sipping away at the lukewarm coffee and wonder what happened to that piece of Cheesecake Factory dessert that was in the refrigerator.

That’ll keep me occupied for the rest of the day, at least until my wife gets home.

That’s when the harsh interrogations begin.

 

 

 

 

I won’t quibble over a day here or there.

International dateline, questionable reporting, time differences, you can take your pick.

I was born on at 3:30 AM on April 7th in Hungary, but in a logical world, now that I live in the U.S., I should be celebrating my birthday on April 6th.

I don’t. That would be stupid, albeit, logical.

Yesteday, May 1st, we learned of Osama bin Laden’s death. One of my kids joined the throng at the White House, the other donned his National Guard uniform and sent me a photo.

I already have the days’ newspaper wrapped in plastic.

Was the glorious day on May 1st, was it April 30th? Who knows and who cares?

But it may by no means be coincidence that Adolph Hitler’s date of death was reportedly April 30th and officially reported May 1st.

Sure, as a child I remember all of those wierd Lincoln and Kennedy similarities.

This is different.

As Americans, we have often been immune from the sense of relief and pure joy when evil dies.Fortunately, 3000 miles of ocean, a strong military and an abiding sense of justice has kept us safe for most of our history.

We haven’t had to endure the daily evils of the likes of Idi Amin or the long list of others.

Even though it’s been almost 10 years since the World Trade Center attacks, we’ve taken some solace that the evils guys probably never were able to close both eyes at night.

Even though it appears that Bin Laden’s final home was more luxurious than the caves we had been hoping that he had been living in, I don’t think you ever really get used to the unexpected sound of overhead explosions.

To some, it may be inappropriate to compare Bin Laden to Hitler. Since I never met the vast majority of my family because they perished during the Holocaust, I feel like I can take a pass on any complaints.

It’s akin to why some people can get away with Gangsta rap lyrics while others can’t.

The only difference between Bin Laden and Hitler is that Bin Laden was deprived the opportunity to carry out his master plan.

If not for the United States and its dogged effort to find Bin Laden, the  “spiritual” leader of al Qaeda (talk about an oxymoron), they would have been far more devestation.

In their tortuous logic, these terrorist zombies will claim that if it were not for the United States there would be no al Qaeda.

No on knew better how useful it was to them to have the United States and Israel be considered the enemy than the leaders of the Arab world.

The longer they could divert attention to the great “Satans” the less likely they would be to suffer the wrath of their own people.

That world is changing.

Democrarcies never go to war with one another.

The Middle East is on a precipice. Just a tip in the right direction and true democracy may overwhelm the region.

The outcome? Once the people see the lies fed to them by their own governments for generations, they are likely to be even more angered by all of the lost opportunities to be part of the civilized world.

In fact, they are likely to discover that neither the United States nor Israel are evil. Only their previous ruling regimes could rightfully take that honor.

Even the “beloved” Saudi regime knew all too well that the more it fomented chaos elsewhere, the less likely its own legitamacy would be questioned.

They realized that 50 years ago.

They, nor anyone else, had love for the Palestinians, but as long as they could stoke the fires against the Israelis, the longer they could delay that fire encroaching on their own turf.

But the winds have changed.

April 30th, May 1st?  Doesn’t really matter.

Today, I feel more safe and more optomistic than in a very long time.

I haven’t even checked my portfolio even once, now an hour into the open. Talk about a shift in winds.

As my brain is aging, there’s only room for a limited number of “where were you when…” kind of memories. I’ll have to displace something to make room for where I was when news of Bin Laden’s death was announced.

It happened to come on the birthdate of my uncle who died as a relatively young man, having  physically survived Aushcwitz, but not otherwise.

For me, yesterday was a little bit of a birthday present to him from Adolph and Osama.

For the rest of the world, it also meant a pre-emption of the closing 30 minutes of Trump’s Celebrity apprentice.

As the Passover Seder song says, if all that would have been done for us was to deliver us from The Donald, “Dayenu”. It would have been sufficient.

But the gifts kept coming.

Sorry, Mark McGwire, I no longer remember whgere I was when you hit your 62nd.

And so it goes.