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“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.


 


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