Not Feeling It






 


Not Feeling ItMaybe its the fact that we just came off a 300 point climb.


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


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


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


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


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


Whatever the root cause, I was antsy.


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


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


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


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


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


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


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


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


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


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


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


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


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


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


Crazy? Like a fox.


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


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


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


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


But no.


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


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


He wasn’t feeling it.


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


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


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


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


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


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


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


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


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


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


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


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


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


Win – Win.


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


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


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


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


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


Never mind.


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


I can just feel it.


 





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What’s your Opinion?






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


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


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


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


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


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


So true. So true.


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


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


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


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


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


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


In hindsight that’s funny.


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


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


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


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


IMHO.


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


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


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


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


Then there was divided opinion over what fueled the rally.


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


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


Think Finland.


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


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


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


Whew.


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


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


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


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


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


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


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


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


But again, irrelevant.


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


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


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


My opinions are usually either worthless or very poorly timed.


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


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


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


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


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


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


FOMO. Stupid me.


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


 


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Fries and Prejudice

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

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

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

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

Pride and Prejudice.

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

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

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

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

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

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

I was more of an observer.

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

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

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

The stadium.

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

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

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

The work was also difficult.

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

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

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

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

They spotted and then called out to Joe D.

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

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

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

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

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

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

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

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

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

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

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

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

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

Character and morality.

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

Environment.

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

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

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

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

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

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

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

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

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

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

  

 

 

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Commitment or Death






We’ve always been lead to believe that commitment was a good thing. It often is cited as the only real thing that distinguishes us from animals, although that’s clearly an exaggeration, as most animals are incapable of ever winning two games of checkers in succession.


Curse that capuchin, especially for not agreeing to best out of five.



CommitmentWe all marvel when hearing of a couple’s impending 50th wedding anniversary. What a wonderful show of commitment.


In fact, as well all know the commitment is “until death to us part.” Commit or die. Commit and die. It’s all the same.


Using the new Google “Translate” module made for this blog, you can now understand that when I say “marvel,” I really mean “shudder.” and when I say “wonderful,” what’s really meant is “terribly sad and confining.”


“Shudder” of course, is just further code for” violently puke.”


Obviously, Sugar Momma has better things to do than read my drivel.


For many, the end to commitment came when the unwritten social contracts providing lifelong employer-employee relationships in Japan came to an end. If the employer-employee relationship in a land that the overwhelming majority of us will never visit, nor know is no longer sacrosanct, what else could be left for the rest of us?


A good point, for sure, but for me, the end came when new TV shows were no longer given the obligatory 13 episode production commitment. Thanks to the one-time sanctity of that commitment the cable TV archives can be filled with such past unrecognized jewels as “Camp Runamuck” and “I’m Dicken’s, He’s Fenster,” as well as some recognized disasters as “Dundee and the Cullhane.”


As an aside, I also don’t understand how “Dundee and the Cullhane” could have flopped. On the surface, it appears to appeal to every demographic.


With divorce rates now beyond 50%, TV shows getting cancelled after just a single episode and Japanese workers actually being laid off, there is obviously no love lost for commitment. The fact that paul Reiser now works at at Nagashima Datsun assembly plant is reason enough to decry the loss of our sense of commitment.


And then there’s “buy and hold.” A strategy which to me always seemed more commited to a specific stock rather than to profits.


I received some interesting feedback on Twitter today, in response to yesterday’s blog “Achilles and his Heel”  that actually was the impetus for today’s theme. Interestingly, that same Tweeter, Dasan, was responsible for the theme of the previous day, as well.


Follow him. I’ve said so before. He’s funny, insightful and humble. Plus, given his training, he probably knows at least a dozen ways to decapitate or incapacitate you in the event of a perceived need to do so.


The comments were related to the commitment and loyalty people had for Amazon and Jeff Bezos, in part, because they also believed that Amazon was loyal to their customers.


Whereas you can be both loyal and stupid, this is not one of those situations. Despite what may be a near term stumble with its Apple like hyped Kindle Fire, based on early adopter comments, the very idea that the loyalty is perceived to be bi-directional is beyond MasterCard “priceless.”


It’s almost like Japan redux.


I think that I’ve demonstrated commitment in the past.


Forget about the 27 years with Sugar Momma. That’s a walk in the park, especially compared to the 75+ years that her grandparents put in together.


Until they died.


Instead, let’s talk about things that really matter.


Earlier today, Mohammed El-Arian of PIMCO commented that “US economic conditions are terrifying.”


As we both continue to New York Mets fans, you obviously have to excuse El-Arian for his emotions getting the best of him. Continuing to be a Mets fan, even after moving far away and after such a performance drought, has to shed some darkness on your credibility and ability to critically assess circumstances.


But that’s commitment. Not the same level of commitment that he showed to the Harvard Fund, but far greater.


I don’t practice “buy and hold” and don’t have an emotional attachment to any of my shares, but I still think that I have commitment in that area, as well.


I certainly haven’t bailed on Amazon, which although up a bit in Tuesday’s trading, has had a bad recent stretch.


My tendency is to stick with loseres. Now that may be an example of where loyalty and stupidity do intersect, but I’m much more inclined to give up on winners in the name of profits.


A commitment to profits means letting go and giving up on the loyalty to your winners.


How ironic, especially if you take a superficial view of things.


In one regard, I suppose that I’m like Charlie Sheen, in that I don’t lke losing and I especially don’t loke taking losses. Again, not really a commitment to a specific stock, but rather a commitment to avoid losing.


Oh, and I also like hookers and crack.


In the case of Amazon, it currently makes up about 7% of my portfolio. At one recent point it was higher, as its price drop has outpaced the S&P 500. Although offset a bit by options premiums, that bit, in homage to the recently departed Lee Pockriss, is itsy bitsy.


I shop Amazon consistently. I hate going into stores and malls. Sugar Momma hasn’t bought a real book in a couple of years, although she probably buys two new Kindle titles each week. We give Amazon gift cards.


Get the idea?


Best of all, I sell more copies of the Option to Profit book on the Kindle platform than any other.


Did I mention that I like profits?


But all of that spells commitment.


Whatever happens to the Kindle Fire or any of its successors, if any, Amazon, as lead by Jeff Bezos will continue to reward loyalty, whether you’re a shareholder or consumer.


Yet, I look forward to the day that I can let my shares go. And really, I never ask for much. I usually am happy to see my shares go for whatever I paid for them, as long as there were plenty of options premiums in-between.


But when I do, I further make the commitment that I’ll re-purchase shares the very first opportunity that they’ve come down in price.


The nice thing is that there’s really not that much downside to commitment unless it’s stupidity that keeps you in the game.


In a totally unrelated Tweet, yet from the very same muse was the thought that there’s no reason to worry unless the SPX goes to zero.


That’s precisely why you need to follow him.


On the road to zero, and I have no doubt that day will come, there will be a near infinite number of other melt down situations that will cause many to give up their commitment and forever take it on the chin. That lack of commitment will just lead to a double dose of disappointment as the obligatory upswing is seen only with the eyes of a spectator.


You show your commitment by being a participant, even if that means “buy and hold.” You show your stupidity by “panic and sell.”


Would you like to buy Amazon shares from me?


 


 







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Achilles and his Heel






Whether you favor classic Greek mythology or good old fashioned American superhero fantasy, there’s a heel or a piece of Kryptonite that’s bound to spell doom and spoil all of your hopes for mankind..


KryptoniteWas there ever a single episode or comic book story about Superman that didn’t contain some kind of Kryptonite or at least its metaphorical equivalent? It was so predictable. There was always something to stand in the way of justice reaching its just destination.


For me, the image conjured up by the designation “super-committee” has to be on par with the mythical heroes of generations past and generations lost.


Just imagine. A collection of seemingly normal people, collected together forming their very own band of super-heroes. As if one super-hero wasn’t enough, surely only good things can come when the many are united as one.


This august group of super-patriots assembled to save our way of life from the predatory grip of a growing and deadly deficit.


Surely, we weren’t Greece and we weren’t the Weimer Republic.


The task ahead of this Deficit League was no less than that of Superman faced with saving the world from impending doom as an earthly sized asteroid with our name on it hurtled through the vacuum of space in our direction.


A couple of months ago the expression “kicking the can down the road” got quite hackneyed, but that’s just what the not so super super committee has done. The only question left for our imaginations is how long and winding the road will turn out to be.


There are lots of jokes about committees and their outcome products. A camel has been described as the design work of a committee of experts. Those jokes are the corporate variant of the “How many X does it take to do Y” joke.


Those jokes never get old, but this one did and on top of that, it was never very funny in the first place.


Question: “How many super-committee members does it take to get nothing done?”


Answer: “Twelve.”


See? I told you it wasn’t very funny.


And there was no product, to boot.


Instead there was the hope that there was a possibility that a solution to the deficit issue might be found sometime in the future.


Now that’s funny.


Seems like the super-committee took a lesson from the European Union and the European Central Bank and tantalized us with the possibility that there might be a plan for a plan sometime in the future.


That kind of certainty sure spells “this is the right time to invest in stocks” to me. Where do I throw my money and how much will you take off my hands?


But like all super hero stories, there was a need for drama. No one wants a story where good wins against a trivial challenger.


The super-committe members suffered the effects of their own unique brand of Kryptonite. Their mortal enemy was the very thing that gave them strength,


Their ego and politics itself.


Given the hype and the belief that the super committee would come through with a judiciously arrived deficit reduction package, the market should probably have discounted the high probability of failure.


It doesn’t take much of a leap of faith into contrarian territory to know that there was no way that the super committee could molt out of its own skin.


I mean, just how do you stand up to ego and the politics of the moment?


In a world where Newt Gingrich is the candidate with momentum, at least at the moment, anything should be possible. But whereas there may have been an antidote to the Kryptonite that sucked the life out of Superman, there doesn’t appear to be any antidote to the butt sucking that “Realpolitik” demands.


While some super committee members can’t see a way to extricate themselves from the Norquist “No Tax Pledge” their committee objectives were bound to be unmet.


Yet the market, despite the conventional wisdom, didn’t see this one coming from even a few feet away as the deadline neared.


Despite the big market move to the downside today, I wasn’t overly distressed.


With assignmenrts of some shares of Green Mountain Coffee Roasters and Riverbed Technology and all of my Sallie Mae holdings, today was a good day to pick up bargains.


It’s entirely possible that they’ll be even greater bargains tomorrow, but I couldn’t resist pulling the trigger today.


In fact, I could barely wait a minute after seeing the inital 190 point drop.


Part of my eagerness was because I had a 9:45 AM flight Monday morning on yet another Southwest Airline flight without a Wi-Fi connection. I’ve been on 6 flights in the past 2 weeks, each one teasing me with the rollout of W-Fi to the fleet, yet none had seemed to make it to my air chariot.


So I made quick trades before they closed the cabin doors and I would be shut off from the sweet flow of data for 90 minutes.


As it turned out there were more shoes to drop, but I repurchased my Riverbed Technology shares at a lower price, added to my Freeport McMoRan and Textron holdings and re-established a positions in Visa and Caterpillar, at much lower price than their earlier assignments that I took just recently took.


Not bad for 15 minutes on the less than intuitive E*Trade interface on my Droid telephone.


By the time the plane landed, any angst over the 300 point drop was eased by silver’s fall and the ProShares UltraSilver’s rise.


Huh?


Before my scheduled meeting, at which I thought it might be rude to whip out the smartphone or netbook, I had a chance to sell options on the new Textron shares and about 20% of the ProShares piece.


In the meantime, there was just a bit of angst over Amazon, which was getting whacked yet again.


This time, the Twitter stream was filled with negative comments about the new Kindle Flame, even coming from those that ordinarily spout Bezos messiah-like chants, the kind that used to be reserved for Steve Jobs.


One 140 space story had anectdotal evidence of a USPS employee saying that he never so so many product returns when Apple released a new product.


That sort of thing can’t be good for a stock’s price. That’s the kind of hard data and fundamental analysis that’s so desperately needed.


Whoever thought that Amazon’s heel would turn out to be Apple? But Amazon will recover, it just may need to remind people that its core business is immune to Kryptonite.


The equivalent would have been if someone actually came out and said that Green Mountain Coffee was insipid, if made properly and even worse, if not. If you thought that Starbucks was Green Mountain’s Kryptonite, you’d be on the wrong track on the basis of product competition. No one compares the products. They just wonder what will be left when Starbucks pulls the rug out from under its agreement with Green Mountain.


That one would be hard to recover from.


But the same thing was said after the first round of accounting improprieties was alleged. Green Mountain recovered and then some and lived to see another day and another round of allegations.


Heels heal and Kryptonite, like all radioactive elements has a half life.


The same can’t be said about the egos of our politicians and the need to perpetuate their elections, at all costs. There doesn’t seem to be any resolution and there’s not enough spin to counter the dizziness and disgust.


Maybe we should just let that asteroid do its worst and move on. 









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Game Theory or Schizophrenia?





I was always a fan of Game Theory and especially of its derivative game, The Prisoner’s Dilemma, since I’m an avowed believer in Zero Sum kinetics.

Game Theory If you don’t know what any of that means, you’ll have to decide whether to admit it, based on what your alter-ego will decide to do, knowing that your reward or punishment will be based on what you both decide, in the seclusion of the recesses of your warped mind(s). 

In the event you have more than one alter ego it gets just a bit more complex.

Welcome to my world.

Game theory is much easier when your alter ego is perfectly in sync with your true self. It’s also easier in totalitarian situations, because in such cases people are afraid to go counter to authority.  

Assuming that you possess some level of sanity and don’t have to take into consideration the needs of your alter ego, investing decisions, especially buy and sell ones, should be pretty easy. 

“Should be” is the operative phrase.  

I’ve long known that I’m incapable of selecting a good stock.

When I appeared on Bloomberg Rewind a couple of weeks ago, the guest panelist asked me the worst stock decision that I had made.  

My first thought was “why is this a**hole asking me that question?” Besides, how do you trust a guy who’s not trying to grow a mustache during MoVember, as the host, Matt Miller was bravely doing, without going on a 3 week vacation to do so.

It didn’t take me long, though, to dredge up a near quarter century decision to purchase shares of L.F. Rothschild, a one time venerated name in investment banking. That particular year, it had the distinction of being the largest percentage loser of any company on the NYSE.  

II may be a lot of things, but no one can accuse me of not learning from my mistakes.

At least the big ones.  

Instead, I stick to my list of “Old Reliables” and rarely venture outside that comfort zone.

When I do venture, my timing seems to be highly correlated to short term unwanted price movements.

About a month ago, just as earnings season was getting underway I bought shares in Green Mountain Coffee Roasters, Amazon and Netflix. Of those, I’d never owned Netflix before.  

I don’t know what made me purchase those. It was an uncharacteristic move for me to do so. 

What that triad had in common was great options premiums in advance of earnings. Maybe a little price momentum, as well. Amazon stood alone in that group by not having any black clouds hovering nearby.  

While Green Mountain delayed its earnings report by a couple of weeks, I had the opportunity to get three weeks of great premiums, but then came the news.

Green Mountain was already suffering from more doubts about its financials and Crazy Eddie like inventory issues.  

Prior to the live broadcast of Bloomberg Rewind the news came. Green Mountain’s disappointing earnings resulted in a $25 after hours decline. 

Of course, I had the lack of good sense to mention that I held shares on the program that evening, but I also mentioned that I didn’t buy into the Bernard Baruch axiom of cutting your losses at the 10% level.

Besides, with a cost basis of about $67, I’d already pocketed about $14 in premiums in that 3 week period. Still, Green Mountain opened at what would have been a 20% loss even when based on the net cost basis. I could feel Bernard rolling in his crypt. 

What I said on air was that I was going to stay the course and let emotions revert to the mean, just as prices do. The highs and the lows don’t last, except in the case of L.F. Rothschild and depression leading to suicide.  

My less cool and collected alter ego wanted to cut and run. 

I still have a hard time reconciling the fact that the investing cautious me, let’s call him “Louie”, is willing to have unprotected sex in a crack house, whereas the “no worry” investor me, “Ricardo”, would never think of doing such a thing.  

Then the realization hit.

It was Ricardo that made those uncharacteristic purchases and he now left me with the dilemma of what to do. Louis, on the other hand was smoking crack with the options premium money that Ricardo conjured up.  

The dilemma was created by not knowing what ultimate price would be exacted on any decision because there was yet another alter ego in the mix.

 This one was a nasty behemoth called the Stock Exchange.  

Great. Now I had to worry about what the macro-economic oriented market would do, as well as what that short sighted micro-economic Louie would want to do. Louis wanted to smoke his crack and have his stock profits, too.

Compound that with the fact that the market was beginning to react in an unprecedented way to rumors, news of possible news and news of real news.  

A purely rational person would have discounted the irrational market and made a decision purely on the remaining alter ego, being intimately aware of its thought processes. 

The investing cautious Louie would certainly look at the potential tax benefits of taking a strategic loss on Green Mountain shares and then take another long drag on that pipe, while taking care not to set his hair ablaze.  

The care free Ricardo would believe that tax consequences were irrelevant. In fact, the more taxes you had to pay, the better. That only meant that you had that much more in capital gains. 

“Laissez le bons temp rouler.”  

Did I mention that Ricardo actually had a Cajun alter ego, Ricardeux? 

Ricardo, for all of his subset personalities understood the concept of authoritarian rule. 

Khaddafi was on top of his game as long as he was ruthless. No one dared to question his decisions and he made them with impunity.  

Then he decided he had to get into the good graces of the West. 

We all know what happened then.  

So did Ricardo. 

As soon as his plane landed in Phoenix last Monday an additional lot of Green Mountain was purchased at $41.85 and weekly calls on that new lot were written at $42, while the original lot went unhedged. He assumed that Louie would be paralyzed by over analysis of the situation and would make no effort to counterbalance Ricardo.  

Louie was apoplectic, because Ricardo was right. And now, it was too late for Louie to do anything or to change his mind. There was no second deal to be made. 

At the very least Louie would have hedged the whole position, but that was now off the table, as well.  

In this game you have to be quick and ready to deal.

In the meantime, that nasty Stock Exchange decided to go into a mid-week funk, dropping about 3%.  

In the Prisoner Dilemma Game you also have to be ready for the unexpected. 

But the real unexpected was that even with walls of support crashing, Green Mountain climbed up to $51.

And so RIcardo and Louie were at odds again.  

Ricardo felt good about at least garnering some more options premium on the split holdings, not hedging the remainder and felt no remorse for foregoing paper profits.

Louis was unapologetic.  

He argued that the proceeds from selling the Green Mountain shares could have been plowed into the likes of Caterpillar, which was now trading below the $95 price at which shares were recently assigned. Besides the 2% weekly premium, theer were those tax advantages, too. 

And so, they were both right, at least for last week. Both had rational thought processes and understood the other’s positions and reasoning.  

But come Monday, the whole tug of war starts again. 

Both Louis and Ricardo will be aboard yet another plane when the Stock Market opens on Monday. In essence, they’ll be held hostage to the irrational movements of their macro ego.  

I wonder what would happen if I actually swallowed these green and white capsules?

 

  

 

  

 

 

 

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Who Needs Friggin’ Options?





Today’s guest blogger was George Pick, famous author, poet and knish assembler under 5 different Presidential Administrations
 
Options?  In my day we called them choices.
 
Choices.…so many choices…who needs them all…I like elevators and keys…its either up or down or in and out…nothing complex…no thinking…we all know how to in and out or up and down…
 
Do we really need 128 cable stations so I can digest some cerebral stimulation from the likes of Snookie, Kim and the brilliant Pawn Star..Chumley…Oh how the world has progressed…Grandpa would have been so happy….LED technology was surely not created so we can spend our evenings being absorbed by reality shows….well at least that is how they are titled….” I asked her her name she said blah-blah-blah…she had 9/10 pants and a very big bra” O.K. I’m back…
 
Olive OilMy wife said we needed oil so I offered to pick some up at the market…hey how difficult could it be…it’s just oil…by the way there are some lovely ladies that are so willing to assist a lost puppy dog looking for oil in the wrong isle…so I found the oil…there was regular oil…olive oil…corn oil…vegetable oil…canola oil….pure oil…virgin oil and EXTRA VIRGIN OIL…I only wanted to see two types of oil…the large can and the small can…. I came to the conclusion that there was no way I was putting previously touched oil on my food…..I went with the Virgin…but should I go with the Virgin or the extra virgin….what makes an oil earn the right to be EXTRA virgin and how do you get from being a regular virgin to something extra….then I wondered how it would effect me by being the first one to open the can…in any event I went with the EXTRA virgin….I guess that is when you have a virgin and there is another one waiting just in case……” Hah Hah…let me clear my throat” 
 
Why does a Chinese take-out need 60 items on the menu and why do we even read the menu…the menu needs 5 items..EGG ROLL…WONTON SOUP…SPARE RIBS…CHICKEN n BROCCOLI and CHICKEN WINGS….then 10 minute would become 5 minute….we go to order Chinese food and demand to look at the menu…we look it over for 20 minutes and what do we order…chicken n broccoli..wonton soup and an egg roll…c’mon you know it happens 90% of the time….too many choices..once again… 
 
Who discovered “The Den” I never had a den growing up…where did the den come from…did somebody say I have too much stuff in my living room so I need a den….I grew up in a small 1 bedroom Brooklyn apartment and was quite grounded and happy without a den…here’s a revelation..we watched TV in the living room sitting on the crisp plastic that encompassed all our furniture…we never really touched that furniture with our flesh….we were just glued to the plastic…why do you have furniture that you cannot touch…we will leave that for another day..I digress…more choices..do I watch TV in the den…living room…the basement man cave…the bedroom…the bathroom…we had one TV…now 5 is not enough…and I slept with my brother on the Castro convertible which was nestled in the corner of our dining room…A DEN …
 
I have reached the time in my life where my worst fears are happening at a fast and feverish pace…no not heart issues although I have them…no not losing my hair…the thing I feared the most…I have hair growing out of my ears…I hate that stuff more than anything…what purpose could that have and if hair can grow like vines from my ear then why can’t I grow new hair on my head…Lord knows my head can use it much more than my ears…I hope I never have to do a comb-over in my ears…Truth be told I cut my ears at least once a week…maybe I should not be allowed to have sharp objects which can lead to some bleeding in my shaky hands…I am on three blood thinners and it would be devastating to bleed to death due to ear hair…how embarrasing of a headline that would be….then again I should be thankful there are two inches seperating the inner part of my eyebrows…weird stuff happens with hair when you age…it sort of never leaves you,it just repositions itself without asking. This is one time you should have some choices….
“I started throwin’ bass, she started throwin’ back mid-range….but when I sprung the question she started acting strange  ” O.K. I’m back…
 
Why do we need NASDAQ, Dow , S&P 500, American…The Dow was up today but the techs dragged down the NASDAQ and the S&P dipped under 1210…but now the Dow is down as earnings from Big Blue were below the street estimate and a surge from Apple sent the NASDAQ soaring….Too much confusion can’t get no relief…Why can’t we have one headliner…either the market is up or the market is down as a whole…why all the choices…too many things to track on my screen…it’s enough that I have 5 different watch lists with 60 ticker symbols on each…more choices that I do not need but I have them…Why is it that when I own 5 NASDAQ tickers that the Dow is soaring and the NASDAQ cannot be found…oh yeah diversify..yeah that’s it..diversify…you need many choices in your portfolio..just in case… “You,you got what I need but you say he’s just a friend and you say he’s just a friend,oh baby…You,you got what I need but you say he’s just a friend”
 
O.K. I’m back….
 
We all have choices in life and one of the greatest times in my life was when I chose to go cruisin to the drive- in with Szelhamos and little Szelhamos…there were not that many choices in those days…one movie..no multiplex and no $7. popcorn bucket…how did we ever survive….cruisin with a bunch of Hungarians named George or Alex…I think those were the only names that Hungarians could choose from…I think George Forman must be Hungarian…doesn’t he have 7 boys..all named George… 
 
I am a child of Holocaust survivors and although I joke about choices….it is a great thing to have choices…I know those Holocaust survivors wish that they had choices….how lucky we all are to have the ability to decide what we want….choice is a great thing….now after typing all this where do I put it….my new H.P. laptop came without WORD…bad choice on my part… should have gone with Apple…more choices….
 
” You,you got what I need but you say he’s just a friend and you say he’s just a friend, oh baby…You.you got…
 
ENJOY…YEAH…YEAH…
 
 
 
 
 
 
 
 
 
 
 
 
 






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Lysol Kills 99% of ……





Malcolm Acs served as today’s guest blogger. The views in this blog entry are his alone and do not represent the Disinfectant Industry, No molds or bacteria were harmed in the writing of this blog

Despite spending the last eight years of my life living in Washington, DC, I’ve managed to stay clear of any and all political involvement.

I voluntarily went into work during the Obama Inauguration. I avoided every form of public transportation during the Glenn Beck “Restore America” rallies. I was in the bathroom for most of the Larry Craig scandal.

Recently when I was asked by a complete stranger on the bus if I thought Obama stood any real challenges in re-election, I immediately retorted that I had voted for George W. Bush in each of the last three elections. Based on the abrupt end to our conversation, I think it’s safe to say that Bush will have my support once again next year.

LysolAlthough I’ve been known as a bit of a hell raiser and a constant contrarian, I’ve always had very little tolerance for protestors in any form. My sophomore year of college the school hosted the “National Conference on Organized Resistance”, bringing over a thousand radical progressives from around the country for a week of discussing everything from authoritative veganism, homemade bomb making, and the evil of tampons. After being tired of the stench of over a thousand unbathed squatters spending a week inside of our building, I attempted to freshen the space with two dozen cans of Lysol. While I did not face any disciplinary action for assaulting the eyes of a few hundred occupiers, my actions were strongly condemned by the student newspaper as an act of ozone terrorism.

Now six years later, I tend to look at things a little bit more rationally. I’ve watched hundreds of inane causes bring people to my backyard, but after the weekend they always move on, leaving some trash on the ground but some dollars with local businesses. When the first tents started popping up next to my office as the Occupy Wall Street movement moved south to Washington, I assumed it would be as fleeting as every other movement and be over before it even really began. Each morning as I passed through McPherson Square (home of the larger of the two occupier camps, immediately north of the White House), I watched the infrastructure get more complex as their population grew. I couldn’t help but wonder if they knew how much Wall Street funding went to the manufacturers of the Eddie Bauer and Columbia brand tents that were popping up.

I became more and more uneasy with the entire situation and it showed increasing signs of permanence. This time however, I left the Lysol at home and took much more combative measures.

I invested every penny I had in Microsoft.

While occupiers have damned Wall Street for destroying wealth through mismanagement of assets and creating a “rich-get-richer” economy based on derivatives, Capitol Hill has struggled with companies like Microsoft bloating their balance sheets with cash that could otherwise be reinvested in job-creating activities.

At the recent shareholders meeting, Gates defended the $57B of cash on hand by claiming, “You want to retain enough (cash) so the company has the strength to be able to take big risks even in the face of some economic uncertainty”.

Microsoft? Risk? Big Risks? Unimaginable. Google Apps is quickly starting to eat into the MS Office suite. Apple’s OSX is growing in home computing and becoming the clear choice for executives, sales teams, and engineers. I’m far more likely to use a payphone and own a rotary phone than a Windows 7 phone.

Amazon Web Services owns the cloud and Google and Apple’s investments will be dominant long before Azure is even relevant. The difference between Amazon, Apple, Facebook, and Google is they respond to consumer demand and iterate daily. Microsoft updates its Office suite every four years.  The companies that actually take the risk to reiterate and reinvent have created enormous gains for shareholders.  Microsoft has traded between $20-30 for the last decade.

My father and I have a number of things in common, but the biggest one is our constant quest to make “easy money”. Since the day I started working, I’ve spent a ton of time scheming up different ways to stop working. When PNC Bank introduced ATM fee reimbursements I spent hours researching the logistics of owning my own ATM machines, charging myself exorbitant fees, and spending my days making $20 withdrawals and living off reimbursed fees. Several years ago as a borderline-suicidal Baltimore Orioles fan, I convinced my father to lend me $1,000 to screen print 200 “DUMP ANGELOS” t-shirts. After showing him that the profit from the first production run would be enough to buy six 1964 color televisions, he promptly funded the venture. We have a lot of shirts left. Four years later I have not repaid the loan, however in my defense I didn’t have time to research the definition of “negatively amortizing” when I signed the document. Why should I possibly repay a loan that is greater than the value of the shirts?

Despite the many past easy money failures (and likely even more in the future), Microsoft has been the closest consistent source. Two trading days before my first ever options-expiration-Friday, I’m sitting on the right side of $27 calls that I wrote less than three weeks ago with a 41 cent premium. Couple that with a 20 cent dividend payment from the $56B never-to-be-used rainy day fund and that’s a 2.3% return in less than three weeks.
Come Monday I’ll take my likely unassigned shares, rewrite a new set of contracts, collect my premiums, and start my work week. I’ll be confident that Microsoft won’t be able to innovate themselves above $30 or squash themselves below $20. Two months later I’ll enjoy the fact that Steve Ballmer truly believes that “We are in the Windows era. We were, we are, and we always will be,” by collecting my dividend payment in lieu of ever taking that big risk that they save every penny for.

One day the Windows era will be over, but at that point I’ll likely be far better for it, 2.3% at a time, every month, every time. Hopefully at that point PNC still reimburses ATM fees and Angelos still owns the Orioles.

Maybe I’ll stop tomorrow morning in McPherson Square and explain to the occupiers how they too can use derivatives and a dividend-capture strategy to safely increase their own personal worth at the expense of market-crashing speculators. I’ll probably just play it safe and stick with the Lysol.


@malcolmacs is a former technology headhunter currently working within the e-commerce and social media industry in Washington, DC. He is a dual graduate drop-out in Quantitative Finance and Information Systems Management . His fund currently manages over $8,000 in assets. Do not follow him on Twitter.



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Sherpa Wanted





Having spent the day in search of a mystical “vortex” high atop some mountain in Sedona, my eyes have been opened to a greater truth.

Of course, it’s entirely possible that the eye opening occured as direct result of the 11 AM wine tasting. There’s nothing better than a sampling of Arizona varietals to get you ready to hike up a mountain or two, or even better, to help you forget about hiking up a mountain or two.

I began to wonder at what point could you no longer justify starting to drink so early on the two hour time change.

7 years?

SherpaGuidance and preparation is the key to everything. We all need a personal Sherpa through all phases of our lives.

They do the work and you get the glory.

Everyone out here knows of the “vortex,” but their locations aren’t publicized widely. You have to find them on your own, given only some rough information.

None of the locals have ever gone to the sacred spots. That has to tell you something, but then again, it took my moving from New York before I ever made it to the Macy’s Thanksgiving Day Parade.

I’ll always be grateful to Sherpa Snoopy.

Aimlessly following along a path that took us higher and higher, a man in a strikingly loud blue sweat shirt, that seemed to blend in with the clear sky and carrying a hiking stick, appeared from nowhere at the very top of the mountain. He worked his way down toward us and then confirmed for us that the vortex was indeed at the peak.

What he didn’t confirm was that the vortex actually had the properties that everyone was seeking. Somehow, the “vortex” was supposed to  deliver vibratory sensations and emanate heat while to providing some magical renewal to the soul.

WIth the two hour time difference and the lack of connection to the world at large. I definitely needed something to renew my soul which was floundering in the void left in the wake of a vacation.

Climbing up a mountain in my all purpose penny loafers seemed to be the answer.

Not having tuned into CNBC or Bloomberg its been difficult to know what’s been shaping the markets into their action or inaction for the past two days.

Although I did ask, this particular Sherpa didn’t appear to be specializing in that particular area of my interests. I never even thought to ask him what macroeconomic issues were at play today.

As I stared into the incredible carved out red mountains against a sea of bright blue sky, there’s probably a greater chance of understanding how those were carved out than we’ll ever truly understand market dynamics.

I heard roughly equal number of comments about God and nature being responsible for the wonders before us. The beauty proved both sides of the argument to my satisfaction. In hindsight, it was probably a mistake for me to suggest that the rock formations proved that fetal stem cell research is ordained by a higher energy.

On these recently increasing days that I’m cut off from a reliable income stream the trades still need to be made. They’re not going to make themselves, although they could if someone would send an algorithm my way.

What I do know is I made a few trades as I occasionally got an opportunity to check in with my cell phone. I bought more shares of Netflix and Goldman Sachs, sold calls on those, as well as calls on Halliburton and Freeport McMoRan.

I remember thinking that there must be a higher order and authority. How else could a cell phone connection exist in such a remote area other than through divine intervention.

In a misguided attempt to make trades on my Droid phone, which is an entirely unsatisfactory experience, I also ended up buying calls on British Petroleum when my intention was to sell.

That, to me, indicated that there was no such higher authority. How could a loving Supreme Being have allowed such a travesty?

I’m certain that had my personal Sherpa been at my side that sort of thing would never have happened.

I never buy calls. He would have known that.

Having a Sherpa at hand can be very useful. Presumably, to be a qualified Sherpa you have to understand the challenges that lay ahead and then endure and conquer them.

To do so, you have to be prepared.

As we trekked up the mountain, my Sugar Momma, who is usually prepared enough for two, fell right out of her completely ridiculous shoes.

Fashion trumping function, those were the same kind of shoes she fell out of while pregnant with our oldest son many years ago.

So that should answer that question.

In this case, she forgot to change into hiking shoes as we left the car.

Fortunately, the outcome was just embarrassment in front of a  gaggle of Taiwanese friends re-assembled for a college reunion.

We eventually reached the summit together and found the “voretx”. The Taiwanese felt the glow, the vibration and the heat.

I’m not surprised. They also don’t feel the acupuncturist’s needles.

I felt nothing, but I did get a cell signal, so at least I felt the joy of being able to read the morning’s Daily Dilbert, high above the roadside.

With SHerpa in hand, I’ll be better prepared for tomorrow. I’m certain that my guide and protector will awaken me before the opening bell in New York.

That didn’t happen this morning. I actually missed the first 30 minutes or so and whatever opportunities may have come along in that time.

The SHerpa will also guide my as we travel to the Grand Canyon tomorrow, to be certain that I methodically check the settings on my Droid app, so that I don’t make the same mistake twice and once again purchase a worthless call option.

In the meantime, Sherpa and I can celebrate the ultimate victory.

Even with Tuesday’s little erroneous trade mishap, I hit a personal best month ever in terms of options premiums with the most recent trades.

Even if we fall off the cliff, they can’t take that away from me, but of course, if that does occur, the loyal Sherpa is likely to break my fall.

And that’s exactly why selling covered calls is like having a personal Sherpa. They protct and guide you toward a defined strike price.

As Green Mountain Coffee Roasters took that huge earnings related hit last week, that fall was nicely cushioned by lots of options premiums the previus three weeks.

Cost averaging down on Monday and selling even more call actions at the lower price strime just served to further reduce the cost basis. Now, despite that $25 drop, the shares are no longer a losing proposition.

The options will expire and no one will ever really remember that they existed. The glory is all mine and I live to trade another day, as long as those calls are out there to protect.

Now, if only I could get a Sherpa to protect me from Sugar Momma’s ire as I play with my various “devices” while I’m supposed to be communing with nature and the energy of the vortex.

That would truly be something special and a worthy cause.

Until that time comes, I’ll attempt to sneak peaks at what’s going on in the markets and attempt to squeeze a few more trades out before the November cycle ends.

Besides, I have to pay for this vacation and Sherpas don’t come cheaply, either.

 






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Mile High Club

Mile High ClubI’m no longer at a stage in my life that I fantasize about becoming a member of “The Mile High Club.”

As I look around the bleary eyed passengers of a 6:15 AM flight to Phoenix, Sugar Momma’s present company excluded, no one really appears to be Mile High appropriate.

Part of that assessment may also be related to the fact that Sugar Momma is peering at the screen and another part may be related to the very cramped spaces in the airplane lavatory.

America is not a thin nation. Airplane lavatories that may have sufficed a generation or two ago just won’t do it anymore.

Combine that with the fact, as I’ve previously made clear, that I don’t use public restrooms and you’ve got a non-starter kind of situation.

If I had the ability to read minds, my guess is that anyone on board thinking about entertaining in a Mile High fashion is equally disinterested in me, although to my credit, I don’t take up much space.

But that’s not the Mile High Club that I was hoping to be part of this morning.

As we begin a few days trip, here we are on a Monday morning, when I would normally be very anxious to trade in on the good names of my holdings and sell whatever call options as I could.

With a monthly record of accrued options premiums already safely at hand, I’m within distance of achieving a 100 on the 1964 Color TV Metric for the November 2011 option cycle. That was a figure that I could barely even fantasize about.

There was an extended period of about 7 years when I flew twice a week but never really gave any thought to what I was missing in the world of streaming data by virtue of being aboard a plane. Besides, back then we were lead to believe that an Internet connection of any kind was incompatible with flight safety.

Back in those days I flew after the markets had closed and besides, options only came in the monthly variety, so I would have a flurry of activity on that first Monday and Tuesday.

Not so this morning.

I’m still anxious, but unable to perform.

Actually, that sounds like the situation for the original Mile High Club, as well.

Having started the morning off so promisingly, seeing the CNBC logo emblazoned on airport newsstand, I was so hopeful that the Southwest Airlines flight would be Wi-Fi enabled.

I had flown the previous week to Nashville, but did so on a late Thursday morning, usually a slow time for my kind of trading activity. It really didn’t matter to me that there was no Wi-fi on that 2-hour flight.

Today, I just knew that it was going to be different.

Despite the fact that the cashier at the CNBCstore gave me a blank stare when I asked for her advice on Green Mountain Coffee Roasters and snapped at me “what do you think? Do I look like friggin’ Herb Greenberg to you?”

As it turns out, those people aren’t really employees of or contributors to CNBC, although the cashier looked strangely like James Altucher.

If I’m not mistaken, Altucher did once have a blog entry entitled “The 12 Things I Learned from the People who made Impulse Purchases at the Register before Boarding their Flight.”

So, it could have been him,

Yet, despite the lack of helpful guidance at the CNBC store, I still held hope that everything would fall into place today.

I was completely prepared to stream CNBC, engage that trading platform and join that Mile High Traders Club, ready to pounce and thrust trades out from this ad hoc trading machine.

I even had visions of having a celebratory cigarette afterward basking in the glow of victory.

Well, guess again.

First of all, it turns out that there is no smoking allowed on airplanes.

Secondly, no Wi-Fi.

To make matters even worse, next to public restrooms the thing that I like the least is making casual conversation with strangers aboard a plane.

In several hundred flights over that 7 years period, I probably averaged 7 words per flight, usually related to the offering of peanuts or a beverage.

While Sugar Momma slept with her head on my shoulder, someone asked what I did for a living and I was begrudgingly engaged me in conversation.

I can’t remember the last time anyone really asked me that question and I really didn’t have an answer.

Without giving her reason to ask, she then told me that her husband, a physician, as if I had cared, wanted to invest all of their money in gold.

She wanted to know what I thought.

Odd, Is what I thought initially.

See he wasn’t there to defend himself, I gave my opinion.

I then made the mistake of mentioning stocks and options.

But I do enjoy rambling on about that topic until she asked me if I only bought shares in corporations that were socially responsive.

I gave her the same “are you serious look” that I’ve given to others on other occasions. I like to make money with my stock investments, and not see them predictably trail the indices.

She had no concept of opportunity costs, when she countered that “if stocks make 10% and your investment made 7%, then you’re not really losing money.”

I tried to tell her that when purchasing shares in Altria, for example, that was a hands off transaction for Altria. They didn’t own the shares, someone, perhaps me, owned those shares. A buy or a sell was transacted with another individual or  institution, and not with Altria.

Donate the capital gains to charity, was my solution to any pangs of guilt.

How I wanted that conversation to end.

But first she had to tell me that what was necessary was a boycott of stocks. She used flawed history to point to the case of South Africa and how people got the system to change.

She had mistaken consumer boycotts for a stock boycott.

Of course, I never wanted to point out the socially irresponsible way that gold may be mined, yet that was there “go to” investment strategy.

All I really wanted to to get off that plane, forget about any hopes of joining the Mile High Club and get on with life.

We landed at about noon New York time. Plenty of time to make a couple of trades. Adding shares of Green Mountain Coffee Roasters and JP Morgan, certainly among the most socially responsible corporations out there.

With quick sales of call options on both it was then time to meet up with friends and head out for a day of hiking.

We didn’t make it very far on this first day, but tomorrow, we all plan to join the Mile High Club together.

I think I mean that in a literal sense, but there’ll be lots of Margaritas, so you never know if the figurative interpretation will show its face.

Tomorrow’s another day. I’m still a bit shy of that 100 Color TV mark, but am hopeful.

Socially responsible or not, someday I’ll reach that Mile High Club, even if it’s by myself.

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Copyright 2011 TheAcsMan