There comes a time in all of our lives when we’ve behaved in one of those really annoying Holier than Thou” kind of ways.
People who do so on a regular basis, and I include myself in that category, come in various shapes, sizes and flavors. The world of faith, that of politics and certainly the world of finance have all seen their fair share of characters espousing the kinds of attitudes that have most people praying for someone to be taken down a notch or two.
Jerry Fallwell, John Edwards and Bernie Madoff come to mind very quickly.
There are so many more of the one time high flying, but then fallen angels, than I could possibly ever fit into the pages of this blog.
But in America our fallen stars can recover and become rehabilitated so quickly. Probably no nation in the world practices the concept of foregiveness as well as we do in America.
Either that, or our collective short term memory has taken a really big hit from way too many ganja hits over the years.
How else do you explain the phenomenon of Newt Gingrich?
Along with the late Henry Hyde (R – Illinois), no two were more vocal and critical of Bill Clinton when his literal and figurative peccaddillloes came to light.
Hyde trumped them all by having a ‘baby momma” hidden from the public’s views for all those years, although Gingrich wasn’t far behind.
Gandhi was reported to have said “I like your Christ, but I do not like your Christians.”
Of course, these days, that quote would be artisitically toyed with a bit by the likes of Jon Stewart to something like “I like Christ, but Christians? Eh, not so much.”
He then would be castigated by someone who shouldn’t be throwing stones from inside a glass broadcast booth (On FOX).
But I stray.
As always, this is about me.
I feel a need to testify as I’ve been moved by the spirit.
At least the spirit in the profits I may have left on the table this past week.
Admittedly, last week didn’t turn out that badly for me. While the S&P 500 was up by 7.4%, I lagged by only 0.2%, having had a good day on Friday, when the market gave all 150 points back.
But it was more of a case of what could have been.
Over the years I’d been fairly immune from making stupid trades. Especially the kind that I describing as picking crumbs, when I try to squeeze out any last bits of option sale related income.
But not this week.
And I feel a need to cleanse myself and confess my sins. By so doing, I also feel a need to testify in the name of profits.
This past week I started by doubting all thouse dismissing Monday’s 300 point run up as nothing more than a “dead cat bounce.” The chorus was too uniform to be true. The devil’s cacophony always overwhelms the sweetly melodius hymns of the angels in the battle for our souls.
As it turns out, I was right about that, but not right about which way to go when the chorus changed its tune.
By mid-week the chorus was calling for a melt-up in stock prices.
Having no faith in the powers of the voices that be, my sinful self opted to go counter to the wave and sold calls on whatever I could that would be expiring on Friday.
Just an example of my personal greed trying to take advantage of the leveraged greed of call option buyers.
By Wednesday I’d sold calls on Green Mountain Coffee Roasters, Caterpillar, Hallliburton and Freeport McMoRan.
For sake of brevity, I’ll leave out those sales for which I have no regrets.
Actually, if I really wanted to be brief I would have done it the other way around, but the backspace button is such an onerous chore.
Of course, those shares that I mentioned just rode the wave and then some.
As the market decided to go with the good employment numbers on Friday and the market took off, I just knew that the wave would ebb.
I also just knew that the meteoric rise in Silver prices would reverse.
So with the confidence that only a “holier than though” trader could muster, I also sold calls on JP Morgan in the firm knowledge that my own brand of faith, that of the wisdom of TheAcsMan, would prevail.
To top it off, I also bought back all of my calls in the ProShares UltraShort Silver ETF, limiting options premium related profits in the supreme confidence that there were even more and bigger premiums in the world to come in a day or so.
But in a blast of truly divine contra-intervention, JP Morgan shares just took off, while the rest of the market began the fade that I so smugly knew would be happening.
Oh yeah. It went up some more and in my case, up is bad.
When it was all said and done for the week and the last day of the trading week, I’d won one the battle, but lost the war. Although I had more right decisions and trades than not, it was the one that was not that sent me into reflection.
JP Morgan Chase.
Now, I’m no Gandhi. Lord knows the extra 2 inches necessary in that pair of pants will testify to that, but at least I could reflect.
Holier than thou? Richer than thou? Richer than the me that could have been?
No, maybe and no.
The sale of last minute calls hoping to capture some extra crumbs worth of premiums is consistent with not being worried about missing out on the kind of totally unexpected gains that could materialize in just a second.
That’s exactly what happened with JP Morgan.
Earlier in the week itr had also happened with Caterpillar, as it went up more than 7% on a day that the Dow went up by just a bit less than 5%.
Now some in the chorus will chant that Caterpillar was unnecssarily beaten fdown in the days before that 490 point gain and that observation would be correct, but it’s certainly not a reason. It’s just an observation, as there were many stocks that were beaten down, but did not bounce back disproportionately.
Jesus wasn’t the only one crucified.
So I lament the loss of Caterpillar, as well, as the heretics exercise their right to take my shares.
But just as Henry Hyde, Tammy Faye Baker and others, the mighty all seem to fall. So too will Caterpillar.
Of course you don’t. He never really existed, but Shelley used the mythical Ozymandias to make a point.
Actually, the reason you don’t remember is that no one reads Shelley and Ozymandias was actually another name for the historical Pharoah, Ramses.
But again, that damn backspace. So much easier to go forward than to linger in the past and try to correct those mistakes.
But just as some whose stars fade and never return, Caterpillar will do so and I’ll be there to welcome it back into the stable.
Of course, what would have been much easier and certainly more satisfying would be to use life’s backspace button and “Give me One More Chance.”
In all likelihood, using that backspace option would do nothing, because I wouldn’t have taken profits in my JP Morgan shares, anyway.
Like most investors, it’s easy to say that you need to banish “Greed.” but to do so is really pretty hard.
Ultimately, that’s what really seperates us from the animals. Our inability to learn from our mitakes is distinctive, as usually our mistakes don’t kill us.
We all seem to share the human tendency of not recognizing when it’s time to sell. Instead of selling JP Morgan shares at their peak, most of us will just watch it go back down as it retraces its ascent downward and will then watch it ascend again.
How sad that we keep making the same mistakes. But at least we live to see another day.
That’s what America is about.
Where else can you make the same mistakes, yet rise again, Newt? (Although I do consider him to be an animal.)
As with every Monday, there’s yet another chance to “Do it One More Time” and see whether the deathbed conversion will actually hold.
I’ve seen my personal Profit and Loss statement and I’ve felt the need to cleanse, but damn it, this is America and I get another shot for redemption, as well as another chance to fall and rise and fall again.
Linday Lohan and all of those who ever sang “Give Me One More Chance” would all be envious.
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Copyright 2011 TheAcsMan