Everyone Needs an Escape Strategy






It’s good to have strategies in most aspects of life.


Exit and escape strategies seem to be be especially important and have lots of attention paid to them.


Pre-nuptual agreements and Living Wills come to mind. I have only one of those two, because Sugar Momma wouldn’t let me have both. My guess is that if I had pressed hard for the one that I don’t have, there’d be no reason for the other.


She would have seen to it that there would be no lingering coma.


Being Monday, I had money in my pocket from stock assignments and as usual had an uncontrollable need to spend that money, just like a big kid in his own version of a candy store.


Escaping PrisomWhat made today a little different was that I had a minor procedure scheduled just a bit after noontime, so I felt a need to have that money escape my clutches in a very abbreviated period of time.


No problem with that.


My strategy was to spend money recklessly until the nearly 30% of my portfolio was redeployed.


I could have taken the easy way and escaped the responsibility of actually thinking and just bought some Berkshire Hathaway shares. But the big boy version doesn’t have options trading associated with the shares, as if I was really able to pick up a multiple of 100 shares of those.


I could have just let the whole thing ride on shares of Sprint, as I do with Option to Profit book royalties, but that hasn’t really been working out, as the fall in share price just continues to outpace any premium income that I can generate.


So I had to just stick with the strategy that got me here and went right back to my list of “old Reliables and either added to positions, such as Freeport McMoRan, Green Mountain Coffee Roasters, Halliburton and Focus Media or repurchased shares that were just assigned on Friday, but at lower prices, such as for Mosaic and American Express.


For the first time in quite a while, I actually bought shares of Apple after it started coming down from its all-time high mark.


That made me feel young again.


Of course, I then reverted to old man status once I sold calls on those shares, but a strategy is a strategy. In fact, I look at the sale of call options as an escape strategy. Knowing that most people, including me, find it very difficult to sell at the right time, I essentially purchase a stock and the call options sold then serve as a form of pre-nuptial agreement, except in reverse.


If things go poorly in a marriage, the pre-nup kicks in. But when it comes to stocks and covered call writing the agreement kicks in if all goes well. It’s when the underlying stock price goes all too well is when you wish you hadn’t entered into the agreement.


But still, everything is spelled out in advance. That’s why I have no excuse to further complain about Netflix adding on another 14% today.


I wish it well and am not likely to see a reconciliation. That story’s been told.


I said “no excuse,” not that I wasn’t going to complain.


Once arriving at my days’ destination and having changed into a much shorter than usual hospital gown, my “assets” were there for all to see. I realized that there really wasn’t much of an escape plan possible, other than for the parts of my anatomy that were escaping under the hem, as well as through the back.


As many windows as there were to see what sadness was  lurking underneath, there were no reciprocal windows to mentally or physically escape the facility.


My escape, did come, however in an unexpected fashion, as I simply failed the pre-op. In hindsight, I think that it was the visible orange ring of “Cheetos” around my mouth that may have sent some sort of non-verbal message.


So I arrived home much earlier than planned, with yet another hospital tag on my wrist, but ready to get back to the work of watching television.


To my very pleasant surprise, for no reason that I care to uncover or understand, shares of Green Mountain turned around with a vengeance from the time that I purchased additional shares this morning. What better time to sell call options?


That’s a strategy.


I know that if Herb Greenberg were here, he’d probably slap me upside the head for buying even more shares of what is likely a stock story that is destined to end badly.


But as long as I can continue to get very rich premiums for those near the money and in the money options, I don’t mind having a front row seat watching the story play itself out to its logical conclusion, nor do I mind the black and blues.


That’s a strategy, too.


Had I not unexpectedly been home, I never would have gotten a special treat. As addicted as I may be, I don’t go prowling through the CNBC video archives.


Sometimes I’m not certain how so many things seem to escape me. After a single appearance, I seem to do quite well at remembering analysts and other talking heads. For some reason, I seem to also have a savant like talent of remembering what they said, although I’m often not blatantly paying attention.


So, you’d think I would recognize someone who’s referred to as “a legend.”


Watching Bill Griffeth and Bob Pisani interview a trading legend is always exciting, but I had no recollection of ever seeing or hearing or “Trader Vic” Sperandeo, and by appearances and otherwise, he’s a memorable guy.


Not to be overly stereotypical, but “Trader Vic” looked and spoke like lots of men that I recall as a child, growing up in my old neighborhood in The Bronx.


For those guys, the escape strategy was simple and was predicated on two things. There was the peep hole on the front door and then there was either the dumbwaiter or the laundry chute. If they didn’t exercise their escape strategy properly, sometimes we would go years without seeing Little Vinny’s dad.


Once I was over the superficiality of my initial response, I liked “Trader VIc’s” bravado. His strategy was to be short the Euro and long gold.


Then he added to his firm conviction by qualifying that he’s be long gold fo only 7 months.


Just like Bill Griffeth, I thought that was odd in its precision. To Bill Griffeth’s credit, he challenged the beast and asked why 7 months?


Trader Vic tied it to the timing of our election and then in a nuanced selection of his words, said that come November, “Obama couldn’t even win an election for dog catcher.”


Maybe that’s why he’s a legend, or maybe possibly just an escapee.


Interestingly, during Saturday night’s GOP debate in New Hampshire, President Obama was chided for fulfilling our Iraqi exit strategy. There was also the comment, related to America’s dependence on foreign oil, that “no American leader should ever have to bow to a tyrant again.”


Since these were actually more factually appropriate references to his predecessor it appears that distortion is also a treasured escape strategy.


It’s hard to say whether Wall Street analysts borrowed this strategy from politicians or whether it was the other way around. Clearly, there has to be some possibility that the strategy to create truths to fit your needs may have arisen independently.


Although I’ve always respected numbers and statistics, unfortunately they’re not immune to any distortions that would seek to create proof where none exists.


The best I can recommend is my escape strategy to prevent being influenced by people that could care less how much of your “assets” are exposed in that metaphorical gown.


Just escape.


Check out Recent PortfolioTransactions




 


























































































































































































Today’s Trades Security Type Action Type
January 9, 2012 GMCR Option STO Weekly
January 9, 2012 AAPL Optin STO Weekly
January 9, 2012 AAPL Stock Buy
January 9, 2012 GMCR Stock Added
January 9, 2012 FMCN Option STO Monthly
January 9, 2012 FMCN Stock Added
January 9, 2012 FCX Option STO * Weekly
January 9, 2012 FCX Stock Added
January 9, 2012 AXP Option STO Weekly
January 9, 2012 AXP Stock Buy
January 9, 2012 HAL Option STO Weekly
January 9, 2012 HAL Stock Added
January 9, 2012 MOS Option STO Weekly
January 9, 2012 MOS Stock Added
January 6, 2012 FCX Option Expired Weekly
January 6, 2012 MOS Option BTC Weekly
January 6, 2012 MOS Option Assigned Weekly
January 6, 2012 AXP Option Assigned Weekly
January 6, 2012 CAT Option Weekly Assigned
January 6, 2012 AA Option Assigned Weekly
January 6, 2012 GMCR Option Expired Weekly
January 6, 2012 NFLX Option Assigned Weekly
January 6, 2012 AMZN Option Expired Weekly
January 6, 2012 BP Option Expired Weekly
January 6, 2012 CAT Option Assigned Weekly

  

 






Click here for reuse options!
Copyright 2012 TheAcsMan

What a Week






I love extrapolations and projections, so based on this past week, I’m getting ready for a great 2012.


Even though this was a holiday shortened trading week, I definitely got my fill of thrills.


I’m not exactly certain how I should categorize the kidney stone that helped to welcome in the New Year. I guess that not all thrills are positive ones, but at the very least it didn’t cause me to miss anything other than some pain free stretches of time. It also seemed odd sitting in my usual perch on the La-Z-Boy without being able to extend the leg rests.


At that point, it’s just a chair, so what’s the point of a La-Z-Boy?


Rectal ExamThe unexpected probing was also an unwanted thrill, but this time the prober did not at all look like Woody Allen and had no sense of humor about him.


Slam, bam, than you man and that was it. No dinner, no drinks and certainly no conversation.


What I found somewhat unusual was not paying in cash to have my asets handled so unemotionally.


Sort of like the relationship with your stockbroker.


I suppose that the kidney stone is something that I’d prefer not to extrapolate. The thought of giving birth to a 7 pound bundle of crystal by years’ end isn’t as appealing as it may sound.


But how could you not love a week when inserted between every verbal comma was mention of the Hungarian currency, the Forint? With all of the discussion of how trivial the Greek economy is in the big picture, imagine where Hungary sits.


Actually it represents about 0.8% of the EU’s annual gross domestic product while representing 2% of its population. In contrast, its one time partner in two wars, Germany, has about 20% of the GDP and 16% of the population.


The Greeks, who have been maligned for their sloth and lack of industriousness, actually have a per capita GDP that’s 40% greater than that of my hometown, Hungary.


But maybe that metric is as meaningless as the retail shopping metric that I proposed to Telsey and Associates.


In hindsight, no pun intended, the use of aerial views of mall bathrooms and the quantittaive analysis of the number of toilet paper plies utilized, giving a Shoppers Hygiene Instore Tracker, was not adequately validated. Who knew that people would be offended to learn that the personal posterior hygiene of a Walmart shopper was less than that of a Nordstrom shopper.


Although closely related to the Forint in my lexicon, my next thrill came from a mention received in a Forbes magazine article by Eric Jackson. The article “Crowd Sourcing the Top 2012 Market and Stock Tips’” was a snapshot comparison of 2012 predictions solicited on Twitter. Apparantly, some of the Twitter users have a version that allows for 2000 space messages, but I was still thrilled to have the opportunity to put my 140 spaces in and to be included among a list of pretty well known people, who may be wondering why security let me through.


And the hors d’oeurves? Excellent. Worth crashing the party.


With all thrills, there has to be the eventual period of descent. That’s the roller coaster ride we are on all of last year.


For me, that descending part of the roller coaster ride was Netflix. After the speculation that a newly led Yahoo! might be a buyer of Netflix, its shares went soaring more than 29% over 3 days, never even beginning to question the insanity.


Of course, I had sold $72.50 call options and seeing shares go from $71 to $86 took a little bit out of my otherwise unbridled joy. Hence, the rant earlier this week.


The particular lot that was assigned was bought at $72.03 on December 27th. That lot, had actually replaced a previous one that was assigned at $72.50 the previous Friday, which had been purchased for $66.16 on December 5th.


So in addition to the $6.81 per share capital gains on that inital lot, the options premiums received during the 5 weekly cycles contributed an extra $5.14 per share.


Still a long way away from $86 though, but the reason it’s easy to say “never have regrets” is that these kind of opportunities always come back. It’s not likely that Netflix is headed back to its original heights.


The laws of physics just won’t allow that to happen.


Now, I do understand some of the physics behind roller coasters, drops, velocity and acceleration, although I choose to not even attempt to understand the application of differential calculus to the process of options trading. But from a pure respecting the laws of physics point of view, following the fall with the Netflix experience, there should have been no way to get to a point that was higher than where I had originally soared, but if the mind obeyed the laws of physics there would never be any fantasies.


There’s a reason the saying “it’s all downhill from here'” exists.


All during the week, the hosts of “Street Signs” on CNBC had been asking viewers to send in their recommendations for the 2012 “Word of the Year'” as it was time to replace “Hopium” the 2011 word.


I spent a good part of 2011 watching Street Signs in 2011 and especially liked the decision to pair Brian Sullivan, Mandy Drury and Herb Greenberg, but to tell the truth, I don’t recall how “Hopium” crept in to become the rage of the 2 PM hour.


I don’t know if there were many other entries besides my own. Among my losing submissions were “shopandippity” and Eusaster.” 


I won’t even bother giving definitions for those losers.


But at the end of Friday’s show, with requisite drumroll, they announced their word of the year, “Eurosis.”


My word.


Whoever said after the competition results were in “there are really no losers” was a loser. And since Eurosis is sort of lame, you can only imagine what the rest must have been like.


Since it was the winner, I’ll give the official definition. 


Eurosis. The fear of European Union monetary policy and its effects on American interests. It’s a less severe form of “Sarkozis,” which is a fear of monetary policy decisions promulgated by the President of France.


I like “Hopium” better.


Still, as they say, a win is a win, regardless of how sloppy.


The tradng week ended with the kidney stone still in place but without the intense pain. From my perspective, it’s as if the roller coaster’s end of the ride was at a different and higher station.


I know that the kind of extrapolating that I’d like to do isn’t possible. Not that the laws of physics control the markets, but greed and fear have every bit as much to do with market movements, as real data do.


This week starts quarterly earnings reporting.


What I have extrapolated, based on the past quarter is that I will no longer try to play a stock right before earnings.


Again, no physical laws involved, just a simple case of “fool me once.”


What a week.


As Sunday is the traditional start of the week, at least for my purposes, this new week has gotten off to another nice start.


Today, I drove my son to New York and dropped him off at JFK airport, as he goes on a trip to Israel, as part of a great program called “Birthright.”


A few days ago I didn’t think that I’d be able to make that 9 hour round-trip drive, due to the kidney stone. Hard to believe that an errant finger could have jostled it free, especially from the other end, but whatever, I was grateful for the opportunity.


Part of the reason that I’d wanted to drive him was to stop at a Kosher-style restaurant, Harold’s Deli, that was featured on the Food Channel show “Man Against Food.”


A big part.


We had a great time trying to stuff ourselves and barely being able to make a dent in the plated offerings.


I got back home just in time to eat some of the doggie bag remainders, still leaving plenty for tomorrow.


Happiness was one last fat filled meal before tomorrow’s procedure and more jostling of personal assets.


Luckily, the procedures aren’t scheduled until the early afternoon.


I say luckily, because Monday starts with me needing to find a home for about 25% of my portfolio, so there’ll be some more jostling of assets going on.


Yes there’ll be cash involved, but at least there will also be that missing emotional attachment.


Ah, it feels so good to have those assets moved around.


 


Check out Recent PortfolioTransactions


 

 
























































































Today’s Trades Security Type Action Type
January 6, 2012 FCX Option Expired Weekly
January 6, 2012 MOS Option BTC Weekly
January 6, 2012 MOS Option Assigned Weekly
January 6, 2012 AXP Option Assigned Weekly
January 6, 2012 CAT Option Weekly Assigned
January 6, 2012 AA Option Assigned Weekly
January 6, 2012 GMCR Option Expired Weekly
January 6, 2012 NFLX Option Assigned Weekly
January 6, 2012 AMZN Option Expired Weekly
January 6, 2012 BP Option Expired Weekly
January 6, 2012 CAT Option Assigned Weekly

  







Click here for reuse options!
Copyright 2012 TheAcsMan

Clarity of Purpose






There’s an expression that combines “clarity of mind” with “clarity of passion.”


“Clarity of mind means clarity of passion.”


Having watched enough episodes of Dateline over the years, I’m not certain that clarity of mind is a necessary pre-requisite for clarity of passion.


Given my current state of pharmaco-reality, I’m not certain that I can negotiate the thought process necessary for the whole “necessary and sufficient” exercise. Certainly, you can possess clarity of mind, yet find yourself without the ability to recognize the passionate nature of anything.


Anhedonism.


People, even smart people, seem to know exactly what they want, and often it is passion for passion’s sake and they then concoct incredibly stupid plans in order to requite that passion.


If you have to look up the word “hubris” today’s Daily Dilbert won’t make too much sense, even if you look up its definition. Otherwise, it’s very funny, as usual in its simplicity.


Clarity of mind is certainly not pre-requisite for clarity of purpose, either.


Take the past few days for example when a kidney stone was making its unwelcome re-appearance.


My mind, which is usually quite clear and reasonably analytical, refused to recognize the symptoms, even though I’d gone through the lovely experience before.


The mind muddled the purpose, though. My purpose should have been to take steps to avoid exquisite pain, rather than to ignore the obvious and expect the irrational.


I spent last night and this early morning in the emergency room of our local hospital. Sugar Momma happens to work in the emergency department of that hospital and it was she that convinced me, as I was writhing on the floor, that I should bite the bullet and make the journey.


Clarity of MindNow, given that she works in the psychiatric section of the emergency room, deep down, I suspected that this was some sort of scheme for having me involuntarily commited.


I was ready to rally the rest of my family around me in my defense, but despite the pain induced delerium, I had enough reason left to realize that they wouldn’t have a lot of credibility.


At least I think this is my family.


Maybe Sugar Momma was right. She was especially questioning of my sanity, when while laying on the gurney, I was able to let the FourSquare world know that I was awaiting the joy of giving birth to a 7 pound delight.


But you may not be able to fault her for otherwise questioning the screws.


After all, why would a perfectly capable person sit on his behind all day long and sell calls on stocks that are rising for no apparent reason?


What kind of clarity of thought was behind writing calls on Visa or Green Mountain Coffee, right before each really hit their meteoric rises?


My purpose and passion were clear at the time and were one and the same. It’s just that occasionally the reality or signs leading one in the appropriate direction are either ignored or mis-read.


In hindsight, I can’t necessarily say that the decision to purchase shares in Amazon, Green Mountain Coffee Roasters and Netflix, in quick succession just prior to the previous earnings reports were reflective of clarity of mind.


Hubris?


Probably.


Certainly, if you exclude the call options premiums, the performance of all three haven’t met my defined purpose.


“Making profits out of nothing at all” was the refrain always going through my mind. That’s a well defined purpose, just not always met.


While waiting for some final word on what was to come next, my concern was whether I’d be able to make it home in order to assume my La-Z-Boy position and trade, as the opportunities warranted.


Instead, laying in the emergency room I just kept hearing the physician say, over and over again, “Everybody must get stoned.”


Funny stuff.


In the past, I’ve not done well with physicians who thought they were stand up comedians, having received my first rectal examination from someone who had great reason for looking like Woody Allen.


No, it wasn’t an even more perversely behaving Woody Allen impersonating a physician. It was his cousin, impersonating a comedian while doing the exam, which was made much more unformfortable by the literal and figurative punchlines.


I was unable to find pleasure in neither the examination, nor the jokes. Again, anhedonism or the working title for “Annie Hall.” I don’t think that Dr. Gnarlfinger would have appreciated the reference.


I don’t know if this morning’s emergency room physician was making a joke about how kidney stones are inevitable or whether he was referring to the prescription for Percocet that he was pinning to my sweatshirt.


Or, it’s very possible that it was all an illusion, as the actual suggestion for that tie-in came from Lee Grindinger and I just felt a need to somehow work that in to the theme.


We’ll never know.


But I do know that Lee is a Forex trader, happily retired in the Virgin Islands. If he’s to be believed, he also enjoys running around in the nude during the winter solstice.


I would do the same, but I’m tired of getting those black and blues around my cankles due to excessive dangle.


Among the nice things about Twitter is that you can actually “meet” nice people, or in this case, we were “introduced” by TradeFast, another one of those nice people, but who does the investing thing for a living. He has to deal with people and their money. That’s not easy. I’ve saved a Percocet for him.


Ultimately, there was reason to believe that my physican was referring to pharmacological management for pain, as a prescription for the narcotic came with the usual advice regarding driving and the operation of heavy farm equipment.


What he didn’t tell me was whether I’d be in a proper frame of mind to responsibly trade stocks today.


It was bad enough that I’d already tried to barter the entirety of the prescription to E*Trade to offset trading costs, but I should have given up before asking whether I could margin the pills.


The one thing that I can say about the Percocet is that it made it much easier to discern Twitter sarcasm.


Maybe it was just coincidental, but a Tweet from Reformed Broker What’s great about this ADP report today is how perfectly it always confirms BLS numbers” was so much easier to recognize as having been sarcastic as the screen fonts seemed to take on severe skew.


And when did Twitter start talking Tweets back to you?


So trading didn’t seem like a good idea.


Mosty of the time, I take a very short term approach, especially now that the weekly options are so readily available.


This Friday, I expect to have holdings of just a few days assigned, such as Freeport McMoRan and American Express, in addition to others.


But one of the longterm plays, the Sirius Satellite Radio puts that I purchased in July, will expire in 2 weeks.


Lo and behold, it was up 10% today, putting it above the $2 strike price.


Now, Momma (not Sugar Momma) always told me never sell puts on a stock you wouldn’t otherwise mind owning. She actually told me that in Hungarian and was probably thinking in terms of the local Forint currency.


But still, that lesson didn’t go wasted on me.


Back in July, I thought that Sirius was a stock that I wouldn’t mind owning at $2 at the end of January 2012.


But now, as I look at the call premium for February’s Sirius $2 call, I’m not certain that I could justify owning the shares. WIth 6 weeks to go until the February options would expire, the $0.12 premium for the $0.04 in the money stock just doesn’t seem worth it.


But my drug clouded my just couldn’t make the logical decsion.


“Making profits out of nothing at all” was obvious, but buying and selling is pretty much like heavy farm machinery.


But who gets hurt if I make a bad decision behind the mouse?


Only my heirs, as I have no plans to spend the money other than perhaps for new racing shoes and an athletic supporter.


Hmm. Only for my heirs. Have you seen that motley bunch?


With my head spinning, yet the pain somewhat better, I realized that I neither filled the prescription nor had I taken the 1 tablet that I was sent home with, that the conspiracy theorists posit was given to get me hooked.


Hmmm.


With that realization, clarity replaced delusion and I closed out the Sirius position.


Netflix? Yesterday’s rant, when it seemed the world lost clarity and instead focused on unfounded rumor? Eh, not so much, as it only gave back a small bit of yesterday’s unwarranted, not short selling fueled run-up.


Clarity is fleeting, as are strategies and profits.


Hopefully, the stone will follow the same path.


 




 

Check out Recent PortfolioTransactions


 

 


















Today’s Trades Security Type Action Type
January 5, 2012 SLM Option STO Monthly
January 5, 2012 SLM Stock Added
January 5, 2012 SIRI Option BTC LEAP

  













Click here for reuse options!
Copyright 2012 TheAcsMan

Friendly Competition






I must be fixated on “oxymorons,” just having written about them a few days ago.


Had it not been for a Tweet from Marek Fuchs of TheStreet.com regarding his attendance at a Fordham versus Harvard college basketball game in the Bronx, I’d never have known about the event, despite the fact that I’m an alumnus of both.


On the other hand, I did know that CNBC was broadcasting live interviews from within Goldman Sachs and was wondering whether a high school classmate, CFO David Viniar, would appear.


To his great credit, absolutely nothing untoward was ever said about him throughout the slew of slings and arrows directed at Goldman’s higher offices. Sometimes, keeping a very low profile is a good thing, so it’s not overly surprising that he didn’t make an appearance.


Fuchs, who somehow finds the time between filming his entertaining and educational series “They Just don’t Get….” for TheStreet.com and his parental responsibilities, Tweets with regularity. At last night’s game his Tweets ranged from wanting his money back, despite the fact that his ticket was free and it being one of the most exciting games he’d ever seen.


He also was the halftime entertainment and penned an article for a local newspaper, while simultaneously putting out a fire in the Village of Tuckahoe.


Really. That’s the name. Tuckahoe.


Oh, and did I mention that he was an author?


My guess is that somewhere along the line either the ecstasy kicked in or the game got competitive. I doubt that the halftime sermon alone would have moved him to hyperbole.


G. Gordon LiddyWhen I went to Fordham, there was a general understanding that Fordham alumni went, in disproportionate numbers into the service of the FBI and CIA and in turn, spent an inordinate amount of time investigating Harvard graduates.


Competition. Think G. Gordon Liddy and then think dirty competition.


Great mustache, just nasty competitor who believed that in order to protect our nation from its enemies you had to use the U.S. Constitution for personal rectal hygiene.


Friendly competition is more like the sort Inspector Clouseau engaged in with any of the adversaries that he faced, yet nonetheless, respected.


The adversaries, in turn, received amusement for their troubles.


I really don’t know who won last night’s competition, but I doubt that it was friendly.


There’s a big schism between “The Bronx” and Cambridge. “Jenny from the Block” and William F. Buckley are reasonable poster children of their respective homes, just add some needle tracks to the former and ample elbow patches to the latter’s images.


Whereas the stereotype of the Harvard man would have him asking “may I top you off, my good fellow?” the Fordham man was just as likely to ask “Yo, you gonna finish that least slice, or what, Mofo?”


With the  conclusion of the Iowa Caucus, whatever that is, it’s clear that the competition for the hearts of living room ballot casters, was anything but friendly.


Newt Gingrich, given plenty of opportunity to soft peddle his assertion that Mitt Romney was “a liar,” acted in a very unpolitical way. He repeated that Romney was a liar and that he lied everytime someone asked him what he had meant.


I’m not certain that the latter was necessary, as being a liar requires the actual lie, but the emphasis was there for good measure.


That’s very different from the Newt Gingrich of the early debates, when he castigated moderator Brian Williams for seeking to foment dissent among the candidates.


Imagine that? Trying to elicit differences from among the debaters. How un-American is that? At the time, Newt embraced a “Kumbaya” approach to competition, just like in T-Ball.


Everyone is a winner. We’re all Charlie Sheen, at least until the caucus results are in.


A few weeks ago, as Newt was just beginning to show some slippage from the suprising rising poll numbers, he implored his followers to show the world that negative ads don’t work.


For a guy who takes every opportunity to let the world know that he’s an “historian,” he certainly got the history of political ad campaigning wrong, in addition to the historical facts regarding his own past.


So the competition just turned a bit less friendly.


Not able to stand the heat, or perhaps realizing that God really didn’t support her candidacy, Michelle Bachman dropped out of the GOP race.


In a related statement, God, when asked for a comment simply said that “It was him, not her.”


I’ve never been an overtly competitive sort, although my Sugar Momma tells me that I’m fiercely competitive.


Not wishing to fight that assertion, I’ll go along with her assessment of things and instead count on some level of passive aggressiveness to get back at her.


But forget that. These days, the competition in trying to beat the market is all I need.


What makes it especially appealing is that the opponent is nameless and faceless.


Unless I’m in a state of total fiction, I seem to remember that a few years ago there was a website that the user, for a fee, was able to control a gun and then aim and shoot at something. Maybe even a human target, who can remember these sort of fictional memories? I think it was a deer or a feral cow, actually.


The point is, what kind of guilt would you have shooting an individual in total anonymity?


Isn’t that what drives most criminals? At least their expectation that their anonymity will be maintained until the very second that they’re caught.


Each and everyday there’s an objective way to measure how you did in the market, in what really is a friendly competition if done properly.


As opposed to real life, in the market, there’s no reason to really think that there’s a Zero Sum game involved. There’s no reason to think that your fortune is matched in quantity elsewhere, only in an opposite direction.


There’s a commercial that I see on CNBC with some regularity, yet I have no clue what company is behind the ads. But in a nutshell, it’s some sort of hand holding trading academy where you can learn the trade of the trade.


Near the end of the commercial, where the student completes a profitable trade, the instructor says “now imagine how the guy on the other side of that trade must feel.”


All of a sudden, its become less friendly or at least a face has been put on the loser. For me, that would kill it.


Would you really eat veal if you could see the face of that cute calf right in front of you? Okay, maybe that’s not a good example, because veal is so delicious.


But in most everyhting else, anonymity is great. How else do you explain the popularity of the “glory hole?”


But there’s a problem for everyone else that comes along with anonymity.


If an unwarranted rumor causes a crash in the forest and you’re not there to hear it, did it really happen?


Misinformation, disinformation and unverified information are all tools of unfriendly competition that can hide behind the cloak of anonymity or disengaged responsibility.


Today, for example, one of the Najarian brothers, and I will never be able to tell them apart, was referring to the sudden uptick in Netflix, based on the purchase of a large number of forward month call contracts. He then commented how Netflix shares were working their way back from their disatrous fall into the $40’s.


That comment, may or may not have gotten anyone to make a trade, in one direction or another. More likely, the comment by Gene Munster of Piper Jaffry & Co., just a short time earlier that suggested Yahoo!, which also announced just earlier that it will be under the new leadership of Scott Thompson in just a couple of days, was a potential buyer of Netflix.


Problem is, that Netflix never made that drop into the $40’s, although at its nadir following the subscription pricing fiasco, it did get down to $62. Further complicated by some pretty out there speculation.


Now, I’m not saying that there was any vested interest or any personal gain from streaming bad information, but who gets hurt?


Certainly not like the case a couple of weeks ago when Dennis Gartman frontran his clients and announced that he was out of gold, whereas their accounts could only be traded at the end of the month.


Equity go poof.


As far as the promulagtor knows, the victim is usually no one that he’ll ever know, because he’s allergic to pine trees and knows better than to enter into the forest. He’ll never know, that is, unless some aggrieved lunatic confronts him. However, if that person traded merely on the basis of the bad information, he was a lunatic to begin with.


In trading, everyone is your competition and yet no one is your competition.


Why in the world would anyone give away their proprietary secrets, insights or knowledge other than to help push outcomes in the direction of their hopes?


Okay, so that guy is your competition and his clone is on some other station, so escaping them is not that simple.


Whereas in a basketball game ignoring the point guard may carry perilous cost, I increasingly believe that ignoring the Talking Head is necessary for avoiding the same.


It’s not the competitor you know, it’s the one you don’t.


 





 


Check out Recent PortfolioTransactions


 















Today’s Trades Security Type Action Type
January 4, 2012 ZSL Option STO Monthly

  












Click here for reuse options!
Copyright 2012 TheAcsMan

Starting the Year Right






 


Maybe I wasn’t listening very carefully today, but this year in the stock market seems to be getting off on the right foot.


For me, that has nothing to do with a 200 point gain, but it has everything to do with platitudes and what is frequently assumed to be the “conventional wisdom” not making their annual appearances.


Okay, maybe the 200 point gain has something to do with it, but I like to think that I’m bigger than that, even though I know that my superficiality won’t take me there.


Specifically, getting off on the right foot means that there was a noticeable absence of anyone getting on the typical first trading day of the year talking points.


In the years that I’ve been fairly addicted to business television the beginning of the year stories are always the same.


Dogs of the Dow, January stock rally, retail sales revisions come in better than expected, Super Bowl Indicator theory and so on.


There’s usually also some human interest story, like the twins born in different years.


Great stuff.


I guess I’m so sensitized to these kinds of stories that the recent nightmare I had made so much sense.


Listening to Dana Telsey describe how this year, once again Chinese restaurants and movie theaters in major metropolitan areas saw 30% of their annual profits maerialize during the week between Christmas and New Years.


Roller Coaster and Vomiting


So far, there hasn’t even been a summary of best and worst performers, although that has to be related to my inattention.


Although, still, its absence may be plausible. I guess when you can go an entire year and not see anything change in the S&P 500 level, it’s almost as if the year had never happened, other than memories of the vomiting during the up and down segments of the ride.


That’s exactly why you need to sit in the front row of the roller coaster. Staying ahead of the curve works. Sitting behind someone who vomits doesn’t.


Now to be totally fair, I did hear someone refer to the “Dogs of the Dow” theory on Friday, but did so only in the context of pointing out that the list for 2012 looks pretty much like the list for 2011.


That’s not the way it’s supposed to work, so maybe that explains today’s silence. Of course, that silence may make adhering to the theory a good idea, were it not for the stocks involved.


After the past week, which was so utterly boring, it really was nice to see a definitive move, especially in a higher direction, but I pretty much traded myself out for the day after the first 60 minutes.


I’m not usually prone to making New Year’s resolutions, but I did so this year.


The first, has already been satisfied.


I resolved not to send out a single Tweet on New Year’s Day and I kept that resolution, despite the fact that my quality of life was demonstrably  lessened as a result.


I made no other resolutions, so I’m pretty clear for the rest of the year.


There are, however, a few investing mistakes that I’ll try not to repeat in 2012.


The fact that writing calls so religiously has sometimes caused me to miss out on some unexpected stock gains, such as Visa, on two separate occasions, is not one of those mistakes.One of my investing resolutions, year in and year out, is to not have regrets.


Probably the biggest mistake I made was to think that I could time stocks and decide what direction momentum stocks would move prior to announcing earnings.


Since I’ve already made it abundantly clear that I’m a lousy stock picker, why not compound the misery by adding timing to the equation?


Although I’ve very much cushioned the disappointment of Green Mountain Coffee Roasters, Netflix and Amazon with aggressively going after call option premiums and cost averaging down, the investment dollars could have been better spent elsewhere.


It’s not likely that my hope that all three would stay in the current ranges for about 40 weeks would have a chance of occuring. But if it did, selling weekly calls would bring you share cost basis down to about zero.


As much as I tell myself that I like the thrill of the ride and the opportunity to make hedging corrections, life would be much easier if the roller coaster went only in one direction.


In the case of CNBC Fast Money, that direction is downward. Its probably become my least favorite show show on CNBC, although I do like Scott Wapner, who is the new host of the afternoon session. For starters, Dennis Gartman is on far more often than even my tuned out ears can take, although I tend to have the same opinion about the regular panelists.


I still pine for Jeff Macke.


Occasionally, they do have irregulars, such as Ron Insana, who provide added value, as does a semi-regular, Zach Karabell.


I hate it when people say, “in my humble opinion'” as there nothing humble about expressing an opinion, especially my own.


Today, however, there was a gem of a comment that definitely made paying attention a worthwhile pursuit.


Of course, it came from an irregular, Mark Fisher. His softly stated comment was “How can people have opinions on everything?” He further went on to say that if you do have opinions on everything, it’s as if you have no meaningful opinions on anything.


The mystery that plagues me is how Mark Fisher is associated with Dennis Gartman.


When I say “plagues me,” I’m over it already, but his comment was a very refreshing one to hear so early in the year.


As the year wore on, meaning by 1 PM on this, the first day of trading, a corollary to the January Rally story line did pop up.


This one was the observation that as goes the first day of trading for the year, so goes the entire year.


Well, that would certainly be the kind of uni-directional roller coaster that most of us would want to climb upon. I’d whip out the calculator to see how 250 trading days of action like today would extrapolate out, but I don’t think my trusty Texas Instruments circa 1974 calculator can carry through on that many digits.


Although there was a reportedly 60% concordance betwen a positive open to the year and the S&P 500 close, to their credit, the two experts downplayed the correlation, in all likelihood, because there is none, if you use the strict definition.


Or real statistical analysis.


However, one did go on to say that in the very few times that a year has ended perfectly flat, the following years, on average, had a 35% gain.


Since that’s based on only 4 instances, it’s not likely that you’d want to invest the ranch.


But still, with the year getting off to an auspicious start, I’m looking for a year end S&P at 1450.


That would represent a 15+% increase, or as I like to look at it, a rate that would take less than 5 years to double your money.


That leaves me in an even bigger quandary.


For me, the call writing philosophy that Barrons had so warmly embraced, is based on my long term optimisitc outlook that is in turn attenuated by short term pessimism.


That turned out to be a good way to go in 2011, as long as you define optimism as meaning neither up nor down.


But given an outlook for a 15% rise, where does the buy-write strategy fit in, especially if fear of missing out (FOMO) on any rallies is a concern?


That gets me to yesterday’s blog.


I guess that could also count as a New Year’s resolution, in that I did vow to not overthink. Since buy-write got me here, it’s buy-write that I’m going home with.


That was easy.


Today that included selling calls on Green Mountain, Freeport McMoRan, ProShares UltraShort Silver ETF, Alcoa, Mosaic, British Petroleum and Riverbed Technology in addition to buying more shares of the UltraShort Silver ETF, which plummeted in price as silver and gold both rallied, continuing last week’s stunning reversal.


Although I know and understand that you really can’t predict that this will be a great year on the basis of a single day, my optimism was set in concrete as Mandy Drury compared the price breakouts seen today to “zits on a teenager’s face.”


How can you argue with those sort of signs?


That one alone makes it worth paying attention. 



Check out Recent PortfolioTransactions


 




Click here for reuse options!
Copyright 2012 TheAcsMan