Groundhog Day Revisited



Groundhog DayGroundhog Day, the Bill Murray movie, is reportedly the most played movie on television and basic cable. I know that I’ve done my fair share of viewing that movie over the years, first starting with it’s original theatrical release and then seeing it ad nauseum during that bizarre commuting phase of my life, spent in many a hotel room.


Given the movie’s storyline, it’s only appropriate that the movie keeps getting repeated.


If you’re one of those very few people that hasn’t seen the movie, or just doesn’t know the story, you’ve likely spent the greater part of your life in Slovakia, focusing on far more important things than light romantic comedies taking place in obscure Pennsylvania towns, starring a now obscure actress.


You certainly wouldn’t understand the connection between Groundhog Day and unending repeating, or as I like to call it; “Life”.


Personally, I don’t understand thow I could have two consecutive days when a Pennsylvania city is mentioned in my blog.


Some things just are out of your control.


I can’t really tell you how the Groundhog Day movie ends. It’s not that I don’t wanty to spoil it for you, it’s just that I don’t remember, but I do remember all of the intervening details.


In the movie the predictabilty of reliving each day first proves to be maddening, almost driving the Bill Murray character to the brink of suicide, until he realizes that he can step out of the pre-deteremined actions of his character.


Ah, now it’s coming back to me.


Only when he realizes that he can capitalize on the mundane and predictable, does he realize the key to his happiness. To top it off, he brings out the best in those around him, as well. As soon as he starts behaving in a manner that conflicts with the expected reality, he changes everyone’s reality.


For some people, in the market’s after hours, today was as if the movie featured Google.


Talk about a replay.


Google came out with great earnings after the closing bell and shot up about 9%. That’s not much of a surprise. They always come out with great earnings and then fall prey to the spin.


Google has a habit of making big moves on its earnings reports that in absolute dollars are magnified by its $500 per share price. It did precisely the same last quarter, making its move to $600, before heading down back below $500 just a short 2 weeks ago.


Unfortunately, you just can’t predict in which directions those moves are going to be. Although I don’t currently hold any shares, I have in the past and have been blown away by some of the downdrafts in price, even after great earnings reports. Hedges helped soften the falls, but dampened the rises.


It goes both ways.


On the other hand, even though you can’t predict direction, you sure can predict that there will be movement.


Today I felt as if I were in my own personal Groundhog Day scene.


It was just another day that happened to have JP Morgan report its earnings as part of the ordinary landscape.


I’ve owned JP Morgan on and off for about 2 years and have especially been going through my own personal Groundhog Day with the shares ever since the weekly options became available.


On Monday I added onto my position and sold $32 calls, for nearly a 3% premium.


As it just seems to do on a predictable basis it went up and then down. They don’t need to report earnings to make significant price movements. The only difference was that today at least there was something going on that could be called a reason for the move.


Everyone was expecting disappointing numbers, which of course is why share price went up admirably from Monday through Wednesday.


Of course?


As luck would have it, it went down sharply today and is now below the strike price, with expiration on Friday. Why ot went down when everyone was expecting bad news and why it first went up in advance of the expected bad news earnings?


Yeah, as if that scene’s never been played out before.


You just have to get used to it and go with it.


I could do these kind of weekly trades every week.


In fact, I do.


On the other hand, the ProShares UltraShort Silver doesn’t come with a weekly ETF, but it really doesn’t matter. Silver goes up big on one day and goes down big the next.


I sell the call options, buy them back, sell them again, buy them back again.


You get the idea.


The share price of the ETF is virtually unchanged from where I bought it, but that volatility brings a great premium. Actually, whereas I usually sell near the money options, the volatility and resultant premiums for this ETF were so nice, that I’ve been selling well out of the money options, balanced with some at the money options, so that I could benefit from the stock’s capital gains, receive options premiums with less risk of being assigned and also receive heightened premiums that are very responsive to the stocks moves.


Huh?


Today, for example, with silver falling and the ETF share price rising, when it hit $14, I sold $16 calls expiring next Friday for $0.34 per share net. That’s on top of the $0.62 and $0.57 per share netted the past 2 weeks on those same shares.


But I also sold some $14 calls on Monday, when the share price was $14 for a $1.19 premium.


The last month’s options cycle was the same.


And the one before that?


The same.


I guess that’s why some people like annuities. They’re so predictable, just like groundhogs.


As an investment, I’d rather not have an annuity, but I don’t mind if my shares throw off predictable options income and start annuitizing themselves.


Now if life really was like portrayed in Groundhog Day, I would certainly banish my lack of nerve that popped up yesterday and I would have sold calls on Sallie Mae and Mosaic.


As it turned out, Sallie Mae gave up most of the gain that it made on Wednesday.


Mosaic on the othre hand went up a bit more, but each day that no new rumors pop up is just another day of lost opportunities to bank some premiums.


But, the one thing I know is that the opportunity will return and I’ll never tire of doing the same thing over and over.


As opposed to the personal hell that Bill Murray found himself in until he found the key to navigating through hell, I feel as if I’m in heaven.


What may be going on is that the market represents the inverse of the Groundhog Day experience.


While everything changes around you, the best way to thrive is to keep doing the same thing.


Inertia is a terrible thing to waste.


 


Hop SIng and Paw Blaze a New PathAmerican Tower ChartMake you Portfolio Work for You!


Invest like TheAcsMan


Option to Profit is available as either an eBook or 300+ paperback. Take a humorous look at a serious topic and learn how to make your portfolio finally go to work for you in bull and bear market environments.


See a sneak preview of Chapter 1.  hoco blogs


More about the book and purchase options. Scroll down and read the Szelhamos Rules blog, updated every weekday.


Find  OTP Book at Amazon, B&N or now you can also Order direct  from publisher. Use 10% Discount Code P4S2ZD8H


 


  








We’re Number One !!



Here’s something that we don’t see very often.


A U.S. city, state capitol, no less, declaring bankruptcy.


That’s almost as unheard of, as say, Athens declaring bankruptcy, except that the buildings in Harrisburg are in a greater date of disrepair.


That decision to do the unthinkable can’t inspire too much confidence in municipal bonds, even though the city comptroller has indicated that they are still current on the General Obligation notes.


The cynic in me believes that the decision to declare bankruptcy isn’t entirely coincidental.


With all of the world’s attention focused on Greece and the EU, we’re starting to feel a bit left out on this side of the pond, and if there’s anything that we need, almost as much as oxygen itself, it’s the spotlight.


I think that Harrisburg is looking toward Florida for its inspiration and wants that Andy Warhol moment in the sun.


We're #1Florida, as well as some other states, is challenging New Hampshire’s hold on being the nation’s first Presidential Primary state.


For some reason, it seems important for a state to be the first, probably because that’s where the big campaign money goes, as serious candidates need to get their toehold early or fall into the abyss.


And that spending blitz isn’t just restricted to media campaigns.


Take for example the tremendous boost just given to the New Hampshire hospitality industry as Mitt Romney, in return for an early endorsement, agreed to provide Governor Chrisite with an unlimited supply of McRIb sandwiches when it is re-introduced onto New Hampshire’s McDonalds’ menus.


FIrst out of the box has its benefits in most every competitive arena.


No doubt that Harrisburg didn’t want Greece or Italy going first. You just know that when that first one goes, the rest will just domino.


Harrisburg simply didn’t want to get left in the dust or ash heap that their $300 million trash incinerator bond had them headed.


Sure, those are quasi-nations within the framework of the European Union, but in an “America FIrst” sense of indignation, Harrisburg did what so many other municipalities around the countyr just didn’t have the nerve to do.


No one strives to be #4.


Besides, how else does a relatively sleepy backwater state capitol get its share of attention and maybe eco-tourism, which is not to be confused with eco-tourism. Instead, think “Keynes to the City” as being an eco-tourists most favorite guided tour through bankrupt Harrisburg.


There’s no special formula or way to predict who will demonstrate the nerve to take on the unknown. It obviously takes a crisp understanding of risk and reward ratios.


I’m sure that every X-Games participant goes through an extensively elaborate algorithm to determine the appropriateness of their next humanly implausible action.


Sometimes “nerve” can be a funny thing.


There was a time that I had the kind of nerve that didn’t mind letting it all ride on a single horse race or spin of the roulette wheel. But during that same period of time, I would break out in tremors at the idea of executing a stock trade on my own, much less look at the paper losses.


But then something happened. I don’t have any clue just what it was, but it all changed.


The entire risk-reward perspective had become turned on its head.


These days, I can’t stomach the idea of losing even a quarter in a slot machine, but am not really moved by a six figure paper loss in a single day.


I’ve been functioning like that for quite a while, but today I seemed to take a step backward.


With the market continuing to climb for no real reason, here it was, mid-week, the time that I usually like to grab some remaining pennies on the table. I was still delighting in the fortuitous timing of Alcoa announcing another set of disappointing numbers only to have the disappointment well cushioned by a continuing euphoric market.


Well done, Klaus.


This time, despite the fact that there were a number of opportunities that I would have normally taken, I found myself selling only Goldman Sachs and Time-Warner calls.


I struggled with the decision to sell calls on Sallie Mae and Mosaic.


I mentioned Mosaic yesterday as it was the target of a potential takeover rumor.


Sallie Mae, on the other hand, has just showed some nice strength going into earnings next week.


Yet, I couldn’t find it within me to make the sales..


I’m rarely undecided, but the “FOMO” hit again.


Fear of missing out. I was worried that I might miss a quick upside move in either and leave a lot on the table.


The other day I read a nice piece by Phil Pearlman, the resident staff psychologist at StockTwits.


His blog title, NetFlix is on Tilt, examined the tendency to overcompensate for stock losses, using a poker players’ analogy.


Admittedly, I know knothing about poker, but I liked his take on “Tilt”.


For me, avoiding fear, greed and envy were always primary requirements for keeping your head above water. I always looked at those as raw human emotions, but “Tilt” didn’t quite fit that category, but it was also worth avoiding. When asked, Pearlman confirmed for me that “Tilt” was not an emotion.


Still, I was left with the feeling that some kind of emotion has to be responsible for causing one to enter “tilt mode”


The tendency to do stupid things in order to erase other stupid actions isn’t an emotion, it’s just part of human DNA.


In my case, I had nothing stupid in my near past that needed to be compensated for, but I felt that if I went on with my usual modus operandi and sold the calls, I was going to be left out of the game. There’s nothing worse than watching that big shiny ball roll down the playing surface and not being able to do anything to get back into play.


I understand that kind of “tilt”, but I also get Pearlman’s kind, as well.


Neither is good for long term survival.


By the time the market closed on Wednesday, half of the index gains were gone, and in hindsight, I should have made the sales.


Is “regret” an emotion? It’s also just another one of our traits, but it is related to envy. Envious of what could have been or just regretful for what never was.


In the meantime, word came across that Slovakia pulled it together and its Parliament endorsed its role in the expansion of the rescue fund.


For another few days, Greece is spared from what everyone believes is the inevitable.


But it doesn’t matter.


Thanks to Harrisburg, American pride is restored.


From a grateful nation, thank you for taking on an unnecessary municipal project, passing the blame onto a previous city administration’s cronyism and faulting pressure applied from the State House for making the ill-fated decision.


Can you say “tilt”?


A real leader would have blamed it on the Greeks.


But at times like this, a grateful nation will take any winner as it own.


Here’s to Harrisburg.


First in our defaults and first in our hearts.


 


Hop SIng and Paw Blaze a New PathAmerican Tower ChartMake you Portfolio Work for You!


Invest like TheAcsMan


Option to Profit is available as either an eBook or 300+ paperback. Take a humorous look at a serious topic and learn how to make your portfolio finally go to work for you in bull and bear market environments.


See a sneak preview of Chapter 1.  hoco blogs


More about the book and purchase options. Scroll down and read the Szelhamos Rules blog, updated every weekday.


Find  OTP Book at Amazon, B&N or now you can also Order direct  from publisher. Use 10% Discount Code P4S2ZD8H


 


  








Do you Know Where Slovakia Is?



 


About 5 years ago Sugar Momma and I, together with our kids were travelling on a sleeper train from Venice to Budapest.


What seemed like every 20 minutes through the night, there was a loud knock on the door of our berth.


Border patrol guards.


The one nice thing that you could say about Marshall Tito, the now long dead ruler of Yugoslavia, is that while he was a live, there really wasn’t need for all of these border guards that came into being after Yugoslavia got split up into its forced component pieces.


I’ll always remember one specific guard who responded to Sugar Momma’s dreary eyed question, “Where are we?”, with the answer, “Slovakia. You’re in Slovakia. Have you ever heard of Slovakia?’.


He didn’t look pleased when she told him that she’d never heard of his country. He then said something in Slovak to his compatriot.


Then he laughed and returned our passports. At least he didn’t point his rifle in our faces.


My wife and I returned to our sleeping car room and she said, “You know, that soldier boy was sort of cute”.


Now before you start getting on my back, I know that Slovakia was never part of Yugoslavia, but for purposes of the above illustration, let’s just assume that it was.


Slovakia Flexes its MusclesFast forward those same 5 years and all of a sudden Slovakia is as big a deal as Malta had been last week.


On Tuesday, all the remained for the Euro rescue to go forward was final approval from the Slovakian Parliament of the plan to expand the Euro Rescue Fund.


Whereas the likes of Malta and others didn’t take the opportunity to flex its muscles, Slovakia jumped at the chance, befitting its role as home to Zdena Nazarejova, winner of numerous Women’s European Bodybuilding and Fitness Championships.


Only in a world defined by the oddities routinely found in the “Twilight Zone” would you have seen a Reuters headline that read “Latin American stocks little changed before Slovak vote”.


As it turned out, today was a very eventful day.


For starters, after the market’s close, word came out that the Slovakian Parliament failed to approve their nation’s participation in the EU fund expansion. As the poorest of all the EU nations, they probably felt they had less to give and besides, they had already gone through years of fiscal resposnibility and austerity just to gain EU entrance.


So while we await formation of a new Slovakian government in the aftermath of this rebuke to its leadership, there was opportunity to see what else was going on in the world.


The fact that there seems to be significant movement on the release of Gilad Shalit, the Israeli soldier held for more than 5 years by Hamas was noteworthy.


Myanmar releasing 3000 political dissidents? Wow.


The arrest of an Iranian-American for conspiring to asasinate the Saudi Ambassador to the US and then bomb the Saudi and Israeli embassies? Get me the screenplay.


Ukraine sentencing its previous Prime Minister to 7 years of prison after having been found guilty of negotiating with Russia over natural gas prices? Same old. Same old.


Herb Greenberg making a triumphant appearance on Jim Cramer’s MadMoney after a much too long absence.


Now that’s newsworthy.


But with all of this going on, all the market was thinking about was the start of earning’s season, as Alcoa was poised to announce after the closing bell.


It was so bizarre to have essentially no trading range through the day.


I did purchase shares of Alcoa on Monday and promptly sold calls. I don’t usually buy shares right before earnings are announced, especially if there’s already been a 20% run-up in price.


But given the fact that Alcoa had been serially projecting earnings downward, my thought was that we should have been prepared for bad news.


Which in fact came after the close.


Did I forget to mention that I also sold some Alcoa weekly puts right before the close?


In the after hours, Alcoa slid to $9.79 after having closed at $10.30.


I also purchased some more shares of Mosaic, using some of the options premium proceeds from the past couple of days.


By the time I logged the purchase into the Portfolio Holdings and Recent Transactions page of the site, Mosaic had jumped up about $2, apparently over some buyout rumors.


I like capital gains as much as the next guy, but I hope the rumors aren’t true. Mosaic has been one of my most reliable stocks in terms of generating great options premiums. At first it was month after month and now, life is even better as its week after week.


I look at Mosaic as my annuity plan. I’d hate to see it disappear from my screen.


But for me, the big news continued to be Greenberg’s return to Mad Money.


At one time as an addicted viewer to Mad Money, my favorite segment was the East vs. West, when Cramer would take on Greenberg via satellite from San Diego. They would discuss their differing opinions on the merits of stocks in the news.


Probably by coincidence, Greenberg’s audio feed would always seem to get abruptly cut off, giving him the next to last word. The look on his face upon realizing that he was silenced was priceless.


What are you going to do?


But what really made this event so special was that my Sugar Momma gave me a special dispensation to watch Cramer’s Mad Money in our family room.


Cramer had been banned many years ago, because she complained that he gave her a headache.


Sigh. The things you’ll give up for love.


But this time she allowed it.


She came back downstairs near the end of the segment and asked who the “other person” was.


“He’s kinda cute. But is he always that hyper?”


After having seen the movie “Contagion” a few weeks ago, I would have thought she would have realized that this was more a case of environment exerting its predominance


For some reason her question reminded me again of the Slovak border guard incident, but at least Greenberg was neither there to hear the comments, and as far as I know, he doesn’t carry a rifle.


But in the event that he does, I won’t comment about what appeared to be matching shirts.


Muted Plum, I think.


That’s a color that never would have existed in Tito’s Yugoslavia or in any of the former Soviet satellites, but it’s an entirely new world.


To welcome in that world, I’m going to see if I can get away with catching tomorrow’s Mad Money episode.


If I get a rifle pointed to my face, I’ll know that my Parliamentary body has chosen to flex her muscles.


 


Hop SIng and Paw Blaze a New PathAmerican Tower ChartMake you Portfolio Work for You!


Invest like TheAcsMan


Option to Profit is available as either an eBook or 300+ paperback. Take a humorous look at a serious topic and learn how to make your portfolio finally go to work for you in bull and bear market environments.


See a sneak preview of Chapter 1.  hoco blogs


More about the book and purchase options. Scroll down and read the Szelhamos Rules blog, updated every weekday.


Find  OTP Book at Amazon, B&N or now you can also Order direct  from publisher. Use 10% Discount Code P4S2ZD8H


 


  








Really? The Recession is Over

What’s in the Szelhamos Portfolio?








RealityReality and reality don’t always coincide


The official word came out that the recesssion was over.


Unfortunately, as incomes were also reported to still be falling and the unemployment picture is only as good as the next revision, it’s hard to rejoice at that reality.


Especially when wages are now lower than when the recession began.


I’m certainly not one to argue with the proclamation, but since the recession was reported to have ended in June 2009, you’d think that enough time would have passed for some tangible obvious improvements.


Although I’m, not one to argue, by far those that posted comments on the New York Times report, took exception to the reality as reported. Although aomw of the recommendations may have shown an equally questionable understanding of reality.


Of course, talk of a “triple dip in housing” can’t be what recoveries are made of, but that’s the latest fear, which should be taken seriously if you believe in the reality that housing drives the economy.


Reality does sometimes have a way of catching up to the real reality.


Take the Occupy Wall Street situation.


No doubt that its been spreading, growing and gaining steam. It’s even being exported to other cities and college campuses, despite the fact that no one has actually reported on the aims and objectives of the original Occupy Wall Street group, much less the spin-offs.


But that’s changing. Today, camera crews were actually beginning to show up, demonstrating that media outlets are perceiving the reality of the situation, although maybe it’s just a slow news day, what with the Kardashians keeping a low profile, as they prepare for the upcoming Jewish harvest holiday of Sukkoth.


As if Jews didn’t have enough problems.


Fortunately, those problems don’t include the Kardashians.


Since I only watch CNBC and don’t have a Daily Show kind of staff to scour all the networks and cable stations, I can only comment on CNBC coverage.


And today, there was some. They were right there.


Despite the perceived reality that the Occupy Wall Street protestors were a collection of society’s professional laggards, John Carney reported otherwise.


In fact, they seem to be pretty mundane, having even organized into committees to establish standards of protest behavior. Doctors, lawyers and college graduates will generally do those things that reek of structure.


They even are reported to have a drug usage policy, and rather than being “use as much as you can, dude”, the policy is that there should be no drug use.


Advil is reportedly acceptable and there may be other exclusions for certain extraordinary circumstances, like needing a buzz.


That doesn’t really support the dirty hippy characterization, neither reeking in a literal nor figurative sense.


While there’s probably enough detestable behavior to go around, maybe much of it even emanating from Wall Street, pointing out the obvious may not bring us closer to a meaingful soluion, especially if the obvious is not the root problem at hand.


The reality is that the Federal Reserve’s mandate to keep interest rates low can only continue as long as wages stay low and discretionary spending is curtailed. Since their dual mandate also includes keeping employment high, at the moment that can only be accomplished by keeping the cost of employment low.


Remember “supply and demand”? What better way to bring unemployment down than by being able to pay the same total dolars but for more employees?


There’s lots of political pressure to go to a single mandate, although others would just as soon get rid of the Federal Reserve altogether and have you eat your gold reserves in the event of residing for extrended periods in your nuclear fallout shelter.


That solution probably isn’t very realistic.


The European Central Bank, on the other hand, has only the single mandate, that of maintaining price stability. But there too pressure is mounting to ease up on that mandate in order to get an employment surge.


Obviously, despite what the protestors believe, it’s not easy being a banker.


European bankers must especially be wondering “what’s next?”. The market was buoyed today by some rumor of a secret plan concocted by Merkel and Sarkozy that will make everything alright.


Actually, there’s not yet a plan. Instead, there’s a commitment by them to come up with a plan. This comes on the heels of the market moving news last week that the EU fiscal crisis was going to be taken seriously.


Small steps, but over-sized responses.


Sarkozy, being the chief proponent of politicizing the ECB in order to bring more full employment is the reality. But so too is Merkel, since she’s got the money, but maybe not the political will nor backing of her fellow Germans, much less the Slovaks and Maltese, who really have little at stake.


The fact that they have little at stake is reality, as well as the reality that they can throw a wrench into the works every bit as easily as Germany or France.


Greece could as well, but that would require some effort.


So that’s not going to become a reality because of the reality.


Whether today’s market move was a reality borne of a dream or not didn’t really matter to me. Although I watched my assigned shares of Halliburton, Freeport McMoRan and QQQ head even higher today, I didn’t mind, especially since I still owned more Halliburton and Freeport McMoRan shares.


As usual, despite knowing that entering the market to pick up shares whenthe market is already up 200 points isn’t a long term winning strategy, I was flush with cash and had to do something.


So I added to positions in Mosaic, ProShares UltraShort Silver ETF, Morgan Stanley and JP Morgan. I also picked up shares of Alcoa, despite the fact that it’s just moved up about 25% and reports earnings after Tuesday’s close, kicking off yet another earning’s season.


While the market stayed up, I sold calls on all of those, as well as Halliburton and British Petroleum, while I looked for more upside on the likes of DuPont, Rio Tinto, Transocean and some others, that I don’t yet have hedged.


The reality is that despite a nice week, the past few weeks had been brutal. Despite what looks like good news at the end of the day and despite the very nice month’s worth of options premiums, the bottom line hasn’t been terribly good.


Sort of like what most of the nation seems to be going through, as long as you believe that 99% represents a majority of the nation.


So is the recession actually over?


As a famous past President once said, “it depends on what your meaning of the word ‘is’ is”.


The term “jobless revcovery” is time worn, but that’s what it looks like we’re seeing.


The people that those occupying Wall Street are presumably protesting against try to paint a different reality.


They claim that they can’t find people to fill their jobs. They claim that people would rather collect unemployment for an extended period of time than go to work.


That reality may apply to some people, since just about every situation applies to someone. Who knows, Chaz Bono may win this season’s Dancing with the Stars.


Hard to imagine that could be reality, but it could.


For all I know, today’s reality was second guessed by those citing the semi-holiday feeling to the day, since there was no bond trading, in commemoration of Columbus Day.


You remember Columbus Day, don’t you? That’s a day that we commemorate something other than the reality of Columbus.


Suspending belief is sometimes a useful tool. It’s worked pretty well for Columbus and it can work for us, as well.


So, yes, the recession is over. There are jobs galore and throngs are gathering on Wall Street to demonstrate the overwhelming gratitude of 99% of the nation to those who actively seek a greater tax burden.


Reality is awesome.


 


 


Hop SIng and Paw Blaze a New PathAmerican Tower ChartMake you Portfolio Work for You!


Invest like TheAcsMan


Option to Profit is available as either an eBook or 300+ paperback. Take a humorous look at a serious topic and learn how to make your portfolio finally go to work for you in bull and bear market environments.


See a sneak preview of Chapter 1.  hoco blogs


More about the book and purchase options. Scroll down and read the Szelhamos Rules blog, updated every weekday.


Find  OTP Book at Amazon, B&N or now you can also Order direct  from publisher. Use 10% Discount Code P4S2ZD8H


 


  








Show me the Numbers

What’s in the TheAcsMan Portfolio?








 


Other than  my family the two things that I love most are numbers and comedy.


I like fried food, too, but now I’m not allowed to eat them, because my numbers are too high.


Sort of ironic. Those numbers I hate.


With so much debate going on about the concentration of wealth in our nation and the unfairness of the tax code, I’m somewhat perplexed that the beautiful objectivity of numbers could be so bastardized.


Living near Washington, DC, I truly understand the beauty of “spin”, but how do you spin a number itself?


Whereas many accept the Bible as the ultimate truth, believing the same about numbers doesn’t violate the first commandment and isn’t really counter to our western belief in monotheism.


In fact, the concept of monotheism couldn’t exist without numbers.


Well, at least one number.


Abbott and CostelloThere’s probably no valid reason for me, however, to have such faith in the sanctity of numbers. I should be cynical based on an old Abbott and Costello routine from a few generations ago.


Costello clearly demonstrated that 13 times 7 equalled 28. He also proved that 28 divided by 7 equalled 13.


And for the perfect trifecta (or Troika, as that’s become a popular word in the world of European Finance) 13+13+13+13+13+13+13 = 28


The Gospel of Comedy may trump all other truths.


These days, the numbers are sliced and diced by all sides to demonstrate points about inequities.


Amazing how one side feels that the disenfranchised are being unduly carrying a tax burden, while the other side believes that the disenfranchised are represented by those people that would be effected by the “Buffett Rule”.


“50% of Americans don’t pay taxes”


“The top 1% of earners carry a greater tax burden than ever before”


Both of those sound patently unfair. And there’s no shortage of other factoids being tossed around. Refute one and you’ll be answered with another factoid. Refute that, and so on.


It was 1982 and I was very fortunate when I first started investing, in that the market was beginning to wake uo from a long slumber. Although after what had been referred to as this generation’s “lost decade” in investing, I guess the best investment would have been a 30 year Treasury at 17% back in the late 70’s, or those great MAC bonds that helped rescue New York CIty after Gerald Ford seemed disinclined to help.


See, that’s the beauty of words.


Ford was portrayed as having told New York to “Go to Hell” in the city’s newspapers. That’s spin.


To borrow and butcher Tom Hanks’ line from a Leagiue of their Own”, “There’s no spinning in numbers.”


By the way, there is one other thing that I love, although it’s more of an addiction.


I love anagrams.


Back in 1982 the concept of trickle down economics was widely introduced by Ronald Reagan. You know him, he’s the guy that both sides embrace with a big, wet hug.


The concept sounded great. After all, the wealthy were the benefactors of society. Of course they would take their increased wealth and shower it down upon the masses.


Well, my love of anagrams always led me to the words “age, rage and anger”, whenever I looked at the word “Reagan”.


Of course that just reflects a person who at the time was still young enough to not fall under an earlier generation’s warning to not trust anyone over 30.


There I was in Public Health School, learning all about maldistribution iand inequities, yet I was also a investment class wannabe with a growing fascination with the stock market.


What amazes me is that no one has decided to look at the supposed inequity in a systematic way, by looking at changes at the margins, let’s say, compared to 1980, which ended by ushering in the Reagan era.


My guess is that it actually has already been done, but that without a sexy sound bite, good luck getting popular traction.


Funny thing, but it has already been done by the Congressional Business Office. The non-partisan CBO.


Back in 1980, the top 1% of the population received 9.8% of all income. By 2005, it was up to 18.1% or an 85% increase.


But when it comes to tax paid, the top 1%, and that included me, rose from 15.4 to 27.6%, or a rise of 79%.


In other words, the same tax code that allows most senior citizens on social security to not pay federal income taxes has also significantly trickled up benefits to that top 1%. They made much more money, yet paid much less taxes.


Of course, then the next debate falls to the source of those earnings, specifically capital gains versus earned income.


I also love charity.


But in my case, it’s donating to charity. In that regard, I really have a hard time understanding why the $100 that I donate only really costs me about $60 after considering tax deductions, while Warren Buffet’s secretary ends up being charged $85 for that same contribution.


But that’s another blog. Maybe in that blog I’ll look at the same comparative numbers since 2000. In which case the differences aren’t quite as pronounced. I guess that’s one way of getting the numbers to do what you want.


In the meantime, the numbers treated me well last week, as it hopefully did for most others.


In addition to the nice paper gains, again I sold a number of call options during the last 48 hours.


In fact, I sold such weekly options on 22% of my portfolio and received an additional 0.68% return in premiums on that portion of the portfolio. Those numbers felt good and Ill be happily paying my captal gains taxes on those.


I’ll be losing some of my Halliburton and Freeport McMoRan shares, but may find myself buying them right back, if the price is right.


In that case, the numbers are truly subject to interpretation. Some of those Freeport shares were assigned, resulting in a capital loss on shares.


So it’s off to Quicken to see whether there’s any value in taking a tax loss on those shares or just buying them back within that 30 day period and forgoing the loss in an effort to create new options income and maybe capital gains.


Wash rule be damned. You don’t own me. Sometimes it’s just worth giving up the advantage of the loss that the tax code gives. The code giveth and the code taketh.


Sigh. Rich people’s problems.


A Europe exercises increasing dysfunction, on this side of the pond we look better and better by comparison, but their dysfunction just compounds our Rich People’s Problems.


At the Finance Minister’s recent meeting in Poland, that weren’t very hospitable to TIm Geithner and weren’t very receptive to the advice that he was willing to share, that was borne out of experience.


If they’re not willing to listen to Geithner, I think that I have a suggestion that should be acceptable to all parties, even Malta and Slovakia


Maybe those European Finance Ministers should all just take a math lesson from Abbott and Costello.


 


  


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