Remembering Mark Haines

 

Does anyone really like a curmudgeon?

Mark Haines SzelhamosApparently so, because the truth about a deep down “softie” came out yesterday in the aftermath of the sudden passing of Mark Haines. We got a glimpse of that part barely 2 weeks ago when Mark Haines bid farewell to his broadcast partner, Erin Burnet.

The difficult task of making the on air announcement fell to Carl Quintinilla, who was choking back tears as we all sat stunned at the news. Newsmen don’t usually do that sort of thing. They’re stoic, unbiased and without on-air passion.

To break through that facade there has to be a very deep and personal connection.

CNBC did a wonderful impromptu job in remembrance of a bigger than life on air personality in the world of business news. Uncharacteristically, they recognized the continued existence of some past on-air personalities, such as Ted David and Liz Claman, by passing on their words of condolence.

These days, I rarely watch CNBC after 6:59 PM, but tonight had to be different. Last night, their 7 PM show, remembering the life and work of Mark Haines was truly in the spirit of NBC’s past, “Must see TV”.

As an inveterate and addicted CNBC viewer, I used to start off my mornings with Mark Haines, Joe Kernen and David Faber.

I was disappointed when that entertaining trio was split up, but came to realize that Haines could entertain on his own.

He entertained by being unlike anyone else on air. He didn’t fawn over self-anointed experts or personalities du-jour. He asked probing questions and had very expressive body language, never seeking to mask his real thoughts.

Everyone is remembering a classic interview with Barney Frank. In fact, it was ironic that Bill Griffeth, such a genuinely nice man, was called upon to interview Barney Frank this afternoon.

Can you take a guess what kind of mood Frank was in when even slightly pressed?

As a liberal Democrat, I typically agree with Frank’s positions on issues, but I just can’t stomach his personna and pomposity. Although power hasn’t corrupted Frank professionally, it certainly has done so on a personal level.

Who would ever think that two seemingly disparate people like Mark Haines and Stephen Colbert could be joined together in a non-partisan demonstration of just how pompous Frank really was?

Mark Haines and Stephen Colbert? One was precisely what you saw on air, the other a comedic parody, but with similar aim and goals.

Except that while Colbert goes for “truthiness”, Haines went for “truth”

The man was never fazed, although sometimes he would lean back in that chair with a characteristic look of disbelief.

“Did that guy really say I what I think he said and with a straight face?”

Mark Haines obviously respected the intelligence of his viewers and the truth.

When was the last time you could say that about anyone on TV, where the superficiality is so overwhelming? In a “me me me” generation and industry, Haines stood out.

Definitely nothing superficial about him.

And yet, as I mentioned in yesterday’s blog, in obviously an unrelated post, the world goes on.

Yesterday my son left for Army basic training. I couldn’t hold back the tears any longer once my wife and I got back into the car. I did handle myself better when I had to make a late night run to his Army supplied hotel room to drop off his Blackberry recharger. It was like a bonus round for me.

This morning, when the news came, I had no tears, yet still a surprisingly overwhelming feeling of loss. The kind you have when you know there will be no bonus round.

Maybe it was the kinship over the New York Mets, maybe harness racing, maybe bringing Barney Frank down a peg or seven.

Whatever it was, he will be missed by so many. For me, it means that more of my TV watching will now become background noise. It never was when Mark Haines was on air.

I remember that when Szelhamos passed away, I was so grateful that my own children had gotten the great gift of knowing him.

Both of my sons are interested in investing, the oldest just having made his first entry into the markets last week. Neither are at the CNBC stage of their lives though and neither will see the likes of Mark Haines again.

Eveyone needs someone to be brutally honest with them and open their eyes. Haines did that every day. Reminds me of the scene in Moonstruck when Cher slaps Nicholas Cage in the face and says “Snap out of it”. Except that instead of being a single scene, it was day in and day occurrence

When Mark arrives at the pearly gates, I would love to see his take and the questions he slings at St. Peter.

If anyone can get to the bottom of what awaits us, it’ll be Mark Haines.

 

POSTSCRIPT: During an invited visit to CNBC in November 2011, I had an opportunity to see the sincere reverence with which Mark Haines was held by long time employees. What you see on the air, whenever his name is mentioned is the real thing.

 

 




POSTSCRIPT May 24, 2012: On the one year anniversary of Mark Haines’ passing, CNBC commemorated his memory, including showing his portrait that hangs in the New York Stock Exchange. On this day, coincidentally it was once again time to send my son for the next phase of his Army “Advanced Individual Training.” This time, a year later there were no tears. Time changes so many things. AS in the case of remembering Mark Haines, the on-air reflections evolved, but were no less touching. A year later, Mark Haines is still missed by many

 

 


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Billie Jo McAllister and AIG Haunt Me

I was at the grocery store last week. I do that much more often these days, as I feel that’s the least I can do to show my thanks to my Sugar Momma. I’m usually prowling the aisles at about 4:18 or so, giving myself a couple of leisure minutes to leave home after the closing bell.


My wife still ridicules me, because I call it “Grocery Store” and not “Supermarket” or “The Market”. I also refer to our local grocery bohemoth, Giant, as “Grand Union”, a defunct chain that we left behind in New York nearly 20 years ago.


To her discredit, she refers to TV stations as “numbers”, as in “let’s see what on the numbers”. She also derides my reference to single family detached homes as “private houses”.


So whose side are you going to take?


But I grew up in a time when grocery stores didn’t have parking lots, nor product selection. Every woman pulling one of their personal folding shopping carriages looked like an old lady, regardless of actual age.


Now, everyone drives and those carriages aren’t even allowed in the grocery store, and you don’t have to be wealthy to live in a single family detached house.


But while mindlessly shopping last week and dutifully crossing off the items on my carefully crafted list, the ersatz overhead music was a familiar tune that I hadn’t heard in years.


Ode to Billie JoeRemember Bobbie Genrty? The big haired Country and Western singer who had a crossover song that made her, I think, a one hit wonder. That song was with “Ode to Billie Joe”, the sad song about teenage suicide and a hidden secret.


“Was the third of June, another sleepy dusty delta day…”. Does that ring a bell?


Well, I haven’t been able to get that song out of my head for the last week. Humming it, singing it and whistling all through the day, until I hear the expression “Stop, you’re giving me a headache”.


 


Today was another one of those sleepy dusty delta days in the market. It was unnecessarily hot, humid and boring. As far as delta goes, unlike other wizened options traders, I don’t believe in The Greeks.


The tease of some early upside was just that. A tease. As many other days in the past two weeks the optimism evaporated. Almost made you want to do something rash, but fortunately, I’m restricted to the basement and the windows have been filled in with cinder blocks.


Yesterday I was pretty excited about the opportunity to pick up additional shares of Textron, S&P SPDR, BP, Williams-Sonoma and some others that escape me right now, in anticipation of quickly sellng some weekly call options.


But the market just seemed to want to do nothing but jump off that Tallahatchee Bridge.


And you want to know what’s happened to my appetite?


To do so, you’ll just have to download the lyrics.


Truth is, I wasn’t fully into the markets today anyway.


For today was the day my youngest son was heading out to Army basic training.


On my side of the family, he’s first generation American. We have no military history in my own family. We were the people typically rounded up by soldiers, so it’s a very foreign concept for me.


There were lots of little things that needed to be done today that took precedence over the markets. As it was, I was still sore from moving him out of his off campus apartment and was dealing with themuscle spasms from working that carpet cleaner machine over one of the filthiest carpets I’d seen since my own student days.


Even though I know that I can easily enter my order criterion and have them executed without my presence, I like the thrill of pushing the button and the anticipation of watching the trade get completed. So not too much got done.


Today, I did make some early call sales in those SPDR’s and Freeport, but the others that I was hoping would materialize, never did, as the market was unable to survive that leap.


There was also that overhang of where the AIG re-IPO would price. WIth the government’s break-even point set near $28.60, it seemed likely that the whisper number was going to be $29. Why people slowly worked the closing share price to $29.60 is as unclear as the nature of the object Billie Joe and his girlfriend threw off the bridge before his fateful plunge.


What was also unclear was why I didn’t sell an AIG weekly call on Monday, when AIG was above $30, particularly when talk of a $29 price was already making the rounds.


Or maybe the fact that I didn’t just sell my AIG position outright haunts me, as AIG has opened the morning at about $28.30


What really haunts me is that I ignored the warning signs. WHy in the world would E*Trade be a co-manager of this issue? Maybe because no one other than a sucker would want to buy it?


Yopu certainly wouldn’t pick up shares to ingratiate yourself with E*Trade for a shot at their next “big IPO”.


I’m not even certain why I care so much about AIG. It represents only a small portion of my portfolio, but it haunts me and my 0.0023% of the current outstanding AIG float every bit as much as much as Billie Joe’s plunge haunted that nice young preacher, Brother Taylor.


But as opposed to the predictably melancholy outcome of a Country and Western song, tomorrow is another day. AIG may haunt me now, but could just as easily profess itself to me.


Either way, the Ode of AIG will someday come to its conclusion. These things always do. Yet, Billie Joe McAllister still remains a complete mystery and will for all time.


Life still goes on. Even though Papa caught a virus that was going ’round and died last Spring, and Momma (not my Sugar Mommma) doesn’t seem to want to do much of anything, it’s got to be different for us.


I hugged my child yesterday as we dropped him off at the hotel right outside the base from which they will be leaving tomorrow at about 4 AM. I know that he will be a very different person the next time I see him.


As it turned out, I saw him 2 hours later, as he called to say that he left his phone charger at the house.


Not so different. Maybe a little taller.


So tomorrow is back to normal, I’ll be carefully watching how the Ode to AIG works out and will try extra hard to squeeze some income out of these ridiculously priced stocks.


Billie Joe is lucky he never had these kind of problems.

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Why Insider Trading is a Victimless Crime

 

Many years ago, I was still in high school, I was preparing to make a U-Turn on what was ordinarily a very busy street in The Bronx.

U TurnI’d made that turn many times in the past and I knew to really check in both directions before I crossed over the 2 sets of double yellow lines. Back then, I actually cared what else was on the road.

Then, as always, when I sensed the “all clear” I made my turn.

  

That time, was just like all the preceding times, successful.

As I settled into waiting at the curb to pick up my father, I heard an unexpected rapping on my driver’s window.

Startled, I looked up and there was a beat cop, back in the days when there were lots of foot patrol policemen.

I rolled down my window already shaking in my flip-flops.

The policeman looked at me and said “It’s not so bad that you made an illegal turn, but what’s bad is that you made it in front of me. Don’t ever do that again”.

With that, he let me go. Never even asked for my license or registration.

That incident colored my outlook on crime for life.

Well, that and Watergate, a concurrent event.

Fast forward 40 years and crime is all around. The particular crime that interests me is insider trading and it is once again a hot topic, as it has been in the past and will assuredly be in the future.

With the conviction of Raj Rajaratnam a couple of weeks ago, there was a flurry of weight jokes and lots of sanctimonious talking heads railing against the evils of insider trading. Sort of like Newt Gingrich tearing Bill Clinton a new one over some marital issues.

The more cynical that I become, the more I believe that catching a big gain in an individual stock is either due to blind luck or inside information, but I’m not upset at the likely prospects of the latter.

Theoretically, we all have access to the same kind of sophisticated data. We can all get our hands on different analytical tools. It’s not as if you have to go to the public library and tear out a page from the huge Value Line binder or find yourself in the position that someone else beat you to it.

Those days are gone. Every bit of information can be found somewhere and crunched on a laptop that doesn’t need to cost more than $300.

Egalitarian? You bet.

The problem, if any, is that there is a data overload, similar to what intelligence services now deal with, as so many streams of data come in, yet there aren’t enough resources to analyze the streams.

And with access to all of that data, as well as teams of research analysts toiling away in the background, we’ve all seen the equally qualified high profile technical analysts look at the same data and come up with diametrically opposing recommendations.

I know the old expression, in that’s what it takes to be a market. Basically some one has to be right and someone has to be wrong.

So consistently doing well in the market can’t be due to a sustainable intellectual process.

Dumb luck is another reasonable answer, but how random is that? Totally. That’s why it’s called luck and to believe that performance is due to luck is itself dumb.

So the only remaining alternative that can explain consistently good trading results in the markets is insider information and trading on that information.

At this moment, it’s not necessary to say that Raj allegedly had insider information. He had it. Despite what Newt says, you really do need to believe the video.

The difference is that while he had it, we wanted it.

And why didn’t we have the kind of information that Rajaratnam had?

Well, look no further than the tip of your own nose.

There’s no reason why any of us should complain about not having such information. We are each our own limiting factor.

Why could I not have gone on a path in life that would have taken me to those kinds of inner sancta? Why did I not become and then stay friends with high school classmate David Viniar who went on to become CFO at Goldman Sachs?

No one ever denied me those opportunities, I just never tried to take them. Could I have wined and dined those with the kind of knowledge that I might have found useful?

Of course I could. No one ever denied me that opportunity.

The essence of insider trading is that you had access to information that was not available to the general investing public. But really, whose fault is that? All it takes is the initiative to develop a circle of friends, confidantes and business partners. Anyone can get access to potentially helpful information.

Of course, the second part of the “crime” is that you acted on that information. Presumably if you made a profit as a result, you just might be the kind of guy that the SEC and Department of Justice may want to prosecute.

But who gets hurt when profits are made after trading on information that was never denied to anyone with the initiative to dig it out from among the avalanche of data?

No one.

And that’s because there was bound to be a loser anyway on the transaction. If anything, the Rajaratnam series of events indicates that what is so called “insider information” doesn’t even necessarily lead to profits.

Of course, I understand the concept of stacking the deck and how that may be inherently wrong. But the reality is that there is potentially an infinite number of such insider bits of data on any number of stocks occuring as a continuum.

People are always winning and people are always losing, regardless of their intellect and regardless of their connections.

While I may not have a choice in the degree of my intellect, I do have a choice in the development of the inter-personal connections that may add critical data points to the equation.

Rajaratnam hurt no one, just as a policeman recognized years ago that I had hurt no one by making that turn. 

Which brings me back to yet another victimless crime on that very same street in the Bronx.

You guessed it, I made another U Turn, once again pulling my car to the curb to wait and pick up my father.

Is it a crime if no one sees it occur?

No police in sight, since it was about midnight or so. As I waited for my father, I leaned over to unlock the door, at precisely the time that a very buxomy lady of the evening was walking by. She apparantly thought that I was summoning her for some sort of service. She opened the car door, sat inside and started talking.

The words escape me now.

I was stunned. And then I saw my father coming out the door, I was really at a loss for words. He peered into the car and saw a strange enough sight, for him to give me one of his patented fist shakes that meant “you son of a gun” and he proceeded to walk to the corner to catch the bus instead of interfering with my plans for the evening.

I’m glad that officer wasn’t there that night, although I think he would have given me the same fist shake and a wink.

As he should have.

 

 

TheAcsMan is now dealing dirty money at OptionToProfit.com

  

 

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Is Twitter a Life Changer?

At the strong recommendation of my son, I opened a Twitter account about 3 weeks ago.

I wasn’t certain why I would do that. After all, I was very happy sitting at home, watching TV and trading stocks and options.

Occasionally, I’d actually work someplace in my professional capacity, but those occasions were becoming more and more rare.

HeroinBut being unable to access the Methadone that my body so desperately needed, I’d become addicted to Twitter faster than I could tie a tourniquet.

It had all started innocently enough. My son told me that Twitter would be an additional great way to get word out that I had published a new book.

The first thrill didn’t come right away, but delayed gratification, like that in finding a $20 bill in the pocket of pants you haven’t worn for a year is especially sweet.

In this case, on the very first day after Tweeting, I had a significant, maybe coincidental uptick in online sales.

So curiousity and the need to try just once more took over rational thought.

The goal, and it quickly has taken over my life, was to get followers. People who would drink the Kool-Ade, but pay for the book, before they swallowed the deadly elixir.

More was better, and definitely the Tweeting fed on itself.

As opposed to Facebook, where I had an account, but proudly paraded the fact that I had no friends, this was completely different. I was able to withstand all of the insidious Facebook tentacles. I was strong and resolute, never letting it get hold of me. But this Twitter thing, it really was just different.

I was so busy reading, Tweeting, replying and retweeting, that I barely even noticed the nosedives that some of my favorites stocks were taking day in and out.

I wasn’t accustomed to seeing my holdings underperform, but this was a perfect storm of bad performance from the likes of Goldman Sachs, Freeport McMoran, Mosaic, Rio Tinto and Williams Sonoma.

Thank God I had my Twitter. I just kept fiddling with Twitter while my stocks burned.

Twitter has to be the most egalitarian place in the world. It’s amazing the varied social strata that have had an opportunity to throw their 140 letters at me.

More importantly, they got a share of my 140 spaces worth of wisdom.

As you age, and I have, you definitely become a creature of habit, but this new venture was more than enticing.

I already had an addictive personality and this took hold of me quickly.

Together with that addictive personality comes the realization that as you get older, you also get stuck in your ways, just another form of addiction. The addiction to not changing

My habits were CNBC and Comedy Central, albeit, I try to catch Brian Williams each night, while silently mourning the absence of Brokaw.

I have a number of favorite personalities on CNBC, as well as a number that have left.

My only real problem with CNBC was their unwillingness to have either Joe Kernan change the spelling of his name to “Quernan”, so that he and his cohorts, Becky Quick and Carl Quintinilla could be referred to as QQQ. Besides, how stock market friendly is that acronym?

I realized that was much easier than having Kernen, Kwick and Kuintinilla. I think that acronym was already taken.

Other than that, a few loud on air personalities were just background noise, with the exception of Kudlow, who always conjured up thoughts of “Shrill, baby, Shrill, whenever he came on air.

But still, I was a devoted watcher. Kernen, Greenberg, Griffeth and Pisani were all comforting and credible voices. For some reason, to me, Jim Cramer was also a voice of calm.

Go figure.

What I was unprepared for was the series of events that got me to watch a segment of FOX Business.

The Twitter stream got me to watch a Dennis Kneale piece on the controversy regarding a proposed Disney trademark on Navy SEALS.

That short segment, and my basic laziness, since my remote control person only works 6 days a week, had me staying tuned to FOX.

And then I got upset.

Why didn’t CNBC tell me that Liz Claman was still alive? And what had they done with Ted David. 

As I stayed tuned, among the first things I noticed was that FOX actually had an anchor of color. There was more than red, green and paleface. As it turned out, though, he was only a guest, but I appreciated the gesture.

My first dilemma was at 3 PM. Claman versus Griffeth.

I feel so dirty. I stayed with FOX.

But that was nothing. I was soon to go on the high of a lifetime and then crash harder than this fragile frame could possibly withstand.

With all of the jokes about Saturday’s impending rapture, at about midnight, while I was watching the Letterman show, I decided to check my “Klout” score.

For those of you that don’t know Klout, it’s just another one of those derivitive Twitter entities. This one purportedly measures how important you are in the Twitersphere.

Using 4 basic measurements, ultimately your “Klout Style” is found in one of 16 squares in the 4×4 grid.

The ultimate place is in the upper right corner, Box #16. That makes you a “Celebrity. You know, people like Ashton Hutcher, Daniel Tosh and Charlie Sheen.

And then you had me. A Twitter newbie, I had after 3 weeks made it to “specialist”, in the #3 Box.

But at mid-night, it became clear that I was one of the remaining souls on Earth, not having joined my more deserving brethren in The Rapture.

How did I know that? All of a sudden, I was a “Celebrity”.

There I was in the #16 grid, with ny thumbnail surrounded by Jim Cramer, Larry Kudlow and my own son. Non-Rapture worthy, all of us, to be sure.

That Klout algorithm was incredible. Someehow it had already accounted for all of those previous Twitter users that had gone on to their great reward in the Heavens.

But rather than being saddened at being left behind, I just had my addiction reinforced. I wanted more. More Tweets, more retweets. I wanted to get to that non-existent #17.

My life had changed. I had followers, I had Klout.

But then the jokes on Twitter about the Rapture ended.

Was it because those left behind were saddened to be so, or was it something else.

No matter, I was a “Celebrity” basking in Twitter glory.

I was even thinking of IPO’ing my Box #16.

But then came the fall. It was brutal.

No Rapture Everyone right where they always were, and sure enough, I was a “Specialist” once again.

I don’t know if Cramer and Kudlow took their demotions as hard as I took mine, but then again, they didn’t fall as far and as hard as I would.

In the blink of an eye, I’d seen the Twiiter Klout heavens and then ate the dirt in its depths.

My poor son fell evcen further, but he’s an adult and on his own.

Yes, my life has changed. I want back at the top. I don’t care whether it takes CNBC, Fox or Bloomberg, but I’m getting there.

 

 

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Is LinkedIn the new Boston Chicken?

Amazingly, there were no big non-business stories yesterday to divert our attention while the broad markets were gently eroding in the background, as they had done the past week.


Forget about the cosmetically insignificant increases every now and then, those were really illusory. But we’ve been so occupied with the shock and awe of the stories that have unfolded over the last two weeks that we haven’t really even noticed the slow meltdown.


At least the stories were more entertaining than substantive. I’m at the stage that I really don’t want to process the meaning of real impactful kind of news anymore.


For one, I’m happy to see this month’s option cycle come to an end today. I’m excited to start over again on Monday. I did get to sell some more British Petroleum options that expire today, but at a return of less than 0.5%. Normally, at higher volatility times, it would have been 1% for a single day right near the strike price.


Even though my options related income was about 2.8% for the month, my shares underperformed the overall market, thanks to Goldman Sachs, Hewlett Packard, Freeport McMoran, Rio Tinto and Mosaic.


Before you say in that sarcastic tone of yours, “Hey, that’s picking them, Sparky”, or something hurtful like, “You want me to buy your book on successful stock trading, why?”,  just remember that not too surprisingly, those were the very same companies that propelled the numbers forward the previous month.


But here we are. Bin Laden is out of mind, at least until he floats down the Mississippi, Strauss-Kahn is behind bars until sometime this morning and Rajaratnam is prepping for the Nathan’s Hot Dog Eating Contest.


So yesterday’s lone big story was the very successful IPO launch of LinkedIn.


Imagine that.


I have no clue what LinkedIn actually does, although I do have an account. By the same token, I’ve had a Facebook account for years, but no friends.


If you knew me, you’d understand.


By all accounts, none of the talking heads I heard yesterday on CNBC and my new friend, Fox Business, seemed to really understand what LinkedIn actually did.


But you can’t sneeze at 100 million users, although who knows how many of them are like me?


No, I don’t mean an unemployed consultant. I mean someone who has no clue what LinkedIn does and is not likely to spring for any “premium services”.


Before I even consider bad-mouthing LinkedIn, as full disclosure, I own the domain ChainedIn.com which is in its early stages, looking for angel investors. ChainedIn is a social media network for white collar criminals who someday will be seeking to re-enter the workplace.


Have you noticed that there seem to be more and more of those kind of guys each day? as a derivitive play, I suggest companies that manufacture security video equipment.


But with an original $33 IPO price, jacked up to $45 last night, LinkedIn opened at $83 and went north of $100, finally settling at $93 or so. Since I didn’t have any shares, I didn’t really feel compelled to come up with the actual price at the closing bell.


Given that more than 3 times the float exchanged hands yesterday, there’s probably a pretty strong base at $85. Not bad, and that should give it price stability for a while, or at least until it’s realized that there’s no real revenue coming from people like me.


Options on LinkedIn will start trading on May 27th, so it will be intersting to see what kind of reward opportunities there’ll be in those premiums.


As the price gapped upward the skeptics asked whether this was the sure sign that the bubble was upon us. Other asked if LinkedIn was yesterday’s Netscape, having had a similarly spectacular debut.


But how quickly the market forgets about the Netscapes of the world.


Boston ChickenMind you, if you look closely at trading patterns, the market doesn’t even remember news from 10 minutes ago, much less the IPO of Boston Chicken in 1993.


Boston Chicken, a decidedly non high tech stock climbed 143% that first day. That put LinkedIn to shame.


And then it Netscaped.


Ultimately, McDonald’s bought it, renamed it Boston Market and now their menus are too complicated for people like me to casually wander in and get something to eat.


Boston Chicken, in fact, has been so thoroughly cleansed from our existence, that not even the all powerful Google search engine could come up with an example of its logo. They may as well named it Ozymandias.


I did find a copy of an original stock certificate, though.


What did Boston Chicken, Netscape and LinkedIn all have in common?


Right. Individual investors got nothing. No allocations. Nothing.


Boston Chicken is completely eradicated, Netscape is making its way to that special burial ground as AOL’s red haired step-child, and LinkedIn is pretending like it’s going to be different?


No sock puppets in LinkedIn’s future.


But let’s look critically at the real differences.


LinkedIn takes advantage of real advances it corporate names. It uses two words, but presents them as one. But more importantly, it uses capitol letters for each of those words. It wasn’t NetScape and it wasn’t BostonChicken.


See the difference?


No? Doesn’t matter. The euphoria will be around for a while and will certainly speed up some more IPO’s in correctly named social media.


Who knows, as desperation for opportunities increases, maybe even Friendster will come public, as Facebook continues to play it coy.


But after a spate of questionable Chinese IPO’s and lots more on the docket, it’s not all rosy.


So it sent a message when I saw that E*Trade was one of the co-managers of the AIG IPO, which is neither an IPO nor a secondary offering.


It’s been redubbed a “re-IPO”.


Since I hold 0.002% of the current IPO float, yet wasn’t important enough to be pitched the re-IPO on Tuesday, when Ben Mosche addressed the big boys, I’m a little concerned that E*Trade is a co-manager of the sale.


Obviously, this won’t be quite as hot as LinkedIn or Netscape. It definitely won’t be as hot as Boston Chicken, which was equally tasty served cold.


As I wonder what to do with my AIG shares, considering that there doesn’t appear to be too much of a market for more shares, I’m somewhat comforted by the thought that so many of the experts are already using today’s LinkedIn performance to parallel the top of the market in 2000.


They all seem to believe that the bubble is about to pop.


And why shouldn’t they? Crazed trading today, crappy Chinese IPO’s and a former scion of the Dow about to be shown no love.


All we need is one more sign. A TIME Magazine cover story touting the beginning of the bubble, together with all of the other signs, speak to a continued strong bull run.


Come Monday, that means averaging down on Goldman, Freeport, Rio Tinto, Mosaic and even HP.


LinkedIn? Maybe, but only with the proceeds from ChainedIn.


Interested, my Angel?



 

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A Tale of Two Shitties





 


I’m sorry. I just couldn’t resist.


Both Dell Computer and Hewlett Packard announced earnings on Tuesday.


The morning started with an earlier than expected release and disappointment by HP and ended with Dell’s decent announcement.


A lot has been said over the last two days about what these two companies have in common. Without exception, those comments have been derisive of Hewlett Packard.


LosersBefore I weigh in, for me, Dell and Hewlett Packard are very much alike, but there is still hope for HP’s salvation.


You see, in the short 4 years or so that I have solely been responsible for managing my own account, I’ve had very few losing stocks.


Now before you say, “yeah right” or something much more offensive, let me qualify the previous statement.


Since I’ve been in the habit of selling call options on just about everything that I have ever bought, when you add the options premiums into the mix, I’ve had very few losing stock positions.


Since I have gotten much more anally compulsive since the advent of computer spreadsheets, I also throw in the opportunity costs represented by annualized S&P gain into the mix, as well.


Anally compulsive. Shitty. Get it?


Never mind, but the dearth of losers makes it easy to remember them, although sometimes I don’t hold a grudge. That’s really only true if I dump a loser specifically to take a tax related loss. Otherwise, I do hold a grudge and the long term memory is still going strong.


Man was YRCW good for that. In fact, it was good enough for both of those. Forever etched in my memory and wiping out lots of taxable capital gains. In fact, it’s almost displaced the debacle of L.F. Rothschild, which soured me on trading for my own benefit some 25 years ago.


Anyway, I digress, but you can probably guess two of the stocks on that short list.


I first bought shares in Dell about the time I started seriously managing my own stocks. I remember picking up shares after Dell announced earnings that  were disappointing. The shares took a $3 hit from their previous close of $36.


That alone will give you an idea of how long ago it was. Dell hasn’t seen $36 in a long, long time. Back in the days when 20 gigabyte hard drives were kick ass. Get it, kick ass, anal, shitty.


Never mind.


I didn’t know the definition of “value trap” back then, but at the very least, I’ve proven myself to still be capable of learning.


I also remember selling call options and clearing a few dollars. Not too many, because I was so convinced that Dell was going to recover all of its earnings related losses and then some, that I sold well out of the money $40 options.


Long, painful  story short, I sold my Dell shares. They were repugnant to me.


They are still repugnant to me, with or without Michael Dell at the helm.


Speaking of long term memory, back in the early incarnation of the Szelhamos Rules blog, I wrote an entry that was directed at Michael Dell and Jerry Yang. It was entitled “You Can’t Come Home”. If anyone is remotely interested you can look for it in the Szelhamos Archives (March 30, 2007).


But if you do so, that’s pretty sad.


Guess which other stock was one of my losers, although I currently am short puts on shares. Talk about a worn out welcome. Yang really blew it on his return. Maybe he should have taken steroids.


At the moment, I hold HP shares, but they’re nowhere near as repugnant, since I’ve been selling near the money call options on it over a few different options cycles.


With a cost basis of $41, I can sell my shares at $37 and still walk away saying that it wasn’t a loser.


But I’d be deluding myself, because it is a loser in pretty much all other regards.


It is amazing that value traps do exist. Knowing that is preventing me from buying additional shares. Fortunately, that same knowledge knew not to pick up additional shares in Dell, or more recently Ford Motors.


I remember every loser, but I don’t lose too much sleep over them, although occasonally I will rant, as I recently did about some Bove related debacles in Citigroup and Goldman Sachs. One, a long ago memory, the other a grudge in the making.


HP on the other hand, shitty as its been, may still have some life in it.


Before talk of HP becoming a commodity, remember than the same accusation was dealt to SanDisk, after it dropped from its highs a few years ago. A little talk of takeover, a little fire on all engines, a little growth in flash memory everywhere and everything and all of a sudden, SanDisk is trading like anything but a commoditized product.


It was a shitty decision not to own shares of SanDisk.


Not to step on Dickens’ rotting corpse, and all due apologies for mangling the title of such a classic, but human nature being what it is and the uncertainties in life and the stock markets, I probably should have entitled this piece “A Tale of Many More Shitties to Come”.


That’s especially true given what a downer this month has been.


But the nice thing about reliance on options premiums is that each month begins a new opportunity and if it weren’t for those spreadsheets, I’d have no meaningful memory of the previous month.


So, I’m completley ready to say goodbye to “This Tale of Two Shitties” and say hello to “A Brave New World” that starts on Monday.



 


 


 






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Baby Huey: The Yin and Yang of the Universe

Yesterday, Herb Greenberg, a CNBC hero, really confirmed his place in my heart.


I’ve always liked his well placed and deserved cynicism, enough so to give him a shout out in my acknowledgments, but yesterday he pulled a cultural coup.


Baby HueyHe singlehandedly restored the once famous Baby Huey back to his deserved place as a cultural icon.


Even I, who used to read, Baby Huey comics religiously, really couldn’t recall much about his character, other than his exceptional physical size and equally large diaper.


As I dusted off the cobwebs of the only portion of my brain that actually worked as a child, I realized that Greenberg was right. Baby Huey was an earlier generation’s Rodney Dangerfield. 


The point of the 140 or less character post made by Greenberg was that Hewlett Packard was now in danger of becoming this generation’s Baby Huey.


WIth what I would imagine a throng of people speeding to Google to discover just who Baby Huey was and a subsequent re-birth of that brand, something else has to give.


In a universe where matter can be neither created nor destroyed, a re-emerged Baby Huey can only come at the expense of something else.


As I sit on my shares of Hewlett-Packarad, I really hope that it’s not HP.


Since these days I am more concerned about generating options premium income rather than capital gains on the underlying stocks, I’m not asking or hoping for much.


And I wasn’t disappointed, because HP’s CEO Leo Apotheker’s appearance on CNBC and subsequent conference call, did nothing to raise the respect level.


So I wasn’t asking for much and I didn’t get much. Maybe even less than I asked for.


But I realized, as I looked through our electronically contemporary possessions, we actually own only a single HP product and that one is definitely not contemporary.


And that single product was an introductory level digital camera that I bought for my wife a number of years ago, as I was looking for something non-threatening to help her enter the 19th century.


As I further thought about the absence of contemporray HP products in our household, it just further reinforced that Baby Huey metaphor. Using an anything but contemporary cartoon character to illustrate a “high” tech company, with a bumbling CEO, was inspired.


Perfect, Greenberg. Just perfect.


Then I also remembered an HP laptop that we purchased for my son as he was getting ready for college. Fortunately, his 6’6″ body could lug that beast around, although he didn’t have to do so very long. A dead hard drive during finals week and battery that wouldn’t hold a charge were enough for him to move elsewhere.


All of a sudden, as more cobwebs are sequentially dusted, I realized that I’m not so happy with HP. But I also realized that I was part of the problem.


So I went to Best Buy’s weekly circular and looked for the HP product that I just had to get. Something to make me feel complete and to perhaps, in whatever small way, help out HP’s bottom line.


While doing that, I also looked through the DVD titles to see if there was a Baby Huey Anthology on sale.


No surprise. Both of my searches turned up nothing.


Apparantly, the IT guys buying servers and services get the same circular that I do and they haven’t been overly impressed lately, either.


So if HP can’t make it happen on their technology, are they really in danger of becoming another Dell Computer?


The reality is that Dell was always Dell. It never innovated, it just assembled and marketed well, until the “Dude, your getting a Dell” guy was busted on marijuana possession.


HP need to distinguish itself, otherwise, there’s not much rationale for a premium price, neither on its products nor on its stock. Although, if Apotheker got busted on dope charges there might be an entire legion of new found fans willing to buy HP just for the show.


Maybe the answer is growth through acqquisition, as Apotheker said. Maybe they’ll one up Microsoft and offer $10 billion for Skype.


Maybe they should bid for the New York Stock Exchange.


Remember, there are no bad ideas when brain-storming. Only stupid ones.


One idea that did come out today was the proclamation that HP would no longer be playing for the subsequent quarter. That might actually be very nice if another one of the big boys decided that longterm was the way to go.


We’ll see how long that philosophy can last in a fast food mentality world. Most people don’t really want to know what McDonald’s is whipping up in its research kitchens. They want to know what’s on the menu now and get it delivered in a consistent fashion.


Thank God, that at least eBay is keeping up with the times.


I’ll see if I have enough left in my PayPal account to pick up a mint copy of a Baby Huey comic. on auction


That’ll make me happy.


Thank you, Herb Greenberg.


Any ideas for Sad Sack?



 


 

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Trump Pulls a Huckabee

HuckatrumpIt seems like an eternity, but it was only a few short years ago that Mike Huckabee was the darling of the media.


He was on The Daily Show, The Colbert Report and maybe other shows, as well, but since I only watch Comedy Central and CNBC, I’ll have to leave it at those.


Just so you don’t think I’m too shallow, I do occasionally watch Access Hollywood, although I never have any clue as to who the celebrities they’re talking about actually are.


Unless they’re dead.


But back to Huckabee. Like so many others, before he became a serious contender, he was actually likeable. Smiling, affable, joking and guitar playing.


In fact, everytime I heard his name, I giggled a bit and had visions of an old favorite, Huckleberry Hound.


Why is it that everyone who’s really the antithesis of “cool” seems to play the guitar?


Maybe the real cool musical instrument is the accordian, after all.


Anyway, Huckabee then went through the classic John McCain transformation.


Then out came the other face. The creationism bit and some of the deeper seated beliefs forming the basis of his evangelistic faith.


Not that there’s anything wrong with faith, as long as it doesn’t trample my right to faith and personal freedom.Although I believe that life begins the moment the condom bursts, I don’t try to force those beliefs on others.


You’d think that would put us all on the same page.


But there’s probably a good reason to do an about face. It is just a necessarey evil to bring out the lunatics that vote in primaries, although some lunatics do stay at home and apparantly, never vote in primaries.


Well, that brings us to Donald Trump.


You see, Donald Trump just pulled a Huckabee, but not the old Huckabee. That’s still more accurately referred to as a John McCain.


No, Trump pulled the new Huckabee.


(Want to see the transformation again? Click here.)


This past Sunday night, the cynics among us saw Mike Huckabee announce what we all knew he would.


He announced that he would not be seeking the Presidency in 2012.


How could that be? How could you not seek the nomination when you came so close in 2008 and have no one of any real stature standing in fronty of you, other than the guy with the false religion that you gently backhanded a few years ago?


The reality is that even though Mike Huckabee used love of family and inner spiritual peace as his reasons for not going forward, we all knew that he wasn’t ready to give up his big, fat Fox News paycheck.


Once you’re shown the money, it’s hard to walk away. Forget about shepharding this Godless and adrift nation toward your vision of Heaven, them’s thar checks that’s needing  cashin’.


So Huckabee really wasn’t a surprise, but what about The Donald?


I envision that someday his Wall Street Journal variety caricature will be adjacent to the definition of the expression “Peaked too Early”.


Trump’s reasons for not running? Why did he decide not to throw his hair into the ring? He’s being altruistic, Comcast and NBC need him to survive. He’s doing it for them and for all of the other business interests that license his name and need his help to be pulled out of their morass.


And think of all the celebrities that are being spared the embarrassment of picking up unemployable checks.


If there’s anyone that could pull something out of his ass better than The Donald, I can’t imagine. And besides, who could not only do the pulling, but then wear it on his head?


I worry about the effects of the Trump announcement on the upcoming jobless reports. No doubt there will be many more unemployed stand-up comics.


Have you ever tried to make a living telling Tim Pawlenty jokes?


There has to be some kind of a silver lining to Trump’s decision to drop out, besides the obvious gold lining, but unless someone pulls something very unexpected out of their butt, this promises to be a very boring upcoming Presidential election season.


That itself may be a wonderful gift.


Instead, wouldn’t it be nice, if instead everyday we had a new Osama Bin Laden killing story, or a new Dominique Strauss Kahn sodomizing story?


You’d never see an unemployed comedian then.


Here’s to high profile death and sodomy, but not in that order.


That would be truly sick.



 

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Is CNBC the Great Satan of the Markets?

I like that title.


Why do I like it?


SatanIt’s very search friendly. “Satan” is one of the most often searched words. All sort of deviants and miscreants use search engines, when all they really need to do is to look into their souls.


It’s the devil within that we should all fear.


Don’t get me wrong. I love CNBC. I watch it about 10 hours each day. Although I don’t really watch it, it is more a background noise that occasionally gets me to look up while I’m doing other things.


I also included references about Joe Kernan and Herb Greenberg in the Acknowledgment section of my book, so obviously I do have a softspot for them.


But ever since I’ve been on Twitter, it’s really clear that there’s not a lot of love for CNBC, at least not by the people that I follow, and I try not to follow crackpots.


Even though I am a loyal CNBC viewer, personally, I still miss Ted David and I long for his return. But I also still pine for the return of Green Acres and as my therapist tells me, “That ain’t gonna happen”. (He’s not Ivy League)


But as much as I do pat myself on the back for being a good observer of quiet patterns, I can’t believe that I’ve missed this one.


And it was so obvious.


CNBC moves the markets. It is the six headed beast.


Now that’s not exactly an earthshaking observation. It’s on the order of Charlie Gasparino predicting that Lloyd Blankfein would depart Goldman Sachs within 2 years.


But it all crystallized for me this past Friday, the day the confusing news about Yahoo! came out.


What exactly was going on between the boards of AliBaba and Yahoo!, and Jerry Yang is still somewhat murky, but there was an obvious impact on the stock price of Yahoo!.


If you were long, that impact wasn’t very good.


At about noon, CNBC started its story on Yahoo and while the story was progressing, Yahoo! shares, which had stabilized at about $16.05 started to drop. They went down to $15.93 in the minute or so after the report.


But that’s when the observational part of my brain started kicking in. I saw what I had subconsciously seen so many times before, as I vacantly stared at the ticker.


Within about 30 minutes, Yahoo!, in the absence of any further news, started an impressive climb upward. What made it even more impressive is that it occured during the rest of the market’s decision to head south.


I took the opportunity to sell puts June 2011 Yahoo $16 puts when the underlying price was $16.


I rarely sell puts, but it clicked. This was one of those times. In the past I had sold puts on Citigroup, Sirius-XM and YRCW, all with good results. But all of those were in the $1-2 range.


What clicked was the realization that when CNBC talks, wait 30 minutes and go contrarian.


That’s not quite as catchy as the old E.F. Hutton ad campaign, but it may be much more accurate.


Years ago, when I used to watch Jim Cramer’s show, it was obvious to anyone that had bloodflow that his words would move stocks in the afterhours. This happened despite his admonishments to viewers not to make purchases in what he called the “Wild, Wild West”.


Back then, if he ever mentioned a stock that I owned in a positive sense, I always made certain to sell it in the after market, knowing that in all likelihood I would get top dollar and a chance to buy the shares back the next day at a lower price.


That’s definitely not meant to be a knock on Cramer. It’s a knock on the human traits of greed and fear, although it’s fine if other people act on those traits.


In fact, its fear that makes many people behave. Fear of ending up in Satan’s domain.


But in the markets, fear often makes people do the wrong thing.


They’re afraid of missing out when they hear good news, so they buy.


They’re afraid of being the last one left at the table when the bill comes, so they sell.


Those behaviors are good for the ones on the other side of the transaction.


Me? I have no fear, for I walk in the Valley of CNBC.

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I Never Liked Dick Bove






I usually try to be a little obscure in the daily blog titles.


The problem with getting older is that the long term memory really does stay intact and the ability to forgive and forget becomes diminished.


Now, I don’t really have anything against Dick Bove, per se, but in the past he has been as ever-present a talking head as you could ever imagine.


Shit for BrainsNow, I don’t want to you to get the wrong idea. Just because there is an image entitled “Shit for Brains”, this is in no way a representation of what I believe is present in Dick Bove’s head. After all, that wouldn’t be fair to the long and storied history of excrement.


For me, I first took notice of Dick Bove when his bald pate and perfectly trimmed beard seemed to be on CNBC every morning and afternoon giving his take on the financial institutions that he followed.


Afterall, he was a financials analyst and we were on the precipice of what would turn out to be the market cataclysm of a lifetime.


And he was the best, right?


I mean, why else would he be featured so regularly amd prominently? And you certainly would want the best to either re-assure the investment community or warn them, as appropriate.


Before I go forward, lest you think that all I plan to do is blast Bove, I would like to give him some credit for his forecasting ability. Although it was a rocky road, taking more than 2 years for the markets to recover most of the ground it lost following the 2007 meltdown, Citigroup is nearly at Bove’s price target of $45.


Granted, it’s price was significantly helped by last week’s 1:10 split, but that would be like splitting hairs.


So while Bove was continually telling the investing world that Citigroup was a solid company and that its dividend was in no jeopardy, Wall Street just burned as his talking head kept talking, oblivious to the air being sucked out of the markets.


Of course, Bove has had his credibility questioned before, in the most important of ways; the losing side of a lawsuit that was based on the accuracy of one of his calls. No reason to dredge the details of that up.


The New York Times last year characterized him as having bounced from firm to firm.


So this is the best they can come up with to assess the financial sector?


Yet for some unknown reason….


Wait, I know the reason. No one on Wall Street has anything resembling a memory.


So, they still listen to this guy. They  still invite him back.


Yesterday he did his damage again.


He used a classic terrorist strategy, perhaps pulled from Bin Laden’s recently discovered diary.


And I’m not talking about the entry when Bin Laden wrote “Fatima’s so pretty, but she doesn’t even know that I’m alive. I just want 2B friends”.


No, he focused on the strategy to go after soft targets.


And what more soft of a target is there these days than Goldman Sachs?


They can’t catch a break on anything. Imagine, they actually offered Hugh Grant the Charlie Sheen role in Two and a Half Men over Lloyd Blankfein.


As if that wouldn’t have been bad enough, Ashton Kutcher? Really?


That’s really kicking a guy when he’s down.


Bove spent the day spreading fear about Goldman and the Department of Justice.


Isn’t that the modus operandi of terorists? Fear? Soft targets?


And Charlie Gasparino was bold enough to predict that Blankfein wouldn’t last another 2 years.


Exactly how many eternities is 2 years in Wall Street years?


Anyway, you know what happened.


Goldman took another beating and you guessed it. I own Goldman shares.


What used to be about 10% of my portfolio is now about 8% and not because I sold shares.


In the aftermath of the Rajaratnam guilty verdict, Bove believes that the Department of Justice has some blood lust. He has a populist image of people wildly celebrating in front of the White House at the mere thought of Goldman convictions.


Personally, I don’t think DOJ will be going after Goldman with quite the zeal that Bove believes. The economic consequences of crippling Goldman, even in the short term has tremendous trickle down. Not good when the boss is in re-election mode.


Although the people at Goldman are deservedly called the smartest in the room, they still may need some help on this one. It isn’t easy getting out from under the grip of a terrorist


My advice? SEALS. Navy Seals.


 


 


 


 




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