Looking for Inspiration

Most mornings I’m up at 6:30 or so.

That gives me plenty of time to have coffee, read the New York Times and check on the pre-opening bell news.

For some inexplicable reason, I slept in this morning. But not only did I sleep in, I missed the opening bell for the first time in a couple of years.

As I’m hurriedly trying to make up for the time that can never be recovered, I’m not getting much inspiration. I haven’t, though, checked the Obituaries yet.

tortureSo far, the predominant coverage in the Times is the role and value of torture. I prefer, “harsh interrogation” methods.

Although I’ve been searching, I haven’t been able to find any derivitive trades off of torture. Those must all be privately held companies.

Torture, I suppose, comes in many forms.

The picture to the left is entitled “Chinese Torture”. That kind of torture may also come in the form of their IPO offerings. I believe that the ingenue pictured was a RenRen friend.

That’s why I’m so proud that I have no friends in my Facebook account.

But I have had my share of tortuous trades in the past.

Some of them were in companies that had the dubious distinction of being the largest percentage loser for its year.

I once owned L.F. Rothschild, a scion of investment banking.

Look that one up. It’s too painful to relive.

It is also painful to not have time to accept the fact that the market will be opening way down. That’s the problem with sleeping in. It was a little bit of  a shock to see that the market was down 100 points before I even had a chance to fire up the computer.

Much less have any coffee.

I did get one trade off so far. I bought back some Textron $26 call options. That’s the second time for that particular trade for the May 2011 cycle.

But as I watch those shares of ZSL, the leveraged silver short shares, I kick myself for having covered those shares, as well.

Missed opportunities can be tortuous as well, but still, I’m not likely to give up any valuable information.

My real concern this morning is that I’ve noticed a very substantial decrease in the number of new Osama Bin Laden jokes hitting the internet.

I’m not much of a historian, but I think that the last time he died, that marked a market top and sudden reversal in fortunes.

I may be wrong on that count, but I’m willing to stand by it, as I watch my own fortunes fall this morning.

At this point, as we approach noontime, and man, it’s great to not have to work, I’m still not getting the inspiration I need. There really doesn’t seem to be anything special about today. No unique character, no defining theme.

Sometimes it’s nice to have a moment of boredom intrude on the rapid fire lives we live.

I’ve decided that for today, I’m just going to sit back, continue sipping away at the lukewarm coffee and wonder what happened to that piece of Cheesecake Factory dessert that was in the refrigerator.

That’ll keep me occupied for the rest of the day, at least until my wife gets home.

That’s when the harsh interrogations begin.

 

 

 

 

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A Day Here, a Day There

I won’t quibble over a day here or there.

International dateline, questionable reporting, time differences, you can take your pick.

I was born on at 3:30 AM on April 7th in Hungary, but in a logical world, now that I live in the U.S., I should be celebrating my birthday on April 6th.

I don’t. That would be stupid, albeit, logical.

Yesteday, May 1st, we learned of Osama bin Laden’s death. One of my kids joined the OBLthrong at the White House, the other donned his National Guard uniform and sent me a photo.

I already have the days’ newspaper wrapped in plastic.

Was the glorious day on May 1st, was it April 30th? Who knows and who cares?

But it may by no means be coincidence that Adolph Hitler’s date of death was reportedly April 30th and officially reported May 1st.

Sure, as a child I remember all of those wierd Lincoln and Kennedy similarities.

This is different.

As Americans, we have often been immune from the sense of relief and pure joy when evil dies.Fortunately, 3000 miles of ocean, a strong military and an abiding sense of justice has kept us safe for most of our history.

We haven’t had to endure the daily evils of the likes of Idi Amin or the long list of others.

Even though it’s been almost 10 years since the World Trade Center attacks, we’ve taken some solace that the evils guys probably never were able to close both eyes at night.

Even though it appears that Bin Laden’s final home was more luxurious than the caves we had been hoping that he had been living in, I don’t think you ever really get used to the unexpected sound of overhead explosions.

To some, it may be inappropriate to compare Bin Laden to Hitler. Since I never met the vast majority of my family because they perished during the Holocaust, I feel like I can take a pass on any complaints.

It’s akin to why some people can get away with Gangsta rap lyrics while others can’t.

The only difference between Bin Laden and Hitler is that Bin Laden was deprived the opportunity to carry out his master plan.

If not for the United States and its dogged effort to find Bin Laden, the  “spiritual” leader of al Qaeda (talk about an oxymoron), they would have been far more devestation.

In their tortuous logic, these terrorist zombies will claim that if it were not for the United States there would be no al Qaeda.

No on knew better how useful it was to them to have the United States and Israel be considered the enemy than the leaders of the Arab world.

The longer they could divert attention to the great “Satans” the less likely they would be to suffer the wrath of their own people.

That world is changing.

Democrarcies never go to war with one another.

The Middle East is on a precipice. Just a tip in the right direction and true democracy may overwhelm the region.

The outcome? Once the people see the lies fed to them by their own governments for generations, they are likely to be even more angered by all of the lost opportunities to be part of the civilized world.

In fact, they are likely to discover that neither the United States nor Israel are evil. Only their previous ruling regimes could rightfully take that honor.

Even the “beloved” Saudi regime knew all too well that the more it fomented chaos elsewhere, the less likely its own legitamacy would be questioned.

They realized that 50 years ago.

They, nor anyone else, had love for the Palestinians, but as long as they could stoke the fires against the Israelis, the longer they could delay that fire encroaching on their own turf.

But the winds have changed.

April 30th, May 1st?  Doesn’t really matter.

Today, I feel more safe and more optomistic than in a very long time.

I haven’t even checked my portfolio even once, now an hour into the open. Talk about a shift in winds.

As my brain is aging, there’s only room for a limited number of “where were you when…” kind of memories. I’ll have to displace something to make room for where I was when news of Bin Laden’s death was announced.

It happened to come on the birthdate of my uncle who died as a relatively young man, having  physically survived Aushcwitz, but not otherwise.

For me, yesterday was a little bit of a birthday present to him from Adolph and Osama.

For the rest of the world, it also meant a pre-emption of the closing 30 minutes of Trump’s Celebrity apprentice.

As the Passover Seder song says, if all that would have been done for us was to deliver us from The Donald, “Dayenu”. It would have been sufficient.

But the gifts kept coming.

Sorry, Mark McGwire, I no longer remember whgere I was when you hit your 62nd.

And so it goes.

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What would Cash Do?





Whenever I’m at a point in my life that I feel that I need direction I find myself often looking at the bracelet on my wrist. It’s a simple, very unassuming bracelet with just four simple letters: WWCD?

What would Cash Do?

 I know that this is supposed to be a financial blog but sometimes it’s not.

Yesterday was one of those days and it’s spilled over to today. I’m not thinking about the kind of cash that you need to do everything in life. The kind of cash it takes to buy things, like stocks or food.

Johnny CashThe cash that I’m talking about is Johnny Cash.

As much as I admire Johnny Cash as a modern day Saint with a voice from the heavens, I must admit that I’ve always been a little squeamish about the lyrics to one of his songs:

“But I shot a man in Reno just to watch him die”

Just how sick and demented is that?

But then my idle mind wondered that if I had the ability to bring someone back to life,who would it be?

By the way, once that person is returned to life, you would also be required to watch him die again.

Now who would you choose?

There was a lot of discussion yesterday about the ethics or morality of revenge.

Obviously, the framing of the question is underlied by the wording. Is it revenge or is it justice?

By the same token is it morality or ethics that are at issue when discussing whether it is appropriate to be happy about the death of another human being.

Admittedly, there is some shame to being happy about the death of anyone, but that shame probably pales in comparison to the shame that should be felt by the people saddened to see the evil die.

You know that there are plenty of those people and they are certainly not thinking about the dilemmas attendant to those thoughts.

Most of us have differences with them. For example, I have a hard time referring to Osama bin Laden as having been “martyred”, especially since he tried using his wife’s body to intercept bullets meant for him.

Or perhaps he just wanted to share his martyrdom.

Oh, that’s nice.

Yesterday, was obviously a very unique day for most everyone within reach of civilization.

Think about the wonderful events in your life. I’m not suggesting that this was one of them, but it’s only natural to want to replay or relive those wonderful moments.

So in a pretense that there’s actually something related to the markets in today’s blog, I played  a trade of Mosaic that I had entered into just this past Friday. I bought back the call options that I had sold then and am now ready to re-sell those same options for the third time in 2 weeks.

Mosaic

In this 2 week chart, Mosaic is unhanged, but in that period it had plenty of2% moves, each of which gave nice opportunity to cash in on sales and repurchases of call options.

That’s the kind of replay that brings happiness to me. I would never get tired of that trade and that’s why I love Mosaic. Did I mention the profit involved?

But yesterday’s events muted any of my attention to the markets. The rest of the world seemed to be distracted in precisely the same way. There was no relief rally, just a quiet day in the trading pits.

In a world where evil behavior can be so easily rationalized, the behavior of the market was quite healthy today. The fact is that the market didn’t need a relief rally. It just needed a breater.

And we needed that breather, too. We needed the opportunity to revel in the good news of the day.

There’s nothing like unmitigated joy to to help you forget about everything else.

Both of my kids made it to the White House last night for the impromptu celebration.

So instead of spending the day trading or looking for opportunities, I thought how in a world where everything seems to be caught on video these days, it seems eerily empty to not have video of the Special Ops attack on bin Laden’s compound.

How we all would have loved to replay that video.

Instead, I have to be left with the fantasy of choosing someone to bring back to life, just to watch him die.

I tried to think about that before going to bed last night, but all I could really envision was the sight and image of bin Laden cowering behind his wife.

That’s a sight that the entire world should see.

My guess is that the Arab world might agree that the only virgins bin Laden should be entitled to are the ones who played Dungeons and Dragons for 200 or more consecutive hours. And to top it off, he would get twice the normal allotment.

Is it justice or revenge?

I’ll have a helping of both, thank you.

But as I think about it, it is with great humility that I have to disagree with Johnny Cash.

I think I would rather see that image of the coward bin Laden using his wife, the human shield, in a pathetic attempt to avoid justice.

That sight would be so much sweeter than going the Cash route.

Much more moral, too, as if anyone cared.

 

 




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William and Kate’s Big Day

Seems like only yesterday that I was attending the Royal Bris of Prince William, the future King of England.

Royal WerddingLots has happened since then, most of which explains why I didn’t receive an invitation to the Royal Nuptials.

My comment at the time that the Royal Moyle should have snipped a bit of Prince Charles’ ears was not taken in the humorous vein that I had intended.

Heh, heh. Royal Moyle. Sometimes I amuse myself.

And I swear that it wasn’t me that requested a courtesy flush from the Queen, although it’s a fact that she has digestive issues.

My backdoor plan to be the Syrian Ambassador’s “plus one” was foiled, when the House of Windsor withdrew the invitation due to sensitivity over events in Syria.

At least that was the official story.

Nonetheless, today, I am still very excited.

Sure, sure, it’s the wedding thing, but I’m just an onlooker there. But even moreso it’s that E*Trade has finally unveiled its weekly options trading platform.

I can’t wait to get going with that since the original Option to Profit newsletter and its recommendations were all based on final week options cycle trading.

Now, I can do it every week.

More commissions for E*Trade too, as if my $10,000+ in commissions last year wasn’t enough, but it’s all well spent and reciprocated with good service and execution.

That’s why I had to economize a bit on William and Kate’s wedding gift. Although I’m certain when “Famous Dave’s” opens up its first location in England, they will delight in using their gift card and chowing down on the frozen Cornwall on the Cob.

The weekly options are perfect for me to deal with the holdings for which I haven’t quite found the right regular options opportunity. I do get frustrated when I’m sitting on shares that aren’t generating some kind of return. This month, and fortunately it’s a 5 week options cycle, I still have about 5 holdings that are not bringing home the fish and chips.

After a couple of unemotionally charged up days that seemed to have little to no conviction, I’m expecting a lower close for the week, despite thepre-open futures numbers.

What post-press conference Bernanke Bounce there may have been should soon be dissipated.

For my sake, I hope so, as my ROI so far this month is lower than the S&P. That doesn’t happen very often, but is the risk you take when you sell call options ahead of an upward moving market.

Still, there’s 3 weeks still left in this cycle and if all goes to script there’ll be a market drop before then.

Listen, if the Divine Creator can allow a Prince to find a commoner from among a sea of non-royals, he/she sjhould be capable of a little market gyration.

Speaking of which, Queen Elizabeth does a mean hula once she’s had a couple of Boilermakers.

  

 

 

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I Don’t Understand Currencies

Since no one else will say so, I will.


I’m a pretty smart guy.


Two degrees from Harvard, living a pretty good life, only working if I want to and having a Sugar Momma go off to work 4 days a week.


Not bad. Kids are out of the house, dog is low maintenance and the coffee is fresh.


But as hard as I’ve tried, I really don’t understand currencies. And let me throw in bonds, too.


All of this talk about the dollar, interest rates, currency exchanges just leave me dazed.


Forget about concepts like the Japanese Yen Carry Trade.


And yet, all sorts of morons are extolling their insights into the FOREX and willing to sell you a piece of their underdeveloped cortical lobes.


But at least I do know that the sanctity of the value of the US Dollar is a heated area of discussion.


In fact, yesterday, Art Cashin, while on CNBC, referred to Tim Geithner’s statement regarding his defense of the value of the dollar as being a “Pinocchio statement”.


Then there’s the perennial Ron Paul crusade. Gold, dollar, consipracy. Whatever. Today he used the word “collusion”.


SantelliBut this morning, just as I thought that I was at least beginning to understand the sides, comes RIck Santelli to upend my tenuous comfort zone.


As he was very patiently and uncharacteristically listening to the question set-up, he started his response by calling Chairman Bernanke an “honorable man”.


The cynical me would have interpreted that somewhat akin to starting a response with the preface “With all due respect…”


But the rant never came off.


He actually did not diss Bernanke.He did not come to bury him.In fact, hestated that he believed that Bernake was a good American and had the interest’s of the country heart.


I ascribe this to the fallout from Obama’s full birth certificate being released.


Who knew that so much venom could be controlled by a single piece of paper?


Maybe the next thing to occur will be Trump changing his hair style.


But getting back to my ignorance, and mind you, I’ve always been very good with numbers and math theory, even having read Irving Adler’s book on mathematical theory in 9th grade, yet still the currency thing escapes me.


Yes, I understand the inverse nature of all things interest rate related. I know to think backwards when it’s called for. I even know not to end a sentence with a preposition.


I understand that as the Euro strengthens, the dollar may weaken (leaving out the further complication of the Swiss Franc).


But I like the idea of being able to pare down our deficit by taking advantage of a weak dollar. Isn’t that also good for our exports? Or is that something that needs to be considered as the inverse of the inverse?


But again, Santelli honoring Bernanke?


That really throws things into a tailspin.


I’ve checked my Harvard degrees. They are irrevocable, not like those honorary pieces on faux parchment.


My best explanation, until proven otherwise, is that this was just another dream.


The idea of Santelli being respectful of Ben Bernanke is more ludicrous than KrispyKreme sending Herb Greenberg a box of free doughnuts daily, in thanks for his thoughtful and insightful analyses of their business practices and accounting.


It could happen.


 


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Too Much?

I’m at that age that I don’t dream that much anymore.


Maybe I still do, but if so, then I don’t remember much.


Ear hairAs you do get older, I think that it’s just a natural tendency to ascribe everything to the aging process. I recently covered the phenomenon of “ear hair”, but there’s really no shortage of changes, that one can only assume are age related.


But last night I did have a dream, a very vivid one at that. With the exception of the dog slobber, though, the bedding remained dry.


 


Interestingly, the dream was about Bed, Bath and Beyond.


 



Okay, maybe not so interesting.


I’ve never even been a shareholder, although admittedly, I do enjoy trying to maneuver a shopping cart through its narrow and maze like aisles, while following my wife as she hunts for “tchotchkes”.


Amazing how that word is making the auto-spell go berserk. I tyhink the CPU is starting to smoke, as well.


Anyway, the essence of the dream is that I was, indeed, a shareholder and extraordiarily disappointing quarterely earnings were released, resulting in a stampede to sell.


My reaction while in slumberland?


“Bed, Bath and Beyond?. I don’t think so. More like Bloodbath and Beyond”.


And that was it.


The whole dream turned out to be nothing more than a soundbite or a pun that no one, including me, would appreciate. The greatest likelihood is that it’s not even original.


And besides, what kind of normal person dreams about earnings reports for a stock that he’s never owned?


Too much?


Too much!


I suppose I coujld be doing things that advance society wity all of my spare time, rather than sitting, sipping coffee, watching CNBC and looking for trading opportunities.


Yeah, and then this blog and those damn addicting Tweets.


But then I hear things like Boone Pickens saying “An economist is just a CPA without a personality”. Well, it’s those little throwaway snippets that make it all worthwhile, never mind that my youngest son just declared Economics as his major and my nephew is graduating next month as an Economics major.


No offense taken.


Of course, then my mind was equally entertained when a photo of Ron Pauil was shown, announcing that he was the on-deck CNBC guest and in the background they were playing the refrain “Tramps like us…” from Springsteen’s “Born to Run”.


I don’t quite get the connection, but it gives me something to think about.


And then, did I hear it wrong, or did Art Cashin call Geithner a liar when he referred to his recent defense of the dollar as a “Pinocchio comment”.


Whoa, let’s see Geithner’s birth certificate. Althoiugh given his less than dynamic personality, I think they may even have difficulty in dredging up a Certificate of Live Birth.


Meanwhile, the first real thing I did this morning, this second week of earnings season, was to check when BBBY was scheduled to report earnings.


They’re still 2 months away from their next report. So then I looked at their 1 year price chart and that was followed by the May 2011 options tables.


That’s a bad sign when I start letting dreams direct my investing activities.


Luckily, it’s still an hour away from the opening bell and there’s plenty of time for rational thought to take hold and prevent me from doing something irrational.


Besides, if you’ve bought the OTP book, you know that I keep a list of about 50 “Old Reliables”, stocks that I trade in and out of as appropriate. I rarely vary from that list.


BBBY isn’t on the list.


Not quite the same entrance criteria as used to be used at Studio 54, but at least I’m still standing and I’m very grateful that Puff Daddy didn’t turn state’s evidence on me.


I’m afraid that today’s market actions will be muted and not because of the uncertainty of my dreams.


I think that absent any great earth shaking news, literally and figuratively, the world is waiting to see what Bernanke will say at the much heralded press conference.


I’m betting that he’ll admit to a series of unsolved murders in the Southwest.


Maybe he’ll announce that he’s a finalist on “The Voice”.


Sure, I know, some of you are probably replacing “The Voice” with “The Biggest Loser”, but I’m not in that category. Besides, I’ve seen the Chairman’s birth certificate.


I happen to use my own Bernanke indicator.


I look at the thickness of his “Talis Bag”.


For some of my readers, you may as well Google that, along with “Tschotchkes”.


I used to use the velocity of the graying of his beard to assess our economic status, but these days there’s no longer any velocity.


As always, the talking heads are taking all sides on the reasons for this unprecedented press conference, as well as the outcomes on the day’s trading.


My guess is that somehow he will affirm the seriousness of S&P’s warning last week, while balancing that with statements pointing to an improving economic picture.


He’ll mention the balancing of increased revenues with spending cuts as being first steps toward a resolution of the debt crisis.


Or he may just talk about the NFL lockout.


Watching Ron Paul, I’m certain that Bernanke won’t admit that he’s finally converted to Paul’s gold position and the currency. and the role of the Federal Reserve.


Not that I’m a conspiracy theorist, but it was interesting that Ron Paul’s satellite feed seemed to go out just as soon as he started his rant.


Besides, Ron Paul’s Talis Bag is might thin.


So who are you going to trust?


 

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Life is a Zero Sum Game






I really do believe that.


It starts from the very beginning. Ashes to ashes and dust to dust.


Yin and Yang.


From what I can see, based on my lost earnings opportunities since my recent addiction to Twitter, they must really be worth a fortune.


I assume that many people that post regularly on Twitter are giving up some income opportunities. Well, in a zero sum game, those have to go somewhere and it looks like that series of tubes in sucking it all in.


Rainn WilsonAs much as I’ve been amazed at the reach of Twitter and how it really does level a playing field, after all, I can “talk” to Rainn Wilson, it has also bought distress into my life.


For, you see, today I lost my first follower.


Although, it would probably be more appropriate to say “followers”, since I lost the wannabe French twins, whose names I forget, although they did rhyme.



I’m not quite certain why they would have been following my stock related posts, but I admired their exclusivity, in that you could not follow them if your were below the age of 18.


I hope they check more carefully than the liquor stores near my son’s campus.


Granted, maybe I should have reciprocated and sought to follow the twins, but if I’m going to get caught up in some internet based pornography thing, I think I’d rather do it at the local library, where it’s legal and I can see my tax dollars at work and gyrating.


Rainn Wilson, on the other hand, can be followed regardless of age and tax bracket, but may be inappropriate for all ages.


Although Szelhamos taught me to never talk about sex, politics, religion or money, immediately before viollating his own principles, usually in the form of a joke, I found Wilson’s picture on a Baha’i faith site, as he is a follower.


I like their principles.


But I must be losing some of my own irreverence, as last night, I didn’t find too much humor in Bill Maher’s “Mormon Underwear” stuff on Letterman, last night.


Mind you, I’ve been intrigued in the past and have done my own bit of Googling (as in searching, not as in the other thoughts going through your wretched minds)


Dave bit his tongue. I, perhaps out of reflex, scratched my crotch.


I’ll be seeing the new Parker – Stone play in about a month and am somewhat saddened that it is purported to be a somewhat sweet look at Mormonism, a religion that they have admittedly been fascinated by, but I really wanted asthma inducing laughter and Mullah inspired Fatwas to be promulgated from Provo.


Now, back to business.


Patience paid off for Textron. I was able to re-sell the May $26 call options, netting a nice extra bit of income. Interestingly, the trading in the call options was really light, as I noticed that most of the open interest was actually my own positions.


Also the bid-ask spread was pretty high, but we ended up splitting the difference and both buyer and seller eschewed greed, which is a good way to do business.


Now, I remain patient for JPM, GS, HPQ, GE and BP.


But let’s face it. All of my thoughts are on how I can get the twins back and to understand “Rainn”?







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I’m a Rock Star

Ben Bernanke is, undoubtedly, a rock star in the financial world.


If I had the inclination, I would actually check to see if he was ever Time Magazine’s “Man of the Year”, but Ben Bernankethat’s really not all that important. It takes alot for me to make an extra click or two.


Usually rock stars made public speeches when they’re giving their version of legal events or as part of a court ordered community service program.


Although I haven’t checked the newswires this morning, I think Bernanke is misdemeanor free.


Fortunately, the felony charges were dropped when the nany proved to be an unwilling witness.


What is important as the whole world is talking about the first ever press conference held by a sitting Chairman of the Federal Reserve is that he not act like a rock star.


It’s hard to believe that it was nearly 50 years ago that John Lennon let out with his infamous words.


Given Bernanke’s lineage, it would be newsworthy if he were to proclaim himself to be “Bigger than Jesus”.


I don’t think that he’s likely to do that, but you never know what happens once you get on stage. Strange things do happen, but don’t count on it.


In the meantime, we have two days before the big event. In my eyes, that’s a much bigger event than the upcoming royal nuptials.


I still remember being at work and making my rounds watching ceiling mounted televisions with everyone transfixed to the screen when the previous generation’s royal couple made it legal.


How’d that one work out? Better than Arthur Burns.


Although the New York Times seems to believe that American’s think this one will be a yawner, I’m not quite as certain.


My own wife, who will be in the very early stages of jet-lag will be in California and she is planning to watch the festivities, although she is by no means a royal watcher.


I’ve tried to get her to be a stock watcher for years and even that hasn’t really interested her, but it’s good to know that while she is awake at some ungodly hour in California, I too will be sitting in front of the television, albeit watching the market’s pre-open news.


Somehow that will unite us through the cable ether.


Come Friday morning, I’m hoping that the market won’t still be abuzz from some Bernanke slip. That would really be a Black Swan event and would take some of the wedding’s mojo.


Since I’m nearly fully hedged at this point, although still waiting on Goldman Sachs, British Petroleum and some other opportunities, I’m hoping for a nice market drop.


It’s fairly likely that he’ll face more germane and probing questions than typically posed by the grandstanding morons front and center at periodic congressional hearings.


Maybe when faced with real questions Bernanke may borrow from the obtuse phrasebook of his predecessor.


Instead of being bigger than Jesus, he may utter something alluding to the fact that he may be of a proportion that is at once on scale, but clearly larger than any deity put forth by civilizations old and new, while accepting the human nature of the duopoly between the Federal Reserve and the Treasury.


I hope that Bernanke lets slip that he’s been embezzling trillions from the Treasury and invested the money into the Libyan movie industry, just as long as the markets recover within 2-3 weeks.


Again, not likely, but these rock stars do wierd things.


Have you seen the tabloid pictures of Bernanke’s trashed hotel suite?


 

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Nothing Makes Sense

Don’t get me wrong. I love Sallie Mae.


Obviously, no one really loves Sallie Mae if they are their student loan processor, but I’m well beyond that stage of my life and fortunately my kids didn’t need to go that route.


Sallie MaeBut you have to love Sallie Mae if you’re a trader. Even investors have to admire Sallie Mae, although the ride from $6 to $10 was bumpy, as it was from $12 to $14.


 


I have to credit Jim Cramer for first putting Sallie on my radar screen a few years ago. That was when Sallie was at about $6, recently up from about $3. Even with that kind of move, Cramer was convinced that Sallie was going higher.


You could have made your career on that gutsy call alone.


 



At that time, there was widespread belief that the Obama administration was going to dismantle Sallie Mae, so a trade in it was fraught with risk. Since I don’t like risk and don’t like to speculate, I’m still amazed that this one caught my interest.


Remember cousins Freddie Mac and Fannie Mae?


The upside, though, especially if you were a covered call trader, was considerable. In those days, Sallie’s volatility was high, but the share price always seemed to revert to a slowly increasing mean.


On top of that, the options premiums were in the 6-10% range for the near term strike and money price.


I had not owned shares for about 2 months, but then repurchased for the March 2011 options cycle, as Sallie kept testing the $15 mark, I was always happy when the cycle ended below $15.


Even though the options premium in the lower volatility environment was now in the 3-4% range, still not a bad monthly return.


On Monday I sold May $15 options and then bought them back on Wednesday, as Sallie fell prior to its earnings announcement.


So what happens?


Sallie announces earnings 25% less than it’s comparison quarter.


Bad news, right?


Oh, it also announced a pitifully small $300 million stock buyback.


And you guessed it. The stock surges by about 17%


Now I’m not complaining, because that gave the opportunity to sell new call options. even though Sallie now went well beyond $16, I still sold the $15 options, as I expect the price to fall down somewhat. Since my purchase price was about $14.50 and the cost basis now even less by a few months of options premiums, the in the money call option will give penny for penny profits if the stock price falls.


Now all of this happens on a day that GE, which is not the parent corporation of this blog, announces great earnings and another, albeit small, dividend increase.


Again, you guessed it. GE moves down, after a very nice pre-market move, testing $21. Not just down, but below $20.


In the first iteration of this blog, a few years ago, I thought that I had learned not to apply rational thinking to the market’s moves.


Clearly, I haven’t learned that lesson, as I’m still amazed at the irrational reactions.


It can’t be reading between the lines. There has to be something else at work here.


While I can’t complain about Sallie Mae, I can about GE, as I still haven’t had an opportunity to sell call options. As it is, the GE shares are becoming the dreaded “dead money.” Even Microsoft is performing better. At least I can get a decent options premium on those shares, which barely move outside of their tight range.


In the end, does it matter that nothing really makes sense?


Not really, but it’s still very difficult to get a rational mind to think irrationally on a consistent basis.


Fortunately, as I’m getting older, the rational part of my mind seems to be diminishing in its relative strength, being replaced by the need to grow hair out of areas that never had hair before.


When you think of the divine nature theory of the creation of the universe and all creatures, you really have to wonder what was in the grand plan that called for hair to grow from your ears as you got older.


That really doesn’t make sense.


Why couldn’t the creator of the universe rest after creating the need for a rising waistline and a complimentary white belt?


I guess rational thought has never really had a place in the universe.


Sadly, tomorrow is a stock market holiday. I hate those days, with all due respect to dead Presidents, religious celebrants and laborers. It means that I’ll have to actually do something less constructive, but it will give me the opportunity to ponder how I might implement irrational thought processes so that they operate in the background.


But if I did that, they I could never become a talking head or “contributor'”  because that would mean that I would correctly be predicting and analyzing the markets.


I wonder what I would say about the price of silver?


Maybe not making sense is really the way of the universe.


Go figure, but do so irrationally.


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Something has to Give



Today was actually one of those rare days that I worked.


Although I think that I work just by sitting at home, watching TV and trading stocks and options. In addition to all of those responsibilities, I also screen telephone calls from tele-marketers, as we still have a landline or two.


My wife doesn’t use the same lexicon as I do and considers work to be something more honest in nature whereby money is exchanged for services. 


I don’t know where she gets these kind of ideas, but I do know better than to disagree.


So today I worked, which was compounded by the fact that I worked on Monday, as well.


The problem, though became apparent as early as Monday, and something really does have to give.


I’m not one of those people who feel that they really need to have it all. I’m not a Cosmo woman. I’m perfectly willing to sacrifice.


But now that my son has convinced me that I need to get with “The Twitter” and revive the blog, all in the name of generating buzz for the OTP book, I barely have time to watch TV or trade stocks.


And now there’s this work thing.


Guess which one I’m perfectly happy to give up?


Today was especially difficult to juggle all of these demands, and I’m afraid that my tweeting suffered.


This came as an especially cruel blow, as I was so proud to receive a direct private Tweet from Herb Greenberg, now back at CNBC, and was looking forward to even more recognition from one of the greats.


His one word Tweet to me was “Funny.”.


That was good enough for me. I didn’t even care if he didn’t call me in the morning. His scent on my Droid screen still remained.


Today was one of those days that really deserved lots of attention toward watching the tape and trading on it. After all, how often does the market move up about 200 points from the open and then just stay there?


Not many. But what made it a really good day was that I still had plenty of positions that I had not yet been able to call cover.


That happens even less often.


What was so nice about selling so many contracts today was that it generated enough options premiums that I could use the proceeds to buy even more shares in some of the holdings that weren’t moving today.


I was able to pick up more shares in Mosaic, Riverbed Technology and Textron.


And it was that same Textron whose call options I bought back after just having sold them yesterday.


Now, all we need is for Textron to move up a bit more, since it did recover much of its earlier days’ loss and then sell new call options.


As my son would probably say after seeing Charlie Sheen on his Violent Torpedo of Truth Tour, “Winning.”


But I didn’t have much opportunity to Gleet.


That’s gloating while you Tweet.


What I did realize is that my wife, who is increasingly more accurately portrayed as my Sugar Momma, needs to step up her game just a bit.


Perhaps a second job.


That would be a very nice good faith move on her part, and one that would certainly be appreciated by me.


I can write these kind of things in this blog, because she has the good sense not to read it, although on certain days I’ve been known to suggest that she read the days’ entry.


Today won’t be one of those days.


Since I’m not “working” tomorrow, I plan to juggle all important aspects of my life in their proper proportions.


At the rate that I’m going, I’l have Ashton Kutcher like Twitter numbers in no time and I promise to do it without a backside view of my sugar momma in her granny panties.


I won’t pander for numbers.


Tomorrow, I’m hoping for a negative image of today. I’d love to see a market drop in pretty much everything, except for those of my holdings that didn’t participate today.


You’ve got the idea.


Textron, Mosaic, and Riverbed. But add to that list JP Morgan.


And then there are those that didn’t participate enough.


Goldman Sachs, British Petroleum and Hewlett Packard.


There may be some others, as well, I just can’t remember. My mind has been too drained by working for the man.


Something has to give.


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