Szelhamos used to have a saying whenever he assessed a project that he had undertaken:

“It’s good enough” was the typical comment as he surveyed the fruits of his labor.

Of course, if you were paying for those fruits you probably wouldn’t want to hear that sort of statement.

He had a friend who was a house painter who used to tell the story of when he told his workmen in Hungarian that they were just going to do a quick sloppy job on one particular project, when the owner, apparently understanding Hungarian promptly showed the work crew the front door.

I remember when Szelhamos and I were trying to finish a small storage space in the basement. For some reason that I can’t recall, we didn’t include that in the rest of the professionally contracted basement project, which was a significant undertaking. That basement was actually larger than the entirety of our two story home in the Westchester suburb of New York City.

Of course, our end result was good enough. I doubt that it will be good enough for the next owners of this home.

Today I started thinking about just how important it actually is to be the very best in your area of expertise or business. You hear the phrase “best of breed” so often as the one one company in a sector that merits your investment consideration.

When news came out late yesterday afternoon that Borders, arguably the best in the business of book peddling was now likely to liquidate, it occured to me that being the best in a dying business offers no solace.

The fact that both Borders and Blockbuster used the same gimmick of a free Buggy Whip with every purchase or rental probably should have sent that message earlier.

I’m just not certain how Merril Lynch is going to work those into a meaningful promotion for its dying business.

In a way, this thought is a little bit in keeping with yesterday’s blog “Remember Report Cards”.

What I didn’t mention in that blog article was something that I learned from my oldest son, who at one point of his early college career had a GPA that if multiplied by 100 would give you an  IQ that might qualify you to wear a protective helmet 24/7.

I’ll give you a moment to digest that one.

What he taught me was that unless you were planning on going to graduate or professional school, grades really didn’t matter.

I’ll never know how true that really is, as he completely turned it around in the latter half of his college years and now only has to wear the helmet during waking and sleeping hours.

As a side note, he has done quite well for himself in his first few post-college years. Working hard, having fun, making money and joining the investor class.

So good enough?

As I look at today’s upcoming  end to the July options cycle, on the heels of Google’s blow out earnings numbers yesterday, I’ll be missing out on what may be a $50 climb in Google, as my call options will see shares taken away from me at $520.

Should I have tried to be the very best and get the most out of that and all investments?

Uh duh. Of course.

There’s no question that there’s an audience for a Home Run Hitting Contest, but there’s not much audience for a Scratch Singles Show.

If you owned unhedged shares of Google, you just hit a home run.

Otherwise, if you’re like me, the third base coach just tackled you as you rounded first base.

But I don’t have much in the way of regrets.

Tomorrow will end and once again I’ll do the final “is it good enough” calculation.

That’s the angst filled calculation that I do to see what my bottom line would have been had I not sold call options on my holdings.

I’m not sure why it continues to be angst filled, especially since most every month I come oit ahead. Not only do I come out ahead, but the money represents realized profits, as opposed to theoretical profits that assume that I would have been smart enough to take profits on the stocks, as opposed to the typical “let it ride” mentality of most investors.

Listen, I know who I am. Otherwise, I would have sold Google back in 2007 when it had reached $700.

One of the nice things about selling call options is that it creates a discipline of selling and forcing yourself to take profits.

It’s akin to admitting that lesser profits are “good enough”.

And they really are, especially if those lesser profits come on a  really frequent basis.

The New York Mets used to have a powerful home run hitter, Dave Kingman. Back in the 70’s or 80’s, he towered above other players. When he hit a home run it was really a marvel, but really accounted for nothing. One dubious record Kingman had, among others, was his home runs to runs scored ratio.

Worst ratio ever!

In fact, Kingman, purely for purpose of exaggeration, was possibly the best homerun hitter of the era and had some of the longest clouts ever recorded, ultimately became the first player ever with more than 400 home runs to fall off the Hall of Fame ballot on after his very first year of eligibility.

Given those highlights, I’d rather take it down a notch or two and be Lee Mazzzilli. Broad repertoire, nothing terribly flashy and ended up with a World Series ring.

Kingman ended dressing a rat up and placing it into a shoebox he gave to a women reporter. He was trying to send some kind of a message, but unfortunately severed horse heads were out of season.

I’m resigned to the fact that I’ll never be the best. But I’ve also come to understand that “good enough” can be good enough if you can just keep doing it year after year.

Mediocrity isn’t really bad as long as it’s consistent. Hitting a home run is great, but not at the cost of striking out in a 3 to 1 ratio. Just look at the high flier funds and see where they stand in the subsequent years

Remember when Fidelity Magellen was the very best? How about when it was the very worst? I’m not much of a mutual fund person, but over the long term, it was the Equity Incomes funds of the world that lived to see another day.

When today is over, I’ll look at all of my shares that are assigned and do the calulation. In Google’s case I’ll bid them farewell until the next time that we meet. Probably in the neighborhood of $510

As it will turn out I purchased this current lot of shares on June 13 at $507.39. I will give it up for adoption to a new owner for just $520.  I also received another $11.01 in options premiums. So for the one month of ownership or rental of those shares, my return was 5%

I’m really happy with that.

It’s good enough.

 

 

When Szelhamos and my mother were still very new to this country, they really didn’t speak much English.

That proved to be of great advantage when I was in the second grade.

Back then, I spent a lot of time in the corner, as I continually acted out a my infantile way of demonstrating my crush on Miss Spillinger, the teacher. The fact that Miss Spillinger would probably be about 70 years old now would make her a cougar by most anyone’s operating definition.

When I received my report card, I was not eagerly awaiting the parental unit’s disappointment over my “Conduct” grade . I had received a “U” for “Unsatisfactory”. Even at age 7 or 8 I knew that there would be some kind of price to be paid.

What I hadn’t counted on was Szelhamos relapsing to German or Yiddish for his interpretation of the “U”. To he and my mother. it meant “Uber”, the very highest of grades. I don’t really know what they thought the only other grade “S” for “satisfactory” stood for. They probably thought that was Hungarian for “szar”, which by all reports would have been consistent with Szelhamos’ school performance.

In cae you’re not fluent in Hungarian, just go to Google Translate.

But they were both quite proud. Clearly, as parents that had done everything right.

Whew, spared whatever the consequences would have been. All I had to do was to promise that I would work harder to get “Ubers” in all of the other subjects and not “Szars”

All was forgotten by the third grade as we moved on to a different grading stysem, the old A through F. with  A and E alternatively used as the highest grades. And lets not forget all of those in-between grades that pluses and minuses were all about.

Through high school our report cards were numerically graded in units of ones. Very precise. Every exam had consequence, as every exam would change your final grade.

For my own children, by the time they reached high school, there was a maddening grading system. Although it was still an abbreviated A through E, with E now replacing F as a failing grade, but all performance motivation was extinguished. That was because the system had no contingency for plus or minus grades. A student with a “B” knew that no matter how well he would have done on the final exam it would have no impact on the final grade. Whether you had an 80 or an 89 it didn’t matter. It was all the same.

Students are very good at gaming the system and there was really no consequence for poor performance or inconsistent performance, as long as you stayed within a broad grade range.

Forget about the concept of doing well just for the sake of knowing that you did well.

Personal Pride? You may as well use a Google Translate tool to figure out what that means as well. You could have done szar on an exam and it would not have mattered one bit.

For me as a parent, report cards became worthless quarterly pieces of paper, knowing full well that the system promoted under-achievement. If that’s too harsh, then let’s just say that the system didn’t promote optimizing efforts.

In hindsight, I give my kids credit, though, for not wasting their time on an equally worthless system.

I often used to think that teachers should have some kind of report card, but I know how subjective those grades might be, especially if parents had a say in the process. Although there must be some kind of evaluation system, the consumer student or family is not privy to that information, even if the teacher has been charged in some kind of sex crime.

But at least the nice thing about the educational system was that most of the time your exposure to a teacher was a once in a lifetime experience. Unless that exposure was part of a sex crime, in which case either the video or the nightmares could make those images recurrent.

I never had Miss Spillinger, or another like her again. That probably turned out to be a good thing. I was able to turn my attention toward academic achievement as opposed to lusting for an academic.

If she were around today, I would probably worship the denture adhesive that she would now be sticking onto her forehead.

But those days are over. Even though my youngest son still has two more years of college to go, they are really over.

Back in the days when I actually worked for a living I would have to do quarterly and annual evaluations on my professional and non-professional staff. Sometimes the criteria were prescribed for me, while other times I formulated the performance criteria to suit the individual’s strengths and job requirements.

People certainly had incentive to do well because bonuses were at stake.

Nice incentive.

In a world where bonuses are most often much more meaningful than actual salary, I often wonder what kind of real report card is used on Wall Street. I’m certain that its entirely related to how much income is bought in, with perhaps some inverse consideration being given for the number of current SEC or criminal investigations. But no doubt, those report cards are internal documents and not shared with the investing public.

Afterall, if public servants don’t have their report cards disclosed, why should employees of publicly traded companies?

A few years ago, Joe Kernen of CNBC did the unthinkable. He called an “expert” to task, when that well known individual, who has since passed away, said something that was clearly not true and in complete contrast to his previous positions prior to the financial meltdown. No one likes a guy who tells you “I told you so”, when in fact he was part of the cheering chorus. It’s one thing to be a  bear and have your followers miss the boat. It’s quite another to be a raging bull and then see your followers fall off the cliff.

The difference is that the bear followers live to see another day. But then again, so does the rampaging bull advisor. Too bad his followers may not get that luxury. Did you ever notice that cult leaders tend not to take the Kool-Aid?

Kernen threatened to bring out the videotape.

Indignant is one way of describing the response and the atmosphere remained tense.No one likes to be graded on performance at any stage of life, especially if you know that you’ve not even qualified for a “Gentleman’s C”.

I blame Kernen for the gentleman’s subsequent death.

Obviously, any kind of financial performance report card is fraught with problems. The mutual fund industry has been great at portraying their performance in the best light by slicing and dicing the numbers and reporting periods in question.

Just look at all of the controversy surrounding Jim Cramer’s performance as a public tout. The numbers generated by “objective” observers are all over the place.

As I sit and listen to analysts and experts all day long it is equally obvious that no one really keeps track of all of the statements, recommendations and pronouncements. Given that these guys are always looking for a way to distinguish themselves from the pack, it should be relatively easy in these days of computers and data collection to actually track someone.

The way to really distinguish yourself is to be lucky with at leat one big call, be attractive and personable. Then you make bold statements while counting on  memory self-destruct processes to kick in.

Of course sending a buy signal is only one part of the equation. The next part, that we rarely get released for public consumption is when to sell. No one wants to publicly come out and say “sell” or more genteely say “take profits”.

There are some brave souls who will say as much, but that comes with personal peril.

As I watch yet another TV sequence with Dennis Gartman of commodities fame, I wonder what his real and current batting average is right now. based on his reception on various shows and the frequency with which he appears, you would think that he was “Uber”.

Amazingly, it always seems as if the talking heads always sell just before the unexpected plunge and always buy right before the climb.

That would be 100%, at least of the acknowledged and unaudited trades.

I do watch CNBC’s “Fast Money” most nights and analysts are marched through all of the time. I know that as people we tend to be biased toward attractive and tall people. That’s borne out by study after study.

When they parade out the technician with the patrician name on casual Fridays, how can you not immediately believe that he was ordained to be infallible?

Especially if a gnome like ogre comes to a different conclusion looking at the same chart?

Even if the guy with three names turned the chart upside down and said precisely the same thing you would believe him, while rolling your eyes if the Kucinich like analyst did the same thing.

Of course, the Kucinich-like analyst never would have made it onto TV, although there is one incredibly ugly guy who appears on CNBC. Given his outward appearance, I’d say that he was probably very, very good at what he does, unless he’s sleeping with the producer.

These are the things that markets are made of, but these are a few of my least favorite things.

For all I know, that ogre may speak the Gospel, but no one calls anyone to task.

Today, with the options cycle coming to an end this Friday, I sold near the money call options in Williams Sonoma, one of my perennial favorites, as well as in Spreadtrum Communications.

A also bought more shares of the ProShares Ultra Silver which was down big today, as silver and gold prices soared again. Although I initially thought that I would hold onto those shares as a speculative play, I eventually sold July call options on those, as well.

Why am I telling you this?

Just as I did last week, when I sold some last minute call options hoping to scrounge out a few pennies, a last minute rally in the markets got my shares assigned. My ultimate trade was pennies for dollars and I was on the short end.

There’s no obligation to tell you, since I’m not an advisor, nor do I sell my expertise in real time.

But report cards are important. When it comes to protecting my money, I don’t mind looking at an ogre. At least with an ogre, it’s all out there for everyone to see, warts and all.

The late Mark Haines would very often question  guests with a cynical tone.With the new iteration of Squawk Box and Squawk on the Street, the remaining members of the trio of the last decade, Joe Kernen and David Faber are back together, albeit in picture frames.

It would be a great tribute if they returned to those days of holding analysts and experts to the fire. It’s time to sharpen up those pencils and let the grades fall where they may.

 

 

 

 

Every time my kids, niece and nephew get together at our house, I have a deeply rooted need to snap a picture.

Always in the same location, always the same pose. My nephew and niece have learned how to position themselves so as to make it difficult for me to PhotoShop them out of the picture.

Seriously, why would I want to look at them everyday?

But they’re very bright and have long ago figured me out. They know that I’m not likely to do it if it takes too much energy, so they choose their positions carefully. They no longer sit next to one another at the ends. As a result, my PhotoShop skills have really waned, whereas had I had the motivation I could have actually expanded those skills significantly.

One of their favorite sayings, always following some lack of common sense action of mine is “Uncle George, you went to Harvard?”

Jokes on them. I’m not really their uncle.

Although the dogs come and go, the kids stay the same, other than the fact that they’re not kids anymore, with the youngest soon to leave her teenage years behind. Sort of like an option’s expiration, only with a much better future.

What made me very happy yesterday, in adddition to the fact that it was the best picture ever in the series and only required a single take, was that my niece requested the photo opportunity. I didn’t have to beg, nor did I need to cajole and I was able to stop payment on the checks.

WIn – win, especially since my bank doesn’t assess me a stop payment fee.

It’s funny how, as you get older, you find yourself spouting the same aphorisms that your parents regaled you with when you were too young to appreciate any one else’s experience. In this case it’s how quickly time passes by.

Someday, I’ll probably assemble the shots taken over the years just to depress myself about the passage of time, but that would take motivation and effort, both in short supply. Instead, I’ll just stare at the gray hairs lining the floor after haircuts.

As quickly as those years seem to have gone, some other things tranpsire so painfully slowly.

Take August, for example. Although nearly each and everyday has been a rollercoaster ride, the kind that I never tire of, as long as the ups and downs are in equal measure, it has just crawled along.

Although the month was filled with happy and sad moments, a graduation and a funeral (I probably dont need to add, “respectively” here), the month still dragged entirely because it happened to be one of those 5 week options cycles.

Man I hate those.

I don’t mind the over-emphasis on the market’s down movements, but what I do mind is that extra week. I mind that even more than the grocery store “special” offering an extra 20% product  in the shampoo bottle, but having to pay 30% more.

Although we have just that one final week to go, I wish it would have ended already. Not to ease the pain, because that really hasn’t been too bad, but to get my hands on more options premiums. I can’t wait for the August contracts to expire. That’s still true even though since this past August still has a chance to be the best options premium month I’ve ever had.

Isn’t volatility wonderful?

With an additional week to sell some options, I’m within reach of my personal monthly best, without worry that an asterisk will need to be placed in my spreedsheet. Having shrivelled genitalia is a small price to pay for all of that income and since I use only generic steriods, my expenses are low.

It all goes to the bottom line.

Once the weekly contracts became more common, I really gravitated to them, now looking increasingly for those opportunities. Unfortunately, some of my favorite stocks, although highly liquid, such as Dow Chemical and DuPont, don’t yet have weekly options, whereas “drek” like Harbin Energy does.

So my trading still comes at a flurry on the first Monday and Tuesday of each cycle and then markedly slows down, other than for the few weeklies. Shares like Freeport McMoran, JP Morgan, Goldman Sachs and others keep the income rolling in through the month, but it’s still heavily concentrated to the cycle’s beginning,

On Monday, I’ll need to replace Caterpillar and Freeport McMoran. At the moment, I’m leaning toward Deere, Chesapeake Energy, Rio Tinto and maybe even Microsoft, which goes ex-dividend on Tuesday. If I’m able to get any of those at just the right prices, meaning right near a strike price, the near the money or in the money options premiums will take the month to new highs.

As I type away, the early reports are of positive opens in Australia and Singapore, but that doesn’t translate very well here, unless there’s something cataclysmic happening. Since most of my remaining August options are still out of the money I’d like to see a nice higher opening, even if it means paying a higher price for the items on my wish list.

As the September cycle approaches, I’m carefully looking at the more favorable premiums as the volatility has risen and wondering whether it’s time to adopt an earlier strategy.

Back during the market bottom in 2008 and 2009, I was actually selling out of the money calls, hoping to capture greater stock capital gains. I could do that since the options premiums, even for the out of the money positions were really very good, owing to that volatility. That strategy was right for the times, but was replaced by an in the money strategy as the market started on its sustained upward climb in 2009.

Given the options, and by that I mean choices, I think that I would rather not go back in time. Even though the grey hairs and the aging kids are making me increasingly forlorn, I think I’d rather stay grey. I’ve learned alot over the years and don’t think I’d want to tarade any of that back.

I think I’d also like to stay with the current in the money strategy. I like it at these higher levels.

The air is actually much better at 12,000 than it was at Dow 11,000 even though the premiums are much sweeter closer and closer to hell.

As the kids are getting older, I know that the photo opportunities are going to get less and less likely. Although I’m sure that if properly motivated I could computer age them appropriately on the exisitng photo collection, that’s probably not as likely to give me the same satisfaction as the reral thing has over the years.

In the meantime, I’ll just have to get my satisfaction from knowing that with each month comes along a new option cycle and some great memories of cycles past

I just wish that time would go by much faster.

Did anyone say Daily Options?

 

 

 

I ended yesterday’s blog with the phrase “metaphor du Jour”

And here we are today and it’s “Crisis du Jour”.

The only thing that I can think of is that I’ve become a Franco-phile ever since the Dominique Strauss-Kahn incident. I won’t tell you if that began as the allegations flew or when the allegations sank.

And I have a soft spot for Szarkozy, too. He’s so far from the US stereotype of a French leader and, of course, he has that Hungarian lineage that has helped to somewhat dampen the bad taste still left over from Esterhazy, more than a century ago.

I only started paying attention to the world economy about 25 years ago or so and unfortunately, my memory has started deteriorating since then, so the recollections may be a bit spotty.

But for whatever memory that remains there seems to be a pattern of ever developing world crises and threats of default.

I vaguely remember Brazil and Latin America of the ’80’s. I recall all of the talk about the kind of horrible exposure Citibank had in Brazil’s economic woes. And then there was the IMF, as well, but that’s not real money. I have no clue where their funds come from, but no doubt, now as then, it’s probably disproportionately from the US. I could be wrong about that, but I don’t really care about accuracy. In that way, I’m just like the elected officials discussed a couple of paragraphs below.

Man, but look at Brazil now.

All that had to be done was to simply press the “Default Button” and all was well again.

Then in the late ’90’s it was Russia. Once they started locking up the “oligarchs” and squashing political freedom in the name of democracy things improved substantially, although you do also have to give some credit to $150 oil. They also save a lot of money by rotating the Presidency between just two people.

At this point, my short term memory really gets fuzzy, because the crises started coming more fast and furious over the past decade. In fact, sometimes it’s hard to keep track of which came first, the boom or the bust.

When was it that Ireland was the economic wonder of Europe? Wasn’t Iceland just another way to say paradise? Come on, you really didn’t expect that much from Portugal, did you?

It is getting hard to keep track of all of the players these days. Germany is once again all powerful. I know that much, but we have a succession of Greece, Spain and now Italy to capture our attention.

Oh yeah, and then there’s the United States. Remember just a couple of months ago when S&P scared the b’jeezus out of the markets? Not to mention the fact that there’s all of this talk of US debt default if the ceiling isn’t raised.

For purpose of this blog, I’ll just conveniently forget about our own financial meltdown of 2008.

Years ago there was a movie, “Don’t Raise the Bridge, Lower the River”. Interestingly, the parties in the Jerry Lewis shennagins were Arab and Portugese.

How prescient. But probably reasonable advice, although it probably wouldn’t be a bad idea to do a little of both with this new invention, that I believe is called “compromise”.

As I was watching CNBC over the past couple of days and listening to our elected officials from both sides of the aisle playing loosely with the facts, it occured to me trhat we would be so much better off if the perjury rules that Roger Clemens is facing over his congressional testimony were applied to members of congress.

They should always be under oath. After all, with every public pronouncement, aren’t they just electioneering for votes? These days being a congressman is akin to being a robot whose only skill is to create new identical robots sharing the same skill.

Since it’s all about the re-election, everytime they, shall we say, stretch the truth to fit their needs, they are lying to the electorate.

Perhaps the only one telling the truth, or at least he thinks he is, is Rep. Ron Paul and he’s a lunatic. Now that he’s announced that he won’t be seeking re-election, we’ll see what sort of increasingly unfiltered things spout from his brain.

I think the best way to play all of these crises is to stay in bed or at the very least mute the TV and wonder why there’s so much red rolling by on the ticker.

Another approach is to do what I do when I get very frustrated with a misbehaving software product, app, code or hardware. Just press the “reset” button or go back to “Default” settings.

Sometimes it’s really that easy and spares you from wasting lots of time.

Sure, there’s not that much gratification from giving up rather than struggling through to try and come up with a solution, but after a while, enough is enough and you have to let those costs sink away.

Not that long ago, perhaps two years or so, the “experts” told us that Italian debt was very different from that of must other countries. The distinguishing factor we were told, which made the Italian situation non-explosive was that its debt was predominantly owed to Italian nationals. Very different even from the United States situation, where we are mortagaged to the Chinese, who assumed the landlord position from the Japanese of the ’80’s.

Remember them?

With each day, comes a new crisis and then a new slew of analysts and talking heads who alternate between telling us that it’s either “risk on” or “risk off” trading.

These things really mean nothing to me. Sure I understand the concept, but I could just as easily stand there and make this stuff up and then just as easily change my take on things the next day.

I don’t know if these pundits receive report cards, but if they do, they are probably curved similar to the way weather forecasters are assessed.

On a positive note, yesterday morning the Dow Futures would have had the market opening down 150 points. In the absence of any really tangible news, it all turned around and the market just stayed flat all day.

I started going for pennies again and sold some JP Morgan $41 calls expiring this Friday for $0.25.Not much, but if I get exercised, I’ve already gotten the quarterly dividend and a couple of weekly options premiums on this one. As pointed out in the recent blog, those pennies do add up.

I certainly don’t mind the scratch singles. I don’t have any pride. I don’t even mind getting on base by error.

Unfortunately, I saw no other opportunities today. In the absence of any news known to the greater investing world I marvelled at how Dow Chemical, a sizeable holding, got smacked down 3.5%. Not that I pretend to be a technician, but there certainly wasn’t any technical reason and I doubt it was related to the Italian banking crisis.

No matter. That crisis will be like yesterday’s fish and Dow will bounce back

I think tomorrow, I may try the Spanish economy or maybe even one of the daily specials.

As Groupon and LivingSocial try to distinguish themselves, this may be their next area of opportunity. The Daily Default Deal might be very attractive  to investors. A 24 hour window to buy bonds at great discounts. Unfortunately, the discounts are likely to get even higher after the offer expires on some of these.

But still, the very thought of being able to get laser hair removal and discounted bonds all at the same time is just too great to pass up. The thrill of the Deal du Jour itself may just be the opiate that we need to forget about the Crisis du Jour.

Can’t wait for tomorrow.

 

CORRECTION: A previous version of this blog post inappropriately referred to Brazil as having defaulted on it’s loans. In fact, during the 1980’s it was Argentina that defaulted, while Brazil approved new lax sodomy laws. Thank you to @Wolfrum for bringing a portion of the correction to my attention.

 

Like pretty much everything that I write about, there’s a metaphor out there somewhere. Sometimes though, it’s so obscure that even I can’t quite get the correlation without holding my breath for five minutes or more.

I can’t wait for my state to enact the Medical Breath Holding Act, as I’m somewhat embarrassed about having to do so illegally. It’s not like breath holding is a gateway tantrum behavior at my age.

I always used to think that Szelhamos would have loved to try a little bit of that medicinal stuff. Funny how it’s not considered medicinal in Amsterdam and Szelhamos did love his assorted baked goods.

Too bad, but at least my kids and I have Amsterdam and you know what they say:

I reached a Tweeting milestone the other day, yet it was greeted with nowhere near the fanfare that Derek Jeter received.

Can you imagine? 3,000 Tweets in barely two months. Yeah, and how many hits did Jeter have during his most productive two months?

Exactly. No one coddled me through the dry spells.

And if it weren’t for some time on the Disabled List, due to a typing index finger injury, I’d be approaching Pete Rose territory. But like Pete Rose, I doubt that I’m headed for the Twitter Hall of Fame. There’s a price to be paid for betting on what Ashton Kutcher will be Tweeting next.

Although the lucky recipient of that 3,000th Tweet didn’t get as much as he was hoping for at the Sotheby’s auction last week, he was still pleased. Imagine the sheer joy of being among those to have an opportunity to read a 4th of July gem like this one, my 3000th:

 

Spell-check, auto-spell, calculators, e-mail, IM’s, texting, sexting, Twitter.

Slow degradation of the 3 R’s and professional pornography

 

It’s amazing what kind of wisdom you can cram into 140 spaces.

My son convinced me to start Tweeting. Why he did so is still unclear. Although he says that it would help me to promote the Option to Profit book and stir sales, I think that he wanted me to do something that might stave off rampaging senility.

Why you couldn’t have both is beyond me, but clearly he didn’t think things out very well.

As far as the first objective goes, I’ve been pleasantly surprised by sales, especially since I really have no friends and an exraordinarily limited and interested family to buy enough books to make me feel fulfilled.

So what has 3,000 Tweets accomplished?

Besides destroying the ability to use prepositions and introducing the concept of substituting numbers for words?

For one thing, it has bought Szelhamos Rules a readership. But what is making me very happy is that increasingly those readers are coming to the site directly, rather than through those obscurely shortened links that originate somewhere in a Libyan domain. The proportion of Twitter referred clicks to direct hits has been steadily changing.

If you know just a little about the various website analytics, you know that site hits are usually categorized on the basis of their origin, being either direct, referred or through search.

Interestingly, the two most searched terms that bring people to the site are “Boston Chicken logo” and “Big Bra sizes”. That just shows you what a wide range of subject matter is covered in the blog.

Being a little more analytical, I can also tell you that the Bra searches predominantly originate in Saudi Arabia, Qatar and Mississippi.

I won’t get into details like bounce rate, average time spent on site and average number of actions.

That’s geeky stuff, just like technical analysis.

See. Did you see the segue? OK, ready for it? The metaphor has to do with trading strategy. My facial color is now sufficiently blue for me to see the connection.

Is it really worth all of the call writing activity. Wouldn’t I be much better off with either a buy and hold or an actively traded portfolio.

Following StockTwits as I now do, as well as the trading crowd on Twitter, I’ve learned a little about momentum trading, but when I say “little”, I actually mean “nothing”.

What was once a fairly analytical mind has no patience for learning, understanding and applying all of the charting nuances that these guys seem to enjoy, or at least tolerate for the sake of making some money.

I still have no clue what phrases like “Swing Trader” and “Position Trader” actually mean, even though I’ve done the obligatory Google search.

But there’s absolutely no way that I could revert to “Buy and Hold”. For one, I really enjoy the options income stream, but more importantly, I really enjoy the trading. (See “Feeding the Beast“)

If you did read my book, you’d know that I have admitted to being a terrible stock picker. I may have used the adjective “lousy” to describe those abilities. Instead, I’ve come to rely on a list of about 50 or so stocks that I routinely trade in and out of, not so much on my own accord, but instead based upon whether the shares are assigned.

Occasionally, I do add a new stock or two to that mix each month or so, but it seems to take a while for those to prove themselves.

Why? Because I’m a lousy stock picker. That means not only do I not know a good stock from a bad one, but I also don’t know the right time to buy a good stock.

So the prospect of actively trading stocks alone just probably would work for me. Besides killing the 2% monthly income stream, I have a feeling I’d be seeing lots of capital losses.

Granted, the joy of trading might not be diminished, but somehow I think that the joy is more in the profit than in the act.

It’s not sex, you know.

I do keep a relatively crude spreadsheet that compares my holdings to the S&P 500 and adjusts for withdrawals and deposits, but doesn’t account for different trading strategies.

Compared to the S&P, so far for the past four years, I’ll gladly take those extra few percentage points.

Even though that kind of assessment is abstract, it does calm my frayed “wish I woulda” kind of nerves everytime I think of the ones like Green Mountain Coffee Roasters that got away from me. Oh yeah, and Visa, a couple of weeks ago. 

So is the incessant call writing really worth it?

1. Sure, it got me a book and even book sales.


2. It got people reading the blog and even commenting and sending non-threatening e-mails.


3. It helped me to stop plying my formal trade.

But the real question was is “Tweeting worth it?”

See all of the above.

And so ends the loop that is the metaphor du jour.

 

 

Over the years I’ve gotten a little more sophisticated in the kinds of trades that I make and obviously, the stakes have gotten higher, as well.

Like an addict, there’s a need to trade, a need to get a greater thrill and to wonder what’s coming next.

And then you die an inglorious death in the streets, with your feet ensheathed in Baggies, lucky only in the fact that you had enough plastic ties to secure your booties so that your trusted pet goldfish wouldn’t float away.

Maybe that’s a bit of an exaggeration, but you get the idea of what excess can do and just how worthless the more expensive Zip-Loc is when it comes to securing the bag to your foot.

Do you remember that song “Want a New Drug”?

The problem is that when the drug does quit, you may not really be sure which way is up.

Not to cherry pick lines from songs, as there are billions available for any situation, but “You may ask yourself, how did I get here?”

It used to be very simple. There was a time when there was just wine. But even then, by the time the room stopped spinning, you rarely knew which way was up.

As I was writing the Option to Profit book, I received a call from a friend in California wanting to know if I had any stock recommendations. It was about 11 AM on the East Coast. She told me that her broker was drunk and she needed to get out of cash.

Being drunk is probably not a good way to make investing decisions, unless it’s for someone else’s money.

Seriously? Who cares if it’s other people’s money?

As time went on, beer and wine begat hard liquor. For purposes of this piece, marijuana was the gateway to LSD, heroin and cocaine. I’m so hopelessly out of it, that I can’t really write with any level of expertise on more modern mind benders. Sure, Crack, crystal meth, PCP, ecstasy. Heard of ’em, but it ends there.

I never even had a Four Loko

Regardless of the drug, they all threw your balance off and altered the perception of reality.

Welcome to my world.

When beer and wine were all there was, so too were individual investors limited in the recreational and investing choices. For me, those are one and the same.

Back then, all you had to know was up and down. Your stock went up or you stock went down. End of story,

As I was getting ready this morning for another week of trading, I looked at my holdings and potential holdings and had to make an increasing and varied series of mental notes.

At least this Friday is the end of a monthly options cycle, so I don’thave to think about which one is a weekly and which is a monthly.

I don’t own many Freeport McMoRan shares at the moment as I’d like, having just lost some to assignment. I want those shares back. I’ve had them on and off, mostly on for the past 3 years, going from a pre-spli $22 to a post-split $52.50, but I don’t want to pay $55.

So I want that share price to go down. Simple enough.

But now, take Google, as another example. It was hit hard on Friday, down about $15 or so on the heals of a $30 run up.

But I still want it to go down because I sold $520 calls expiring this Friday. Granted I got good premiums last month and this month, but it would make me happy to be able to keep my shares and “…..go back Jack, do it again.”

That seems simple enough to keep track of, Google down. Down good.

Certainly, it’s also simple to keep track of the fact that I want Mosaic to go up, but knowing that its just gone up about $10 in the past week makes me less than optimistic for a rerun. But, if it gets near $72.50, I’ll be selling a call contract expiring this Friday and then hoping it stays right around there.

Again, simple enough, just a little bit woozy on that one.

Then there’s the Spreadtrum Communications deal. I had some puts expire this past Friday and I still have others due to expire this Friday. But, I also was just assigned some shares, so now I own shares, as well.

Now it’s getting a bit complicated, but as the room is slowing down, I think I want my shares to move up.

Yeah, that sounds right. I think I’ll try to sell $17 call options for this Friday and hope that Spreadtrum closes above $17, since I really don’t want to be holding a Chinese company of any kind for any amount of time.

But since I don’t like taking losses, I’ll see if I can’t make a go of it for a week.

On the other hand, the Sirius $2 puts I sold are expiring January 2012. I suppose that it would be good to see a nice price rise and then buy back the puts to close the position. But if it goes up too much, too fast, I’d feel like a fool for not having purchased the shares outright, even though I know that I would never buy a $2 stock.

Why not? I don’t know. Don’t make me think, I’m getting a headache.

Alright, what’s this I see. I also have shares in the Proshares Ultrashort Silver and have sold calls on it, as well.

Let me try to get this one straight. Man my head hurts. The price of silver goes down, and then the price of the ETF goes up. Oh, and its 2:1 leveraged as well.

My cost basis is $17.02 and received a $1.02 premium for the most recent $17 call sale. Friday’s close was at $16.86.

I have no idea of what I want.

Do I want silver to go up or down? Too much thinking involved. Way too complicated.. I may need something to bring me down off this bad trip.

I need some Rocky Road ice cream, maybe a little Chocolate Marshmellow.

But here’s the thing.

After the headache goes away, after the room stops spinning and once I know up from down, I just want to do it again.

Anytime the opportunity presents itself, it’s just time to do it again.

I’m sure before it’s time to cash in my literal and figurative chips the investing choices readily available to an individual investor like myself will increase even further.

Sooner or later it won’t matter. In a world where up is down and down is up, the Mad Hatter reigns.

I wonder if a yarmulke counts?