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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