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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