Swimming Downstream





 


In the real world, we marvel at how salmon swim upstream, back to their own birthplace, in order to perpetuate their species’ life cycle


Then they die.


As opposed to a long ago blog article about Michael Dell, but just as easily could have been about Jerry Yang, Ted Waite and some others, it’s really hard to go back home, unless you’re Howard Schultz or Steve Jobs.


In general, it’s always easiest to go with the flow and become one of the crowd, unless you’re a lemming.


Lemmings on ParadeThey take exactly the opposite approach of the salmon. They go with gravity and are disciples of Thomas Malthus, thinking that their species would have its best chance of survival without them taxing the limited resources available to the next generation.


I saw Meatloaf in concert a couple of years ago, in a relatively small venue. Bat out of Hell, arguably one of the greatest rock albums ever, dared to ask the querstion “What’s it going to be boy? Yes or No? Yes or No?”


And that was the question for me on Thursday. Be a lemming or be a salmon.


The problem with that analogy is that either way you die and they both depend on some strange fascination with herd mentality.


The real question then becomes: “Go with the flow or fight the tape.”


In general, those are the two basic categories in society. Are you a Goth or a preppy?


There’s no question that the tape has been decidedly up the past few days, even if a few of those were limited to only the closing hour. But ever since that boring 300 point Dow down day on the day that the NYSE commemorated the 10th anniversary of 9-11, there have been only good feelings.


Market Kumbaya with everything being carried upstream as there’s an expectation for less than horrific news coming out of the European Union has been the rule. That was definitely the case with Thursday’s trading as the market nicely bounced back from an early day retreat of gains and went on to close at highs.


In general, I tend to be an optimist as far as the longterm direction of the market goes, but right now my longterm horizon is limited to the end of the options cycle, which happens to be today.


Based on what I’ve done the past couple of days, including the sales of call options on Dow Chemical, Textron, Home Depot, Transocean and more Freeport McMoran during the first phase of Thursday’s rise, it says that I don’t expect follow through for the last day of the cycle.


Now that’s a pretty stupid position to take, trying to predict market movement for a specific day in the absense of any real news and in the face of an obvious trend.


I base that on one thing and one thing only.


Watching Chrisitne Lagarde, the new head of the International Monetary Fund, I realized that she looked just like comedian David Brenner’s older brother.


There’s was just no way I was going to be soothed by economic forecasting from her once I couldn’t get David Brenner’s vision out of my head.


Any of you of my generation understand the difficulty of balancing thought and action when something displeasing is part of the equation. That’s precisley why sex counselors used to advise men suffering from premature ejaculation to think of Willie Mays at critical moments.


With that in mind, I decided to keep swimming downstream into the face of a gusher. At least when it came to stocks.


When it comes to those UltraShort Silver ETF’s, I decided to go with the flow and exercised judgement based on greed. No matter what our stock market does in response to the EU crisis, I expect gold and silver to give up much more of their entirely unwarranted gains. So there was no way I would sell call options on those holdings. The reward of picking up a few more crumbs wouldn’t even remotely cover the costs of missing out on the plunge, thanks to the gift of ETF levereging.


Today may turn out to be the day that might Austria gives its thumbs up to the EU plan to bail out Greece, so there may be even more of an upward bias to come and then the obligatory letdown.


The plan, if approved, gives Greece a few more months before defaulting, by freeing up some $8 Billion Euros to help its banking rescue.


Sounds like a great idea, mostly because I missed hearing the word “traunches” repeated every fifth word.


The problem will become obvious though when the rest of Europe sees that Greece ends up using that first traunch to buy cigarettes and book vacations to Thailand to make up for the vacation time missed while striking.


In the markets the only real news was from Netflix which lost nearly 20% of its value. They showed just how easy it was to swim downstream today. But they had good company in gold and silver, although their density alone made it much easier to work against the upward stream.


Although I neither hold shares, nor use Netflix’s service, I’m beginning to understand the madness behind their model change and increasing dependence on, coincidentally enough, “streaming” media.


Just imagine if you were a Netflix user. You could have been streamed the bad news well ahead of when basic cable investors would have gotten it. Talk about a great advantage.


Obviously JP Morgan gets its news the old fashioned way, as it decreased its price targets after the 20% drop.


You’d think that for whatever advisory fees they’re paid by their clients, they’d at least be streaming Netflix.


After the close, Research in Motion joined Netflix with a 20% drop in the after hours trading once their disappointing earnings were released.


I’m not really certain that you can call anything RIM does these days “disappointing”.


A few short years ago bad news from RIM would have cast a pall over the market. It’s not too likely that will be the case as the market opens on Friday. But at least RIM has been consistent regardless of short term market direction. Since its last earningss report, its been all uni-directional.


On a positive note, the RIM executive officers were certainly able to much more easily and quickly e-mail news of the disappointment, owing to the great Blackberry keyboard. Imagine how much more time it would have taken to disseminate the bad news on, say an iPhone. 


Say what you will, but there’s something refreshing about a technology company basing its fortunes on a mini-keyboard.


The way I see it, RIM has gotten the best of all worlds, as long as those worlds place a heavy emphasis on oblivion.


It’s definitely in a lemming march, yet it’s also trying to swim upstream. No matter how you look at it, that’s a losing combination.


Sort of like the European Union.


 


 


 


 


 






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See a sneak preview of Chapter 1.  hoco blogs


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Kicking the Can Down the Road





 


The other night, the NFL record for longest field goal was tied for the second time.


I still remember when Tom Dempsey, the otherwise unheralded kicker for the 1970 New Orleans Saints, beat the Detroit Lions with his 63 yard field goal.


What I remember most about that is Alex Karras, the Detroit Lion defensive tackle, who was a oretty funny guy, appeared on Johnny Carson’s Tonight Show and put a great comedic touch on describing the tragedy of that kick in his team’s eyes. Mind you, his team’s eyes were also seeing the fact that Dempsey, who had a congenitally malformed foot and wore a special kicking shoe, had less than an athletic physique.


Tom Dempsy’s professional life span didn’t last much longer following that kick, but it’s been an inviolate part of football lore for more than 40 years.


The nice thing about have a finite lifespan is that kicking things down the road is a great strategy.


It works for people and governments, too.


Kicking the CanMy guess is that people that can kick the can down the road without any real guilt probably extend their lifespan by greatly reducing stress. At the point that they realize that the “jig is up” and the end of the road is figuratively approaching, its time to literally approach the end of the road and kick the can.


People that are protected from the overhang of stress usually make better decisions, as well.


Maybe not better decisions when assessed with regard to the longterm, but at least better decisions for them, which in turn leads to even less stress.


Talk about a real win – win situation.


There have been lots of movies made about people returning to earth from the after-life to make amends for the lives they’ve lived.


Although I’m not a cinematic expert by any means, I don’t think that any of those movies have ever examined the guilt associated with taking advantage of passing your financial responsibilities to your unseen great-grandchildren’s grandchildren.


My personal hero is the father of a friend of mine who actually took out school loans in his son’s name, used the money for himself, and then saddled his son with the debt.


How is that not a great strategy?


It’s so good, in fact, that governments and leaders, whether elected or otherwise do exactly the same thing, finding great inspiration from the alternative life form band, Devo.


Dependence on foreign oil? Kick it.


Social Security Trust Fund problems? Kick it good.


Rising deficits and debt? You must kick it.


Chinese own too much of our debt? Issue more, preferably a long Sebastian Janikowski kick on that one.


So when I heard Treasury Secretary Geithner this morning at the Seeking Alpha Conference sponsored by CNBC, emphatically say that the European Union would not see a repeat of Lehman Brothers, it gave me great cause for concern.


He seemed to be saying that the problem wouldn’t get kicked down the road and that tough, but responsible actions would be taken by the world banking community to ensure that  the Lehman debacle wouldn’t repeat itself.


As you look around the European Union that can has been kicked around alot, but it always seemed to end up in Germany’s backyard. But then again, we’ve had some bad experiences when Germany’s ventured out of its backyard in the past, so maybe it’s for the best.


Yet, just when it seems that there will be some way to quench the flames without a great deal of hardship, you get Finland, flexing its influence and introducing such responsible banking concepts as “collateral”.


Actually, if Finland really had any influence, you’d see Nokia phones being used by others than just unemployed elves. As Finland realized it really didn’t have quite the bandwidth it thought, they acquiesced, besides how much feta per capita did they really need, anyway? Given Finland’s location, just about anything can qualify as a much needed chill pill.


The market then tanked earlier today when word came out that the other EU powerhouse, Austria, was against the Greek bailout. It’s no coincidence that chill pill and buzz kill rhyme.


Funny thing about those Austrians and their language. Apparently, it’s hard to understand those Germanic languages, as somehow Austria’s intentions were not reported properly and when clarification was made the market started a voracious climb.


My own experience with that group of languages is that it’s much easier to comprehend when it’s being yelled at you in very close proximity to your face. Even if you don’t quite understand the words, the tone gives the real message.


Austria needs to scream more. Maybe even some hand gestures.How do you say “Nein” in Austrian?


When everyone eventually realized that Austria, in fact, didn’t come out against a bailout, only delaying until Friday some sort of vote, the market did a 400 point turnaround.


With options expiration on Friday I looked for more opportunities to pick up some crumbs and there were plenty as the price trend was going higher.


So I took the opportunity to sell call options in DuPont, British Petroleum and Riverbed Technology.


On top of that, I sold some more January 2012 Sirius-XM Satellite Radio Puts.


Although I’m not likely to get all of my remaining positions hedged, I’m reasonably happy, as my shares have been handily outperforming the S&P 500 during this recent 3 day climb.


I was especially happy to see that my troika of environmentally disasterous stocks, British Petrolueum, Transocean and Halliburton have also fared nicely, especially in the wake of today’s report which scolded all three for last summer’s rig disaster.


As the afternoon started wearing on I began having some doubts about foraging for crumbs, because the market had climbed 270 points and suddenly every talking head was exuberant about the market’s future.


Well, wouldn’t you know it, just as the unbridled enthusiasm got on the air, the market cut its gains in half during the last 30 minutes of trading.


I didn’t mind. For me, the ideal end of an options cycle is having my positions close out right near their exercise prices. For my part, I wish this had been Friday.


I love kicking the same stocks right over into the next options cycle and then selling at the money options on them.


For me, kicking them down the road is a strategy that can never go wrong, regardless of life expectancy.


On the other hand, things may start getting serious in Europe. They may actually address the issues instead of kicking them down the road. That raises the questions as to whether our markets have already discounted that and will drop upon the reality occuring and whether precious metals will reverse their climbs, as fiscal responsibility enters our vocabularly.


Nah, that’s not going to happen. No one ever  got re-elected by making the responsible decision.


The EU should just follow the lead of Americans everywhere in dealing with financial crises.


They need to get a new credit card and take those 0% Cash transfer offers


 


 


 






Hop SIng and Paw Blaze a New PathAmerican Tower ChartMake you Portfolio Work for You!


Invest like TheAcsMan


Option to Profit is available as either an eBook or 300+ paperback. Take a humorous look at a serious topic and learn how to make your portfolio finally go to work for you in bull and bear market environments.


See a sneak preview of Chapter 1.  hoco blogs


More about the book and purchase options. Scroll down and read the Szelhamos Rules blog, updated every weekday.


Find  OTP Book at Amazon, B&N or now you can also Order direct  from publisher. Use 10% Discount Code P4S2ZD8H


 


  












Crumbs, Anyone





 


It’s that time of the month again.


No, I’m not being visited by Aunt Flo, as the euphamism would go, if indeed it were germane.


CrumbsNo, it’s the end of the September options cycle in just a few short days. Time to see if there are any crumbs left out there just waiting to be taken. And you do have to act quickly, because before you know it those crumbs get smaller and smaller, before they disappear entirely.


I suppose that since I now try to find as many weekly options opportunities as possible, that third Friday of each month has lost a bit of its significance. Now its more or less like any other Friday.


I’ve never had a visit from Aunt Flo, but I can’t imagine that her dropping by on a weekly basis would be very good.


In a way, I guess that’s as sad as when you know that Aunt Flo won’t be visiitng anymore. Fortunately, that single long hair on my chin that popped up after Flo disappeared is obscured by my full beard.


By the same token, most people I know no longer deal in euphamisms, anyway. They get right down to brass tacks, no sense beating around the bloody bush.


Hmm, now I’m not certain if the preceding itself was a euphamism for something, but no matter, I just like using uniquely British adjectives.


As I looked back at the monthly statistics for the past few years, I should have been tipped off that this wouldn’t have been the kind of month to e-mail home about.


It seems that the month following what turns out to be my best options premium month of the year is a dog.


And that was this month because that was last month.


Since options premiums keep me afloat, I have a need to trade, but times like these offer the biggest dilemmas.


Holding on to so many positions that are significantly below their purchase prices, it’s hard to justify trying to optimize options premiums by writng near the money contracts when their assignment would result in meanigful capital losses.


Although I always check my spreadsheets to see how much in accumulated premiums each position has captured, I still have a reluctance to take the loss, even when it is mitigated or even fully offset by those premiums.


I’m not beyond rationalizing my actions, though.


On days such as the first two trading days of this final week, you see the clock ticking away on the one hand, but you also see the possibility of that silver lining in depressed stock prices, or at the very least the lack of support in silver prices, as I own unhedged shares of an UltraShort Silver ETF.


Will there be some good news coming out of the European Union sending our markets for a nice climb? I sure wouldn’t want to miss out on recouping some of those paper losses, but those crumbs, those 0.5% options premiums, do I really want to leave those on the table?


The answer to those questions are “who knows” and “not really”


The full answer to the latter question is actually “not really, but I don’t want to feel like a schmuck”.


But you do have to eat, you can’t really let pride get in the way. As small as they may be, those crumbs can add up.


And so, in a measured reaction to a meandering day, I did get the opportunity to sell call options on JP Morgan, Freeport McMoRan, Halliburton, Williams-Sonoma and the Triple Q’s.


Actually, with the exception of Williams-Sonoma, if the others do get assigned, I’ll still be taking capital gains on the underlying stocks, so the risk will be determined by how wildly they may explode upward between today and Friday’s close.


Opportunities potentially lost. That ends up being the performance metric, but since I don’t harbor regrets, I also rarely learn lessons. You can fool me over and over again as long as those premiums add up and losses have some strategic value in reducing tax liability.


When I did add the crumbs up it was worth the risk, given the reward and the need to be able to feed Laszlo the Dog.


It’s either crumbs or go back to work, not to mention the shriveled carcass of a wiener dog.


Hmmm. Weiner dog.


If anyone reading this is old enough to remember Bob Denver’s character, Maynard G. Krebs, you would know my reaction to the very thought of “work”.


Whatever optimism there’s been in the markets during the last hour of each of the two past trading sessions it’s a little frightening to thank what it’s been based upon.


First, the rumor of Chinese intervention to buy Italian debt turned Monday’s market on a dime.


But you know that we’re really in trouble and living a life of deep delusion if we think that Chinese benevolence is going to be the remedy that saves the European Union’s financial systems.


Today’s good news was that there wouldn’t be a Greek default.


At least not today.


The other good news was that somone had interpreted something that Angela Merkel said as being of a positive note, regarding satisfying Finland’s need for Greek collateral.


When I wrote about what was wagging the dog the other day even in my wildest dreams I never would have guessed Finland.


But Finland, too, was just in search of crumbs. Whatever assets Greece actually has rights to, Finland wants it. After all, with its dying Nokia enterprise, what else does it have going for it? And besides, those reindeer need to eat, too.


So I know the feeling.


Wherever you can get those crumbs, get them.


Tomorrow? Who knows what tomorrow brings. New rumors, maybe some actual news, maybe not.


No matter. This week ends in a few days and a whole new world of opportunities comes along.


This time, I’m hoping for the whole loaf and will gladly take the crumbs, too.


 


 


 






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Sometimes it Pays to Wait





 


Patience paysToday was the kind of day that it paid to be patient.


Sometimes it’s worth hanging around to see how the story will end.


As it turned out there were so many twists and turns that had I fallen for the first one and gone with that as inspiration for this blog entry, I’d have missed the real story.


As it turned out, the downgrade of Societe Generale was just an irrelevant way station.


Same with the next series of twists and turns. It was just that kind of day. One with no unifying hypothesis, just a series of crumbling European economies and maybe a reluctant German savior.


So I patiently watched and waited for some message that might signal the opportunity to take action. Buy something, sell something. Anything. After all, I’m not making any money by blogging. I need to trade something now that I’m out of Beanie Babies.


I tend to be a fairly patient person with most things, although Sugar Momma has just come to the realization that I’m much more nervous than I let on. Those two may be connected.


If that’s true, she’s really patient, because it took her more than a quarter of a century to say anything.


Although the words “uber” and “cool” have never been used in juxtaposition with my name, the only possible explanations for taking such a long time to make that diagnosis is that she was blinded by love.


Or maybe she just never paid attention.


I guess she was just waiting for the right time and it somehow popped up when I found myself watching a football game that I had absolutely no interest in, but nonetheless, must have been exuding some pretty obvious stress.


What stressed me out was how the place kicker, who was the son of a past professor of mine, might get cut once again, this time because it didn’t appear as if he made any real effort to tackle the kick off return guy enroute to the end zone.


Steve Hauschka, late of the Baltimore Ravens, in fact, the guy that made Matt Stover expendable, is the son of Peter Hauschka Ph.D who was a giant of a man and one time placekicker for the Dallas Cowboys. He was also one of my favorite professors and was every bit as nice as he was big.


But still, I like to think of myself as being patient and above the stress that makes most people have moist underarms.


This weekend, even before the meaningless football game, my patience was tested.


Each year the past 10 years or so we have belonged to the Columbia Film Society and have dutifully gone to the newly renovated Howard County Community College auditorium, for what may be one of the best entertainment bargains around.


They are obviously doing something right as this season is their 43rd.


With each year comes the wonderment of how the campus has changed during an impressive expansion. Beyond that, there’s also the wonderment that they just keep adding more and more showings each season as more and more people want to see films with sub-titles.


Now, even the English speakig films will have sub-titles, although admittedly, some of the Briitish films have been nearly unintelligible.


Somehow, despite the consistent increase in membership, we still seem to be the youngest in the crowd, although that may be a skewed observation as we now go to the early bird Friday showing.


This years’ premiere movie was “Of Gods and Men”, a French film set in Algeria, following the conflicted lives of a small group of monks who grappled with the dangers of Islamic fundamentalism invading their peaceful village and cloister.


The movie was terrible, unless of course you’re a fan of Gregorian like chanting and multiple crescendoing scenes that have no crescendo.


I’m guessing that the $3.9 M in box office receipts wasn’t matched by CD or bobble-head sales and almost definitely was the least favorite Happy Meal Toy of 2010.


But patient as Sugar Momma usually is, she just couldn’t stand sitting and watching any longer. She actually walked out after a bit more than an hour.


I stayed.


Until the bitter end.


But I didn’t stay because I was patient. Nor did I stay because I had an unjustifiable sense of optimism.


I certainly didn’t stay for the singing or the consistent disappointments as various scenes seemed to be approaching a signifcant turn and twist.


I stayed because I don’t understand the principle of “sunk costs”.


For some reason I have a difficult time admitting that I’m wrong and moving onto something else.


Maybe even something better.


Otherwise I would have written this blog after the first 100 point drop in trading, moaning about how the European banking system was dragging us down with them.


Or maybe I would have written about how that drop was erased for about 30 seconds about an hour into the trading session.


But I stayed and lingered, watching the ticker descend further into the territory that we’ve known all too well lately.


But then it changed. The crescendo came and it didn’t disappoint.


All it took was a rumor to turn things around, and we really didn’t see this one coming. Almost like an M. Night Shymalan kind of twist, at least back when he knew how to twist.


The rumor was that China was seeking to purchase Italian debt. Despite the fact that it seems that Greece is going to be the nation to default on its debt, the Italian economy is so much bigger. Additionally, the fear of contagion is lessened if an intermediary block is fortified.


The problem is that while the market made up about 200 points, as it did a number of times last week, this time it was based on a rumor. That’s even more stressful than when moves are based on nothing at all.


I’m preparing myself for the “Breaking News” announcement that Chinese officials were actually meeting with Italians not to purchase debt, but rather to discuss 1300 years of back royalty payments owed for the Chinese patent on pasta.


But no matter. It was worth waiting to see how this day would play out.


I’d thought of selling some call options on Halliburton, JP Morgan and some others as the market was recovering, but as I kept watching the market build on the rumor I decided that this story may go into the next trading day.


Unlike “Of Gods and Men”, which never did get any better, I’ve got high hopes for Tuesday’s market.


I have no stress about the outcome, nor do I lack in patience. I know that sooner or later things will get better. I’m not walking out on this one.


At the very least, maybe gold and silver will take their rightful paces with the other bottom dwellers that I currently own. Since I’m on the short side of those precious darlings, days like today, with another $40 drop in gold and $1.40 in silver helped to ease the day, even when the rest of the market was decidedly down.


Unfortunately, I can’t say the same about “of Gods and Men”. It’s never going to get any better. It’s not very likely that there’ll be any pre-quels or sequels in my lifetime. By the time the next Columbia FIlm Society film rolls around, the South Korean “Poetry”, I will not have learned anything.


I’ll still sit through the entire showing and will still wait for an ending that will justify the time investment.


When it doesn’t work out that way, I’ll just shake my head and tell myself that next time it will be different.


It won’t be.


But at least I pulled it off today. I waited and it paid off.


Oh, and see you at the 44th season.


 


 


 


 





Hop SIng and Paw Blaze a New PathAmerican Tower ChartMake you Portfolio Work for You!


Invest like TheAcsMan


Option to Profit is available as either an eBook or 300+ paperback. Take a humorous look at a serious topic and learn how to make your portfolio finally go to work for you in bull and bear market environments.


See a sneak preview of Chapter 1.  hocoblogs@@@


More about the book and purchase options. Scroll down and read the Szelhamos Rules blog, updated every weekday.


Find  OTP Book at Amazon, B&N or now you can also Order direct  from publisher. Use 10% Discount Code P4S2ZD8H


 


  








When is 300 Points not 300 Points?





The answer is easy.


This past Friday the market closed down 300 points.


For some reason, it just didn’t seem that way. That sense of disbelief and denial just wasn’t there, but I don’t think it was desensitization or numbing.


Although news is no longer pre-requisite for big moves, we did have news that was painted as being the root cause of the drop. That was the resignation of Jeurgin Stark from the European Central Bank, ostensibly over a disagreement between northern and southern European nations over how to handle the Greek crisis. This came on the heels of the German Supreme Court ruling that it was constitutional for Germany to participate in a Greek bailout.


Of course, Stark’s announcement pointed to health considerations.


For me, I thought that Juergen Stark was a character in the 1960’s cult comedy “Get Smart” ad that the market had 40 years to respond to that news. So much for that worthless aphorism that the market looks forward by 6 months and discounts the future.


Also turns out that was “Shtarker”


American FlagMaybe the day didn’t seem like any other 300 point drop day because it was the day that the NYSE commemorated the tenth anniversary of the September 11th tragedies.


There were moments of silence preceding the opening bell and then throughout the first 2 hours of trading, each representing a specific event on that horrible day.


There were many of those events, each one more unbelievable than the preceding and still hard to believe could actually happen to us.


Or to anybody.


Throughout the weekend there were ceremonies and special broadcasts.


The human mind may forget some of the details of that day, 10 years will do that, but the emotions were still there each and every time that the fall of the Towers was replayed.


Beyond that, the poignant personal stories in New York, the Pentagon and aboard United 93 still evoke tears. There’s no numbness, it’s still very fresh and painful to think about those personal stories.


Nearly everything elicited moist eyes. Paul Simon’s slow and somber rendition of “Sounds of Silence” was perfectly appropriate and gave an opportunity to interpret the meaning of each and every word.


I didn’t know anyone that was directly impacted by the death of a loved one or friend that day. I know that fellow high school and college alumni were victims that day, but I knew none of their names.


I happened to be in New York of September 10, 2001, having driven up early that morning upon receiving news that my mother had a stroke.


I’d made that 200 mile drive many times, very often as a day trip.


As it turned out that day was no different, as the stroke was relatively minor and I felt confident enough to return home, while already beginning to map out our family’s next steps.


I still recall seeing the Twin Towers as I entered New Jersey on the return trip home, but just quickly glanced at them, as I had always done, never lingering, unless traffic was stalled.


This time, the glance was perhaps less, as I recall being on the phone with a friend, trying to stump him with a piece of baseball trivia. I knew he would know the answer, since he was a sports trivia savant, even more so when it came to the Pittsburgh Pirates, his boyhood hometown.


The question was whose pitching record was Roger Clemens seeking to break for best winning percentage in a single season.


I just needed someone to talk to and joke with after a long day. He was just the tonic. The trivia question was just an unnecessary excuse.


He’s gone now, too, but I can still recall every word of that converstaion, coincidentally etched in time.


As it turned out, Clemens never broke Roy Face’s best winning percentage record, but who cares?


The next day, of course, is now one of those very few of our collective experience that people will always remember where they were and what they were doing as the news came through and then unfolded.


Two weeks later I was back in New York, this time to move my mother down to live with us.


The Towers weren’t there on the horizon and the air was still thick. That was the very last time she’d ever see New York, the city that gave her refuge. Freed from the Nazis, freed from Soviet Communists, orphaned and alone, but like so many others, discovered incredible inner strength and helped to defeat evil.


Now it was time to escape, one last time.


Thinking about a 300 point drop reminds you how meaningless some things are. Most things we can recover from. In fact, a 300 point loss, for most people, is just an event marked on paper. Unless you close out positions in panic, they’re just unrealized losses.


Not so for the events we’ve just commemorated. Even if there is no direct connection, there is a direct connection and a grief that will never go away.


Following Friday’s 300 point loss, there’s every reason to believe that the market will return to life on Monday, every reason to believe that at least there is a potential for rebirth.


For those that perished on that day that potential has been extinguished. Yet, much has been said about what that horrible day and its events has given us as a nation and as a people.


3,000 victims murdered on a single day, 2,000 orphans, 1,000 children that never met their father, another 5,000 military fatalities and, yet, Americans have rebuilt their lives and nation.


Amazingly, there never really was an endemic sense of panic. There was the immediate “fight or flight” adrenaline rush of those that due to their unfortunate destiny to be in a certain place at a specific time, but that’s a response that we’re wired for.


When it came right down to a rational assessment of the immediate hour and then the future, it is incredible how quickly individuals, businesses and our government started to move forward.


Together.


We still disagree. Just look at how long it took to get any kind of agreement over the New York memorial and rebuilding project, but we’re wired to do that as well.


In free societies, that’s what people to. They express themselves. Human expression is the bane of evil and of those that seek to promote evil.


Buildings get destroyed, innocent people are murdered, but our basic wiring is unchanged and we don’t cower in caves or behind women and children. We don’t attack places of worship, soft targets on non-combatants.


For me, watching thousands gather to commemorate the lives of those lost and the physical evidence of our monuments in respect of their lives and contributions is a greater victory than the death of a miscreant terrorist leader.


Bin Laden will be remembered as he died, even by those unwilling to admit the vision of him aged and prisoner in his own home. He grew old and pathetic. Our ideals and national spirit have not. They’ve become renewed, strengthened and resolute.


At first, I thought that a 300 point down day occuring on the day that we were commemorating the tenth anniversary of victims was an affront to their memory. Couldn’t we do better?


But then it dawned on me that the absence of panic and the focus on things far more important is a small, but fitting tribute to the legacy of those that have helped to carve out our newly strengthened national identity.


 


 


 


 


 


 






Hop SIng and Paw Blaze a New PathAmerican Tower ChartMake you Portfolio Work for You!


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Option to Profit is available as either an eBook or 300+ paperback. Take a humorous look at a serious topic and learn how to make your portfolio finally go to work for you in bull and bear market environments.


See a sneak preview of Chapter 1.  hoco blogs


More about the book and purchase options. Scroll down and read the Szelhamos Rules blog, updated every weekday.


Find  OTP Book at Amazon, B&N or now you can also Order direct  from publisher. Use 10% Discount Code P4S2ZD8H


 


  












A Dog with Two Tales








I mentioned the other day that I was never very good at idiomatic expressions, maybe I’m not very good at spelling either. I’ve definitely become too lazy to look up the spelling of words, as I’ve been unable to get the spell check feature to actually function without crashing the installation.


Hononyms have always been the bane of my existence.


For want of a waywardly mis-spelled word, I’m certainly not going to bother with the headache of backing up my site’s data. A lot of good it used to do for numbers runners to have their data readily available.


The Szelhamos site may go down, but I’m not.


But I do know the expression “Tail wagging the dog” refers to an inappropriate decision making process or a case of mis-placed organizatonal structure. And I also know that it’s “tail” and not “tale”


Who's Wagging Who?Sometimes, though it seems that there is no head, just a couple of tails wagging one another.


On first re-read, that actually sounds like the premise for a gay pornography film, but that’s for the future to decide. But just in case, I just purchased the domain name “HesAllForeskin.com”.


Thursday’s trading was just another one of those days when, in the absence of any particular news, one of the tails got the upper hand.


I suppose that could be part of the film, as well.


As always, regardless of what is going on in front of our eyes, it then becomes a tale of another kind.


On dog’s of a day like those with triple digit losses, the tales start wildly wagging as each person tries to out-expert the next. Despite the fact that there is often no identifiable difference bewteen two successive trading days, there’s never a shortage of interpretations to explain the action.


After Wednesday’s 275 point climb and gold’s $60 drop it was a different story Thursday. A differnt story is actually the same old story.


At first, it looked as if Wednesday’s tail had overtaken the opposite wagging of the early morning. After nearly a 100 point drop on the open, within 10 minutes the Dow erased that in its entirety and actually made it to a gain over slightly over 40 points.


Gold, in the meantime, just ignored the $60 drop and recouped nearly that entire days’ loss.


While gold was staying on its singular course the market gave up its gain and then some in the 10 minutes before the Federal Reserve Chairman, Ben Bernanke, delivered his speech in Minnesota.


Considering that President Obama is appearing before the joint house this evening, just prior to the NFL season kick-off, it probably shouldn’t have been too surprising that Bernanke didn’t really say that much.


In this case, one tail was bowing to the other. His may be a non-political position and independent from the Executive Branch, but the man is not a rude schmuck.


But still, it was surprising that the market would show any reaction at all. What were they expecting, something other than the obvious? Given the well established belief that the market is forward looking, they must have had their sights set somewhere well beyond the horizon.


The inability to expect the obvious was also evident in Wednesday evening’s GOP Presidential debate, although no one would ever excuse this sad group of being forward looking. After having just seen ex-candidate Tim Pawlenty on with Stephen Colbert, I have a new found respect for Pawlenty.


It all derives from his simple comment that he should have “put a sparkler up his butt” to bring some excitement into his now dead campaign.


As for the rest of the wannabes, clearly, these combatants were following two different tales.


After listening to Newt Gingrich, a strong 12th in the polls, chide the moderators, I’m not certain he understood what a debate is all about.


He faulted Brian Williams and the Politico guy whose name I never bothered to register for trying to get the debate participants to disagree with one another.


Perhaps the producers gave two different tales to the opposing sides. The moderators were told to ask insightful questions and the participants were told to sing “Kumbaya”.


Rick Perry and Mitt Romney did nothing to dispel the notion that they had no clue what a debate was supposed to be about, although right after saying that they weren’t there to disagree with one another, they each quickly forgot that sentiment and then tried to outdo one another with unsubstantiated “factoids”. However, I do have to give high marks to Romney for suggesting that Perry, when it came to signing an Executive order mandating Gardisil vaccinations, would have rather accomplished the same thing but through a legislative process, instead.


Of course, Ron Paul believed that the moderators should have no mandate, so he just answered whatever question popped into his mind. Not surprisingly, there was some gold and even silver, thrown in with his answer, in addition to the idea that the marketplace takes care of everything.


When asked about such specific issues as car safety regualtions, he again said that the market would decide and consumers would move away from less safe cars.


Of course, what was left unsaid was that without mandated safety regulations the only way to discover the spmething is unsafe is through the laboratory we call “life”.


Too late if that’s the way you have to find out. Condolences in advance.


The funny thing is that such a belief is no different from religious zealots that believe that God is responsible for everything that occurs in the world. God willing, God will provide or the market will decide are all expressions of blind faith and the abdication of responsibility.


Poor Rick Santorum. How does he reconcile the demand that government stay out of our lives when it comes to Gardisil vaccinations for young girls, but government should step in and outlaw abortions?


In one tale he tells the story of how parental rights shouldn’t be abrogated, and in the other tale personal rights should.


I imagine his head might explode if a parent actually supports their child’s decision to get an abortion.


Although as the old saying goes “If a head exploded and there were no brains inside, would there still be splatter on the wall?”


Like most things, I don’t pretend to know the answer to that question.


As the day just degenerated further I made a couple of trades adding to my ProShares UltraShort Silver ETF position, which has snuck up to 5% of my portfolio. Most of those holdings are not hedged, as I’m feeding my evil, but reasonably latent speculative side. That side is one that’s very differnt from my overall conservative approach that eschews greed, panic and envy.


If silver falls I will dedicate a room in my home to the Hunt Brothers and will pray to their alter.


But that’s another tale for another time.


 


 





Hop SIng and Paw Blaze a New PathAmerican Tower ChartMake you Portfolio Work for You!


Invest like TheAcsMan


Option to Profit is available as either an eBook or 300+ paperback. Take a humorous look at a serious topic and learn how to make your portfolio finally go to work for you in bull and bear market environments.


See a sneak preview of Chapter 1.  hoco blogs


More about the book and purchase options. Scroll down and read the Szelhamos Rules blog, updated every weekday.


Find  OTP Book at Amazon, B&N or now you can also Order direct  from publisher. Use 10% Discount Code P4S2ZD8H


 


  








Did I Not Get that Memo?





 



 


With Eddie Murphy being back in the news following the announcement that he will be hosting the next Academy Awards, I was reminded of a vintage sketch he did on Saturday Night Live many years ago. (Regular readers will note this is the second time this week I’ve reached for an ancient SNL citation)


Going undercover as a “white person” he discovered the secret society, along with all of its perks, that was hidden from people of color.


The bottom line was that even with “white people problems,” life’s not that bad, I want in.


As I listen to the daily description of the over-riding trading strategy manifesting itself as either being “Safety trade off”, “Risk on” or “Risk off”, I wonder where those decisions are being made.


The various “talking heads” say it with such a cavalier attitude that I get the impression that there is some secret cabal meeting where the Stock Market Direction of the Day Committee gets together and decides where things will be headed.



 


Eddie Murphy does RedI’d like to be on that committee, despite the fact that I generally agree with Groucho Marx’s observation that he wouldn’t want to join any club that would have him as a member. I’m perfectly willing to use any leftover white pancake powder that Eddie Murphy doesn’t need. I’d even wear one of those powdered wigs, but will not wear one of his skin tight red leather suits.


You have to draw the line somewhere, even though I don’t do charts.


As I look through my resume, which is chock full of worthless committee assignments, this one I would gladly be part of, not that Radiation Safety isn’t vitally important to vital organs.


At least a memo. Send me a memo, preferably a day or two in advance. That way I could instead look through my portfolio and not see a list of worthless or non-performing holdings. Besides, I’ve made my position on Insider Trading pretty clear.


No one gets hurt.


The existence of such a committee is clearly patterned after the London Gold Market Fixing Ltd. committee which meets twice daily in London to set the morning and afternoon price of gold.


The difference is that we all know about that committee. Membership is tightly controlled, but it’s proceedings are publicly divulged.


Interestingly, as the London Gold Market Fixing Ltd. Committee meets twice daily, physically present members may pause proceedings by placing a Union Flag atop their desk, whereas telephone members simply say the word “Flag” to pause the proceedings.


Very typically civilized and orderly as is the rest of the days’ precious metals trading.


In the case of Carol Bartz, who was fired via a telephone call from the Yahoo! Board on Tuesday, I don’t know if she had a flag to use. My guess is that if there was a transcript of that phone call, some flags would be raised if I tried to reprint what would likley have been a salty conversation, given her past penchant for profanity.


Whereas many feel that such a firing over the telephone is quite distasteful, I look at it as being symbolic.


Maybe its actually “emblematic”, but I’m certainly not going to use what little remains of Yahoo! Search to figure out which word is best suited for use.


Oh. Nothing remains?


The manner of Bartz’s firing is actually very much similar to the way the CEO of Borders informed employees of the demise of the bookstore chain.


He did it my e-mail. Maybe if he would have used paper and the printed word and convinced more people to do the same, Borders would still be selling books.


You would think that Yahoo! could have come up with a much more technologically savvy way to inform Bartz.


Personally, knowing that every person of stature “Googles” themselves, that would have been a good way to deliver the news.


The fact that “Google” is a verb, while “Yahoo!” not so much, tells the tale. Instead, Yahoo is a noun and not a very flattering one, unless you take pride in being rude, noisy or violent. Maybe profane, too.


In the meantime, the other big news of the day happened at the beleagured Bank of America.


Despite great performance at its Wealth Managment division headed by Sally Krawcheck, she’s now ex-BofA, as she is ex-Citi.


Here too, though, it’s clear that a memo hasn’t been received.


In this case, its for all of those who are showing their support for CEO Moynihan.


Those supporters should know that it’s no longer acceptable to use the excuse “he inherited this mess” in defense of someone who assumed leadership in January 2009. If you buy that line of thinking, either Angelo Mozilo has been elevated to George W. Bush status or the other way around.


Seems that you can’t decry that defense when applied to President Obama and then turn around and use it for Moynihan. But then, those silly Wall STreet types never think that anyone is listening and taking notes.


I keep the memos.


That memo might have been best delivered in the foreclosure notice that was actually filed against a Bank of America branch in Florida.


Today’s secret memo clearly set a signal to put the risk back on, despite the fact that it’s hard to understand how you can refer to prices now being of “value”, yet refer to the actions taken to secure value as being “risk on”.


Whatever.


Today as we just picked up from the last hour of Tuesday’s trading the climb in prices never looked back.


I took the opportunity to sell weekly call options on Halliburton, Freeport McMoran and Sunoco. I also had the opportunity to sell a September Bank of New York call option on the shares I picked up this past Friday.


With still a week to go for this month’s options cycle I find my performance to be well below last month, which was the second best I’d ever had with regard to premiums collected.


Not too surprisingly, when stock prices go down, as they did in the past month, I’m not as aggressivie in selling those calls, as I do like to  recoup unrealized capital losses. Luckily, that’s been the case.There’s a trime for income and ther’s a time for trading profits.


I think that was a song by The Byrds.


As the day came to an end with the Dow up 275 points and gold down nearly $60 the view on “The Street” was summed up by the exchanges “Streetwalker”.


According to CBC’s Bob Pisani, we should stop using the phrases “risk on” and “risk off”.


Ah, finally a man who is against the secretive mechanics of the markets. A man who believes that we should all drink from the same deep cup of wine.


His reasoning was so crysta clear and to the point.


“Risk on and risk off are QE2 phrases”.


Huh? What? What does that even mean? Why do they keep changing the code every day?


I’m sure that won’t be the last memo I’ll miss.


 


 


 


 


 





Hop SIng and Paw Blaze a New PathAmerican Tower ChartMake you Portfolio Work for You!


Invest like TheAcsMan


Option to Profit is available as either an eBook or 300+ paperback. Take a humorous look at a serious topic and learn how to make your portfolio finally go to work for you in bull and bear market environments.


See a sneak preview of Chapter 1.  hoco blogs


More about the book and purchase options. Scroll down and read the Szelhamos Rules blog, updated every weekday.


Find  OTP Book at Amazon, B&N or now you can also Order direct  from publisher. Use 10% Discount Code P4S2ZD8H


 


  








Turn the Lights Off (Archives)









 


The original Szelhamos Rules ran for precisely 1 year, from February 2007 – February 2008. This article originally appeared March 27, 2007. It is reprinted here in honor of Dick Parsons’ appearance on CNBC this morning and the ouster of Sally Krawcheck from Bank of America


 


What do India, Buffalo, Cincinnati and northern New Jersey have in common? Here’s a hint. They are the antithesis of London, Hong Kong and New York.


Sad CitiCitibank, or as it is now known, CitiGroup, announced that it is laying off 10,000 people and re-assigning another 14,000 +.


Do you remember the old Citibank slogan? “The Citi never sleeps? Apparently, the slogan was true. But there was a steep price to be paid. Why didn’t Citi ever sleep? Because it always kept its lights on in such high electricity cost sites as London, Hong Kong and New York. With the worldwide cost of energy soaring, it was only a matter of time until the venerable Citi put on a sweater, turned the thermostat down, lights off and fired 10,000 employees.


The much beleagured Citigroup Chairman, Charles Prince, has decided that the Citi must sleep. So he has ordered that the lights be turned out, at least in those costly cities. And 10,000 people will now be able to get some rest.


As for those other 14,000 that are going to be relocated, they won’t be sleeping. Scientific evidence seems to indicate that the lack of sleep in low cost of living areas has no detrimental effect on health. And like any good employer in a capitalist society, Citi wants what’s best for its employees. So now, they won’t be sleeping in affordable sections of India, Buffalo, Cincinnati and northern New Jersey. Did you ever think that the latter three would ever be in the same league as a third world nation?


So say “hello” to India, Buffalo, Cincinnati and northern New Jersey. If you’ve ever been to Hong Kong, you’ll be amazed at how similar it is to Buffalo. That should be an easy relocation. I feel badly, though, for those Hong Kong people being relocated to Cincinnati. Talk about culture shock. Do you know how hard it will be to get good fresh pickled eel? They may have to cross over into Kentucky.


But I know what you’re asking. How does this news effect me? Pretty straightforward. Your life as a customer in need of assistance, will be miserable. If you think the accent of your customer service rep in India was tough to handle, just wait until you hear the northern Jersey accents. You’ll be pining for the old days.


Over the years I’ve been looking for good reasons to buy some Citi. Until today, I hadn’t found any. As Citi kept getting bigger and bigger, it seemed to lose its way. Jim Cramer is very blunt about Citi. He thinks the only way for the stock to appreciate is for Prince to go, The chorus is getting louder.


So today comes the big announcement. Even in today’s down market, the news would have ordinarily been met with enthusiasm. As it turned out, Citi under-performed today’s market. What will Prince need to do next to keep his head off the chopping block? He’s obviously going to strategize like it’s 1999. But whatever else, it’s probably too late. So as it turned out, I still haven’t found a compelling reason to make the purchase. But it’s coming sooner, rather than later.


So Citi didn’t help things today, but at least it’s not involved with sub-prime, at least not as far as we know. But in just a second degree of separation, the market wasn’t very good today, with homebuilders, yet again, dragging everyone down. Put this into short term context, though. Yesterday, after all, was actually a great day. After 5 straight up days, we were poised to slide. Down over 100 points, the rebound returned us to a loss of just 11 points. How great was that?


So today, with no real news, just more dwelling on the housing numbers, the market didn’t do much of anything. No conviction or just a case of taking a breather. I doubt the latter. Traders are just waiting for the slightest positive hints to take us to the next level. But they are nervous.


On a personal note, despite the qualms about trading UNH for Altria, on day one it’s looking like a really good move, especially with UNH down $1.20 from where I sold it and the Altria (when issued) up $0.42 from its purchase price. I’m glad that when I get my life insurance premium quotes they don’t ask me whether I’m a smoker, by proxy.


And did you see NYSE today? It continues on its climb back toward its high. I’ve been holding off selling call options, because I felt that it’s stock price was too low and the stock would still be heading up. In the after hours, thanks to some very positive comments by Jim Cramer, NYSE doubled its regular trading gain, closing in on $96. Once it gets to 100, it will be time to sell April $105 or more likely, May $110 call options.


While the market continues to look poised to move up once it completely digests this sub-prime stuff, I am actually wondering what Citi’s move portends in the long term.


In the past few years, the economy has been adding jobs. We’re a little removed from some of the misery a few years ago when it seemed that each week a new and ever larger layoff was announced. We were getting used to companies announcing one huge layoff after another. It’s hard to know whether the relative calm of the past few years has been because companies are now lean and mean, or because business has been good.


The consistently increasing monthly productivity numbers might seem to indicate that both are true. Perhaps there was a causal relationship. But its been calm lately, that is, until today. No numbers were given on the proportion of Citi layoffs in the United States. You would think that with the past outcry over outsourcing, if jobs were being relocated to the US, CitiGroup would trumpet that fact. So who knows?


It’s time to turn the light back on CitiGroup to help clarify what their announcement really means for all of us. Or as is said when the lights go off for the night, “Good night sweet Prince, good night”.


 


Note: The original version of this article did not include the graphic “Sad Citi”


 


 






Hop SIng and Paw Blaze a New PathAmerican Tower ChartMake you Portfolio Work for You!


Invest like TheAcsMan


Option to Profit is available as either an eBook or 300+ paperback. Take a humorous look at a serious topic and learn how to make your portfolio finally go to work for you in bull and bear market environments.


See a sneak preview of Chapter 1.  hoco blogs


More about the book and purchase options. Scroll down and read the Szelhamos Rules blog, updated every weekday.


Find  OTP Book at Amazon, B&N or now you can also Order direct  from publisher. Use 10% Discount Code P4S2ZD8H


 


  












All that Glitters










There are lots of things that I’m not very good at.


One, apparently, is the inability to not end an opening sentence with a preposition.


I’m also continually reminded that I don’t clean countertops very well, although it’s still not clear whether I can’t master the process or am just disinterested in the proocess.


I also tend to use multiple negatives in the same sentence.


But the one thing that bothers me is my inability to understand idiomatic expressions. That weakness haunted me back in my SAT days.


Math? No problem. Same with reading comprehension, analogies, synonyms and antonyms. I was even able to keep those prepositions and negatives in check when it really counted. But once you started throwing those idioms at me I was at a loss.


Fortunately, I think that idiom interpretation held a relative weighting role similar to the traditionally recommended place of gold in your portfolio, so it probably didn’t contribute to the final score all that much.


I don’t do well with adages, either.


All that GlittersI do understand the expression “All that glitters is not gold” in that there are either other things that actually glitter, or perhaps there are other things that have the ability to entice.


I guess it could also mean that just because something glitters doesn’t make it valuable, but that’s the least likely one that I think of when I hear the expression.


So using my contraindicatoromometer, that would have to be the correct answer.


And then there’s that silver lining thing.


Did the Rwandan carnage really have a silver lining? The Killing Fields of Cambodia? Does there really have to be something good that underlies everything that is so clearly bad?


Is there anything good about rhetorical questions?


The fact that every cloud is said to have a silver lining is akin to “beauty is only skin deep”. The stuff that’s hidden and out of the way, weither a lining or deeply rooted beauty is totally irrelevant.


If it can’t be seen it doesn’t exist.


That expression is not likly to need any deep analysis. The correct answer is “all of the above”.


These days everyone is touting gold. I’m not, but everyone else seems to be doing so.


What’s funny is that it also seems that all of the commercials for buying your old gold and all of the hype about gold parties seem to have died down.


I don’t know whether that’s due to people realizing they were getting less than bottom dollar for their old gold or the fact that market has already been tapped out at the significantly lower prices of the recent past.


I don’t know anything about gold. Yeah, in the early days of my previous life I had played with casting gold using the ancient lost wax technique, even designed our wedding bands, but that’s about it. When it comes to gold as an investment or as a hedge, I’ve got no opinion.


In general. But these aren’t general times.


These days, you can cast yourself into one of two camps, more clearly defined than The Bloods and The Crips.


You’re either a “Glitterati” or a “Fundamentalist”.


I did purchase 10 gold coins for my 2 kids a few years ago as college graduation gifts, never thinking that their value would double. At least not in my lifetime. So call me a Glitterati, but I did so with no conviction.


Despite the fact that my oldest son, thus far the only one to receive his gift had sold three of those coins at about $1500/oz and reinvested in S&P 500 ETF’s, I still believe that was a rational trade, mostly because my mantra is “no regrets”.


I don’t know if that’s his mantra, too. Based on some of his college and young adult party pictures I’d say “no regrets” is his mantra for daily life, but I’m not certain that extends into his investing philosophy.


It’s funny how your approach to money changes when it’s your money that’s at stake.


Other than that one time foray into the metal itself, somewhere I have a nearly 40 year old silver bar. I think it may have been 25 ounces and I think it was at about $4/oz. But then again, I really have no clue where it is. What I do know is that I fared better than the Hunt Brothers, who even if they had held onto the silver they had purchased in an attempt to corner the market, still wouldn’t have reached a breakeven.


And that’s despite using 1979 dollars.


So as gold and silver have been on this upward tear, for people like me and by which I mean anyone with a shred of rational thought, would assume that their prices were primed to drop.


Last week that one day $100 drop seemed to be the start of a well deserved return to normalcy and perhaps a return of the stock market to more sane intra-day movements.


Wrong and wrong.


Down $100. No problem, just go up $150 and then some for good measure.


Now, I do have to admit that I have been slowly accumulating shares of the ProShares Silver Ultrashort ETF.


I first started doing that when those shares were at $17. They subsequently moved up to about $21, as silver fell to $32 or so, per ounce.


Since I hedge just about everything, I was more than happy to pocket a very healthy option speculative and volatility driven premium and give up my shares.


Since then, though, silver too has been on an unabated upward climb and I’ve again started accumulating shares.


I’ve done so always in the belief that silver would join gold and return to its senses.


It hasn’t and neither have investors, or speculators, whatever you want to call them.


Tuesday, after about a 300 point early day drop in the Dow Jones and a $25 rise in gold’s price, some sense of normalcy returned. Obviously, on the basis of 3 hours worth of sane behavior, I feel comfortable projecting the next 10 years into the future of the markets.


The Dow finished down just 100 points and gold lost about $25 in just a couple of minutes.


While it showed as much as a $9 loss, it did end the day up $4. Silver on the other hand was down all day long, but came off of its lows for the session.


I suppose that Ron Paul, probably still seething over the Tulip Bulb Crash, is happily telling everyone who shows the least interest in listening that he told them so.


I can’t blame him if he were to do that, especially since he should get his moment in the sun after 40 years of trying to spread that message that has clearly been a losing proposition for the vast majority of that time.


These days stocks are clearly not the ones with glitter. It’s certainly not real estate or European bonds, either.


Although I’ve never been one to pay too much attention to price charts, I’m having a hard time understanding why people don’t look at a chart of gold or silver and apply the same kind of cautionary notes that they would if they saw a stock or index demonstrate the same upward climb.


That cautionary note is called “gravity”.


I do understand the perspective of the crumbling world economy being thrown into the mix as perhaps being the reason given for the available support of a continued climb. But I’m old enough to remember we’ve had lousy financial periods over the past 30 years and nowhere near the same reaction in metals.


Granted, the Russian economy of the 90’s was not precisely of the same weight as the European Union of today, but that would have been a great time for gold to rocket. At least the European Union of today has some banking and financial standards and the existence of some relatively healthy members who are willing to prop up the union.


On the other hand, it’s hard to say with any kind of certainty that Russia of today still has any banking standards. Can you imagine the devastation that would have occured back in 1998? And yet, gold did nothing and the stock markets, fueled by technology soared.


I wish that people would have the same sense and sensibility that I have when it comes to the emotions that surround this glittering stuff. Although I did take a pick and shovel with me as I paid a brief visit to the cemetery the other day, common sense eventually took hold after I had broken into a third crypt.


That’s when I remembered that I just wasn’t cut out to be a Glitterati and was no longer a practicing necrodontist. I needed to focus back on Fundamentalist concepts, instead.


The one thing you can say about the fundamentals is that they definitely do not glitter. They’re boring, but at least no one is going to be blaring on my TV suggesting that I go through my old drawers for unwanted fundamentals.


And no, there will never be any alcohol fueled “fundamentals parties” with my many fundamentalist friends.


That would just be weird.


 


 





Hop SIng and Paw Blaze a New PathAmerican Tower ChartMake you Portfolio Work for You!


Invest like TheAcsMan


Option to Profit is available as either an eBook or 300+ paperback. Take a humorous look at a serious topic and learn how to make your portfolio finally go to work for you in bull and bear market environments.


See a sneak preview of Chapter 1.  hoco blogs


More about the book and purchase options. Scroll down and read the Szelhamos Rules blog, updated every weekday.


Find  OTP Book at Amazon, B&N or now you can also Order direct  from publisher. Use 10% Discount Code P4S2ZD8H


 


  





Check out Recent PortfolioTransactions


 



Never a Good Sign







 


I used to really dislike three day weekends.


Since my only hobby is watching the CNBC ticker, I feel a real void on days when the markets are closed. As if Saturdays and Sundays aren’t bad enough, the third day makes it truly insufferable.


I certainly don’t dispute the need to have national holidays nor do I dispute the specific events or concepts that we honor, but so much is lacking on those days.


For example, even inveterate viewers can stand to watch “Enron: The Smartest Guys in the Room” only so many times as CNBC seeks to fill the air on the holiday schedule. Admittedly, though, I could watch the “Marijuana USA” special on an endless loop, as long as someone lets in the medicinal delivery guy when he knocks.


A few weeks ago, as Hurricane Irene was threatening to blow the roof off of the northeast, CNBC broadcast live on Sunday, a day normally reserved for broadcasting its public service imformercials. I’m not certain why I have MediaBistro.com bookmarked in my browser, but they showed a photo of the CNBC air mattresses after their deployment, to show just how seriously they were taking their commitment to breaking news.


Had Hurricane Irene posed a threat only to Florida or North Carolina viewers would still be able to learn about the many purchase opportunities available for their kitchen rotisserie. However, since Irene was headed for the northeast, the only part of our nation deserving of weekend coverage, that gratification had to be delayed.


Any other part of the nation and MediaBistro.com would have posted photos of CNBC hammocks.


Well, here I was, Labor Day and me without a job, by choice. What to do? What to do? Mind you, back when I was working, Labor Day and all 3 day weekends were a welcome event.


Today was Sugar Momma’s turn to take her visiting brother to the movies and they’ve left to see “The Smurfs Movie” prior to his departure for home tomorrow.


Me she sent to see “Rise of the Planet of the Apes” with him the other day. In the recent past, he and I had seen such delights as “Yogi Bear”, “Alvin and the Chipmuks” and “Marmaduke”. I don’t know why I listened to her this time, as I didn’t follow her advice last year to take him to see “Inception”. This time  I wanted to see the Smurfs, but will bide my time for appropriate revenge. That threat is probably empty as I still haven’t devised my revenge for the time she made me place a “to go” telephone order, that took about 20 minutes to complete, at a new Japanese restaurant where the staff didn’t speak anything resembling English.


That was 26 years ago. There’ll be hell to pay.


So that left me home alone with Laszlo the Dog and I was scratching my head and his back over a topic for today’s blog.


The most difficult blog of the week is always the first, as boredom and slow news days don’t lend themselves well to an interesting topic. The biggest story, the absence of Jerry Lewis from the traditional Labor Day Muscular Dystrophy Association Telethon wasn’t a real story, since the news was released months ago. Besides, despite the lack of transparency over the surprising decision, everyone, including Jerry Lewis, seemed to be focused on the main event rather than the behind the scenes drama.


Even the Twitter stream was slowing, but then again, I only follow 29 people and they seemed to be taking the day off bidding an official goodbye to yet another summer.


But there she was, Jane Wells.


Second time this week she provided topic inspiration and guidance. You can always count on her, even though if she ever ascends to elective office in the “Draft Jane Wells for President” movement,  she may ban corked bottles of wine.


I’d like to see her struggle with an screw top bottle of Australian wine and see how long it takes to realize that “righty loosey, lefty tighty”. Besides, is America really ready for a “Wine Party” candidate?


This time she tweeted that CNBC was live with European market coverage.


That Can't be GoodThat can’t be good.


I tried to tune into CNBC, but the Hammacher-Schlemmer Artificial Intelligence Remote Control seemed to know that was a likely error and instead suggested that I watch CNN on this market holiday.


So I had to try and figure out what the various buttons on the TV and cable box actually did and eventually found the proper sequence of clicks to summon up CNBC.


Do you see why I don’t like these 3 day weekends?


As it turned out the market equivalent of a hurricane hit Europe, with the FTSE 100 faring best, down only 3% for the day. You don’t want to know how the DAX did, but let’s say it dropped the equivalent of the savings afforded by one of those tax free shopping days.


The only thing in this financial natural disaster missing was video of George W. Bush patting the back of the Bank of Greece CEO and saying “Heckuva good job, Brownieopoulis”.


As it turned out, the Enron documentary was being pre-empted by a group of people with decidedly British accents, yet unaccompanied by sub-titles. There was a banger filled rotisserie grill in the background and I imagine air mattresses, as well, although there’s a very good chance that the British do not celebrate our Labor Day.


Sorry, Labour.


Luckily, numbers,charts and graphs are reasonably universal, as are the colors red and green.


Oh, I’m sorry again. Colours.


Conventional wisdom had it that following the terrible open in US trading on Friday, the market would recover much of that loss by the second or third hour of trading.


No one was more surprised than me that the conventional wisdom turned out to not be correct.


But I do have to admit that I fully expected, in the absence of any earth or market shattering news, our Tuesday trading to be positive.


Now, it’s not looking quite as good.


In hindsight, it’s unfortunate that the sell-off on Friday, taking a number of my holdings that were hedged by weekly options, ended up with them being slightly out of the money. As much as I enjoy being able to repurchase those shares on the next trading aday at a price lower than was assigned, that won’t likely be happening on Tuesday.


Only some of my Freeport McMoRan shares will be assigned, and there’s never any telling where those will trade, as they don’t particularly follow the market trend with any regularity.


At this point, it’s barely noon on Monday, the European markets are closed and the US futures are pointing down over 200 points.


Live CNBC coverage has now ceased, there’s still about 20 hours before our markets open and it promises to be a slow remainder of the day.


Who knows, between now and then some unforeseen good news may pop-up, like maybe capturing and killing bin Laden again.


Short of that it’s hard to see any good news offsetting those bad signs.


At least I got my CNBC fix today and have an idea of what to expect tomorrow.


As it stands, we don’t have anymore 3 day weekends for a while, but there will be another Sunday coming up next week.


From now on, I’ll be using CNBC as my guide for breaking weekend and holiday news. If there’s no Magic Bullet slicing and dicing its way through the weekend, take cover, it’s just not a very good sign.


 


 


 


 


 





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