Porn, Pot and Policy

I’m old enough that I should be able to exercise some kind of self-restraint.

I’ve already confessed to my need to “Feed the Beast” and nothing seems to be able to tame that desire other than the lack of available cash. Unlike others that have to commit felonies to feed their beast, that’s a place I’m not willing to go.

Yet.

In terms of falling prey to consumption, fads and bodily desires, I’ve been pretty good at resisting those temptations, especially if you have a lax definition of “pretty good”.

Sort of like the floating definitions of “short term” and “long term” in investing circles.

Convicted?

One of my favorite Twitter people, is a guy who goes by the nom de plume of Dasan. I’ve looked at his website, Dasan Stock Digest, and he’s a very credible guy, as far as investment professionals go. Also, a West Point graduate, therefore, if there are indeed any morals charges outstanding, they’re probably sheer folly. Not too shabby a pedigree. My guess is that his subscription service is far more worthy than my Option to Profit service had been. I base that solely on knowing what my service was like. And that’s enough.

Among a universe of people using social media to do nothing but self-promote (see @TheAcsMan ) or to hide behind a veil of anonymity to hurl Molotovs, he’s self-effacing, humble, funny and has a keen sense of observation. Any of the preceding sets him apart from much of the universe. That and his penchant for changing his Avatar on at least a weekly basis, although I haven’t entirely ruled out Witness Protection as being a the root cause of that behavior.

Oh, and before I forget, he marches to a different drummer. Much like the classic line in “Back to School” when Rodney Dangerfield says after Sam Kinison finishes his tirade about US policy in Vietnam: “Good teacher. He really seems to care. About what? I have no idea”, Dasan uses the “%” symbol, rather than the StockTwits standard “$” to designate a stock by its ticker symbol.

Why? No idea. Do I ask? No, I fear for my children’s safety.

Can you say “Rebel”?

Pot PartyFor the past two days, his Tweets have inspired my choice of blog topic. On Monday he Tweeted something about crystal meth. Maybe it was just meth. Maybe it was about pearls or some other gems. I don’t really recall. I was too busy trying to figure out how to scratch my way out of my skin to be paying too much attention.

The Tweet that got my attention on Wednesday was this one:

“The only CNBC I’ve watched in the last decade is ‘the Business of Porn’ and that Pot special they run all the time at night.”

Clearly, this guy is not a good influence, but he certainly got me thinking about how I’m spending my life.

Mostly, I’m spending my life glued to two monitors.

One sits silently, just flashing reds and greens. Today, lots of greens. Mixed with the predominant reds of just a few days ago, it’s been mostly a nice shade of ash.

For any wise guy readers, no, the other one monitor is not chained to my ankle.

The other sits not so silently and is tuned to CNBC from about 6:30 AM to 6 PM, at which point is time to watch the local news.  If you want to know why I no longer watch Jim Cramer, I’m not telling

I almost stopped my habit earlier today to protest Simon Hobbs’ pronunciation of Moshe Orentuch’s name as “Mushy”, but then I realized that I actually liked Simon Hobbs. He seems to have greater insights into the psychology behind European actions than anyone else on air and his accent doesn’t overly confound me., unless he ventures into a Yiddish neighborhood.

Since Europe and rumors of Europe seem to be important for us these days, he probably has as much to offer as the next guy, assuming that the next guy is Charlie Sheen.

Which coincidentally brings me to pot and porn.

Szelhamos taught me to never talk about sex, poltics, religion or money. As I’ve noted many times, he would quickly disavow that policy and was as good as anyone at introducing inappropriate conversation into the mix. Policy itself, was off the table as well, since it was a derivative of politics.

All politicians were “crooks and bloodsuckers”.

Luckily, with his undecipherable Hungarian accent most people had no clue what he was saying, but he did use the word “sucker” often enough as to render it intelligible, regardless of the context.

He didn’t include drugs and rock and roll into his admonitions, because they really didn’t exist in his world, as addictions themselves, of any kind, were just moments of temporary weakness.

His definition of temporary may have been derived from Wall Street, though.

But I clearly need to break my dependence on CNBC, although I do enjoy most of the on-air personalities and just love hearing many of the guests spin whatever it is that they want to spin, as if everyone has a Never Never Land zip code.

What better place to begin my weaning process than with special episodes on porn and pot? Admittedly, I’ve not seen either of those in their entirety, as I have a harder and harder time focusing my attention long enough to sit through a one or two hour structured or scripted show. And of course, there’s that little problem that they too are on CNBC.

Both of those topics, besides the obvious economic story, are issues of public policy.

I’m not a libertarian, but I do believe that so much of what we consider to be off limits would just lose its mystique and special aura if only we stopped paying so much attention. Why we exercise selective approval of vices is beyond me, its clearly not done for public health reasons.

Did I become an alocholic because I grew up in an era when the legal drinking age was 18?.

No. I grew up to be a jerk.

Coherent policy would be nice. Ben Bernanke didn’t beat around the bush at yesterday’s congressional hearings on that issue. In fact, he even ventured that the lack of discernible policy or even meaningful attempts to create policy was in part responsible for the growing “Occupy Wall Street” phenomenon.

In the meantime, any kind of policy coming out of DC, or Europe, for that matter would be delightful.

I often used to think that in the last years of Szelhamos’ life he would have done well with some pot.

Maybe porn, too. Policy would have been superfluous.

Since there’s really not a solution that’s palatable to the entire EU, especially to those most on the line, I think those finance ministers who the Financial Times reported are seriously looking at the Greek situation, should probably seriously look at some porn, instead.

Maybe passing a little joystick around the conference table and before you know it, there’s a solution.

Probably a funny one, too.

Too bad someone ate the notepad that it was written on would be the likely outcome, but still, policy makers need to light a little bit of a fire under themselves, or at least adopt a Rodney King attitude.

While wrestling with heady issues as these, I watched the monitor continue flashing green today.

Again, there was no real news, but why ask why?

I sold some more calls on Freeport McMoRan, as well as some new ones of Halliburton and QQQ. All of those expire on Friday. Deep down, my contrarian self tells me that we will get some truly significant news by Friday and the market will continue its thus far unwarranted climb.

I guess that China must have decided to change their mind and quietly go about unbridled infrastructure expansion and feeding its people since our best and brightest proclaimed otherwise on Monday.

Thanks to big jumps in Mosaic, Rio Tinto, Halliburton and Freeport McMoRan, I had a really good day today, at least on paper. Still doesn’t make up for the very bad days those shares have had the past couple of weeks, but I’m trying to scratch back Renminbi by Renminbi.

At some point, my big fear is that if we don’t come up with some coherent economic policy, the Chinese will swoop in and take control

Bad enough they own so much of our debt and dump IPO shares of dubious companies on our shores, but do we really want them taking over our Pot and Porn industries?

For me, that alone is reason enough to come together and hammer out economic policy.

Now pass that Doobie and don’t turn the channel.

 

Correction: In an earlier version of this posting, I may have lead some readers to believe that I condoned breaking into your neighbor’s home and stealing copper piping. To be clear, my intent was to bring attention to Hank Williams, Jr.

 

Come on Eileen

By 11 AM on Tuesday the market had calmed somewhat, but the jury was still out.

Listening to Ben Bernanke, our venerable Chairman of the Federal Reserve, answering Congressional committee questions, it’s comforting to know that he’s calm, under very trying circumstances.

In fact, even the committee members seemed somewhat subdued, maybe even reverential. Truthfully? To me they looked as if they had had some Kool-Aid.

More surprisingly, some of them even seemed to be asking real questions and not looking for the local news sound bite. Sean Duffy. Never heard of him, but he really asked insightful questions. He even got Bernanke to suggest the mechanism of valuing Treasuries may be tantamount to a QE3.

This morning’s Plunge du jour was courtesy of some Belgian bank, Dexia, which apparently is a major player in the Eurozone sovereign debt arena. They seem to be having some short term funding issues.

Most Americans don’t even know that Belgium exists. Sure, they’ve heard of the waffles and maybe even the fries, but few know anything about Belgium or its two state system.

Fewer, will have ever heard of “Dexia”.

I know that I haven’t, yet today, it’s rocking my world.

Dexy's Midnight RunnersI must admit, when I first heard of Dexia, my thoughts went to that one hit wonder band, Dexy’s Midnight Runners and their hit, “Come on EIleen”.

That song is particularly meanigful to me because it was receiving incessant airplay when I first met the woman who would go on to become my Sugar Momma. We still both enjoy that song some 28 years later.

Still rocks my world.

But the other thing that came to mind was “dexies” which is just another name for Dextroamphetamine, such as the active ingredient in Dexedrine, which just happens to be a key ingredient of crystal methamphetamine.

For the few non-druggies that read my drivel, “dexies” are used in the management of ADHD, that 20th century malady that we all suffer from.Dexies

How it works, no one really knows, because “Dexies” are actually a stimulant, but has paradoxical actions in people correctly diagnosed with ADHD.

Based on the way today worked out, I’m of a frame of mind to believe that “dexies” played a pivotal role all through the day.

Looking at the subdued tone during the Congressional hearings, the only possible explanation is that all of the Type A, extraordinarily hyperactive members of Congress, and their equally hyped staff members, must have had their bottled water tampered with. There is no other plausible explanation for the absence of insanity and fidgeting, calling out of order and all of those other uncontrollable behaviors usually displayed during these hearings.

The typical roomful of alpha males was well controlled and orderly.

Strangely, they were channeling “One Flew over the Cuckkoo’s Nest”.

While Bernanke was in his usual calm state of mind and tone, his responses reassured investors and the market made up about 150 points.

Unfortunately, that euphoria didn’t last long and the market made its way to a 200+ loss going into the final minutes.

What we then witnessed was a very memorable, although probably not unprecedented, 400 point turnaround in about 30 minutes.

I looked up the half life of “dexies”. That is the amount of time that it takes to clear half of the active ingredient out of one’s system

Why is that important?

Do you recall a recent study that showed that there is a high association between hyperactive personalities and successful careers on Wall Street and business in general?

Neither do I, just go with it.

Now the conventional wisdom is that the market started its turnaround when the Financial Times of London published a report that the European Finance Ministers were looking seriously into the Greek debt crisis.

Maybe I’m wrong, but to me that meant that they hadn’t been doing so previously. Couldn’t we just have avoided these past two months of agony if only they had started looking for solutions, say in August?

Maybe that month long August vacation extended into September this year. No one on the continent really wants to do any “serious looking” until well after the end of summer.

So any reasonably rational person knows that news could not possibly have driven the market to that stunning turnaround.

Based on my extensive research into neuropsychiatric arbitrage, it’s clear to me that somewhere around 3:30 PM all of the paradoxical actions of those dexies had dissipated, leaving a universe of money starved traders with lots of pent up energy and the need to dominate the room.

And they did in an unscripted concordant symphony of buying.

It was as uncontrolled as any off the medication kid would be after a couple of cotton candy cones. Just imagination an entire classroom filled with medication lapsed ADHD kids and then multiply that by a lot.

Going into the early Bernanke Bump I took a small plunge and picked up some shares of the very badly beaten down Morgan Stanley at about $12.13. I did as I’m programmed to do and quickly sold October 2011 $13 options.

I don’t mind that Morgan Stanley closed the day at $13.90. I hope it goes to $25, even though I’ll lose my shares at $13. Even with assignment, my ROI would be about 20% for less than 3 weeks of holding.

I liked that so much, that I picked up even more shares at $12.50

Last month I did the same with the beleagured Bank of New York. My shares were assigned and I happily moved onward. Just in time, because at the close of Tuesday’s trading Bank of New York found itself on the short side of the New York State Attorney General over some foreign currency trading action that allegedly defrauded pension funds in excess of $2 Billion.

Glad I moved on.

The rest of the day was just a series of disappointments.

No Chris Christie run for the GOP nomination, although he did publicly endorse the new Wendy’s line of hamburgers.

At the same time, Apple’s new CEO Tim Cook failed to dazzle with the iPhone 4s introduction. Everyone was expecting an iPhone 5.

Yawn. Although the video of Chrisite eating a deep fried iPhone 4s was a nice touch.

And with nothing but disappointing news, the market could do just one things, that is if you believe in that kind of cause and effect.

I don’t, especially since this neutrino faster than light discovery raises doubt about the whole concept of cause and effect.

Instead, I think it’s the dexies at play that are to blame.

Sometimes you crash after the amphetamines wear down, especially if they were being used to manufacture crystal meth.

But I doubt that’s what was going on during the congressional hearings, probably just plain old dexies there.

As far as the trading floor goes, I’m not quite as certain.

The turnaround in the market today was mirrored in the weather here.

It had been a few cold, dreary and rainy days, but then at about noontime, the sun burst out.

Just in time for a Szelhamos birthday celebration and just in time for those 400 much needed points.

Today would have been Szelhamos’ 89th birthday.

Years ago, so the story goes, on one particular day I was being especially testing of my mother’s nerves and she said to me in her finest Hungarian “On one nice day you’re going to put me in my grave”.

I was told that my response was “today’s a nice day”.

I probably should have been on dexies.

But today turned out to be a nice day all around.

Happy 153 points, Happy Birthday.

 


It’s Getting Cold

I’m glad I’m sitting indoors today.

Even Laszlo the Dog doesn’t want to go outside. It’s cold, dreary and the grass is wet after a record 13 inches of rain in September. I suppose that dachshund bellies are close enough to the wet grass that they’d rather take a respite from romping on days like today.

Laszlo is sharing the La-Z-Boy with me.

My thoughts are with my kids who are going to the Sunday Night Football game, seeing the Ravens versus the Jets. It’s going to be very cold and with rain in the air. Not my kind of day or night.

Listening to the TV commentators repeat what great football weather it is, my thoughts turn in another direction:

Morons.

Lately, the weather down here has been good for only one thing. Growing mushrooms.

Watching Herman Cain jump out of a van and gather mushrooms from my lawn is a clear message that there’s been more than enough moisture and that economic times are truly trying.

Imagine if that image was really true. The very idea of paying for my own personal lawn grown mushrooms on a Godfather’s Mushroom Pizza is abhorrent to me, but not as abhorrent as eating a Godfather’s Pizza. It’s that same concept, that of paying a monthly fee for the right to use a debit card to spend your own money, that’s beginning to rub lots of people the wrong way.

I guess that Bank of America had that same Herman Cain image in mind. After all, what better strategy than to follow in the footsteps of a winner.

In reality, Herman Cain, instead of gathering other people’s mushrooms and offering them off for re-sale, is gathering votes in straw polls in Florida and Kansas, having just won the Kansas Women’s GOP Straw Poll, probably the most prestigious of all of the Women’s straw polls in the former dust bowl.

Bank of America.should consider using Godfather’s Pizza’s consulting firm. That firm is so out in front, they already have a fallback ad campaign if Cain falters.

In that event, look for life-sized posters of their new spokesperson, Chris Christie, who is already hunkered down in the Godfather’s test kitchen, but is coyly resisting the coaxing to come out.

As the sun is setting early in the eveningI know, from having lived a lifetime on the east coast, that when the cold rainy days in October arrive, it’s time to hunker down for the winter and resist the need to go out and face the elements.

Sure, there may be an occasional nice warm day, and sure, despite knowing better, there’s always the hope that winter will skip coming around this year, but that’s never the way it works out.

I keep thinking that when our youngest son finishes college in a couple of years, Sugar Momma and I will move to California, her home state.

But the other day she asked me what I would do if we moved to California. Would I still spend the entire day parked in front of the computer and the “annoying” people on CNBC?

The problem is that I don’t think that they’re annoying, by and large. I think Judge Judy is annoying, yet she doesn’t.

The reality though, is that I’m glad that I’m sitting indoors everyday. I don’t venture very far from my La-Z-Boy, especially during market hours. I don’t think that would change very much even after a move to a sunnier and warmer climate, although I might be more apt to head outside to shake off a particularly bad trading session. Maybe a quick glance at the ocean’s soothing shores or the sight of a drive by shooting would help to settle some frayed nerves.

This past Friday, after a particularly brutal week, where my “God’s Bounty” portfolio of Freeport McMoran, Mosaic and Rio Tinto was emasculated by some other deity, I needed that kind of light hearted romp. Even the Lord’s precious metals got swamped, but in hedging my bets, I went with Zoroaster, playing the short side of silver.

Turns out, the movie “Contagion” isn’t very funny. It also turns out that this monotheism may be a seriously cramping  belief system.

But early on Sunday, there was potentially good news, maybe even market moving news, hearing that Ali Baba is interested in buying Yahoo!

I don’t know what positions Malta or Estonia will take on a proposed buyout, but we need some good news soon.

As opposed to the upcoming winter, I know that spring is coming. I also know that despite global warming things won’t change that drastically during my lifetime to substantively change the natural order of things.

With that said, the natural order of things clearly included Yahoo! become a laughing stock and Ali Baba being in a position to buy it, hook, line and sinker.

But when it comes to the stock market, it appears that there is less and less concordance, correlation and connection.

News has become largely irrelevant, at least in terms of predicting market reaction.

The old adage, “Sell in May and go away” had been largely written off for years, just like “Dogs of the Dow” hasn’t worked terribly well of late.

But as we closed out the third quarter this past Friday, it seems that the old selling adage may have finally been a winner.

Does that mean “buy and hold” is coming back, too? Maybe Communist hunting is next.

I do know that “buy low and sell high” hasn’t been working out lately. Maybe that one will be back in vogue soon. Maybe even sooner than spring’s predictable blossoms.

Looking at the early Asian markets trading, right now it’s not looking very promising, as we get ready to start a new quarter.

Despite the paper losses of the past few weeks, for me its been a good options premium period. With three more weeks left to go for the October cycle, I’m already ahead of the September cycle.

That’s a small comfort, since September was the second worst month of the year, but I’m hopeful for some good opportunities.

Like some of the old stock market adages, it’s hard to know when to let go of the optimism. But by the same token, you can’t completely dismiss the optimism. Otherwise you’d have to face the dark side and become an avowed short seller.

I’m not going there. At least not yet, the deperation hasn’t hit that level.

This coming week our weather forecast is for a couple of nice, very warm days. Maybe a little bit of movement in Europe, a little bit of merger and acquisition news and a little bit of global warming can all help get rid of this gloomy and cold overhang.

In the meantime I’m going to watch the football game safely in the warmth of my home and look for my kids in the stands.

I know that it’s highly unlikely that I’ll spot them, but if you hope and wish for enough unlikely things, sooner or later one of them is going to happen.

I just hope it’s the right one.

Sorry kids. You’re on your own on this one. Hope you’re bundled up.