Not Feeling It






 


Not Feeling ItMaybe its the fact that we just came off a 300 point climb.


Maybe it’s because its been nothing but rainy and dreary all day long, but despite what was looking like nearly a 100 point run up on Tuesday, I just wasn’t feeling it and couldn’t really get in the game today.


Maybe it was because Silver wasn’t exhibiting its recent paroxysmal and alternating direction behavior.


More than likely, though, my lack of enthusiasm today was probably strongly related to the fact that my portfolio under-performed the market all through the day.


That was thanks to Amazon, Netflix and Green Mountain Coffee Roasters, which, wouldn’t you know it, led the portfolios to out-perform the markets on Monday.


You can have Yin or you can have Yang, but not both, unless their conjoined twins, in which case they might be more appropriately referred to as “Siamese.”


Whatever the root cause, I was antsy.


Not only was I not feeling it, but it may have been contagious.


The news that the parent of American Airlines was going into bankruptcy wasn’t terribly interesting, either. The only thought that occured to me was that at its closing stock price, it would take about 25 shares of AMR to purchase an in-flight alcoholic beverage.


Even in boredom I amuse myself, but no such luck with AMR shareholders. I suppose they just weren’t feeling it.


I rarely venture from my perch on the La-Z-Boy during the course of the day, but today was different.


Yesterday, despite having only made about 8 trades, I remained transfixed. So much so that despite the fact that our home was in a shambles from having the first phase of new carpet placement done during the day, I let the mess wait until after the closing bell.


Today, I had just two tasks assigned by Sugar Momma. My usual approach and strategy whenever I’ve been given chores is to work like a whirling dervish once the closing bell occurs. That typically gives me 90 minutes to get everything done.


The tasks today ranged from standard to complex. I had to start restoring order by returning furiture to their rightful spots in time for Christmas holiday guests. That was standard and required only brawn, of which despite being in short supply, can be accomplished by using simple laws of mechanics.


I also had to make some sense of our mismatched collection of Rubbermaid and Ziploc containers and lids.


I have every bit as difficult time doing the latter task as I do trying to match socks.That task fell into the “complex” category as it required a combination of visual identification and pattern matching.


Ever since I went to the all Crocs all the time wardrobe, socks haven’t been part of the equation. I wondered why the same couldn’t be done with plastic containers.


Damn, how many different subtlleties in shape can a quart container take? And why don’t they emboss both the container and the lid with useful information?


With my sights set on the 4 PM bell the market quietude led to boredom setting in.


I made a single trade trying to take advantage of some intraday strength in Halliburton by selling calls expiring this Friday.


If Sugar Momma knew that was the extent of my trading activity today she wpould probably exhort me to find a real job, but I feel comfortable knowing that all readers of the blog had to sign non-disclosure agreements.


Crazy? Like a fox.


Although it’s a very small liability, the only thing that really kept my interest during the trading day was the continuing story regarding the CHinese company, Focus Media.


Following a scathing report, by who else but Muddy Waters, their stock had taken a significant hit. As I noted on Monday, I took that as a cue to sell puts on teh shares. My only equivocation was that unlike Harbin Energy and Spreadtrum Communications that had likewise been excoriated, Focus Media wasn’t listing weekly options contracts.


But then I realized that my life expectancy probably didn’t warrant tooking 3 weeks into the future, so I bit.


Carson Block, the head guy at Muddy Waters was the scheduled guest on CNBC’s Street Signs. Admittedly, I’d expected that given the deserved bad reputation Chinese companies have had with regard to accounting and business practices that the hosts were going to ask questions that would simply reaffirm the basic hypothesis that there was something amiss.


But no.


Block was hit by probing questions from the hosting crew of Brian Sullivan, Mandy Drury and Herb Greenberg.


Block faltered. He was tentative in his answers, perhaps using the same law firm that’s representing Jerry Sandusky of Penn State.


He wasn’t feeling it.


In less time than it took for Green Mountain to shed 20 points a couple of weeks ago, Focus Media, trading at about $16 following a $1 intra-day loss, erased all of that during the course of the segment and closed the day higher.


Well, at least that was interesting, but from my perspective, as far as my portfolio went, wasn’t very substantive.


And so I started with my chores while the market was still in full swing.


Uncharacteristically, I felt  no longing today. There just wasn’t anything around to incite interest.


Not even that new retail metric unveiled by Dana Telsey, the ubiquitous retail analyst.


Last year we were blown away by the concept of aerial monitoring of parking lot capacity as well as the ensuing debate as to whether or not access to that kind of information constituted unfair advantage.


And yes, we’ve all heard about the store watchers looking at the size of shopping bags as a proxy for shoping activity.


But this one? Pure inspired genius. The Mall Toilet Paper Index.


Imagine having spotters continually monitoring the volume and quantity of toilet paper used as a measure of jhow long consumers are spending at the mall and how long they are commited to remaining there.


Personally, I would hire DIck Bove, Bank analyst for Rochdale Securities to camp out in the mall restrooms, although that may offend the flies.


Following his response the other day that Bank of America would be his buy recommendation in that sector, BofA stood poised to break the wrong side of $5.


Thus far, no one from Bank of America has returned my call regarding my strategy to help them deal with the financial morass and recent bad publicity.


I advised that they institute a new monthly fee on their basic checking acount, charging customers a single share of Bank of America stock each month. In all likelihood that will be somewhere south of $5.


Win – Win.


Maybe the fine people at Bank of America weren’t feeling it, either.


The only other bit of news today it capture much of my interest either, but it ran counter to my general theme of the day.


Rumors swirled that Herman Cain was reconsidering his bid for the GOP Presidential nomination.


Following accusations made by a seemingly credible woman regarding an alleged 13 year affair, it seems that Cain may have been feeling it.


I can’t even get away with occasionally pumping super unleaded gas and this guy gets away with 13 years of pumping….


Never mind.


But wuth this day now behind us, I have every confidence that tomorrow will be different.


I can just feel it.


 





What’s your Opinion?






What's your OpinionThere’s a saying that if you put 2 Jewish people together in a room you’ll get 3 different opinions.


I’m allowed to say that. Sometimes you get a free pass.


The same has probably been said for other ethnicities, cultures and religions, but other than Hungarian, I’d be ill at ease to use that saying for any other group. Years ago, when I was still in grade school, there was a funny joke book called “Race Riots.” It was a collection of ethnic and religious jokes and was really pretty funny.


So funny and so popular, that there was even a Race Riots II, focusing on the lesser known and under-stereotyped groups, such as Angolans.


I didn’t mind telling those jokes and others didn’t mind laughing, although subconsciously I may have tailored the joke set for the audience, just like when Jeff Foxworthy performs for the Johns Hopkins Applied Physics Laboratory.


Race Riots actually even had a chapter on Hungarians that wasn’t very funny. At least that was my informed opinion. I also knew lots of Hungarians and they didn’t see the humor in those jokes either, but they loved the Polish jokes.


So true. So true.


These days I still think that those kind of jokes are funny, but I would never admit to that, because when it comes to that area of discourse, opinions don’t really matter.


About 5 years ago there was a great piece on Jon Stewart’s “The Daily Show” that highlighted the last two known remaining Jews in Afghanistan.


They lived together under the same roof in an old synagogue, but hated one another. They couldn’t find agreement on any topic, although my guess is that there weren’t too many different topics out there for discussion. By all accounts, though, they were each very opinionated.


There must be a joke in there somewhere, but you’re not likely to get anyone to write one when there are only 2 people in the whole world to poke fun at. By the same token, however, I was the only Jewish kid in my neighborhood and was routinely beaten up by the only 2 Chinese kids in the neighborhood.


In my opinion they should not have beaten me up on a regular basis, but in their humble opinion the black kids shouln’t have been beating up the only two Chinese kids in the neighborhood.


There’s was just an early form of “paying it forward.”


In hindsight that’s funny.


There was certainly no shortage of talking heads today putting their two cents in about what today’s 300 point gain really meant.


I like opinions, after all, that’s the essence of a free society. But what I don’t like are “humble opinions” or especially those who preface their humble opinions with the words “in my”. Don’t get me started with the “IMHO” group of people.


Of course mixed in with the opinions was the obligatory “light volume” comment, although that’s more observational than opinion and is often just an excuse to explain why their clients didn’t participate in a meaningless rally.


Since I don’t care whether there’s tons of white powder over my trading profits, I certainly wouldn’t care if they came on light volume.


IMHO.


The prevailing opinion on Monday was that this was some sort of a “dead cat bounce” or a bull rally in a bear market. Again, this is code talk for “I’m not in it to win it, today.”


The talking head that referred to this as a bull rally in a bear market then went on to say that he wasn’t certain that this was a bear market.


To be confused, you actually have to listen. That’s why you have to shake your head when a talking head insists that the market only trades on fundamentals.


In my humble opinion, that guy doesn’t know what he’s talking about. These days the market wouldn’t know a fundamental even if you bit it on its asset.


Then there was divided opinion over what fueled the rally.


You had your Euro-centric school of thought people and you had your “This was the best Black Friday weekend ever” crowd.


The Euro-centric school was elated over the rumor that the EU nations were reportedly closing in on some sort of deal to tackle debt. This, if the past is any indication, would lead to a nearly equal, but opposite movement when that rumor or deal falls short or some other complicating factor arises.


Think Finland.


The retail sales crowd seems to say the same thing every year and then starts to question the meaning of having an overly successful Black Friday through Cyber Monday period.


How many years in a row will we have to watch the give and take of concerns related to cannibalism of sales for the rest of the holiday period, or the stream of data indicating the the remaining sales days between Cyber Monday and Christmas fell short of expectations.


Those thoughts are then typically followed up by revised data that’s released sometime near New Years and those data sets always seem to indicate that sales were actually better than previously reported.


Whew.


The thing about analyst opinions is that they’re subject to interpretation, but that’s understandable.


So too is it understandable that both the written and spoken words could be subject to interpretation, especially when rendered in a foreign language.


But that wasn’t the case on Monday when a piece written by Eric Jackson of Forbes Magazine for the Chinese Wall Street Journal somehow didn’t lose anything in the translation. Instead, it added to the translation, starting a rumor that Muddy Waters, that efficient Chinese stock price disinflation research firm, was planning a report on SINA.


In the past I’ve benefitted from such reports, Harbin Energy, Spreadtrum Communications come to mind. Both taking mighty hits as significant questions were raised about their accounting practices.


Having an opinion on those shares was irrelevant to me. I just waited for the big hits and then sold out of the money puts, much to my delight, as they both recovered from their acute hits.


Jackson said nothing about SINA, but someone just added his humble opinion into the translation.


In the meantime, the concern over another Chinese company, Focus Media was enough to send those shares into another day of tailspins and enough to get me to sell puts.


It’s my evil speculative side that makes me do those things. It’s usually well under control, but just like the craving for crack and hookers, it sometimes is pre-eminent. I have no clue what business Focus Media is engaged in, although I can venture a weak guess.


But again, irrelevant.


At any rate, Jackson’s reporting turned into an opinion, which turned into a rumor, which was then denied.


Sort of the way all of our EU news gets transmitted and with the same results.


I tend to be a very opinionated person. Not Perez Hilton opinionated, but enough so to get me to write daily, albeit without the use of a translator.


My opinions are usually either worthless or very poorly timed.


But having that contrarian tendency I could only believe that today’s 300 point rally would be something other than the quick and uninspired bounce that was the prevailing thought.


Unfortunately, that contrarian side has to deal with my pragmatic side.


In my own personal Afghani synsagogue, despite the belief that today’s move wasn’t a terminal event, I still sold whatever calls I could reasonably get a fair price upon. So I rented out Freeport McMoRan, Caterpillar, Visa, Amazon, Netflix and DuPont. I would have done more, but there were still some sizeable paper losses to overcome before so willingly giving up a share in any future profits.


To my disappointment, despite ProShares UltraShort Silver taking a big hit today, their call options didn’t move enough for me to repurchase them in order to await yet another opportunity to sell them.


As the market was getting to be somewhat boring, I took the opportunity to look at those ProShares UltraShort Silver ETF holdings which have grown to about 10% of my portfolio by slow and steady acquisition since mid-July. I even added on more shares today.


Despite a paper loss of about $5,000 they’ve spun off $30,000 of realized premiums. Had greed not gotten in the way, this would not have been the first time that all of my shares were hedged. I gave up additional option premiums for the fear of missing out on share appreciation.


FOMO. Stupid me.


And that’s a humble opinion we can all agree upon.


 


Fries and Prejudice

I’ll be the first to tell you that literary references are pretty much wasted on me.

I’m very shallow, poorly read and have little motivation to change my ways, much to the  dismay of Sugar Momma, who these days is happy just to see me change my socks.

She’s pretty much given up on all of the rest, although occcasionally I will agree to see a movie based on a piece of literature, as long as it stars Seth Rogen or Rob Schneider. I may no longer be fully malleable, but I am open to suggestion before I roll my eyeballs.

So no one is more surprised than me that what is considered a literary masterpiece would help to coalsesce some of the thoughts that I had during this very nice Thanksgiving holiday.

Pride and Prejudice.

First of all, it was exceedingly nice Thanksgiving because there was no trading on Thursday, Saturday nor Sunday. Normally, I love any day that the market is open for business, but we all needed a break. What few hours of trading that we did have on Friday, despite coming off 100+ points from the intra-day high, resulted in a mere 25 point loss.

If that’s not a profitable trading session, then I don’t know what is.

Having had a wonderful Thanksgiving Day dinner with family and friends, my two sons and I headed for the Baltimore Ravens and San Francisco 49ers football game that evening.

I’m not much of a football fan, but I was even decked out in a Ray Lewis jersey, as were approximately 20,000 others, although none approached my inherent talent of frightening opponents with a mere sneer.

Since my kids are the social animal that I am not, it was very easy for them to get into the surrounding tailgate culture once we arrived at the off stadium parking lot.

Do I have to remind you that Pride and Prejudice examines the role of environment on behavior?

I was more of an observer.

Among the many things that I noticed at my first tailgate venture was that blue jeans come in a very wide range of waist sizes.

Realizing that there was really no substantive way to turn that observation into a tangible asset, I followed the lead and downed some whipped cream vodka and Baltimore’s best, National Bohemian, also known as Natty Boh beer.

By then, we were ready to enter yet another environment, this one much more highly structured and with highly codified terms of conduct..

The stadium.

But before we went to find our seats, both sons had to go to the Boardwalk Fries concession stand. But not to order anything, although we’d done that plenty of times before, but instead to look and see if Joe D, the co-owner was in house.

Sure enough. He was. Despite the fact that he presided over more than 100 Boardwalk Fries locations, he was right there in the middle of it all, together with his son Joey D and lots of others.

It’s been nearly 5 years, but both kids worked the Boardwalk Fries location in Raven’s Stadium to help raise money for their Fraternity. It was a good relationship. The fraternity brothers hustled a good product and Boardwalk Fries helped to support their fundraising efforts.

The work was also difficult.

But 5 years later both kids sought Joe D out because of good memories of a man that even a wizened set of eyes would recognize as someone who was commited to his product and its quality.

Why else would he leave a comfortable home on Thanksgiving evening to spend it behind a spattering fryolator and frequently unruly stadium customers?

Why? To oversee every aspect of the operation and to make certain that everything was up to the Boardwalk Fries standard, although truth be told, a bunch of happily inebriated football fans aren’t that likely to notice very much.

Boardwalk Fries isn’t exactly a household name. It’s not Amazon, nor is it Apple. But Joe D is Steve Jobs and he is Jeff Bezos. It’s actually repugnant to me to cite a book in my blog, much less two books. But Im certain by now Joe D has put in the requisite 10,000 hours that Malcolm Gladwell defined in “Outliers” as distinguishing the really greats from the schlubs of the world.

They spotted and then called out to Joe D.

He saw the kids and came out from behind the cook area to speak to them. Hugs, sharing memories and stories. The guys eyes actually twinkled.

They really did. And then there were several rounds of hand shakes. You really felt that this guy sincerely cared.

We didn’t buy any fries, after all we were still stuffed, but my family loves a good french fry and still has fond memories of the fries Szelhamos made late in his life, when we were all stunned to learn that he could actually cook.

Joe D seemed to have something that you just don’t seem to see that often. Maybe its just the wizened me talking now, but his pride in his product and business was so blatant. He didn’t have Jobs’ aura or Bezos’ laugh, but he did.

Pride and Prejudice tells a story of development of character and morality.

After watching a great game and a home team win, we came home to enjoy a few days together.

On Friday I had the opportunity to make about 5 or 6 call sales for that day’s expiration, using Green Mountain Coffee Roasters, Amazon, Caterpillar, Freeport McMoRan and Mosaic to pick up a few pennies for my troubles and stresses of the past week’s trading.

Once the market closed I stumbled upon Josh Brown’s posting “How do you have so much Time to Blog” on his site “The Reformed Broker“. It was yet another insightful post, but this one really struck a chord with me.

I would actually tell you to follow him on Twitter, but for some inexplicable reason he has me blocked.

Why, Josh, Why. Could Buddy Holly not bring us together?:

Anyway, among the things that he wrote about were his bygone days as a retail stockbroker.

I’ve written on many occasions that I was very fortunate to have worked with a wonderful broker. I really believed that he sought to protect and nurture my interests. We were at the same stage of life as we began a 25 year investing relationship.

Over the years I’d also had some highly contrasting experiences when infidelity resulted in trying some hot young broker or two, just for the thrill of it all. But when my trusted broker so unexpectedly passed away, there wasn’t much to think about. I didn’t think that it would be likely to find another “Bob”. Instead, I thought that it was far more likely that I would find, what Josh Brown so eloquently self-referred to as “a jerkoff retail stockbroker.”

Character and morality.

But it really went beyond that. The brokerage itself had no pride. It’s hard not to be a jerkoff retail broker when you work for a jerkoff retail brokearge house.

Environment.

Bob had pride, but despite the great example that he had set, I was left with a very deep prejudice against ever using a retail broker again.

Steve Jobs and Jeff Bezos obviously had more than pride. They had a great products, business models and vision.

Most of all, they weren’t products of their environments. Instead, they helped to create all new environments. Look, they even refer to Apple as its own “eco-system.” Jobs idea of design was to make it part of its environment while still standing out from its environment.

Amazon is creating a fusion between physical goods and the eponymous cloud. Someday, if Bezos has anything to say about it, that 65 inch 3D LED you just bought won’t even take up space in your media room. It’ll just be somewhere in the cloud, along with your music, milk, burial plots and books.

As I think a bit about Joe D, Jobs, Bezos, Bob and Josh Brown, in addition to the un-named brokers that I referred to, I’m increasingly convinced that every investor needs to take pride in his portfolio and trading acumen. Regardless of what environment helped to form you, what is the chance that environment will put forward someone to take the same level of pride in your portfolio that you can?

Joe D hasn’t turned it over. Maybe someday it will be Joey D who has the same level of pride and commitment. For all I know, he may already have it, but why put Joe D’s talents aside?

Even when not slinging fries he’s slinging life lessons.

Monday is the start of yet another week. This one is being framed by speculation that Germany may leave the EU, the Euro may crumble and that french fries may contain more saturated fats than is recommended.

I choose to be aware of all of those possibilities but to act accordingly.

In this case, “accordingly” means in prejudice to conventional wisdom.

Addendum: A short time after this posting appeared, Mandy Drury of CNBC, interceded on my behalf and I am no longer blocked by Josh Brown on Twitter. He is, absolutely, one of the most refreshing follows on Twitter!!

 

 

Commitment or Death

We’ve always been lead to believe that commitment was a good thing. It often is cited as the only real thing that distinguishes us from animals, although that’s clearly an exaggeration, as most animals are incapable of ever winning two games of checkers in succession.

Curse that capuchin, especially for not agreeing to best out of five.

 

We all marvel when hearing of a couple’s impending 50th wedding anniversary. What a wonderful show of commitment.

In fact, as well all know the commitment is “until death to us part.” Commit or die. Commit and die. It’s all the same.

Using the new Google “Translate” module made for this blog, you can now understand that when I say “marvel,” I really mean “shudder.” and when I say “wonderful,” what’s really meant is “terribly sad and confining.”

“Shudder” of course, is just further code for” violently puke.”

Obviously, Sugar Momma has better things to do than read my drivel.

For many, the end to commitment came when the unwritten social contracts providing lifelong employer-employee relationships in Japan came to an end. If the employer-employee relationship in a land that the overwhelming majority of us will never visit, nor know is no longer sacrosanct, what else could be left for the rest of us?

A good point, for sure, but for me, the end came when new TV shows were no longer given the obligatory 13 episode production commitment. Thanks to the one-time sanctity of that commitment the cable TV archives can be filled with such past unrecognized jewels as “Camp Runamuck” and “I’m Dicken’s, He’s Fenster,” as well as some recognized disasters as “Dundee and the Cullhane.”

As an aside, I also don’t understand how “Dundee and the Cullhane” could have flopped. On the surface, it appears to appeal to every demographic.

With divorce rates now beyond 50%, TV shows getting cancelled after just a single episode and Japanese workers actually being laid off, there is obviously no love lost for commitment. The fact that paul Reiser now works at at Nagashima Datsun assembly plant is reason enough to decry the loss of our sense of commitment.

And then there’s “buy and hold.” A strategy which to me always seemed more commited to a specific stock rather than to profits.

I received some interesting feedback on Twitter today, in response to yesterday’s blog “Achilles and his Heel”  that actually was the impetus for today’s theme. Interestingly, that same Tweeter, Dasan, was responsible for the theme of the previous day, as well.

Follow him. I’ve said so before. He’s funny, insightful and humble. Plus, given his training, he probably knows at least a dozen ways to decapitate or incapacitate you in the event of a perceived need to do so.

The comments were related to the commitment and loyalty people had for Amazon and Jeff Bezos, in part, because they also believed that Amazon was loyal to their customers.

Whereas you can be both loyal and stupid, this is not one of those situations. Despite what may be a near term stumble with its Apple like hyped Kindle Fire, based on early adopter comments, the very idea that the loyalty is perceived to be bi-directional is beyond MasterCard “priceless.”

It’s almost like Japan redux.

I think that I’ve demonstrated commitment in the past.

Forget about the 27 years with Sugar Momma. That’s a walk in the park, especially compared to the 75+ years that her grandparents put in together.

Until they died.

Instead, let’s talk about things that really matter.

Earlier today, Mohammed El-Arian of PIMCO commented that “US economic conditions are terrifying.”

As we both continue to New York Mets fans, you obviously have to excuse El-Arian for his emotions getting the best of him. Continuing to be a Mets fan, even after moving far away and after such a performance drought, has to shed some darkness on your credibility and ability to critically assess circumstances.

But that’s commitment. Not the same level of commitment that he showed to the Harvard Fund, but far greater.

I don’t practice “buy and hold” and don’t have an emotional attachment to any of my shares, but I still think that I have commitment in that area, as well.

I certainly haven’t bailed on Amazon, which although up a bit in Tuesday’s trading, has had a bad recent stretch.

My tendency is to stick with loseres. Now that may be an example of where loyalty and stupidity do intersect, but I’m much more inclined to give up on winners in the name of profits.

A commitment to profits means letting go and giving up on the loyalty to your winners.

How ironic, especially if you take a superficial view of things.

In one regard, I suppose that I’m like Charlie Sheen, in that I don’t lke losing and I especially don’t loke taking losses. Again, not really a commitment to a specific stock, but rather a commitment to avoid losing.

Oh, and I also like hookers and crack.

In the case of Amazon, it currently makes up about 7% of my portfolio. At one recent point it was higher, as its price drop has outpaced the S&P 500. Although offset a bit by options premiums, that bit, in homage to the recently departed Lee Pockriss, is itsy bitsy.

I shop Amazon consistently. I hate going into stores and malls. Sugar Momma hasn’t bought a real book in a couple of years, although she probably buys two new Kindle titles each week. We give Amazon gift cards.

Get the idea?

Best of all, I sell more copies of the Option to Profit book on the Kindle platform than any other.

Did I mention that I like profits?

But all of that spells commitment.

Whatever happens to the Kindle Fire or any of its successors, if any, Amazon, as lead by Jeff Bezos will continue to reward loyalty, whether you’re a shareholder or consumer.

Yet, I look forward to the day that I can let my shares go. And really, I never ask for much. I usually am happy to see my shares go for whatever I paid for them, as long as there were plenty of options premiums in-between.

But when I do, I further make the commitment that I’ll re-purchase shares the very first opportunity that they’ve come down in price.

The nice thing is that there’s really not that much downside to commitment unless it’s stupidity that keeps you in the game.

In a totally unrelated Tweet, yet from the very same muse was the thought that there’s no reason to worry unless the SPX goes to zero.

That’s precisely why you need to follow him.

On the road to zero, and I have no doubt that day will come, there will be a near infinite number of other melt down situations that will cause many to give up their commitment and forever take it on the chin. That lack of commitment will just lead to a double dose of disappointment as the obligatory upswing is seen only with the eyes of a spectator.

You show your commitment by being a participant, even if that means “buy and hold.” You show your stupidity by “panic and sell.”

Would you like to buy Amazon shares from me?

 

 

 


Achilles and his Heel






Whether you favor classic Greek mythology or good old fashioned American superhero fantasy, there’s a heel or a piece of Kryptonite that’s bound to spell doom and spoil all of your hopes for mankind..


KryptoniteWas there ever a single episode or comic book story about Superman that didn’t contain some kind of Kryptonite or at least its metaphorical equivalent? It was so predictable. There was always something to stand in the way of justice reaching its just destination.


For me, the image conjured up by the designation “super-committee” has to be on par with the mythical heroes of generations past and generations lost.


Just imagine. A collection of seemingly normal people, collected together forming their very own band of super-heroes. As if one super-hero wasn’t enough, surely only good things can come when the many are united as one.


This august group of super-patriots assembled to save our way of life from the predatory grip of a growing and deadly deficit.


Surely, we weren’t Greece and we weren’t the Weimer Republic.


The task ahead of this Deficit League was no less than that of Superman faced with saving the world from impending doom as an earthly sized asteroid with our name on it hurtled through the vacuum of space in our direction.


A couple of months ago the expression “kicking the can down the road” got quite hackneyed, but that’s just what the not so super super committee has done. The only question left for our imaginations is how long and winding the road will turn out to be.


There are lots of jokes about committees and their outcome products. A camel has been described as the design work of a committee of experts. Those jokes are the corporate variant of the “How many X does it take to do Y” joke.


Those jokes never get old, but this one did and on top of that, it was never very funny in the first place.


Question: “How many super-committee members does it take to get nothing done?”


Answer: “Twelve.”


See? I told you it wasn’t very funny.


And there was no product, to boot.


Instead there was the hope that there was a possibility that a solution to the deficit issue might be found sometime in the future.


Now that’s funny.


Seems like the super-committee took a lesson from the European Union and the European Central Bank and tantalized us with the possibility that there might be a plan for a plan sometime in the future.


That kind of certainty sure spells “this is the right time to invest in stocks” to me. Where do I throw my money and how much will you take off my hands?


But like all super hero stories, there was a need for drama. No one wants a story where good wins against a trivial challenger.


The super-committe members suffered the effects of their own unique brand of Kryptonite. Their mortal enemy was the very thing that gave them strength,


Their ego and politics itself.


Given the hype and the belief that the super committee would come through with a judiciously arrived deficit reduction package, the market should probably have discounted the high probability of failure.


It doesn’t take much of a leap of faith into contrarian territory to know that there was no way that the super committee could molt out of its own skin.


I mean, just how do you stand up to ego and the politics of the moment?


In a world where Newt Gingrich is the candidate with momentum, at least at the moment, anything should be possible. But whereas there may have been an antidote to the Kryptonite that sucked the life out of Superman, there doesn’t appear to be any antidote to the butt sucking that “Realpolitik” demands.


While some super committee members can’t see a way to extricate themselves from the Norquist “No Tax Pledge” their committee objectives were bound to be unmet.


Yet the market, despite the conventional wisdom, didn’t see this one coming from even a few feet away as the deadline neared.


Despite the big market move to the downside today, I wasn’t overly distressed.


With assignmenrts of some shares of Green Mountain Coffee Roasters and Riverbed Technology and all of my Sallie Mae holdings, today was a good day to pick up bargains.


It’s entirely possible that they’ll be even greater bargains tomorrow, but I couldn’t resist pulling the trigger today.


In fact, I could barely wait a minute after seeing the inital 190 point drop.


Part of my eagerness was because I had a 9:45 AM flight Monday morning on yet another Southwest Airline flight without a Wi-Fi connection. I’ve been on 6 flights in the past 2 weeks, each one teasing me with the rollout of W-Fi to the fleet, yet none had seemed to make it to my air chariot.


So I made quick trades before they closed the cabin doors and I would be shut off from the sweet flow of data for 90 minutes.


As it turned out there were more shoes to drop, but I repurchased my Riverbed Technology shares at a lower price, added to my Freeport McMoRan and Textron holdings and re-established a positions in Visa and Caterpillar, at much lower price than their earlier assignments that I took just recently took.


Not bad for 15 minutes on the less than intuitive E*Trade interface on my Droid telephone.


By the time the plane landed, any angst over the 300 point drop was eased by silver’s fall and the ProShares UltraSilver’s rise.


Huh?


Before my scheduled meeting, at which I thought it might be rude to whip out the smartphone or netbook, I had a chance to sell options on the new Textron shares and about 20% of the ProShares piece.


In the meantime, there was just a bit of angst over Amazon, which was getting whacked yet again.


This time, the Twitter stream was filled with negative comments about the new Kindle Flame, even coming from those that ordinarily spout Bezos messiah-like chants, the kind that used to be reserved for Steve Jobs.


One 140 space story had anectdotal evidence of a USPS employee saying that he never so so many product returns when Apple released a new product.


That sort of thing can’t be good for a stock’s price. That’s the kind of hard data and fundamental analysis that’s so desperately needed.


Whoever thought that Amazon’s heel would turn out to be Apple? But Amazon will recover, it just may need to remind people that its core business is immune to Kryptonite.


The equivalent would have been if someone actually came out and said that Green Mountain Coffee was insipid, if made properly and even worse, if not. If you thought that Starbucks was Green Mountain’s Kryptonite, you’d be on the wrong track on the basis of product competition. No one compares the products. They just wonder what will be left when Starbucks pulls the rug out from under its agreement with Green Mountain.


That one would be hard to recover from.


But the same thing was said after the first round of accounting improprieties was alleged. Green Mountain recovered and then some and lived to see another day and another round of allegations.


Heels heal and Kryptonite, like all radioactive elements has a half life.


The same can’t be said about the egos of our politicians and the need to perpetuate their elections, at all costs. There doesn’t seem to be any resolution and there’s not enough spin to counter the dizziness and disgust.


Maybe we should just let that asteroid do its worst and move on.