Howard Marks in Saudi Arabia

The really nice thing about money and its pursuit is that even inveterate enemies can turn their nuclear tipped projectiles into rose petals at the feet of their otherwise erstwhile adversary.

This morning I was reminded of that incongruous scene a number of years ago when Sandy Weill, the ex-Chairman and CEO of Citigroup was secretly and then not so secretly in the middle of the desert, in Saudi Arabia, with camels in the background, meeting with Prince Al-Waleed.

Now, in Saudi Arabia, everyone is a prince, but Al-Waleed is a Prince among Princes and known for his investing acumen.

That acumen has often gone against the conventional wisdom.

At the time, Citigroup was in tremendous crisis, along with the rest of the financial sector, which in turned dragged the market down to its “666” level on the S&P 500 by March 2009.

In hindsight, I shouldn’t have been surprised to hear Prince Al-Waleed refer to Weill as “my good friend, Sandy Weil,” and cap that off by putting his arm around the Jewish New York banker.

Did I mention that Weill was Jewish?

Did I mention that Prince Al-Waleed had a very, very significant stake in Citigroup?

So this week, fast forward some 8 years and I saw this photo on CNBC this morning:

There was Howard Marks.

Founder of Oaktree Capital. An investor with his own acumen, A Nice Jewish boy from Ozone Park, Queens and most importantly, boyhood friend of Dr. Jack Dillenberg.

But Marks wasn’t the only prominent figure there having originally hailed from the 12 Tribes slightly to the north of Saudi Arabia. There were lots of familiar names and for those who believe in stereotyping, there was plenty to confirm those beliefs, but then again, those people in the habit of stereotyping don’t really need proof of anything.

Anyway, Howard Marks, along with others was there for the “Future Investment Initiative 2017.”

What is the “Future Investment Initiative 2017?”

Who better to explain than the ad campaign people for those seeking outside investment?

The Future Investment Initiative 2017 is “An initiative of the Public Investment Fund (PIF) of Saudi Arabia, FII is a pioneering new global investment event that will connect the world’s most powerful investors, business leaders, thought leaders and public officials with the path-breaking innovations that are defining the future.”

The Saudis want money to get them beyond their oil reserves and who better to get if from than their friends?

When I say “friends,” I mean “enemies,” but when money is at stake, those lines can become blurred.

That may be the actual point.

Ask Jack Dillenberg. Continue reading “Howard Marks in Saudi Arabia”

A Natural Corollary

A natural corollary to the concept of collecting crumbs, is what I used to call (and still do),  the “D’oh Trade.”

That article, in a highly edited version appeared in TheStreet.com, but the unedited version appeared in the old OTP website.

I thought that writing for TheStreet would be a great way to get followers, but I found that I preferred to write without an editor more than I wanted the followers.

But, here, it is  

Run-on sentences and all.

I’ve spent a lot of time in 2017 making those D’oh trades and those crumbs have really added up, although sometimes they do take a lot of maintenance, as well, as I look at the possibility of losing Petrobras this week at an $8.50 strike and possibly an early assignment of Abercrombie and Fitch as it goes ex-dividend, this week.

But if you own those shares and have been following those trades, stay tuned.

Are You Too Proud to Collect Crumbs? (Reprint)

I made a trade on Friday that I didn’t report. That’s because it was for a premium of only $0.03 and was only worthwhile if you owned lots of shares, but for those into that sort of thing, here is a reprint from about 5 years ago

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It’s that time of the month again. Even males have known the feeling of that monthly visitor, at least indirectly. In that sense, males are naturally accustomed to dealing with derivatives that have predictable times of onset and expiration.

But for me and so many other traders, instead of being visited by a normal physiological event, it’s the end of yet another monthly 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 as Friday’s closing bell hearkens.

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 to deal with a regularly recurring and potentially disruptive physiologic event, but I can’t imagine that such disruptions on a weekly basis would be very good. But when it comes to options, the more frequent the better.

Continue reading on Seeking Alpha

More Selling

 

Image result for more selling

A few weeks ago, 2 weeks to be precise, as I don’t write very much anymore, I did something that I had never done before.

That was to sell positions in order to raise cash.

The positions that I sold, weren’t in my usual “covered option” portfolio. They were all uncovered index funds that I had held for quite a while and had some nice long-term profits on them, as they just went along for a long market ride.

2 weeks ago on a day that the DJIA went about 144 points higher, I sold 50% of those accumulated shares.

I did so because I saw nothing to warrant the belief that we were heading even higher, at least not for a basket of stocks kind of portfolio.

Individual names, maybe. A basket? Not so much.

But, I did so with the intention of going back in with the cash to buy once again, although not all at once if the S&P 500 had retraced a mere 3% or so.

In those 2 weeks, the portfolio that held those index funds outperformed the S&P 500 by 0.5%, partly because the S&P 500 fell about 0.1% in that time period.

Yesterday, on the heels of a 130 point gain in the DJIA, I sold the remaining 50% of those index fund shares. Continue reading “More Selling”

Someday Began Today

I’m a bit more rambling today than usual, but it was an unusual day after an eye opening weekend.

A few years ago, maybe about 5 years ago at this point, I wrote an article about a lower maintenance approach to hedging a portfolio.

It involved the use of a well diversified portfolio of about 10 names. They would, ideally, all be high and safe dividend paying companies.

The idea was to use LEAPS and try to stagger the expirations and then just sit back.

Sit back and collect dividends and add that income to the premiums from having sold the options.

For the LEAPS strategy I had also planned on using a strike price that would reflect a fair amount of capital; appreciation over the year or two. Say 7% a year? 10%? Continue reading “Someday Began Today”