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Today 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.

 

 

 

 

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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”

Maybe 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.

 

 

 

 

 

 

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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.

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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”

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.

 

 

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.

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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.

 

I’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.

 

 

 

 

 

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

 

  

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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.

Citibank, 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”

 

 

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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.

I 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.

 

 

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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 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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How many times do you find yourself doing a double take when you see or hear something that appears incongruous?

For example, when a really stupid question comes out of the mouth of someone who is supposed to be smart, presumably by virtue of their status in life, during congressional committee questioning of Ben Bernanke.

Chaffetz said what? I still have a hard time understanding how Bernanke doesn’t at least roll his eyeballs, although there is evidence that suggests he dons ocular prostheses during testimony. He probably has to think of dying puppies to keep from laughing.

For the rest of us the real world offers some very tangible examples of opposites and how we react to them.

Jane Wells, of CNBC fame, Tweeted about the guy in Starbucks who was munching on an Arby’s meal, while glomming the free Wi-Fi. She didn’t describe her response, but I don’t think she would mind being spotted rolling her eyeballs.If I were to guess, I would let the entire portfolio ride on her spitting out iced mocha in spasms of laughter.

Guaranteed that you’ll never see Starbucks blend being served in an Arby’s. I’m still afraid to find out what actually constitutes their Horsie Sauce. Although if Jane Wells was actually spitting out iced mocha, you may never find her in a Starbucks again, either.

If you’re a male you’ve probably asked the question “What does she see in him?” on more than one occasion.

In this regard, men and women aren’t really from different parts of the solar system, as women are equally likely to ask “What does he see in her?”

Szelhamos’ usual answer to this kind of oddity was typically “He/She must be good in (the) bed”. Szelhamos always interposed the word “the” before every noun. Attempting to train dictation software to comprehend his reading of passages and understand his accent caused several CPUs to fry in their attempts.

But keen observers of human behavior will probably venture to answer “money” and “sex”, respectively.

If you’re Ron Paul, the correct answers of course would be “gold” and “sex for gold”, respectively.

If you’re Jason Cheffetz the answers provided would likely be “tuna fish and “Jumbalaya”.

While the saying “opposites attract” has near universal appeal and seemingly offers the potential to level the playing field, opposites still elicit the double take. Most studies seem to agree that marriages that begin with the “opposites attract” foundation don’t do terribly well in the longterm.

My brother-in-law who is now visiting us from California for one of his semi-annual visits is very similar to me in some regards and very different in others. He is developmentally disabled and functions on a 4-5 year old level, greatly enjoying cartoons and movies.

In that regard, we are very similar.

My wife, who is his guardian suggested that on his first day with us, which was today, he and I go to see a movie. She suggested “Rise of the Planet of the Apes”, as she recalled that he had enjoyed the series in his younger years.

Against my best judgment, I agreed.

I wanted to see The Smurfs” movie. I recall having enjoyed them during my early adulthood.

In regard to today’s movie choices we were very different.

Usually, when he and I go to the movies no one sits near us, as it’s somewhat unusual to see two grown men, one of whom qualifies for a senior’s discount, at “Yogi Bear” or “Marmaduke” in the middle of the day. Not only should mothers not let their children grow up to be cowboys, but they shouldn’t let them sit anywhere near adult men at children’s movies, especially if they carry velvet painting supplies.

I suppose that’s he and I are already an odd pairing, but at least it’s legal and not really Date Line worthy, unless Chris Hansen is really getting deperate.

Despite generally good critic and consumer reviews, I thought the movie was horrendous. I know that much of the action was computer generated, but I would have felt better if there was a disclaimer that “No humans were harmed in the making of this film”, as the movie, based on the true story of when apes conquered San Francisco did have some edgy moments.

Naming the protagonist Harvey Banana was a bit heavy handed, though.

For me the oddity of this movie was James Franco. The pairing was the near romantic and deeply caring relationship he had with a monkey (for purists, it was an ape). That’s what I call an odd pairing, although they may have been of the same religion.

I’m certainly not opposed to inter-species marriage, but I still have strong feelings about inter-faith relationships.

My God is a confused and vengeful God.

Stoner? Yes, by all means, get Franco for that role. Amorous monkey man slash research scientist, I don’t know, maybe Jim Carrey, if Olivier is still dead.

What made suffering through this movie even worse was that we saw it at the height of the day’s trading. I hate missing the last hour of trading, because as you must know if you watch enough CNBC, “It’s the most important hour of the trading day”, along with a good breakfast.

I did manage, however, to get a couple of trades through earlier in the day and they were their own odd pairing.

A few months ago I had sold puts on Spreadtrum Communications. I did so after Muddy Waters came out with a report that cast some significant aspersions on their accounting and may have referred to the Spreadtrum CEO as having been the bastard child of a kimono dragon and capitalist lackey.

On that day Spreadtrum got pummeled and I sold puts in a rare display of speculative play.

The shares quickly reversed course and I kept selling even more puts at higher and higher prices, just taking in all of those nice premiums associated with its volatile trading.

One of those lots, at $17 got assigned, whereas the $8, $12 and $15 just lined my pocket with their premiums

In the 6 weeks that I’d held the position I did sell some calls, eking out about another $1 of premium, but nothing compared to the glory of unassigned puts after panic had set in and then subsided.

But for some inexplicable reason, maybe related to a Motley Fool posting a couple of days ago, shares shot up 10%, past $19 today.

I decided to just take profits, not thinking that it was worth selling calls any longer. Besides, this little speculative play had done quite nicely and for me had now run its full course.

Knowing that I can’t keep cash in my pocket very long, I just had to get some nice hot and exciting stock to take its place in my speculative corner of the portfolio.

Since I like the word “inexplicable”, I’ll use it again to describe my purchase of Dow Chemical with the proceeds.

Inexplicable is certainly a good way to describe that odd pairing. Spreadtrum Communications and Dow Chemical. Whereas Spreadtrum is hardly the steward of responsible investing, Dow Chemical doesn’t exactly have a frivolous entry in its balance sheet. It would never even consider the possibility of sneaking Arby’s into the Boardroom  even if there was a chance of sitting in one of those comfy chairs and getting free herbicide samples.

Spreadtrum and Dow are probably as infrequently mentioned in a pairing as “Jason Cheffetz” and “highly intelligent steward of the public good” are uttered together.

In the meantime, I need to get to the ATM and flash that wad around at the mall for our next theatrical outing

This time, I took out enough money for both of us to look pretty good.

I’d do anything for my brother-in-law, as long as it never involves monkeys again.

 

 

 

 

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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.

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Back in 1978, when Saturday Night Live was still in its infancy, Weekend Update covered the death of Pope John Paul I in its own special way.

Occuring barely 30 days after the death of Pope Paul VI, the immediate response after reading the “breaking news” was “We did this story a month ago”. It marked Bill Murray’s first appearance as co-anchor along with Jane Curtin.

With that kind of trivia, I could end today’s blog right now and still feel highly satisfied.

But wait, if you read more…..

Ah, memories. Too bad I can’t remember where we keep the toilet paper.

With today’s news that the Department of Justice was seeking to block AT&T’s deal with Deutsche Telecom to buy T-Mobile, for a mere $39 billion, it once again seems as if we’d just done that story.

The saga of AT&T is fascinating since the break-up in the early 80’s and its subsequent reconstruction through take-over, merger, buyouts. You name it, they’ve done it. Somehow, Quest and Verizon have maintained their independence as AT&T just reconstituted itself bit by bit.

This morning, its CEO, Randall Stephenson was on CNBC hours before the DOJ announcement, which itself came minutes after President Obama’s brief announcement regarding adressing Congress on jobs and the economy.

As time passes, I find myself believing less and less in the concept of “coincidence”.

The irony of the Department of Justice announcement is that it potentially jeopardizes job repatriation which AT&T had promised, but that others had questioned.

A case of one hand giveth?

The fact that the Communication Workers of America labor union was in favor of the T-Mobile buyout makes everything curious if the net result would be a loss of jobs.

According to Stephenson, the union was in favor because they recognized the deal would bring more investment and more jobs. That’s the same union that just uncharacteristically caved in to Verizon and went back to work without an agreement.

Eric Jackson, of Forbes Magazine, actually helped finish Spehenson’s partially correct answer in response to a question I posed to him on Twitter. Amazingly, Twitter, the great creator of an egalitarian society allows anyone the opportunity to communicate with anyone else, even people of stature. How else could someone like me have ongoing discourse with Idi Amin?

As it turns out, the deal, which may or may not actually bring more jobs, does present the opportunity to increase CWA’s roster of union members by encircling T-Mobile’s work force.

No matter whose spin you choose to believe, there’s enough healthy cynicism to satisfy everyone.

So in honor of Jackson’s contribution to my knowledge data base, I wanted to put the AT&T legal saga in a perspective that we both might appreciate. 

In 1974, a full seven years after the original REO Speedwagon formed, the DOJ filed an anti-trust lawsuit against AT&T. Finally in 1984, at the very height of REO Speedwagon’s popularity, the divestiture took place resulting in what were called “The Baby Bells”. The make-up of both AT&T and REO Speedwagon has varied greatly over the years representing business opportunities and creative differences, respectively.

There are lots of things in life that I don’t understand. Advancing age has afforded me the luxury of admitting that fact since I no longer care what other people think.

But Jackson really put it succinctly, in the form of a Twitter hashtag: #selfinterestaliveandwellinAmerica

He is much more pragmatic than I am, because in my cynical mode, I thought that the CWA support was due to #FearAndLoathingOfVerizon and the belief that the enemy of my enemy is my friend. From labor’s perspective, going back to work was like making a deal with the devil, but without the deal.

What really fascinates me is the talk of a $3 billion cost to AT&T if the deal doesn’t go through. Not only that, but there are reports that AT&T would also have to forfeit some spectrum to Deutsche Telecom.

If these are all true, I understand US companies being out-maneuvered by Chinese companies, hell even North Korean negotiators, but I just can’t see how they could have been bested by a European company.

I have no basis for believing that other than stereotyped notions that are deeply ingrained within.

Great. Those things I can remember.

I would probably also wonder whether my legal representatives were double agents.

When I buy a house, my contract always has the contingency that makes the sale subject to an inspection. There may even be some other escape clauses, as well, such as the presence of a counter-clockwise spin of thetoilet flush.

It seems that someone at AT&T should have considered the possibility that DOJ might take exception to the creation of an oligopoly, as the merger would shrink us down to just 3 major cell carriers (Read Eric Jackson’s Forbes article).

Seems that would have been less likely during the Bush administration when for all intents and purposes mergers were like the Wild, Wild West. But the climate is different these days.

Three billion is a pretty big leap of faith to make.

But now the fun begins.

There’s been lots of speculation about how political self interest will kick in in the hallowed halls of Congress, especially when jobs may be at risk in someone’s district. We all know that any representative would sell the interests of the nation down the river if it meant re-election.

Since AT&T said that the benefits of the deal would be increased jobs and technological innovation, the inference being that just the opposite would occur if the deal was blocked.

No one wants to see either of those events occur.

But wait a second, it’s unlikely that AT&T would hold its commitment to technology as hostage, particularly since that would be akin to suicide in a very competitive landscape, I think that has to be discounted in its entirety.

Further, the skepticism regarding increasing jobs is probably warranted, as workforce redundancy can’t be allowed. Besides, what better way to improve margins than by makes cuts in your most expensive cost center?

But for AT&T, this can end up being a win – win situation.

Faced with losing $3 billion and valuable spectrum property, AT&T could make a highly signifcant improvement to its public face by guaranteeing across the board job increases, amounting to, shall we say $3,000,000,000 for some defined period of time.

At that point, whatever objections Sprint and Verizon might have to the deal have would be laughed at as being counter to the interests of the nation. That sort of thing may go unnoticed for politicians but not for “greedy capitalist” institutions.

As far as I’m concerned, I got rid of both Verizon and AT&T a few months after the market started its recovery from its 2009 bottom. At that time I moved almost entirely into accidental high yielders, to quote Jim Cramer.

I do own some Sprint, but that doesn’t count, since I never would have purchased shares of a sub $5 stock with real money. Instead, I bought those last month with royalty payments from Option to Profit sales.

The funny thing is that when news does come out everyone looks for second and third derivative trades.

When the original deal was announced, American Tower got slammed because the consensus was that there was overlap in AT&T and T-Mobile tower contracts.

I bought AMT at the time, sold some calls and held onto shares for just a brief time as the share price quickly recovered. It was a very good trade for me and if I could get that kind of annualized ROI for a year, I could have retired 20 years ago.

Today, American Tower moved up on the news. Guess what it’s likely to do in a couple of days?

I rarely deal with put options, but this seems like a good time.

Whoever said the market discounts the future needs to redefine the time frame from the widely accepted 6 months to about 6 minutes.

But back to AT&T.

In the first iteration of the DOJ vs AT&T, it took 8 years for an agreement to be reached and then a bit more than a year to effect the break-up. By the time the Baby Bells were in ascendancy REO Speedwagon was in descendancy.

Nearly 30 years ago, when all of this was happening, technology was moving relatively slowly. Not too much happened in the 10 year period from start to finish. It’s hard to believe, but portable phones were an oddity back then. Forget cell phones as we know them. Have you seen episodes of Seinfeld recently?

But what would happen if AT&T was in another drawn out 10 year process? How would that effect its strategies or reluctance to enter into certain ventures?

What impact would a muted AT&T have on the national economy?

I don’t know the answer to any of these. In fact, if it weren’t for Eric Jackson, I’d have no clue regarding CWA’s real motives.

But this time around, as we go through a second round of DOJ action, I think we need to let AT&T move forward and prepare ourselves for the eventual third round of DOJ versus AT&T.

I’m hoping to have front row seats for the battle of 2048 and seeing how President McCain, who made his own deal with the devil, handles that one.

 

 

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.

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I rarely write about local events even though my world these days revolves around an area of about 50 square feet, maybe more, if you include the TV’s remote control range. If La-Z-Boy could design an in chamode model I could get that range even tighter.

Fortunately that tight range is by choice as the only tether I have is to the TV, but if I wanted or in a pinch, the only programming that mattered during the day could easily be streamed thanks to E*Trade and CNBC.

I did need to go out the other day to have a repair done on our car after a break-in attempt in the District of Columbia.

Funny thing was that they really didn’t need to smash the window, since I keep my full sized body bong secured to the roof rack for easy access.

In case Howard County police are reading this blog, I’m not being serious. The break-in occured in Laurel, but on the Prince George’s side.

In case PG County police are reading this, it was in the Ann Arundel County piece of Laurel.

And so on.

Without going into too much detail, I wasn’t terribly happy with what I thought was an inadvertent problem caused during the repair process. I tend to be fairly low maintenance and am not one prone to complaints, but I am wary of and will speak out against irresponsible behavior directed at me, as a consumer.

Sometimes “speaking out” means raising the questions rather than a ruckus. I wasn’t trying to be a villain and I didn’t think that there were villains stacked up against me. Just people seeking to mutually protect their interests in the name of justice

Since I’m nearing one of those standard retirement ages and haven’t really perpetuated any scams (yet), I’m not really likely to start along that path in life at this point, especially with a local business in a small town.

Of course, there’s really no reason for the people at Win Kelly Chevrolet to know that, as I’m certain that they see their fair share of complainers, maybe even scammers, dealing in an industry that probably has a fair amount of consumer mistrust as the baseline.

Look at all of the people that tried to blame Toyota for what proved to be a non-existent electrical problem.

Long story short, they took every effort to make me, as a customer feel satisfied with the outcome. There were no threats, no yelling, just reasoned discourse from both perspectives. Had they decided to take a different approach or come to a different decision I would have been upset and would have just gone elsewhere for the required service.

And that would have been the end of it.

Instead, they chose to treat me, the customer, in a way that represented an investment in the future. They decided that there was no need for a villain on either side of the tale and were likely more forgiving and understanding than I would have been.

What they did was to create a future customer and a fair amount of good will. I mean, after all, here I am, impressed enough to be writing about them (Helen, Mark and Lyle)

Why doesn’t this happen in the markets?

Why is there always a need to find and identify a villain when things don’t go our way?

In the few years that I’ve been actively involved with managing my own portfolio there seems to be a villain each day the market goes down and an uber-villain when there is a downward trend. Granted, when the market does go up in a significant manner, it’s equally common to try and identify  the root cause, but human nature being what it is, the fervor in pursuit of that cause is much less

Most recently, the villain has been Highy Frequency Trading. Someday, I’ll probably write a blog about that along the same lines as “Why Insider Trading is a Victimless Crime.”

Market goes down? Blame it on leveraged ETF’s.

How about the uptick rule?

Short sellers. Don’t forget the short sellers. It’s amazing that Overstock.com is still around given the conspiracy led by short sellers to see it implode. Hedge funds, too.

Whatever happened to the Yen Carry Trade. I still don’t even know what that means, but that was a biggie about 4 years ago, or so. 400 point drop? Japanese Yen Carry trade. Up 175 the next day? Uh, something else.

Almost forgot about algorithms.

Now, probably the most unexpectedly designated villain is Alan Greenspan who obviously pulled the wool over everyone’s eyes for 19 years. As soon as he left the Federal Reserve it was decided that his policies were responsible for what ultimately became the housing bubble and banking crisis, maybe the Cambodian Killing Fields, as well.

That’s why you should never take vacation from work. Someone is bound to discover that you’re totally unnecessary. Remember Mel Brooks’ great line from Blazing Saddles? “We have to protect our phony baloney jobs, Gentlemen”.

What really amazes me is how any  of these could be identified as an endemic problem, yet suddenly become irrelevent the very next day.

Having a villain to point a finger at is very comforting. The United States is used to being blamed for all of the world’s woes. Every despot throughout the history of the world has known that an external villain must always be identified so that the poor “Schlubs” can be distracted from finding out the truth.

Whoever said “The truth shall set you free” probably knew what he was talking about.

Again, it’s the Mel Brooks concept at play. It really does have near universal application.

In that regard, it will truly be amazing to watch the evolution of the “Arab Spring”. After 60+ years of being fed a single line people may get to see that the enemy was actually within, unless of course the new governments sense a tenuous grip on power. In that case, it’s same old, same old.

As investors or traders, there’s no doubt that introspection is called for, rather than always seeking to place blame elsewhere when things don’t go as had been hoped.

Not having a unifying strategy or even worse, not following your strategies, is a good first place to begin the soul searching.

One of my favorite Tweeters is Eddy Elfenbein, who runs the Crossing Wall Sreet site. He is a buy and hold investor and has an exemplary record, one that is fully transparent. He’s also great with market and economic statistics and is funny, to boot. That’s not easy to do in the context of 140 spaces, even more difficult when 13 of those spaces are taken up by his name.

Yesterday he Tweeted “The sound investing rule that I most often break is that I get frustrated when a stock rallies right after I sell it. So hate that.”

Feelings and emotions are the bane of investing. The real villains are greed, fear and envy. Add frustration and regret to those.

In yesterday’s blog I wrote about some rules of my own that I sometimes consciously break because I have a hard time resisting the temptation that presents itself when there are idle funds in the account.

I was partially successful in breaking old habits on Monday but just couldn’t wait to burn through my cash today.

I continued with my energy theme and bought shares in British Petroleum, Transocean and Chesapeake Energy, as well as picking up additional shares of Riverbed Technology.

Boy, talk about villains. Take yesterday’s Halliburton and mix that with a little BP and Transocean and we’re talking some heavy evil, except for the fact that they’ve been very profitable for me in the past year.

With the exception of RVBD, I got them all at better prices than I would have yesterday, but I actually used the proceeds from call options sales to pick up the Riverbed shares and then used those proceeds to pick up more ProShares Ultrashort Silver ETF shares.

Of course, I still partially fell back into my bad habit of falling victim to my short term pessimism.

Once again, though, I’ll call it a partial victory, as I waited for the prices in today’s newly purchased issues to rebound before selling my calls.

I only blame myself for not waiting longer as the market did an almost 200 point turnaround that would have netted me even better premiums. As it was, before you knew it, the market finished up by only 20 points after a final hour drop of 70.

I was wondering who the talking heads would blame the last hour fade on but instead had to go and pick up my car.

After dropping off the loaner and driving off in my well cared for car I felt good about the dealership and the market’s close, despite the rocky paths taken.

As famed, but now long dead Pogo had said, “We have met the enemy and he is us”.

 

 

 

 

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

 

  

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