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Tuesday
Dec202011

I Hate Homework



I first started watching Jim Cramer when he was teamed with Larry Kudlow. Their show, interestingly enough called "Kudlow and Cramer" for a reason that has been lost to history, was an evocative blend of financial and political analyses.

I used to watch the show with Szelhamos. He really enjoyed Cramer. Partially that was due to the Lenin-like appearance and probably to some degree owed to the raw emotion and enthusiasm.

I think he also liked Cramer's teeth.Szelhamos judged everything by its teeth. Horses, people, watches.

He would have loved Mad Money, but never got the opportunity. I can actually just picture the look on his face had he ever had the privilege of watching a chair get flung across the studio.

Cramer blocks my tweets, probably due to a misinterpretation of the title of a blog entry "Why I No Longer Watch Jim Cramer."  Although it may also be related to the ill-advised combination of toilet paper and egg home decor that I provided one drunken morning when he got the booth I had my eyes on at The Olive Garden.

Because of that, I won't include the photo of me at what would go on to become the Mad Money studio set, when I auditioned for the part years ago. To see that, you'd have to actually click here.

In hindsight, I should have gone with the goatee, chucked the sports jacket and not sat down.

Regardless, his transition over to Mad Money came at a very critical time during my own investing development and subsequent plunge into managing my own portfolio after 25 years with a trusted broker.

I think that I learned a great many things during the years that I watched the show. In fact, as I used to travel quite a bit back in those days, I actually recorded shows to DVD to carry along with me.

There must be a word for that, but I'm not going to dig up Sugar Momma's copy of the most recent DSM-IV diagnostic terms.

Crazy is crazy.

HomeworkAmong the things that Cramer preached was doing your homework. He always recommended one hour per stock, per week. Because of that heavy time load, he also had a corollary recommendation that you shouldn't own more than 10 stocks at any time.

As he used to say, "What are you? A mutual fund?"

Point very well made.

But on deaf ears.

Even though I was always a good student, those deaf ears weren't really physically incapable, they just had a hard time listening.

You know the kind of person that I am.

The kind that always thinks that they're right and always has a better way.

Guilty. And annoying.

Actually, in that regard, I certainly don't think that I have a better way. Beyond that, when it comes to actual performance and credibility, it's obviously laughable to even entertain the comparison, unless you're actually looking to accumulate DSM-IV diagnoses.

Here's the thing.

Even though I always did my homework as a child. And even though I always completed all professional tasks that could be thought of as "adult homework," I don't like homework.

It was with that kind of insincerity and hypocriticism that I would exhort my kids to do their homework.

Clearly, they knew what I was all about, as they were able to see right through me and could basically care less about things like homework, practice and all of those other bogus endeavors that are supposed to strengthen your mind, body and skillsets.

When it comes to investing, or more appropriately to trading, I'm an idiot and seek to do nothing to bring myself toward enlightenment. I certainly don't do homework.

I've said before that I've owned stocks in the past, including at this very moment, that I have no clue as to what product or service they provide.

For example, Focus Media Partners, which I first sold puts upon, then bought shares and sold calls upon, after taking another cue from Muddy Waters.

Again, a case of not listening, as Muddy Waters' advice was to flee ownership of shares due to more Chinese accounting improprieties.

Don't know. Don't care. I'm agnostic as to that information, but I do like the profits from the hedge trades.

Anyway, at the moment, I own shares in 21 different companies.

One of those happens to be Riverbed Technology, which was first put on my radar screen by Jim Cramer a long time ago.

I didn't purchase shares when he first recommended, but did so some time after. It is still a mystery to me as to what it actually does, even after about 5 years of reasonably steady ownership. WHat I do know is that shares could go to a negative value and I'd still be in profits because of all of the great option premiums.

I just had some of my Dow Chemical and ProShares UltraShort Silver ETF shares assigned, as well as all of my Sallie Mae holdings. I happen to know what all of those are about.

So there.

With the cash in hand, I picked up shares in JP Morgan Chase and Halliburton at prices lower than at which they were assigned to me two weeks ago.

Funny how that happens.

But I also picked up replacement Sallie Mae shares and became reacquainetd with General Electric, as I hope to double dip on its upcoming dividend and option premium this week.

By my count I lost shares in 3 companies and bought shares in 4 companies.

After a few years of doing that kind of an exchange, you do tend to accumulate stocks in different companies.

Among the many things that I learned from Cramer was to avoid the arrogance of thinking you know exactly when to buy and when to sell. Buying and or selling your entire position at a single time is an exercise in arrogance.

So often, when picking up new shares, I do so in lots, as long as a single lot is large enough to warrant the profitable sale of call options.

So when I may see a position assigned it may not be unusual to see more than one stock take its place, especially if the assigned shares were high priced, as my Amazon and Goldman Sachs shares (used to be.)

But still 20+ different stocks?

Here's the other thing.

Not only do I not like doing homework and not only am I lazy, but I'm a creature of habit.

I don't like new things. I'm a terrible stock picker and happily admitted that when on Bloomberg Rewind last month. When I do venture out and about and try out a new stock, it always seems to be a mistake.

In Option to Profit, I talk about my "Old Reliables." Those are the stcoks whose shares I go back to over and over again.

Why look for opportunities with new stocks, trying to find some hidden gem when your old friends are right there for you?

Like everyone, they have their ups and downs.

When the time comes and one of myr shares are assigned, there you go. Just look toward Old Reliables for one that has cycled down on its luck.

That's a friend in need who will very often pay you back in gratitude.

How can you lose? You help out an old friend and at a bargain price for that matter.

That's how JP Morgan and Halliburton made it back today after just a few weeks of being away from the portfolio.

I don't want to complain or seem like a bad host, but so far today, Halliburton hasn't behaved well after the morning's purchase and I haven't sold any calls.

As far as JP Morgan goes, just because I sold the calls an hour or so after it arrived back home and am hoping to see my shares assigned, there's nothing personal.

I learned that from a friend many years ago.

Business is business and friendship is frienship.

He didn't teach me anything about homework, so I took that as a sign of his disapproval, as well.

In the meantime, I realize that I owe Jim Cramer quite a bit. Believing so, is perhaps just a further manifestation of a contrarian attitude, as he's pretty maligned.

Jealousy will do that.

Homework on the other hand, from my perspective, desrves to be maligned, as long as you don't mind being an agnostic idiot.

 

 

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George Acs - TheAcsMan. - I now spend my time at Option to Profit - OTP.