Empty Nest

I love the "empty nest."

I don't get all the people who bemoan the fact that their children have made lives for themselves. These days that isn't terribly easy to do, so instead of being saddened, it seems that pride is called for when looking at the empty bedrooms.

And the cleaner house. And the lack of towels and socks strewn all over the place. And the discovery of unknown sleepover friends. And the milk returned to the refrigerator.

Ah, empty nest.

Literally within days of the second of our two boys leaving our home, my wife had his bedroom painted pink.

There was no mistaking the message, yet she's the sentimental one and the one with the parental instinct. I would have chosen nature's way and just eaten the young before they had the opportunity to suck all life out of us.

This past Saturday evening we went to the house of some friends for a "planning session." We're traveling together to Europe in September, literally minutes after their nest becomes seasonally empty.

They have the right idea.

Don't get me wrong. I love my kids and am very happy when they come for a visit, have dinner with us or call.

I'm also happy when they leave.

There are lots of other things that make me a bad person. Those feelings will just have to stand in line.

When I see Facebook postings, as I did this morning from my oldest son who is currently in Cambodia, I'm glad that he's not here for me to look directly into his face. 

"Got my first massage today. After around 45 minutes she told me to turn over and giggled. She then flipped on a TV and played me the last fifteen minutes of "Homeward Bound". Incredible Happy Ending."

At least this way, I don't have to ask if the happy ending was related to the movie.

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Pull the Plug

I've already made my wishes pretty clear.

After seeing the latest George Clooney movie, "The Descendants", I definitely don't want the plug to stay in the wall whenever that time comes along, as it most certainly will.

Nor do I want my loved ones tearing me a new one as I helplessly lay comatose in an overpriced hospital room if (when) by chance they discover some dark secret about me that will occur sometime in the distant future.

Or while I was 500 miles away from home today.

It seemed funny in the movie, but I think that would mar the legacy that I'm actively trying to fabricate.

So, in the event that the documents I've previously completed in response to the certainty of the former occuring  are misplaced, let today's blog serve as a legal document as to my intentions.

Pull the plug. Let me go.

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You Can Never Go Back Home (Archives)

The original Szelhamos Rules ran for precisely 1 year, from February 2007 - February 2008. This article originally appeared March 29, 2007. For Michael Dell update, read "How Much Bad News Can we Handle? (August 19, 2011)

Recent data seems to refute this old adage. After spending 5 or 6 years in college, many newly minted, diploma holding graduates are returning home. "Failure to Launch" was a reflection of a growing phenomenon around the country. For me however, the sight of Terry Bradshaw's butt, has made that both a memorable and disturbing film. But the reality is that you can go back home. It's cozy, it's safe and it's cheap. And everyone is doing it.

But in the world of business it's not quite so clear that you can go back home. Steve Jobs and Charles Schwab did, and their company's shareholders were elated to welcome them back. Apple Computer may just have well been named Jobs Computer, because there was only a rotten Apple during his absence. Even the threat of his departure, whether due to personal health or options related scandal, had depressed the stock price, and his returns to grace and health saw upward moves in Apple's price.

In Charles Schwab's case, the company was already called Charles Schwab. No need for renaming. But when he left, it lost focus. When he came back, Schwab, the company came back, better than ever. Among the discounters it is still able to command a premium for its services.

So they could go home. And everyone lived happily after after, that is, until they leave again. And someday Steve Jobs and Charles Schwab will pack up and go. Planned succession? Who could fill their shoes? John Scully?

But it's not always that way. Remember Gateway Computer? It's still around. It's a $2 stock that every now and then gets speculative play because people think that it will return to its former glory. And why not? A couple of years ago it's iconoclastic founder, the pony-tailed Ted Waites returned, to help rescue the company, that littered the landscape with its ubiquitous cow boxes in the mid-90's. Gateway once had cachet, now it has some shelf space at Best Buy.

Well, you know what happened. I already told you it was a $2 stock. Buying out low quality maker eMachines didn't do much for Gateway. Bringing the cow boxes out of pasture didn't help much either. And so Ted Waites left again. He couldn't go home. He never did learn to avoid the pastures while in sandals. That was his real downfall.

Why bring this up? Who really cares about Gateway? Although I still have my first PC, a Gateway P70, with a kicking 1 Gig hard drive, I really don't think about Gateway. In fact, the only reason I still have the unit is that it is too heavy to take to the dump. There is nothing compelling about their machines, other than to bring back memories of the early post-IBM days when Gateway and Dell slugged it out for the hearts of the computer newbies.

But I do care about Dell. A few days ago I wrote that I was planning to make a sale of my Dell stock if it reached 25, which I was expecting, since the bad news was certainly behind us.

In my own mind, I may think that I'm pretty important, but I'm pretty sure that my disclosing my intentions didn't send panic waves through the market for Dell stock. O, as it turned out, it was more bad news.

A couple of months ago, the famous founder, Michael Dell himself, stepped back up to the plate. Out was his hand picked CEO successor, whom he had wholeheartedly endorsed just weeks before. That's always the kiss of death. The stock rallied on that news. The prodigal father was returning to rescue his child. Dell would go up, would go down, would show some brief upside trends on news. But Michael was back. He came back.

Now it's never good news when you start the morning with an announcement that trading in Dell stock is halted. That was this morning's news. It followed yesterday's announcement that there may be a need to restate prior year's' earnings. Irregularities. How I hate that word, at least if it refers to a stock that I own. At my age, it's very important to be regular.

Dell is a good example of how not to buy a stock. A while ago, after quarter after quarter of great earnings and guidance, Dell announced a disappointing quarter. The stock fell about 10% on that news. I though that was a great opportunity to buy into a great company, at a great price. Not !

Who knew that the house of cards was beginning to crumble. Those disappointing results may have been the first indication that you can't hide irregularities forever. Manipulate as much as you want, but sooner or later the truth comes out. And so for the past 18 months or so, its been one delayed filing after another. That's never good news. Yet Michael Dell stood by his man. After all, they did share an office.

In hindsight, with the continued delays, and the continued support of Michael Dell, there should have been alarms going off for me. But I kept confident. Secure in the fact that even while no longer running the company, Michael Dell would get this thing back on track.

He didn't and he hasn't. It's hard too imagine that he didn't know the depths of the problems at Dell. They still make a great product, albeit not price competitive, but a great product. In a household full of computers and laptops, our Dell is our top dog. But as a company, it's broken, and Michael Dell should never have gone back home. Only time will tell what whether there was criminal activity or securities violations and now Michael Dell is back. If he knew the depths of the problems, his arrogance is mind boggling. The market wants results, not camouflage and not a soft shoe shuffle.

Maybe more disturbing is that if he didn't know what was going on, what is he doing coming back? Stay away. How could he have been so removed? That's very different from the departure of Jobs from Apple. If he was so removed and distanced from operations at Dell, how in the world could he be prepared to rescue them from this morass?

I hate selling on bad news. That's why I didn't panic last month. The difference is that ultimately, with a broad enough time frame, the market always recovers. Remember 1929?

You can't say the same for companies. Remember Enron? Maybe Dell makes up a few cents, but it's hard to see a return to its glory days. There's lots of competition. Computers are commodities and are priced as such. Dell products are no bargains and you have to wait a few days to get yours. Americans want instant gratification, not a visit from the UPS guy.

Oh, and the SEC problems don't help, either.

I have two solutions. Think private equity, if you can't comply with the SEC.

So, Michael. Come. Visit. Have a nosh. But seriously, what were you thinking?

And my other solution?

It's time to go before you end up on Best Buy's shelves, next to your old friend, Ted.

NOTE:  The graphic appearing in this blog article did not appear in the original version

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Daddy, what Do you Do?

For most of my professional life I worked fairly hard, never taking the typical route nor career plan, based on my education and training. Had I taken the typical route I could have retired long ago as I've always believed that there is a limit to how much anyone needs.

If my kids were younger and they would pose me with the question "Daddy, what do you do?", I have no idea what I would say to them.

"Daddy sits on the La-Z-Boy. Sometimes Daddy presses the "ENTER" key on the keyboard. Then sometimes Daddy transfers money from Mr. E*Trade to Daddy's bank so that I can buy cigarettes for you little cute boys to play with," is how I envision my response would have been 15-20 years ago.

Although my kids knew what I did for a living when they were younger, there was really no reason for them to understand what I really did, especially since I also traveled quite a bit for work. Luckily, they didn't ask many questions, oterwise I'd have to kill them.

That may seem harsh, but there's a lot at stake.

Having a second family will do that. Since my Sugar Momma doesn't read this blog, I can say that with reasonable impunity. Unfortunately, that second family didn't come with many benefits, as all they did was pre-warm my rental car and make certain that I always got the same hotel suite each week, although at the time, that seemed pretty risque.

The best thing my other family ever did for me was making certain that when I arrived back home to pick uyp my car from the airport lot, it was always cleared of snow and ice. 

How sweet was that? I tell you the guys at the Key West International Airport Park and Fly were the best.

As many hours as I put in, they were still nowhere near the number of hours that Szelhamos toiled away. Although he was proud of the income that I was making I always felt somewhat guilty that I could make more in about  2 weeks than he could make in a full year. No one shovelled out his car, either, although in later years, it was actually his car that I left in the airport lot.

To use the 1964 TV barometer mentioned in previous blog posts, in a great year, Szelhamos could buy a new TV every week. 

During the 7 year phase that I flew twice a week and would see the same faces lined up in the Southwest queue I often wondered whether I should get one of those wrinkle free logo shirts. I often thought about creating the most bizarre little shirt pocket level logo and some oddball corporate slogan and web address. In hindsight, I can't really understand why I never did so, other than the fact that it would have required some minimal effort.

I eschewed conversation so I never burst into spontaneous word exchange, but I was often on the receiving end. I guess I just have that kind of face or perhaps salesman have either a need to talk or just like to talk. EIther way the familiar faces would always ask me what I did and who I worked for.

I would just make careers up on the spot and at that time, my memory was pretty good, so that I would remember to whom I said what. Regardless of the story, I was always a lone wolf, never working for "The Man".

On those occasional memory lapses, I clearly had just moved on to a new area of consulting expertise. Whenever someone asked me for a business card, I would tell them that I accepted new clients only by referral from exisiting clients that were on the approved list.

The inference was pretty clear. "You're not on the list".

There was no need for business cards. I almost felt like I was running my own personal Studio 54, except for a lot less drugs, sex and music. But I did get tiny bags of honey roasted peanuts and a complimentary soft drink.

Some of those guys even believed that my Southwest Airlines seat was designated First Class.

Which gets me to today.

My kids are grown. One is doing his own stock investing and, if the IPO market stays strong, will be well ahead of where I was at his age. In fact, I'd have to get a new indicator to replace the Color TV measure, as the Y axis couldn't extend far enough to do service to my own earnings.

The other is in college and has both an entrepreneurial streak and a need to serve, as he just finished Army Basic Training and will be heading back for specialty training following the upcoming academic year. In itself, service is not a road to riches, but he will have many other interests to support his choices.

These days, I set a bad example for each of them, as I sit at home on most days my head askance staring at the monitor and my eyeballs awkwardly pivoted to also glimpse the TV. I'm afraid to look, but I think I'm getting La-Z-Boy sores on my backside.

What do you do, Daddy?

It's almost embarrassing to say that I simply sit and wait for an opportunity.

On days that opportunity doesn't come, we don't eat, said the lion to his cubs. Of course, my cubs are moved out so that's really not too much of a concern.

But before the shame and guilt gets too far along, there comes a day like yesterday, when driving my oldest son to his home, he asked me about this months' options trading.

Unlike Sugar Momma, he reads the blog and knows that I'm in the hunt for a monthly options premium record, which I didn't reach on Wednesday, either.

He's stunned at how much is generated out of this La-Z-Boy, regardless of whether the market is up or down.

That also led him to  observe that he'd never met anyone at the stage and satus in life that I currently enjoy, who is driving around such a loud piece of shit car.

I smiled.

Mostly because I couldn't hear him over the noise.

So Wednesday just turned out to be another in a series of big swings, all occuring in the absence of any kind of noise. Since I had sold in the money calls recently on Deere, I was happy to see it take an early price hit. Maybe it did so in sympathy will Dell's disappointing earnings. Dell, Deere? DELL or DE, seriously, how much different could they be?

For me, not very, as I tend to stay reasonably agnostic as to industry or sector. SUre, I know what they both do, but don't really care. I have experience with both and that's all that counts. In Dell's case, it is one of the few stocks that I've bought that didn't make money for me, either through capital gains or options premiums.

I bought Dell about 4 years ago after its first ever disappointing earnings releae. Back then it was about $35 and I thought I had gotten a great price. After three months I got my first lesson in the meaning of  the expression "value trap".

I swore that I would never but Dell again. I'm not a very forgiving fellow.

Deere on the other hand has rewarded me over and over, both on the stock and on the options premiums.

I know Deere will go back up. Dell? Maybe they should merge with Yahoo!. Then I'd only need to stay away from the single entity Ya-hell! instead of both of those dogs.

During the course of a typical month I find myself a;\lternating between hoping for up days and hoping for down days, all in the name of managing the covered calls and minimizing opportunity costs. With two days left in this options cycle I now am hoping for a sustained rise across the board. Most of my covered options are going to expire, so I'd love to see capital gains, at least on paper, complimenting the realized gains on the options premiums.

Next time, if my kids ask me what I do for a living, it's probably reasonable to say that I sit around hoping for things to happen.

If only there was a Viagra-like solution, although looking at a screen filled with green just might have the same effect., except that I won't need to seel medical attention after 8 hours.

If I'm lucky enough toi be around, I'd love to see the day that my own granchildren would ask their fathers the same question.

I hope that their answers are simple and to the point.

"I don't really do much. I just watch stocks go up and down and cash in on other people's greed, fera and envy".

Now how sweet would that be?

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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.

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