Friendly Competition

I must be fixated on "oxymorons," just having written about them a few days ago.

Had it not been for a Tweet from Marek Fuchs of TheStreet.com regarding his attendance at a Fordham versus Harvard college basketball game in the Bronx, I'd never have known about the event, despite the fact that I'm an alumnus of both.

On the other hand, I did know that CNBC was broadcasting live interviews from within Goldman Sachs and was wondering whether a high school classmate, CFO David Viniar, would appear.

To his great credit, absolutely nothing untoward was ever said about him throughout the slew of slings and arrows directed at Goldman's higher offices. Sometimes, keeping a very low profile is a good thing, so it's not overly surprising that he didn't make an appearance.

Fuchs, who somehow finds the time between filming his entertaining and educational series "They Just don't Get...." for TheStreet.com and his parental responsibilities, Tweets with regularity. At last night's game his Tweets ranged from wanting his money back, despite the fact that his ticket was free and it being one of the most exciting games he'd ever seen.

He also was the halftime entertainment and penned an article for a local newspaper, while simultaneously putting out a fire in the Village of Tuckahoe.

Really. That's the name. Tuckahoe.

Oh, and did I mention that he was an author?

My guess is that somewhere along the line either the ecstasy kicked in or the game got competitive. I doubt that the halftime sermon alone would have moved him to hyperbole.

When I went to Fordham, there was a general understanding that Fordham alumni went, in disproportionate numbers into the service of the FBI and CIA and in turn, spent an inordinate amount of time investigating Harvard graduates.

Competition. Think G. Gordon Liddy and then think dirty competition.

Great mustache, just nasty competitor who believed that in order to protect our nation from its enemies you had to use the U.S. Constitution for personal rectal hygiene.

Friendly competition is more like the sort Inspector Clouseau engaged in with any of the adversaries that he faced, yet nonetheless, respected.

The adversaries, in turn, received amusement for their troubles.

I really don't know who won last night's competition, but I doubt that it was friendly.

There's a big schism between "The Bronx" and Cambridge. "Jenny from the Block" and William F. Buckley are reasonable poster children of their respective homes, just add some needle tracks to the former and ample elbow patches to the latter's images.

Whereas the stereotype of the Harvard man would have him asking "may I top you off, my good fellow?" the Fordham man was just as likely to ask "Yo, you gonna finish that least slice, or what, Mofo?"

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Starting the Year Right

Maybe I wasn't listening very carefully today, but this year in the stock market seems to be getting off on the right foot.

For me, that has nothing to do with a 200 point gain, but it has everything to do with platitudes and what is frequently assumed to be the "conventional wisdom" not making their annual appearances.

Okay, maybe the 200 point gain has something to do with it, but I like to think that I'm bigger than that, even though I know that my superficiality won't take me there.

Specifically, getting off on the right foot means that there was a noticeable absence of anyone getting on the typical first trading day of the year talking points.

In the years that I've been fairly addicted to business television the beginning of the year stories are always the same.

Dogs of the Dow, January stock rally, retail sales revisions come in better than expected, Super Bowl Indicator theory and so on.

There's usually also some human interest story, like the twins born in different years.

Great stuff.

I guess I'm so sensitized to these kinds of stories that the recent nightmare I had made so much sense.

Listening to Dana Telsey describe how thisyear, once again Chinese restaurants and movie theaters in major metropolitan areas saw 30% of their annual profits maerialize during the week between Christmas and New Years.

So far, there hasn't even been a summary of best and worst performers, although that has to be related to my inattention.

Although, still, its absence may be plausible. I guess when you can go an entire year and not see anything change in the S&P 500 level, it's almost as if the year had never happened, other than memories of the vomiting during the up and down segments of the ride.

That's exactly why you need to sit in the front row of the roller coaster. Staying ahead of the curve works. Sitting behind someone who vomits doesn't.

Now to be totally fair, I did hear someone refer to the "Dogs of the Dow" theory on Friday, but did so only in the context of pointing out that the list for 2012 looks pretty much like the list for 2011.

That's not the way it's supposed to work, so maybe that explains today's silence. Of course, that silence may make adhering to the theory a good idea, were it not for the stocks involved.

After the past week, which was so utterly boring, it really was nice to see a definitive move, especially in a higher direction, but I pretty much traded myself out for the day after the first 60 minutes.

I'm not usually prone to making New Year's resolutions, but I did so this year.

The first, has already been satisfied.

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Stunning Reversals

I've never made any secret of the fact that I don't read very much.

My daily ritual of reading DIlbert and The New York Times Obituaries was recently complemented with James Altucher's blog. I actually thought long and hard about whether to refer to it as being in "complement" to or in "supplement" of my daily activities and realized that there really wasn't a word to convey both impacts.

I've linked to it a couple of times and bored readers of this blog have clicked on that link, which has also activated a small hidden webcam near their laptops, in addition to any resident webcams you they already have.

I like my fuzzy clandestine streaming to be in 3-D.

For those who read this blog on a regular basis it doesn't come as a surprise that I don't read much. In fact, there's really not a strong body of evidence that I even read my own blog, much less proof-read it.

And forget about reading for the sake of getting my information right.

When I was younger, I was horrified to find some ham in our refrigerator since it's not Kosher, as you may be aware.

My mother, in response to my pointing this out to her, said "if it tastes good, it's Kosher."

What a great philosophy.

I use that philosophy with my supportive facts. If I believe them to be true and accurate, then they're true and accurate.

A "Kosher pig" is an example of an "oxymoron" until some moron ruined it about a decade ago with the discovery of a species of pig in some god-foresaken rainforest that might just satisfy all of the criteria necessary to be considered Kosher.

I wrote about Oxymorons a few months ago, but with an emphasis on the "moron." The thought was rekindled a few days ago reading one of Altucher's blog entries.

He was asking whether there could really be anything such as an amicable divorce.

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Does it Pay to be Mean?

Probably from even before the time that ancient cave dwellers were able to make wall drawings people have been asking the question.

"Why does it seem that the evil among us thrive?"

The corollary, "Why do bad things happen to good people" is frequently asked and was the topic of a very popular book in the early 1980's.

That particular book may in fact be the last one that I've read, but I'm not certain if there's a connection.

Whatever version you take or don't take your Ten Commandments, it's clear that good behavior has to be spelled out as do the choices that should be made.

Don't kill.

Oh. Don't. Don't kill. My bad.

I'm not a particularly deep or profound thinker although I took many more than my fair share of philosophy and theology classes in college. In all likelihood I owe my inability to recall any discussions of good versus evil due to an everpresent fog.

Watching episodes of COPS week in and out over the past quarter century it's clear that the likelihood or high probability of reward is not what drives people to do evil things.

In those cases it's probably stupidity mixed in equal parts with alcohol that's responsible for the repeated journeys down the wrong path.

Sometimes it's profit motive.

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Selling a Kidney for Crack

I know that my short term memory is degraded, but I still remember what 2008 was like. It wasn't very good.

Even if I didn't remember, I could just dig up an old spreadsheet or look through my Quicken archives and would be reminded of the pain.

Every now and then, even though I don't pay too much attention to stock charts, I'll pull up 5 year charts just to see how low we coud sink when times get tough.

Stocks, like people, can sink to unimaginable depths.

Luckily, and totally serendipitously, that was the time that I started a strategy of aggressively selling covered call options and sticking to a relatively tightly controlled universe of stocks, so the pain wasn't as bad as it could have been. Always solid companies, never any speculative plays.

I've always thought of speculative stocks as being Zombies that could come back and devour its master if guard was ever let down.

Back then, though, I also worked for a living and actually made lots of money. In fact, by my estimation obscene amounts, particularly relative to my actual degree of effort.

I like to think of it in mathematical terms, except I'm reminded that the divisor can never be "zero".

Now, I sit and try to generate income from my holdings by selling and re-selling call options on the portfolio's holdings. It's been a really good alternative to the alternative.

As each monthly cycle begins I find myself in an optimistic frame of mind.

This past week, the beginning of the October cycle was no different. In fact, if anything, I was even more optimisitc after coming off an absolutely stunningly good last week of the September cycle.

During that week the market fought back from early day losses on a couple of days and rallied on other days in the face of no news, or even bad news.

Does it get any more bullish than that? Even more so when the markets appeared oversold in previous weeks. Like that wound up coil some people like to use in their attempts at imagery.

Funny how things work out.  I questioned my own sanity based upon last Friday's rally going into the weekend. There were so many open questions remaining in Europe, I never did understand where the optimism was coming from. Despite that, I was still looking forward to a great month coming and lots of new options income.

Did I mention "funny how things work out?"

Despite the terrible market in 2008, I never felt any desperation, even on a day when I may have lost the equivalent of 200 Color TV's (using 1964 Color TV Index).on paper. Having a job and employment income was probably a factor in maintaining a calm demeanor.

A few weeks ago, on the day the NYSE commemorated the tenth anniversary of the September 11th attacks, we had a 300 point drop, yet it was just an ordinary day as far as drops go. No stress and no worries.

Yesterday and Wednesday had very different feels to them. Sometimes it's not just about the magnitude, sometimes there's a qualitatively different feeling. Yesterday, in fact, it was the FOMC report, that led me to believe that they need to measure their words more carefully and perhaps consider "qualitative easing" for a change.

Adjectives can be really hurtful.

Gloom. That's the feeling. The same kind of feeling back in February 2009, which was the last time we'd had a week like this. It was just a couple of weeks later thatthe "Haines' Bottom" was called.

I actually shuddered to look at my largely unhedged positions today. Were it not for the plummet in silver and the subsequent rise in the ProShares UltraShort Silver ETF, which slowly has come to be about 9% of my portfolio, there really would have been some frightening numbers .

I actually have images of the short silver ETF's being my portfolio savior, if we can shave another $3-4 off the price of the metal.

And I don't really believe in saviors, but am willing to accept delivery from my misery. When I'm knocking on the door, I'll take all rites.

Just another form of hedging, that's all.

Unhedged, those shares were really easing the pain. Seems appropriate, as silver is also the antidote to a Zombie attack when forcefully thrust.

But one week into this 5 week options cycle, I was so woefully unhedged that the blows were all full body and the options premium income was much lower than I typically expect. Considering that September was the second worst income month of the year, I was feeling the pinch.

The other night we were watching some show on the National Geographic channel about cocaine. They profiled a Chicago addict who was going through a couple of hundred dollars each day.

Sugar Momma and I both wondered where he was getting the money from and then we found out, even though we both had a clue.

It was from that bad kind of crime that I covered in Wednesday's blog "7 Reasons Why Criminal Life is Great".

But sometimes you do what needs to be done. When faced with your personal stress test you do things that you may not be proud of.

So I looked at my babies and I do love them all and wondered which ones to sacrifice in order to generate some income.

Unfortunately, there weren't any really good prospects. In fact, the only promising position was the UltraShort Silver ETF. Just about everything else was deeply in the red.

Loving all of them equally, but loving the ETF most, it was a difficult decision, but Daddy needed some money.

Sigh. Like an addict going after that crack rock, I sold call options on about 30% of my ETF's. Almost like Abraham ready to sacrifice Isaac for a chance at the unknown.

However, instead of selling in the money or near the money calls, I sold the October 2011 $17 options, at a time when the ETF had already been up about $1.80 to $14.40

Sort of like Abraham using a magician's trick sword.

I've been confident that the metals would realize that gravity was an important contender and haven't been selling the covered calls in anticipation of that realization.

Until now.

I just needed that fix. It really did feel like selling your last remaining kidney for just one last crack rock.

Self-respect is pretty unimportant.

Dennis Gartman, that ubiquitous CNBC contributor must feel the same way, as he told people to "go out on the street and raise cash".

I think he was exhorting people to panhandle. I don't think Mayor Bloomberg is going to be a fan of that strategy. But at least that clears up the question of why Gartman spit on my windshield yesterday morning as I exited the Holland Tunnel.

To his credit, he was the only one out there with a magnetic credit card reader and a Skype connection.

Personally, despite my desperation, I am still the guardian of my dignity and would sooner sell apples or jump out my first floor window.

For a brief moment there was a 100 point climb off the lows when a FInancial Times report was misinterpreted. When the realization came that the report indicated that the European banks needed capitalization yesterday, those 100 points were gone in a flash.

I did take that opportunity to close out sold call option contracts on Transocean and DuPont, in anticipation of some kind of a bounce.

That may be overly optimisitc, as I don't expect the same kind of week closing rally as we had last week.

But at least I didn't take it quite to the lengths of the Greek banks.

The fact that Greek banks were offering lakeside villas for every new account deposit in excess of 50 Euros was not likely to create the kind of extra capital hordes that would be necessary to forestall collapse.

Can you imagine the size of the crack rock that it would take for Greece to pass that stress test?

Interestingly, the Greek banks may be in better shape than our very own Bank of America, where a new account deposit of $50 now gets you a major equity position, as shares have now fallen to a new all-time low point.

Moynihan, stop bogarting that crack pipe.

As bad as today was and as regrettable as the actions were, extending the metaphor, at least I can grow a kidney back.

We've all done it before and will likely all do it again.