The Spilled Milk Bounce

I grew up in a household where in my early years English was decidedly a second language.

Even as my parents quickly became fluent in speaking and reading the language of their adopted country, one thing that they didn't adopt was the use of classically American idiomatic expressions.

Although I'm certain that most such expressions have their counterparts in other cultures, our household, at the very least was idiomatically deprived. Adages were never tossed about as part of casual converstaion, nor were parables frequently used to teach life lessons.

Well, other than the obvious "Never let a Cossack into your home while your daughters are there alone."

In fact, while I did quite well on the SAT exams, I'm certain that what kept me from having an asterisk next to my name was the fact that deciphering the meanings of such expressions as part of a multiple choice exam was somehing beyond my naturalized ability.

The exam was just culturally biased against me and probably even against those that did the actual marauding, raping and pillaging. Those poor Cossacks never stood a chance.

Over the years, though, I've learned some of the very basics, although I don't seek to apply them under any circumstances, except maybe to illustrate a point, almost like what an idiom tries to do.

Silver Lining? Got it, every cloud has one.

Don't s**t where you sleep? Got that one too. Damn good advice.

But last week I was following a path opposite that advised by another popular expression: "Don't cry over spilled milk."

I suppose that in the affluence of America that certainly holds true, but how could you even think to say that in parts of Bangladhesh? Or how can you even remotely suggest that to someone who's let stock profits disappear into someone else's pockets?

For them, it's the end of the world as they know it.

But I get it. It's done. It's over. Move on. Sunk costs, etc.

But there I was last week moaning the losses of some favorite stocks as they closed above the strike prices at which I sold their call contracts.

One, which I only passingly mentioned over the past few days was Halliburton.

Halliburton, like my other favorites is such, because it predictably spins off a nice options premium. Unfortunately, it's not one of my triple threat stocks because it has only a pathetic dividend.

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All that Glitters

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.

Invest like TheAcsMan

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