Ron Paul Rethinks Strategy

I'm not a really big fan of chart analysis.

I'm really humbled when I see some of the analyses that are performed by chart technicians as they crunch and manipulate data and then lay it out in simple graphic forms for the rest of us to ogle and admire.

I won't say that I'm amazed by what they do, but I will say that I'm amazed that 2 different people can see the same exact graphs and draw the same lines and come up with different conclusions.

Using the kind of analysis that is better suited to a Rorschach Test, somehow people see incredible details and images from the saw-toothed lines. Best of all, they even give names to the images that they think they see.

I've often wondered why the "p" in "psychotic" was psilent.

With that in mind, you might understand why charts don't show up very often in this blog site and why I pay very little attention to charting and technical analysis in the Option to Profit book.

The fact that I know nothing about the tenets of technical analysis are just incidental to their absence.

I still think of myself as analytical, but most of the time quantitative analysis is best suited for events that are predictable.

Human emotions and the reactions to external events aren't very predictable. That's why it's easy to have a "fair and balanced" discussion on any economic issue.

Until the least 2 hours of trading on Tuesday, when word came out that there would be a permanent oversight "troika" in Greece and that the EU was prepared to assemble a $2 Trillion bail out fund, the day's big story was Green Mountain Coffee Roasters.

David Einhorn, who is legend for his early and dismissed warnings about Lehman Brothers, has some concerns about the K-Cup Kings. (See his 110 slide PowerPoint presentation, GAAP-uccino)

He was fairly universally atacked.by the 99% and at least some of the remaining 1%.

GMCR has been one of those "mo-mo" stocks. Not only did it have "mo", but it had a double dose of momentum.

After a 3 for 1 split, it's current $80 per share price would have been $240. Not bad, but just a 2 months ago GMCR was at about $110.

There have been lots of questions swirling around GMCR. Accounting issues, patent issues and whether their alliance with Starbucks is really a good deal.

But look at the above graph. Just look at the performance of the Coffee Kings compared to SPDR Gold Trust Shares.

As a disclaimer. I've owned both GMCR and Starbucks in the past year and we drink lots of Peets at home, as it reminds Sugar Momma of her care free days in Berkeley.

By comparison, Gold has been a piker. It doesn't come close to even the laggard performance of Starbucks.

Gold, the basis of all that we hold valuable, the cornerstone of Ron Paul's economic theory has been, at best, an also-ran, three times removed.

Here's the thing. It's repeatedly been ;pointed out that gold is just a rock. James Altucher was the first person that I heard to come right out and say so, at the very peak of gold's price run higher. But he has also predicted that Apple will be the first $2 Trillion company, making its liquidation a possible solution to the money needed for the EU banking bailout. Although in his blogs he talks abouty a $1 Trillion level, during a CNBC interview he hiked it to double that amount. Either way. enough to buy a few months of banking calm overseas.

The rock part makes it hard to eat.

Without doing the research, I'm certain that point has been made prior to Altucher pithy "It's just a rock" comments.

I don't know if Ron Paul has considered that shortcoming. It's no surprise that you don't find Godfather's Pizza offering a gold topping. It may have as much to do with the fact that would be a price buster for the 9-9-9 special, as much as it has to do with its inedible state.

If the eventual GOP nominated team turns out to be Paul-Cain, they'll have to work that out.

In the meantime, not only can coffee be ingested and help to sustain life, but it also helps to nourish and give life to another useful currency.

Tulips.

Just spread those coffee grounds around the tulip bed and you'll have an energized bounty of flowering fools.

The next step is Ron Paul's. I don't see how he can keep his ground, especially after mentioning that children's health care wouldn't be on the chopping block in a Paul administration.

At least not until other areas were eliminated first, since he explained, "we wouldn't be able to do everything all at once".

If Green Mountain continues its fast fade, Paul may be spared the painful decision of switching from Gold to Grounds

In the meantime, once the EU news was reported, the market took a decent 90 point gain and quickly turned it in 250, before giving up a little.

Simon Hobbs, of CNBC, who if you didn't know, was British, has been a consistent voice of reaonable interpretation of European actions during their banking crisis.

His skepticism has, thus far, been consistently appropriate.

His critique of the report in the U.K's Guardian newspaper seems to have been well placed, as the market began to recognize that the reports were more paper tiger-like than a real full frontal assault.

For the most part, I was a bystander during the day's trading.

I did sell some JP Morgan Chase calls, but did so prematurely, as the shares went quite higher later in the day as the EU news came out.

No matter. There are still 3 days for more earth-shattering news to hit.

Once the EU news was digested and GMCR was ancient history, all ears and eyes turned to the after hours earnings reports of Intel, Yahoo and Apple.

The big news was that Apple, which always "underpromises and over-delivers", had its first EPS miss since 2004.

The inital reaction was pretty brutal, with Apple taking a quick $30 hit, which represented a 7% hit.

Cooler heads prevailed and those losses were quickly pared back to about 4%.Certainly those cooler heads prevailed in Goldman Sach's case, as it reported  poor earnins, but saw its inital 5% drop turn into a 5% gain.

Based on "technicals" one talking head on CNBC posited that Apple was exhibiting "bubble" behavior and that it's price momentum was indicating that the bubble was about to burst.

He might be right, but we'll probably never know if he was wrong.

Yahoo and Intel had nice numbers, so hopefully there will be some follow through in Wednesday's market.

The problem with that line of thought is that it puts too much emphasis on rational market action. Events driven by events and data, rather than tangentially related rumors.

Based on where we seeem to be going, the likelihood of the market responding to real economic news is as likely as Ron Paul burying his gold around Ben Bernanke's tulip beds.

More likely is that in a Ron Paul administration he would just plant a big kiss on Bernanke's two lips in preparation for a literal fitting of cement shoes, and then peacefully sip away on some fine Green Mountain espresso brew

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

  

Really? The Recession is Over

What's in the Szelhamos Portfolio?

Reality and reality don't always coincide

The official word came out that the recesssion was over.

Unfortunately, as incomes were also reported to still be falling and the unemployment picture is only as good as the next revision, it's hard to rejoice at that reality.

Especially when wages are now lower than when the recession began.

I'm certainly not one to argue with the proclamation, but since the recession was reported to have ended in June 2009, you'd think that enough time would have passed for some tangible obvious improvements.

Although I'm, not one to argue, by far those that posted comments on the New York Times report, took exception to the reality as reported. Although aomw of the recommendations may have shown an equally questionable understanding of reality.

Of course, talk of a "triple dip in housing" can't be what recoveries are made of, but that's the latest fear, which should be taken seriously if you believe in the reality that housing drives the economy.

Reality does sometimes have a way of catching up to the real reality.

Take the Occupy Wall Street situation.

No doubt that its been spreading, growing and gaining steam. It's even being exported to other cities and college campuses, despite the fact that no one has actually reported on the aims and objectives of the original Occupy Wall Street group, much less the spin-offs.

But that's changing. Today, camera crews were actually beginning to show up, demonstrating that media outlets are perceiving the reality of the situation, although maybe it's just a slow news day, what with the Kardashians keeping a low profile, as they prepare for the upcoming Jewish harvest holiday of Sukkoth.

As if Jews didn't have enough problems.

Fortunately, those problems don't include the Kardashians.

Since I only watch CNBC and don't have a Daily Show kind of staff to scour all the networks and cable stations, I can only comment on CNBC coverage.

And today, there was some. They were right there.

Despite the perceived reality that the Occupy Wall Street protestors were a collection of society's professional laggards, John Carney reported otherwise.

In fact, they seem to be pretty mundane, having even organized into committees to establish standards of protest behavior. Doctors, lawyers and college graduates will generally do those things that reek of structure.

They even are reported to have a drug usage policy, and rather than being "use as much as you can, dude", the policy is that there should be no drug use.

Advil is reportedly acceptable and there may be other exclusions for certain extraordinary circumstances, like needing a buzz.

That doesn't really support the dirty hippy characterization, neither reeking in a literal nor figurative sense.

While there's probably enough detestable behavior to go around, maybe much of it even emanating from Wall Street, pointing out the obvious may not bring us closer to a meaingful soluion, especially if the obvious is not the root problem at hand.

The reality is that the Federal Reserve's mandate to keep interest rates low can only continue as long as wages stay low and discretionary spending is curtailed. Since their dual mandate also includes keeping employment high, at the moment that can only be accomplished by keeping the cost of employment low.

Remember "supply and demand"? What better way to bring unemployment down than by being able to pay the same total dolars but for more employees?

There's lots of political pressure to go to a single mandate, although others would just as soon get rid of the Federal Reserve altogether and have you eat your gold reserves in the event of residing for extrended periods in your nuclear fallout shelter.

That solution probably isn't very realistic.

The European Central Bank, on the other hand, has only the single mandate, that of maintaining price stability. But there too pressure is mounting to ease up on that mandate in order to get an employment surge.

Obviously, despite what the protestors believe, it's not easy being a banker.

European bankers must especially be wondering "what's next?". The market was buoyed today by some rumor of a secret plan concocted by Merkel and Sarkozy that will make everything alright.

Actually, there's not yet a plan. Instead, there's a commitment by them to come up with a plan. This comes on the heels of the market moving news last week that the EU fiscal crisis was going to be taken seriously.

Small steps, but over-sized responses.

Sarkozy, being the chief proponent of politicizing the ECB in order to bring more full employment is the reality. But so too is Merkel, since she's got the money, but maybe not the political will nor backing of her fellow Germans, much less the Slovaks and Maltese, who really have little at stake.

The fact that they have little at stake is reality, as well as the reality that they can throw a wrench into the works every bit as easily as Germany or France.

Greece could as well, but that would require some effort.

So that's not going to become a reality because of the reality.

Whether today's market move was a reality borne of a dream or not didn't really matter to me. Although I watched my assigned shares of Halliburton, Freeport McMoRan and QQQ head even higher today, I didn't mind, especially since I still owned more Halliburton and Freeport McMoRan shares.

As usual, despite knowing that entering the market to pick up shares whenthe market is already up 200 points isn't a long term winning strategy, I was flush with cash and had to do something.

So I added to positions in Mosaic, ProShares UltraShort Silver ETF, Morgan Stanley and JP Morgan. I also picked up shares of Alcoa, despite the fact that it's just moved up about 25% and reports earnings after Tuesday's close, kicking off yet another earning's season.

While the market stayed up, I sold calls on all of those, as well as Halliburton and British Petroleum, while I looked for more upside on the likes of DuPont, Rio Tinto, Transocean and some others, that I don't yet have hedged.

The reality is that despite a nice week, the past few weeks had been brutal. Despite what looks like good news at the end of the day and despite the very nice month's worth of options premiums, the bottom line hasn't been terribly good.

Sort of like what most of the nation seems to be going through, as long as you believe that 99% represents a majority of the nation.

So is the recession actually over?

As a famous past President once said, "it depends on what your meaning of the word 'is' is".

The term "jobless revcovery" is time worn, but that's what it looks like we're seeing.

The people that those occupying Wall Street are presumably protesting against try to paint a different reality.

They claim that they can't find people to fill their jobs. They claim that people would rather collect unemployment for an extended period of time than go to work.

That reality may apply to some people, since just about every situation applies to someone. Who knows, Chaz Bono may win this season's Dancing with the Stars.

Hard to imagine that could be reality, but it could.

For all I know, today's reality was second guessed by those citing the semi-holiday feeling to the day, since there was no bond trading, in commemoration of Columbus Day.

You remember Columbus Day, don't you? That's a day that we commemorate something other than the reality of Columbus.

Suspending belief is sometimes a useful tool. It's worked pretty well for Columbus and it can work for us, as well.

So, yes, the recession is over. There are jobs galore and throngs are gathering on Wall Street to demonstrate the overwhelming gratitude of 99% of the nation to those who actively seek a greater tax burden.

Reality is awesome.

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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You Know what I Like

What's in the Szelhamos Portfolio?

About a month ago, in honor of what would have been Buddy Holly's 75th birthday a small tribute was paid in his honor in "What Buddy Holly Teaches Us".

But Buddy Holly wasn't alone on that fateful stormy night.

Some other time, we'll get to RIchie Valens, once I get the translation module to function. But for now, I remember The Big Bopper and that great lead in line to his hit, Chantilly Lace".

You don't need Viagra to know what you like, but it does help you to remember why you liked it.

Obviously, I liked the 300 point gain.

I liked it less when 200 points of it evaporated in the last minutes of trading.

But still, 3 days in a row of gains is very likable and definitely reinforces for me why I like these big upward spikes in the morning.

More on that, later.

Since these days we're all about rumor or absence of rumors, the late day drop came as the Financial Times reported that there was some discord among the EU members.

Yeah, I know. Hard to believe. But even more difficult to believe was the the discord all centered around which country's Rosh Hashonah services the ECB commisioners should attend. There was not much support for Greece on that one.

Can't say I blame them. The thought of feta based matzoh balls is repugnant to me.

We'll see how that unforeseen little bump in the road works out. Sometimes being in a union means spending time with your partner's loved ones.

When will Europe learn?

Since I'm not a very social person it's not difficult to explain why I was such a late adopter of anything resembling Social Media.

I was so far removed from the scene, that I didn't even know what Friendster was and couldn't even bring myself to feign laughter at the jokes directed toward its status of being far removed from the scene.

But I like social media, even though my Google + circle is determined by just a single point.

Take that inviolable laws of Geometry.

I'm still not very social, but I like the egalitraian nature of the network with which you can participate.

You can even choose not to have Nigerian Princes be part of your network.

Me? I would never turn a follower down.

Today I posted a query on StockTwits and Twitter regarding what I saw as a disconnect between Monday's silver price action and the price of the UltraShort Silver ETF. Just a follow-up to the semi-rant in yesterday's blog.

Bottom line, I spent more time in bilateral conversation with "Kid Dynamite" via 140 spaces at a time than I have with my Sugar Momma this past week.

The fact that she was on a fun filled trip to Chicago with her friend in birthday celebratory mode is not relevant.

I spend more time with the Kid. I p[icture him as being stooped over and quite elderly.

It was a combination of educational, philosophical, agreement, disagreement, interpretation and a mutually deep seated hatred of 16thy century colonialism.

At least that's how I interpreted it, still upset with Europe's role in unseating long established tribal governance, thereby resulting in a flood of poor and unemployed Nigerian Princes.

Regardless, it did introduce me to a new blog. I tend to like those written by people with an authoritative grasp on a topic, yet that write in a breezy and humorous fashion.

In my case, one out of three may even be a stretch.

Today though, despite the final 15 minutes, made it 3 out of 3.

By Meatloaf's standards, that's damn good.

Even though there's still almost 4 weeks left in this option cycle and lots of opportunity for more upside, I took advantage of todays jump out of the box.

I was able to sell weekly calls on British Petroleum, JP Morgan Chase and PowerShares QQQ. I also sold some monthlies on Textron and Dow Chemical.

I was also trying to re-sell some Halliburton, Transocean and DuPont calls, but never got my prices. Too bad, because Transocean hit a rough patch late in the session when it got bitch slapped by the EPA.

I just love it when I can sell calls on my unholy troika of BP, Transocean and Halliburton. Maybe tomorrow.

As Kid Dynamite and I were exchanging Tweets and he was trying to school me, I bought back about 30% of my call options on ProShares UltraShort Silver, locking in a very nice 2 day profit, as silver recouped some of its losses.

Assuming that everything Kid Dynamite tried to transmit to my knowledge base was false, you'd be left wondering why the UltraShort ETF was down by 18%, whereas the SIlver ETF (SLV) was up by just 4.3%

2 to 1 correlation, my ass. At least they got the directions right today.

But for some bizarre reason I have a driving desire to know what time it is in London.

Apparently, it's because I now know that the UltraShort Silver ETF share price is pegged to the morning "London Fix"

I miss the days when "London Fix" referred to what killed a punk rock drummer..

I still remember back about 30 years when the morning business report always started with the London Gold FIx. Back then I was young and foolish and thought that I would conquer the world one gold contract at a time.

Amazing how not much has changed.

In what can only be called an incredible coincidence, about a month ago, I mentioned the London Gold Market Fixing Ltd. Committee in "Did I Not get that Memo? " and the blog entry also featured Eddie Murphy.

In case you're wondering, I'm neither a transvestite, nor do I currently have a restraining order out against me.

Whatever, it's still an issue of those colonizing bastards.

Financial Times. London Fix. They're all wagging our tails, but then again, maybe that's the Viagra.

To learn how to put such a trading strategy into action consider purchasing the Option to Profit book

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

  

Crumbs, Anyone

It's that time of the month again.

No, I'm not being visited by Aunt Flo, as the euphamism would go, if indeed it were germane.

No, it's the end of the September options cycle in just a few short days. Time to see if there are any crumbs left out there just waiting to be taken. And you do have to act quickly, because before you know it those crumbs get smaller and smaller, before they disappear entirely.

I suppose that since I now try to find as many weekly options opportunities as possible, that third Friday of each month has lost a bit of its significance. Now its more or less like any other Friday.

I've never had a visit from Aunt Flo, but I can't imagine that her dropping by on a weekly basis would be very good.

In a way, I guess that's as sad as when you know that Aunt Flo won't be visiitng anymore. Fortunately, that single long hair on my chin that popped up after Flo disappeared is obscured by my full beard.

By the same token, most people I know no longer deal in euphamisms, anyway. They get right down to brass tacks, no sense beating around the bloody bush.

Hmm, now I'm not certain if the preceding itself was a euphamism for something, but no matter, I just like using uniquely British adjectives.

As I looked back at the monthly statistics for the past few years, I should have been tipped off that this wouldn't have been the kind of month to e-mail home about.

It seems that the month following what turns out to be my best options premium month of the year is a dog.

And that was this month because that was last month.

Since options premiums keep me afloat, I have a need to trade, but times like these offer the biggest dilemmas.

Holding on to so many positions that are significantly below their purchase prices, it's hard to justify trying to optimize options premiums by writng near the money contracts when their assignment would result in meanigful capital losses.

Although I always check my spreadsheets to see how much in accumulated premiums each position has captured, I still have a reluctance to take the loss, even when it is mitigated or even fully offset by those premiums.

I'm not beyond rationalizing my actions, though.

On days such as the first two trading days of this final week, you see the clock ticking away on the one hand, but you also see the possibility of that silver lining in depressed stock prices, or at the very least the lack of support in silver prices, as I own unhedged shares of an UltraShort Silver ETF.

Will there be some good news coming out of the European Union sending our markets for a nice climb? I sure wouldn't want to miss out on recouping some of those paper losses, but those crumbs, those 0.5% options premiums, do I really want to leave those on the table?

The answer to those questions are "who knows" and "not really"

The full answer to the latter question is actually "not really, but I don't want to feel like a schmuck".

But you do have to eat, you can't really let pride get in the way. As small as they may be, those crumbs can add up.

And so, in a measured reaction to a meandering day, I did get the opportunity to sell call options on JP Morgan, Freeport McMoRan, Halliburton, Williams-Sonoma and the Triple Q's.

Actually, with the exception of Williams-Sonoma, if the others do get assigned, I'll still be taking capital gains on the underlying stocks, so the risk will be determined by how wildly they may explode upward between today and Friday's close.

Opportunities potentially lost. That ends up being the performance metric, but since I don't harbor regrets, I also rarely learn lessons. You can fool me over and over again as long as those premiums add up and losses have some strategic value in reducing tax liability.

When I did add the crumbs up it was worth the risk, given the reward and the need to be able to feed Laszlo the Dog.

It's either crumbs or go back to work, not to mention the shriveled carcass of a wiener dog.

Hmmm. Weiner dog.

If anyone reading this is old enough to remember Bob Denver's character, Maynard G. Krebs, you would know my reaction to the very thought of "work".

Whatever optimism there's been in the markets during the last hour of each of the two past trading sessions it's a little frightening to thank what it's been based upon.

First, the rumor of Chinese intervention to buy Italian debt turned Monday's market on a dime.

But you know that we're really in trouble and living a life of deep delusion if we think that Chinese benevolence is going to be the remedy that saves the European Union's financial systems.

Today's good news was that there wouldn't be a Greek default.

At least not today.

The other good news was that somone had interpreted something that Angela Merkel said as being of a positive note, regarding satisfying Finland's need for Greek collateral.

When I wrote about what was wagging the dog the other day even in my wildest dreams I never would have guessed Finland.

But Finland, too, was just in search of crumbs. Whatever assets Greece actually has rights to, Finland wants it. After all, with its dying Nokia enterprise, what else does it have going for it? And besides, those reindeer need to eat, too.

So I know the feeling.

Wherever you can get those crumbs, get them.

Tomorrow? Who knows what tomorrow brings. New rumors, maybe some actual news, maybe not.

No matter. This week ends in a few days and a whole new world of opportunities comes along.

This time, I'm hoping for the whole loaf and will gladly take the crumbs, too.

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A Pretty Penny

What's in the Szelhamos Portfolio?

Most of us who grew up when cash actually exchanged hands for things other than drug transactions, probably remember the old saying "Find a penny, pick it up and all day long you'll have good luck."

Just as an aside, people who are accustomed to transacting their drug deals on the street rarely concurrently engage in reciting such pithy sayings.

Being somewhat analytical, I tried searching for any evidence that this old adage was actually data driven, but could find none.

In fact, I couldn't even find anectdotal evidence.

Somewhat nervous about what my internet searching history may say about me, I want to warn people not to seach for "Penny Pick-up".

In an age when absolutely everything is documented, videotaped and then posted on the internet you would think that the evidence would exist.

If not in the affirmative, maybe the data would exist to contradict the expression. But even a search through Tosh.0 archives could show no videos of someone picking up a penny from the ground and then getting flattened by a baby grand piano falling out of a window.

You also remember the old saying about how those pennies add up.

When I moved south of the Mason-Dixon line I first encountered the ubiquitous "take a penny, give a penny" dish in all of the 7-Eleven's that lined every thoroughfare. None of the cash register people could explaiin the concept to me, but that was because most had only been in the country for two weeks or less and I definitely have an INS look about me.

I still have no idea of how that works or what utility it carries. My paranoia tells me that if I take a penny out of the dish, I'll find out that it was all an FBI sting operation and I'll be going away for a long, long time.

Every few years as the price of copper fluctuates, we also hear talk about discontinuing production of the penny, which in everything but the world of old sayings, is thought to be pretty useless.

Of course, useless as it may be, talk of discontinuing its production brings out all sorts of characters and experts on both sides of the argument. Equally compelling are the counter arguments related to the role of the penny in either promoting inflation or promoting deflation.

Like most economic arguments, just take your pick. When they say "A penny for your thoughts" they're probably referring to the value placed upon financial and economic opinions.

But the value of those pennies, just like in the cult classic, Office Space, was really driven home today as trading was shortly halted in shares of both Visa and MasterCard.

I have a long history with both as an investor. MasterCard was actually the first stock that I sold call options on, probably some 5 years ago or so. For a while, I just concentrated on MasterCard, Apople and Google, all expensive stocks, as far as prices went, but all with great options premiums back at that time.

I'm still inappropriately seeking to exact revenge for not receiving an IPO allocation for Visa.

Bygones being what they are, I've almost continuously owned Visa shares since the IPO, but have not owned MasterCard in at least a year. In fact, my Twitter profile page is adorned with a Visa price chart as its wallpaper.

As with most everything I do these days in the markets, I don't really seek much in the way of capital gains on the underlying stock. To me, the stock is just a means of delivering income. When it's all said and done, I'm agnostic as to whether the stock moves up or down, just that it move somewhere and then eventually return near to where I got started with it.

Visa has been a great stock for behaving according to script.

Having just pocketed the premium for the options that expired on June 24 for Visa, which was a 1% gain, I sold $75 July 1 calls at about a 2.5% premium. My purchase price for the lot purchased on Jiune 20 was $74.06

Interestingly, the premium for the weekly July1st expiration was much better than for the end of cycle option on July 15th, due to the uncertainty that was being baked into the price related to the upcoming Federal Reserve rules decision on debit swipe fees.

Well, the rules came out today and trading was halted in both Visa and MasterCard as they gapped up significantly.

So while I'm on the hook for letting go of my Visa shares at $75, they closed the day at $87, up about $12, I won't tell you how many shares I own, because I don't want to short circuit my laptop with tears. Neither will I go to my Keurig and drown my sorrows in a nice hot cup of coffee, because the same thing happened not to long ago with Green Mountain Coffee Roasters, as Starbucks became a Kissing Cousin.

It seems that pennies really do add up in the case of debit cards. The final Federal Reserve rules on swipe fees sets the per transaction cap at 21 cents, higher than the expected 12 cents, but still much lower than the banks had previously enjoyed.

But it wasn't really clear why the stocks moved as they did, especially when JP Morgan released a statement that said that the won a battle in this decision, but lost the war.

That was a surprising kind of statement, because you don't usually lose a war if you won the final battle.

And the retailers don't seem to happy about the rules either.

But wait, if you order now, there's more.

Why did MasterCard rise as much as it did, albeit a litlle less on a percentage basis than Visa? Especially since Visa has a very significant debit side business, whereas MasterCard doesn't.

Why would American Express go up at all? Discover? really, Discover? Why did they go up? Did someone actually make a purchase?

In all, the reaction seemed overblown for all parties. But that seems to be par for the course. If I had some free cash right now, I would think about buying Visa puts, although i don't buy puts as a general rule.

I have no idea how those pennies will ultimately add up, but then I realized that sometimes I play for pennies, as well. One of my trading rules in Option to Profit is to not let a penny here or there make a difference between executing or missing a trade.

I rarely get bogged down because of that level of greed. I just want to make the trade.

But where the pennies come in is on a derivative play of the Option to Profit strategy, one that is implemented during the last two days of an options cycle.

In this case, the cycle is this Friday, July 1st.

With both Goldman Sachs and JP Morgan up nicely today, well in advance of the Federal Reserve news, I decided to sell options expiring in just 2 days. $0.10 premium on JP Morgan and $0.44 on Goldman.

In the case of Goldman, the sum total was pretty much in pennies, as well, as I'm at my lowest holding of those shares in years. The JP Morgan total was better than that as I had 8 times as many shares.

Still, no big whoop. But whoops are like pennies. They do add up.

With a couple of days now left to go until this Friday's expiration, I'm in the position of hoping for share prices to go down, not just on Visa, but on a few others after this past three day run-up.

But the nice thing is that even if they don't, one of my other old reliable stocks from the past is probably at a good enough place now to warrant its repurchase, knowing that someday Visa will shed a few thousand pennies and be ripe for the taking, once again..

Pennies may be from heaven, but on days like this I curse the rogue angel that showered them down.

No matter. Tomorrow, I will again be a slave to the man and cut off from my sea of information, but at least a few of those employment related pennies will come my way.

All the more to buy you, my pretty.

Appropriate Behavior is a Moving Target

A few weeks ago I wrote about why I loved modern times.

This past Friday, I had an opportunity to put my admiration for technology to work.

Although I was an early adapter of technology, having set up a Novell network back when it was v1.1 and the people in Orem, Utah knew me on a first name basis, I was very slow to pursue the personal technology explosion.

Mostly because I non't really believe in personal relations. Remember, I have no Facebook friends.

I resisted the temptation of Palm Pilots, I eschewed all things iAnything and my personal cell phone has always been antiquated, although its tethering cords are spun of fine silk.

Admittedly, I've have some wanderlust for the iPad, but I know that once I make that plunge, the "cool factor" will officially be gone, so I allow the world to remain giddy while I stay unconnected.

In many ways, I'm still stuck in 1986, which was a very good year, including the birth of my first son and the last time my beloved New York Mets won the World Series. In many other ways, though, I go back much further.

But my 19th century sojourn in the land of cellphones past ended a few months ago when my son picked up a smart phone for me, as part of a "BOGO" deal.

Now, I'm an emotional cripple if my Droid battery dies on me, which it does seemingly every 15 minutes. Fortunately, most days I'm glued to the La-Z-Boy and all electronics are plugged and charging.

This past week was really my first test of personal integrity and respect of institutions, decorum and education.

Although I am essentially retired from professional life, I was attending a professional conference in New York City, that for all purposes, marked the end of my commitment to the organization that represents my healthcare specialty.

My final Board of Directors meeting was on this past Friday, from 9 AM to 1 PM.

But instead of paying much attention and contributing whatever wisdom remained in the now smoothened ex-fissures of my brain, I focused on my trusted Droid and its E*Trade application, although I occasionaly checked Twitter and read my daily Dilbert.

With every Friday now being an options expiration Friday, I really didn't feel that I had the luxury of paying attention to such issues as promoting life-long learning.

Did I really want to analyze budgets and P/L statements?

Not really. I wanted to make some trades and my Droid was my "bestest" friend. After all, even a couple of hundred dollars on an options contract expiring in a few hours was a worthwhile endeavor.

It just took time, effort and attention to find the right trading opportunities and the willingness to close my mond to other things going on around me.

My Sugar Momma of a wife would say that I was already quite good at that.

Now if I had happened on a student acting the way I was acting just a few short years ago, I probably would have had some very sarcastic, humorous comment that would have superficially covered some deeply seated anger over the wanton display of disrespect.

Man, I should have been a therapist.

But here I was, being the disrespectful kind of guy that I never really cared for, unless they could do it without getting caught.

Those guys I respected.

But I didn't even make any attempt to hide my lack of focus on the topic at hand. It's not like I hid the phone in my lap. I was fully engaged in a behavior that had evolved to a point that it seemed entirely appropriate.

Besides, I was too busy trading to care. I sold some JP Morgan Chase $43 calls that were set to expire later that day, as well as some Time-Warner calls, right after Time Warner went ex-dividend.

I made enough that morning to make me happy for a week and it at least makes up for Monday's day off, due to Memorial Day.

After the meeting was over and the market closed, I remained holding my JP Morgan shares, as the options expired worthless, although I did lose some other holdings, owing to a late surge in SPY and Freeport McMoran..

Later in the day, as we sat with some friends in an Ale House, I was thinking about my behavior earlier that morning. It really didn't take much to get me to rationalize my "multi-tasking", particularly in light of the continuing education program the following morning on ADHD and OCD, but still, I felt as if I had behaved inappropriately.

As I had not yet dismissed any guilt over the morning, I re-directed my attention and admired the framed  collection of 1986 New York Mets baseball cards hanging on the wall. At that moment, we were all unaware of the news that was going to hit in a couple of days, that Gary Carter, "The Kid" had a rapidly growing inoperable brain tumor.

His card was front and center among a collection of great New York Mets stars, some of whom went to to inglory, wasting great talents and robbing the Mets of a potential dynasty.

Gary Carter was the conscience of the Mets back then. He was the leader and had a work ethic and zeal that was second to none.

To be both "The Kid" and the elder statesman of the team says quite a bit.

I don't know very much about Carter's life after professional baseball, but I imagine that he applied the same sort of zeal and enthusiasm to everything he did.

In my mind, Carter's behavior probably had not evolved, or from some perspectives on modern culture, devolved to meet society's changing directions.

Apparently, I don't have the same kind of moral compass.

During the lecture on Saturday morning, very possibly the last lecture I will ever sit through, I resisted playing with my electronic umbilicus for as long as I could.

As I looked at more and more slides on the topic, I decided that I had ADHD, and as such, I could excuse my need to shift my focus.

Unfortunately, the markets are closed on Saturdays, but still, there was no shortage of games to play, news articles to read or Twitter posts to make.

Reprehensible behavior? Maybe so to the me of a few years ago.

Today, not so much, but deep down, I probably wished that I could maintain the effusive energy and commitment to tradition as Gary Carter.

Eh, at least I made some money while evolving into a bad boy.

Here's to Gary Carter and a commitment to ageless standards. May you continue to make great new memories for you fans and admirerers.

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Life is a Zero Sum Game

I really do believe that.

It starts from the very beginning. Ashes to ashes and dust to dust.

Yin and Yang.

From what I can see, based on my lost earnings opportunities since my recent addiction to Twitter, they must really be worth a fortune.

I assume that many people that post regularly on Twitter are giving up some income opportunities. Well, in a zero sum game, those have to go somewhere and it looks like that series of tubes in sucking it all in.

As much as I've been amazed at the reach of Twitter and how it really does level a playing field, after all, I can "talk" to Rainn Wilson, it has also bought distress into my life.

For, you see, today I lost my first follower.

Although, it would probably be more appropriate to say "followers", since I lost the wannabe French twins, whose names I forget, although they did rhyme.

I'm not quite certain why they would have been following my stock related posts, but I admired their exclusivity, in that you could not follow them if your were below the age of 18.

I hope they check more carefully than the liquor stores near my son's campus.

Granted, maybe I should have reciprocated and sought to follow the twins, but if I'm going to get caught up in some internet based pornography thing, I think I'd rather do it at the local library, where it's legal and I can see my tax dollars at work and gyrating.

Rainn Wilson, on the other hand, can be followed regardless of age and tax bracket, but may be inappropriate for all ages.

Although Szelhamos taught me to never talk about sex, politics, religion or money, immediately before viollating his own principles, usually in the form of a joke, I found Wilson's picture on a Baha'i faith site, as he is a follower.

I like their principles.

But I must be losing some of my own irreverence, as last night, I didn't find too much humor in Bill Maher's "Mormon Underwear" stuff on Letterman, last night.

Mind you, I've been intrigued in the past and have done my own bit of Googling (as in searching, not as in the other thoughts going through your wretched minds)

Dave bit his tongue. I, perhaps out of reflex, scratched my crotch.

I'll be seeing the new Parker - Stone play in about a month and am somewhat saddened that it is purported to be a somewhat sweet look at Mormonism, a religion that they have admittedly been fascinated by, but I really wanted asthma inducing laughter and Mullah inspired Fatwas to be promulgated from Provo.

Now, back to business.

Patience paid off for Textron. I was able to re-sell the May $26 call options, netting a nice extra bit of income. Interestingly, the trading in the call options was really light, as I noticed that most of the open interest was actually my own positions.

Also the bid-ask spread was pretty high, but we ended up splitting the difference and both buyer and seller eschewed greed, which is a good way to do business.

Now, I remain patient for JPM, GS, HPQ, GE and BP.

But let's face it. All of my thoughts are on how I can get the twins back and to understand "Rainn"?