Show me the Numbers

What's in the TheAcsMan Portfolio?

Other than  my family the two things that I love most are numbers and comedy.

I like fried food, too, but now I'm not allowed to eat them, because my numbers are too high.

Sort of ironic. Those numbers I hate.

With so much debate going on about the concentration of wealth in our nation and the unfairness of the tax code, I'm somewhat perplexed that the beautiful objectivity of numbers could be so bastardized.

Living near Washington, DC, I truly understand the beauty of "spin", but how do you spin a number itself?

Whereas many accept the Bible as the ultimate truth, believing the same about numbers doesn't violate the first commandment and isn't really counter to our western belief in monotheism.

In fact, the concept of monotheism couldn't exist without numbers.

Well, at least one number.

There's probably no valid reason for me, however, to have such faith in the sanctity of numbers. I should be cynical based on an old Abbott and Costello routine from a few generations ago.

Costello clearly demonstrated that 13 times 7 equalled 28. He also proved that 28 divided by 7 equalled 13.

And for the perfect trifecta (or Troika, as that's become a popular word in the world of European Finance) 13+13+13+13+13+13+13 = 28

The Gospel of Comedy may trump all other truths.

These days, the numbers are sliced and diced by all sides to demonstrate points about inequities.

Amazing how one side feels that the disenfranchised are being unduly carrying a tax burden, while the other side believes that the disenfranchised are represented by those people that would be effected by the "Buffett Rule".

"50% of Americans don't pay taxes"

"The top 1% of earners carry a greater tax burden than ever before"

Both of those sound patently unfair. And there's no shortage of other factoids being tossed around. Refute one and you'll be answered with another factoid. Refute that, and so on.

It was 1982 and I was very fortunate when I first started investing, in that the market was beginning to wake uo from a long slumber. Although after what had been referred to as this generation's "lost decade" in investing, I guess the best investment would have been a 30 year Treasury at 17% back in the late 70's, or those great MAC bonds that helped rescue New York CIty after Gerald Ford seemed disinclined to help.

See, that's the beauty of words.

Ford was portrayed as having told New York to "Go to Hell" in the city's newspapers. That's spin.

To borrow and butcher Tom Hanks' line from a Leagiue of their Own", "There's no spinning in numbers."

By the way, there is one other thing that I love, although it's more of an addiction.

I love anagrams.

Back in 1982 the concept of trickle down economics was widely introduced by Ronald Reagan. You know him, he's the guy that both sides embrace with a big, wet hug.

The concept sounded great. After all, the wealthy were the benefactors of society. Of course they would take their increased wealth and shower it down upon the masses.

Well, my love of anagrams always led me to the words "age, rage and anger", whenever I looked at the word "Reagan".

Of course that just reflects a person who at the time was still young enough to not fall under an earlier generation's warning to not trust anyone over 30.

There I was in Public Health School, learning all about maldistribution iand inequities, yet I was also a investment class wannabe with a growing fascination with the stock market.

What amazes me is that no one has decided to look at the supposed inequity in a systematic way, by looking at changes at the margins, let's say, compared to 1980, which ended by ushering in the Reagan era.

My guess is that it actually has already been done, but that without a sexy sound bite, good luck getting popular traction.

Funny thing, but it has already been done by the Congressional Business Office. The non-partisan CBO.

Back in 1980, the top 1% of the population received 9.8% of all income. By 2005, it was up to 18.1% or an 85% increase.

But when it comes to tax paid, the top 1%, and that included me, rose from 15.4 to 27.6%, or a rise of 79%.

In other words, the same tax code that allows most senior citizens on social security to not pay federal income taxes has also significantly trickled up benefits to that top 1%. They made much more money, yet paid much less taxes.

Of course, then the next debate falls to the source of those earnings, specifically capital gains versus earned income.

I also love charity.

But in my case, it's donating to charity. In that regard, I really have a hard time understanding why the $100 that I donate only really costs me about $60 after considering tax deductions, while Warren Buffet's secretary ends up being charged $85 for that same contribution.

But that's another blog. Maybe in that blog I'll look at the same comparative numbers since 2000. In which case the differences aren't quite as pronounced. I guess that's one way of getting the numbers to do what you want.

In the meantime, the numbers treated me well last week, as it hopefully did for most others.

In addition to the nice paper gains, again I sold a number of call options during the last 48 hours.

In fact, I sold such weekly options on 22% of my portfolio and received an additional 0.68% return in premiums on that portion of the portfolio. Those numbers felt good and Ill be happily paying my captal gains taxes on those.

I'll be losing some of my Halliburton and Freeport McMoRan shares, but may find myself buying them right back, if the price is right.

In that case, the numbers are truly subject to interpretation. Some of those Freeport shares were assigned, resulting in a capital loss on shares.

So it's off to Quicken to see whether there's any value in taking a tax loss on those shares or just buying them back within that 30 day period and forgoing the loss in an effort to create new options income and maybe capital gains.

Wash rule be damned. You don't own me. Sometimes it's just worth giving up the advantage of the loss that the tax code gives. The code giveth and the code taketh.

Sigh. Rich people's problems.

A Europe exercises increasing dysfunction, on this side of the pond we look better and better by comparison, but their dysfunction just compounds our Rich People's Problems.

At the Finance Minister's recent meeting in Poland, that weren't very hospitable to TIm Geithner and weren't very receptive to the advice that he was willing to share, that was borne out of experience.

If they're not willing to listen to Geithner, I think that I have a suggestion that should be acceptable to all parties, even Malta and Slovakia

Maybe those European Finance Ministers should all just take a math lesson from Abbott and Costello.

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

  

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It's Getting Cold

What's in the Szelhamos Portfolio?

I'm glad I'm sitting indoors today.

Even Laszlo the Dog doesn't want to go outside. It's cold, dreary and the grass is wet after a record 13 inches of rain in September. I suppose that dachshund bellies are close enough to the wet grass that they'd rather take a respite from romping on days like today.

Laszlo is sharing the La-Z-Boy with me.

My thoughts are with my kids who are going to the Sunday Night Football game, seeing the Ravens versus the Jets. It's going to be very cold and with rain in the air. Not my kind of day or night.

Listening to the TV commentators repeat what great football weather it is, my thoughts turn in another direction:

Morons.

Lately, the weather down here has been good for only one thing. Growing mushrooms.

Watching Herman Cain jump out of a van and gather mushrooms from my lawn is a clear message that there's been more than enough moisture and that economic times are truly trying.

Imagine if that image was really true. The very idea of paying for my own personal lawn grown mushrooms on a Godfather's Mushroom Pizza is abhorrent to me, but not as abhorrent as eating a Godfather's Pizza. It's that same concept, that of paying a monthly fee for the right to use a debit card to spend your own money, that's beginning to rub lots of people the wrong way.

I guess that Bank of America had that same Herman Cain image in mind. After all, what better strategy than to follow in the footsteps of a winner.

In reality, Herman Cain, instead of gathering other people's mushrooms and offering them off for re-sale, is gathering votes in straw polls in Florida and Kansas, having just won the Kansas Women's GOP Straw Poll, probably the most prestigious of all of the Women's straw polls in the former dust bowl.

Bank of America.should consider using Godfather's Pizza's consulting firm. That firm is so out in front, they already have a fallback ad campaign if Cain falters.

In that event, look for life-sized posters of their new spokesperson, Chris Christie, who is already hunkered down in the Godfather's test kitchen, but is coyly resisting the coaxing to come out.

As the sun is setting early in the eveningI know, from having lived a lifetime on the east coast, that when the cold rainy days in October arrive, it's time to hunker down for the winter and resist the need to go out and face the elements.

Sure, there may be an occasional nice warm day, and sure, despite knowing better, there's always the hope that winter will skip coming around this year, but that's never the way it works out.

I keep thinking that when our youngest son finishes college in a couple of years, Sugar Momma and I will move to California, her home state.

But the other day she asked me what I would do if we moved to California. Would I still spend the entire day parked in front of the computer and the "annoying" people on CNBC?

The problem is that I don't think that they're annoying, by and large. I think Judge Judy is annoying, yet she doesn't.

The reality though, is that I'm glad that I'm sitting indoors everyday. I don't venture very far from my La-Z-Boy, especially during market hours. I don't think that would change very much even after a move to a sunnier and warmer climate, although I might be more apt to head outside to shake off a particularly bad trading session. Maybe a quick glance at the ocean's soothing shores or the sight of a drive by shooting would help to settle some frayed nerves.

This past Friday, after a particularly brutal week, where my "God's Bounty" portfolio of Freeport McMoran, Mosaic and Rio Tinto was emasculated by some other deity, I needed that kind of light hearted romp. Even the Lord's precious metals got swamped, but in hedging my bets, I went with Zoroaster, playing the short side of silver.

Turns out, the movie "Contagion" isn't very funny. It also turns out that this monotheism may be a seriously cramping  belief system.

But early on Sunday, there was potentially good news, maybe even market moving news, hearing that Ali Baba is interested in buying Yahoo!

I don't know what positions Malta or Estonia will take on a proposed buyout, but we need some good news soon.

As opposed to the upcoming winter, I know that spring is coming. I also know that despite global warming things won't change that drastically during my lifetime to substantively change the natural order of things.

With that said, the natural order of things clearly included Yahoo! become a laughing stock and Ali Baba being in a position to buy it, hook, line and sinker.

But when it comes to the stock market, it appears that there is less and less concordance, correlation and connection.

News has become largely irrelevant, at least in terms of predicting market reaction.

The old adage, "Sell in May and go away" had been largely written off for years, just like "Dogs of the Dow" hasn't worked terribly well of late.

But as we closed out the third quarter this past Friday, it seems that the old selling adage may have finally been a winner.

Does that mean "buy and hold" is coming back, too? Maybe Communist hunting is next.

I do know that "buy low and sell high" hasn't been working out lately. Maybe that one will be back in vogue soon. Maybe even sooner than spring's predictable blossoms.

Looking at the early Asian markets trading, right now it's not looking very promising, as we get ready to start a new quarter.

Despite the paper losses of the past few weeks, for me its been a good options premium period. With three more weeks left to go for the October cycle, I'm already ahead of the September cycle.

That's a small comfort, since September was the second worst month of the year, but I'm hopeful for some good opportunities.

Like some of the old stock market adages, it's hard to know when to let go of the optimism. But by the same token, you can't completely dismiss the optimism. Otherwise you'd have to face the dark side and become an avowed short seller.

I'm not going there. At least not yet, the deperation hasn't hit that level.

This coming week our weather forecast is for a couple of nice, very warm days. Maybe a little bit of movement in Europe, a little bit of merger and acquisition news and a little bit of global warming can all help get rid of this gloomy and cold overhang.

In the meantime I'm going to watch the football game safely in the warmth of my home and look for my kids in the stands.

I know that it's highly unlikely that I'll spot them, but if you hope and wish for enough unlikely things, sooner or later one of them is going to happen.

I just hope it's the right one.

Sorry kids. You're on your own on this one. Hope you're bundled up.

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