Porn, Pot and Policy

What's in the Szelhamos Portfolio?

I'm old enough that I should be able to exercise some kind of self-restraint.

I've already confessed to my need to "Feed the Beast" and nothing seems to be able to tame that desire other than the lack of available cash. Unlike others that have to commit felonies to feed their beast, that's a place I'm not willing to go.

Yet.

In terms of falling prey to consumption, fads and bodily desires, I've been pretty good at resisting those temptations, especially if you have a lax definition of "pretty good".

Sort of like the floating definitions of "short term" and "long term" in investing circles.

Convicted?

One of my favorite Twitter people, is a guy who goes by the nom de plume of Dasan. I've looked at his website, Dasan Stock Digest, and he's a very credible guy, as far as investment professionals go. Also, a West Point graduate, therefore, if there are indeed any morals charges outstanding, they're probably sheer folly. Not too shabby a pedigree. My guess is that his subscription service is far more worthy than my Option to Profit service had been. I base that solely on knowing what my service was like. And that's enough.

Among a universe of people using social media to do nothing but self-promote (see @TheAcsMan ) or to hide behind a veil of anonymity to hurl Molotovs, he's self-effacing, humble, funny and has a keen sense of observation. Any of the preceding sets him apart from much of the universe. That and his penchant for changing his Avatar on at least a weekly basis, although I haven't entirely ruled out Witness Protection as being a the root cause of that behavior.

Oh, and before I forget, he marches to a different drummer. Much like the classic line in "Back to School" when Rodney Dangerfield says after Sam Kinison finishes his tirade about US policy in Vietnam: "Good teacher. He really seems to care. About what? I have no idea", Dasan uses the "%" symbol, rather than the StockTwits standard "$" to designate a stock by its ticker symbol.

Why? No idea. Do I ask? No, I fear for my children's safety.

Can you say "Rebel"?

For the past two days, his Tweets have inspired my choice of blog topic. On Monday he Tweeted something about crystal meth. Maybe it was just meth. Maybe it was about pearls or some other gems. I don't really recall. I was too busy trying to figure out how to scratch my way out of my skin to be paying too much attention.

The Tweet that got my attention on Wednesday was this one:

"The only CNBC I've watched in the last decade is 'the Business of Porn' and that Pot special they run all the time at night."

Clearly, this guy is not a good influence, but he certainly got me thinking about how I'm spending my life.

Mostly, I'm spending my life glued to two monitors.

One sits silently, just flashing reds and greens. Today, lots of greens. Mixed with the predominant reds of just a few days ago, it's been mostly a nice shade of ash.

For any wise guy readers, no, the other one monitor is not chained to my ankle.

The other sits not so silently and is tuned to CNBC from about 6:30 AM to 6 PM, at which point is time to watch the local news.  If you want to know why I no longer watch Jim Cramer, I'm not telling

I almost stopped my habit earlier today to protest Simon Hobbs' pronunciation of Moshe Orentuch's name as "Mushy", but then I realized that I actually liked Simon Hobbs. He seems to have greater insights into the psychology behind European actions than anyone else on air and his accent doesn't overly confound me., unless he ventures into a Yiddish neighborhood.

Since Europe and rumors of Europe seem to be important for us these days, he probably has as much to offer as the next guy, assuming that the next guy is Charlie Sheen.

Which coincidentally brings me to pot and porn.

Szelhamos taught me to never talk about sex, poltics, religion or money. As I've noted many times, he would quickly disavow that policy and was as good as anyone at introducing inappropriate conversation into the mix. Policy itself, was off the table as well, since it was a derivative of politics.

All politicians were "crooks and bloodsuckers".

Luckily, with his undecipherable Hungarian accent most people had no clue what he was saying, but he did use the word "sucker" often enough as to render it intelligible, regardless of the context.

He didn't include drugs and rock and roll into his admonitions, because they really didn't exist in his world, as addictions themselves, of any kind, were just moments of temporary weakness.

His definition of temporary may have been derived from Wall Street, though.

But I clearly need to break my dependence on CNBC, although I do enjoy most of the on-air personalities and just love hearing many of the guests spin whatever it is that they want to spin, as if everyone has a Never Never Land zip code.

What better place to begin my weaning process than with special episodes on porn and pot? Admittedly, I've not seen either of those in their entirety, as I have a harder and harder time focusing my attention long enough to sit through a one or two hour structured or scripted show. And of course, there's that little problem that they too are on CNBC.

Both of those topics, besides the obvious economic story, are issues of public policy.

I'm not a libertarian, but I do believe that so much of what we consider to be off limits would just lose its mystique and special aura if only we stopped paying so much attention. Why we exercise selective approval of vices is beyond me, its clearly not done for public health reasons.

Did I become an alocholic because I grew up in an era when the legal drinking age was 18?.

No. I grew up to be a jerk.

Coherent policy would be nice. Ben Bernanke didn't beat around the bush at yesterday's congressional hearings on that issue. In fact, he even ventured that the lack of discernible policy or even meaningful attempts to create policy was in part responsible for the growing "Occupy Wall Street" phenomenon.

In the meantime, any kind of policy coming out of DC, or Europe, for that matter would be delightful.

I often used to think that in the last years of Szelhamos' life he would have done well with some pot.

Maybe porn, too. Policy would have been superfluous.

Since there's really not a solution that's palatable to the entire EU, especially to those most on the line, I think those finance ministers who the Financial Times reported are seriously looking at the Greek situation, should probably seriously look at some porn, instead.

Maybe passing a little joystick around the conference table and before you know it, there's a solution.

Probably a funny one, too.

Too bad someone ate the notepad that it was written on would be the likely outcome, but still, policy makers need to light a little bit of a fire under themselves, or at least adopt a Rodney King attitude.

While wrestling with heady issues as these, I watched the monitor continue flashing green today.

Again, there was no real news, but why ask why?

I sold some more calls on Freeport McMoRan, as well as some new ones of Halliburton and QQQ. All of those expire on Friday. Deep down, my contrarian self tells me that we will get some truly significant news by Friday and the market will continue its thus far unwarranted climb.

I guess that China must have decided to change their mind and quietly go about unbridled infrastructure expansion and feeding its people since our best and brightest proclaimed otherwise on Monday.

Thanks to big jumps in Mosaic, Rio Tinto, Halliburton and Freeport McMoRan, I had a really good day today, at least on paper. Still doesn't make up for the very bad days those shares have had the past couple of weeks, but I'm trying to scratch back Renminbi by Renminbi.

At some point, my big fear is that if we don't come up with some coherent economic policy, the Chinese will swoop in and take control

Bad enough they own so much of our debt and dump IPO shares of dubious companies on our shores, but do we really want them taking over our Pot and Porn industries?

For me, that alone is reason enough to come together and hammer out economic policy.

Now pass that Doobie and don't turn the channel.

Correction: In an earlier version of this posting, I may have lead some readers to believe that I condoned breaking into your neighbor's home and stealing copper piping. To be clear, my intent was to bring attention to Hank Williams, Jr.

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

  

Exercise Restraint to Prevent Premature Speculation

I'm getting better at exercising restraint.

In some areas, anyway.

When I learned about a year ago that my cholesterol levels were high enough to supply my family and successive generations with lifetime supplies of Crisco, I radically changed my diet.

Much less red meat, very little fried food and almost no fast food.

Although I must admit that watching the making of fried chicken in the recent period piece movie "The Help", did make me want to rethink my re-thought ways.

I do miss the delicious ooze coming from my pores, as it was also eminently spreadable, but I tell myself that it is all worth it.

In some other areas, I've not been as disciplined.

For example, on Sunday, CNBC, instead of offering their infomercial programming had live coverage of Hurricane Irene.

I just couldn't resist watching. I wish I had the restraint necessary to just turn the TV off, even though gluing myself to the screen was potentially jeapordous to my marriage.

I found myself hoping for the power outage that never came. That would have also given me another excuse for not using the treadmill for a 1,276th successive day.

Fortunately, at some point CNBC decided that Irene was for the most part, much ado about nothing, and regained its business senses and went back to its regular weekend schedule pimping itself to the highest bidder.

While it was doing live broadcasting, I thought that CNBC management missed a great opportunity to take advantage of obvious synergies. They really should have considered having on-air personality Brian Sullivan presenting while on a BowFlex or perhaps while whipping up a rotisserie chicken in no time at all.

Or both.

Over the weekend I had done my homework. Knowing that there would be cash in the accounts due to assignment of shares, I had made a list of stocks that I was ready to buy as soon as the market opened Monday morning.

Now, I like up markets as much as the next guy who isn't short, but on days that I have cash, I'd rather see moderating prices. I really don't like chasing stocks, even though that brings the best options premiums.

So I was disappointed to see that the overseas markets were posting 1% and higher gains on Sunday evening and that our futures markets were opening with an upward pop.

The real problem is that despite the fact that I know that what goes up must come down, I'm like a little kid as soon as I get some cash.

I just have to spend it. Now. I have to spend it now.

The funny thing is that only applies to stocks. Otherwise, I'm not much of a consumer, neither of goods or services. If the economy is waiting on me to change my spending habits it had better stop holding its breath.

But when it comes to stocks it's a totally different story.

Take last month, for instance, when I received my first royalty payment for the Option to Profit book.

Normally, if I buy shares, I like to buy in large enough volume that selling call options on the shares will be worthwhile. Additionally, I typically like each position to represent somewhere between 5-10% of my total portfolio value. I'm also not a fan of perenially low priced shares.

But what did I do with my suddenly found cash position?

Sure, I invested it, but how?

Since it wasn't enough to pick up my usual sized lot, instead I bought shares in Sprint.

Sprint!

Granted, that allowed me to get enough shares to sell enough call contracts, but Sprint?

That went counter to everything I stood for other than the need to clean my pockets of cash.

Even when prices are going up I've always had a really hard time resisting the urge to buy. Despite the fact that I have a long list of rules to follow when buying and selling, the need to resist the urge is something that I've never been able to do. Buying high and selling low is not on my list of trading guidelines.

Unfortunately, that also means that when opportunities do present themselves, such as after a nice downward move, I'm usually fully invested and am not in a position to take advantage of bargains.

Well, I did have my list of stocks all set and ready to go this morning.

Halliburton, Chesapeake Energy, Goldman Sachs, Transocean, British Petroleum and ProShares Ultrashort Silver ETF.

But everyone of them just followed the cue set by the pre-open futures.

Being the short term pessimist that I am, I fully expected the 100 point advance to retreat. Then I expected the same of the 150 and 200 point advances.

But somehow I resisted parting with the cash.

Well, not entirely.

I did pick up shares of Halliburton after it had fallen from having been up about $1 to just $0.40. I was able to do the same for shares of Freeport McMoRan and ProShares QQQ, which wasn't on my original list.

Those opportunities didn't last too long and my second series of urges hit, in that I just had to sell options right away.

That's also the pessimist in me coming out. Since my expectation is that prices are going to drop, I want to make certain that I get the insurance premium before the opportunity is lost.

And so I did sell weekly options on those three newly purchased positions just in time to see another 100 points added to the Dow and lost additional capital gains opportunities in the underlying stocks.

As always, should have waited.

Just a case of "Premature Speculation".

I'm not really embarrassed by it happening. I just get so excited. But I still wish it wouldn't happen.

Especially as I'm getting older, I can't click the submit button on cue as I used to be able to do in my prime, which probably occured in a different lifetime.

By the time the trading day ended, incredibly the market not only kept its gains, but closed at its highs. Always necessary to attribute the unattributanble to something, today the "Raison d'etre" was some nebulous news on the Greek banking scene and perhaps some relief over the relatively mild impact of Hurricane Irene.

Of course, had the market gone down, the reasons given would have been disappointment over the Greek banking merger and the hurricane related costs being discounted on Friday by the meteorologically enhanced trading algorithms of the High Frequency Traders.

Still, when it was all said and done, I felt great.

Despite battling with the ever-present "FOMO", fear of missing out, I watched the market's unabated move toward its 250 point gain and was still left with half of my cash still in hand. I was able to exercise some modicum of restraint, yet still felt like a trader.

I could hold my head up high, with an angle to the horizon of a young man.

Perhaps keeping things in hand is the solution to all things premature.

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