Weekend Update

What an oddly serene, yet uncomfortable week coming up.

Here we were, on Good Friday, on the precipice of another year in which lunar coincidence allows Passover and Easter to coincide.

For many, serenity comes from family time, celebration and sometimes the re-inforcement of faith, culture and heritage.

In honor of the holiness of Good Friday, even capitalists will put away their arms and take the day off from their all consuming efforts. After all, the Prince of Peace wasn't exactly a fan of the 1%, so what better way to honor the message of peace than to take a day off from advancing your personal caches of wealth?

I may not recall much from my college Theology class days, but I'm fairly certain that among the things that was not discussed at that Last Supper Seder was hedging strategies for the coming week.

Even those Jewish people without much in the way of belief will retell the story of the Exodus from Egypt in whatever metaphors are appropriate for their own friends and family. Again, hedging strategies are not likely to play a role in the re-telling of the story.

But still, what a perfect day to release the employment numbers.

Our currency may say "In God We Trust," but report releases rest for no deity.

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Love Stinks

I know that "Love Stinks" is not exactly an original sentiment. It's either wildly appropriate or inappropriate of a sentiment on Valentines Day.

The other day as those who were not watching Oprah Winfrey's show on a behind the scenes look at life in an Orthodox Jewish were watching the Grammy awards, they got to see songstress Adele receive six awards.

By now, everyone on the planet knows the stories of personal and emotional pain behind some of her songs, such as "Someone Like You." Great story for sure, but I'd really like to know the story behind the J. Geils Band song "Love Stinks."

Yeah, yeah.

But as long as it is Valentines Day, it's obligatory to search for things that you do love and express those feelings.

Among the things that I love is how egalitarian Twtitter is, allowing everyone to rub elbows, as long as they maintain some kind of decorum and don't show excessive skin on their Avatars.

You also get to see communication, exchange and banter between and sometimes among reasonably well known people. That is, if you happen to travel in a highly defined circle. The love of my life, my Sugar Momma, doesn't travel in that circle or even its outskirts, where I hang out, but even she now knows the name Herb Greenberg.

Even the "hoity toity" of Twitter will occasionally respond to the "hoi polloi." Greenberg is not among the "hoity toity," he's a big advocate of engaging the masses and does so on a very regular basis.

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Empty Nest

I love the "empty nest."

I don't get all the people who bemoan the fact that their children have made lives for themselves. These days that isn't terribly easy to do, so instead of being saddened, it seems that pride is called for when looking at the empty bedrooms.

And the cleaner house. And the lack of towels and socks strewn all over the place. And the discovery of unknown sleepover friends. And the milk returned to the refrigerator.

Ah, empty nest.

Literally within days of the second of our two boys leaving our home, my wife had his bedroom painted pink.

There was no mistaking the message, yet she's the sentimental one and the one with the parental instinct. I would have chosen nature's way and just eaten the young before they had the opportunity to suck all life out of us.

This past Saturday evening we went to the house of some friends for a "planning session." We're traveling together to Europe in September, literally minutes after their nest becomes seasonally empty.

They have the right idea.

Don't get me wrong. I love my kids and am very happy when they come for a visit, have dinner with us or call.

I'm also happy when they leave.

There are lots of other things that make me a bad person. Those feelings will just have to stand in line.

When I see Facebook postings, as I did this morning from my oldest son who is currently in Cambodia, I'm glad that he's not here for me to look directly into his face. 

"Got my first massage today. After around 45 minutes she told me to turn over and giggled. She then flipped on a TV and played me the last fifteen minutes of "Homeward Bound". Incredible Happy Ending."

At least this way, I don't have to ask if the happy ending was related to the movie.

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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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Oracle as an Oracle

I've never done well investing in the technology sector, with a couple of notable exceptions

Let me list my failures: Intel, Dell, Hewlett Packard and Yahoo. There may be some others, but there are times when I buy stocks in companies without even knowing what it is that they actually do.

Probably not a good idea.

Nearly 30 years later, I still recall a close call in the technology sector.

I received an allocation in the IPO for  hot company called Eagle Computer. It was perceived as a real competitor to the IBM PC back in the very early days when a PC cost about $5,000 or more, if you wanted a second floppy drive for storage.

Funny story.

Its charismatic CEO was killed in a car crash on the day of the IPO.

Only an oracle could have foreseen that.

The underwriters actually refunded money to IPO investors and ran their next IPO a few months later without me. Eventually, the proprietary Eagle Computer, bereft of its guiding light, morphed into an IBM clone and then was sued out of existence by IBM along with some other early players.

In hindsight, maybe that's not such a funny story.

I was spooked by the reliance on a single individual and continue to be so.

Technology seems to be highly linked to charismatic individuals.

Okay, sometimes, like Bill Gates, they're not really charismatic, but in his own way, he was. Who else could turn mosquito netting into a sexy way of saving lives?

Ballmer?

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Achilles and his Heel

Whether you favor classic Greek mythology or good old fashioned American superhero fantasy, there's a heel or a piece of Kryptonite that's bound to spell doom and spoil all of your hopes for mankind..

Was there ever a single episode or comic book story about Superman that didn't contain some kind of Kryptonite or at least its metaphorical equivalent? It was so predictable. There was always something to stand in the way of justice reaching its just destination.

For me, the image conjured up by the designation "super-committee" has to be on par with the mythical heroes of generations past and generations lost.

Just imagine. A collection of seemingly normal people, collected together forming their very own band of super-heroes. As if one super-hero wasn't enough, surely only good things can come when the many are united as one.

This august group of super-patriots assembled to save our way of life from the predatory grip of a growing and deadly deficit.

Surely, we weren't Greece and we weren't the Weimer Republic.

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You get what you Pay For

I rarely get bored.

That explains why I can sit all day and stay glued to the TV screen watching and listening to various "experts" spread their wisdom.

Today, though, as good as it was, turned out to be very boring.

For a change, not only was there no news to move the markets, but there weren't even any rumors.

To make matters worse, even though I am a big fan of Ben Benanke, Federal Reserve Chairman, his press conference, which now can no longer be referred to as "unprecedented", came to pre-empt CNBC's "Street Signs," which for me has been a reincarnation of the old NBC concept of "Must See TV."

To put that into perspective, I felt the same way today as when episodes of COPS and America's Most Wanted are pre-empted by NASCAR, except I don't like NASCAR.

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Read me a Story

I can still think back to those days when my kids would be put to bed each night with a story.

"Moo. Baa. La La La."

That phrase will be stuck in my mind until the day I die, as like most parents, I found myself reading the same story over and over, night after night, because that was the story that wanted to be heard.

Whatever it took to get the little darlings to sleep. Whatever it took. Even Moo. Baa. La La La.

I was only talked off the ledge because the nice policeman promised me I'd never have to hear those sounds again.

Instead, it was a book devoid of silly sounds, but sadly chronicling the deaths of brave, hungry, thirsty, polite, sleepy and explorers, leaving only a single smart explorer to survive.

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Put a Condom on your Portfolio

Nobody ever got giddy over practicing caution.

The other day I was looking through a "new feature" being offered by E*Trade, their "Online Advisor". It''s not terribly different from the myriad of other such tools in that essentially the same questions are asked, particularly with regard to your tolerance for risk, the number of years until retirement and other seemingly important questions.

Single ply or two ply, I believe is a proxy assessing your spending habits.

When it's all said and done, there's nothing more exciting than having "Fixed Income" recommended for your stage in life.

You know the stage. Respirators, catheters and orderlies that don't know how to use any of them.

Caution is pretty boring and I really don't want to be reminded that I'm at that stage of life.

I may be ready for Depends, but  I'll fight until the end to avoid those Fixed Income investments.

I had a friend in college who always thought that he was the desire of every woman's dreams. He used to proudly show me the condom that he kept in his wallet, as he always needed to carry "protection."

After a while, I recognized the crease in the foil of that condom and realized that for years he was showing off the very same one. he was taking the exercise of caution to an extreme that really wasn't terribly appealing, but he was behaving otherwise.

He had a business card that read something to this effect:

"My name is Harold. I want to sleep with you. If you want to do the same, please call my number. If not, please return the card, as I'm running low".

In this instance no names were changed to protect anyone.

He also used to talk about how he was going to go to the "free clinic to get "tested." It seemed that he needed to be tested everyweek. Whenever I would hint that I might want to go with him to get tested, he would always come up with a reason why he wasn't able to go at that particular time.

Somehow, I don't think he was quite as accomplished as he had been inferring. I don't think he really needed much protection, except perhaps from reality.

I made no such pretense and was never a big fan of "protection".

To be clear, I'm still talking about FIxed Income investments. I like protection in most other aspects of life.

Although I've never been a big fan of reckless behavior, especially when it comes to investments, I'm not a big believer in living a life of over-caution, either.

The problem is that when giddiness does set in, caution is thrown to the wind.

Certainly there has to be a graph somewhere that shows the association between alcohol and unwanted pregnancy, just as their has to be a graph someplace showing the association between a rapid rise in the stock market and stupid decisions. Greed will do that, as will the fear of missing out.

Unless you were in FIxed Incomes or in cash, which are essentially the same, you've been very happy the past couple of weeks. Surprisingly, that feeling would have alternated with having been very sad the previous few weeks.

So happy, that you probably think that everything is just going to keep going unchecked in the same direction. One of these days, the "this time it's going to be different" feeling is going to come true, but that's not likely to happen this time or the next.

And then, along come days like today.

After a couple of weeks when grasping at rumors of good news was all that it took to drive the market higher, today was the day that Germany's pessimism on an EU solution came back to haunt.

Pissing in the wind, punching a whole in a condom and buying high are all reckless behaviors. Pinning your hopes on a promise to resolve a crisis is probably not a good strategy.

But from my perspective, not having downside protection is every bit as reckless, especially when the market goes up and down in completely unexpected spasms.

Sure, I was saddened to see Halliburton drop $3 after announcing earnings before Monday's opening, but the $38 call options that I sold on Friday for $1.02, that happen to expire this coming Friday soften the pain.

Of course, the downside is pointed out by those that believe that stocks are all poised to make spectacular climbs at any given moment in time.

There's no shortage of examples where that's happened.

This year, I can look back at shares of Green Mountain Coffee Roasters and VIsa among others, that I'd lost to assignment after unexpected run-ups.

Those are easy to remember and hard to forget.

But I'll also remember that last week I didn't bank any option income on my downbeaten shares of Mosaic because there were rumors of a buy-out and I didn't want to get caught flat-footed.

I've thought of alternatives to selling covered calls, but that would require picking better stocks and making their purchase and sale at just the right time.

That solution would require effort and skill, so that makes it a "no go". Although I'd be willing to use insider information to help arrive at the same end point, I don't appear to yet have those kind of connections.

The reality is that there are very few surprise break-outs of a stock's price. For every Visa that gaps from $80 to $90, or very Green Mountain that goes form $45 to $60, there are a couple of thousand each day that don't.

Today, El Paso did, but space doesn't allow me the opportunity to list those that didn't.

The fear of missing out on one of those great moves is unfounded. They just don't happen that often.

What does happen often is that stocks go up, they go down and they go up again, right before going down and then up again.

After that has all happened, you can reliably predict that cycle will repeat itself.

On Monday, I started the day with cash coming from the assignment of British Petroleum, Freeport McMoRan and Alcoa and was looking for a quick bang for my investment buck. For the day, at least, I got it by picking up additional shares of Riverbed Technology, DuPont, Sallie Mae and ProShares UltraShort Silver ETF.

I immediately sold in the money calls on all three of those purchases. After all, when do you put protection on? After the proverbial horse has left the barn?

For my trouble of selling near the money and in the money calls expiring on this Friday, if assigned, I'll net a 3.4% return on the options income alone

Sometimes the protection is worth more than the asset it's protecting.

I'm not exactly certain how that same analogy can be applied to condoms, but at least in my world of investing, it seems to be true.

For the shares that I picked up today, I don't have very many high hopes of an El Paso like surge.

Whatever surge there may be will be restrained by the protection, but enjoyable nonetheless.

As the markets have been evolving I'm looking forward to even more variety in the protection available.

As we begin selling derivatives on derivatives, such as options on the VIX or short options on the VIX, I'm looking forward to the inevitable appearance of some of those UltraSheer options to help make the experience that much more enjoyable.

And what investor wouldn't want to be long in UltraSheers? 

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7 Reasons why Criminal Life is Great

Following Wednesday's Moodys downgrades of Wells Fargo and Bank of America, fresh off the heels of a downgrade of Italian debt on Monday, it was not going to be a good day. The only hope was that maybe our Bernanke led Federal Reserve would pull an incredible rabbit out of its hat and just turn things around.

But for the most part, everyone was just waiting for the anticipated "Operation Twist" and its details before commiting one way or another.

Once those details came from the FOMC, which was uncharacteristically following Obama time for release of its statement, the market didn't like the description of our current economic state. Maybe it just couldn't deal with the fact that there were three dissenting votes

In a couple of blinks we went from being up 14 points to down 283.

Just another day at the office, dear. Just a little bit of dissent in the ranks.

Surprisingly, I don't feel like talking about stocks today, as I took another, largely unhedged pummeling, getting only two call sales made, both on beaten down RIverbed Technolgy, which was probably riding Hewlett Packard's coat-tails up this afternoon, as Leo Apotheker, its CEO of almost 12 months was rumored to bedismembered by coyotes.

Instead, I need to come clean and this is a good time as any.

It's not easy saying this, but at some point the truth needs to come out.

No, I'm not a virgin. A game of Twister, years ago, took care of that. And if I was, I don't think that I would admit it.

But as I sit and really think about it, the criminal life is great. The problem is that I'm not a criminal, but there's still time to re-invent myself. In a society where so many occupations are disappearing, there will always be criminality. Some things can't be entirely shipped offshore, even if the Nigerian princes are more authentic 10,000 miles away.

So then there's the whole credibility issue.

I suppose that everyone is a criminal by some definition. Depends on your society and your own personal values and especially how those values may be at odds with others, especially those with power. The guy who "pied" Rupert Murdoch during the Parliamentary hearings is a criminal, although most people watching the proceedings were probably equally criminal, at least in intent.

Years ago, when Jimmy Carter was running for the Presidency, during a Playboy interview he admitted to having "lusted in his heart". Nothing really criminal about that, but had he said that 20 years earlier he would have been condemned as a godless pariah and cast to the bottom of the heap with the other low lives.

Even Mother Teresa had her detractors, so much so that some theologians, perhaps of dubious merit themselves, believe that she is consigned to eternal imprisonment in Hell.

As I've grown accustomed to sitting on my La-Z-Boy, watching TV and trying to trade stocks and options, I've started to wonder whether I'd squandered the first 30 years of my professional life by toeing the line. Working day and and out, not only paying bills on time, but actually paying and other things that now seem so arbitrary.

Growing up in The Bronx, I now realize that the old neighborhood was populated by Mob families. The fathers were always home, were always around to play stickball with their kids and even had their own little coffee shop with blackened windows. The shirts weren't called "wife-beaters" back then, but I suppose they were.

Plus, the streets were always plowed and they had the best fireworks.

Can anyone say "Winning"?

My Sugar Momma and I have religiously watched COPS for about the last 20 years. Even though neither of us know more than the first line of the theme song, some things have become fairly obvious, besides the fact that some people can garner respect in a wife-beater, while others just can't and never will.

But what we really learned is that there's good criminal life and there's bad criminal life. COPS always portrays the bad criminal life.

Stupid people drinking, fighting, stealing and lying. That's bad criminal life. They seem to live in pretty squalid kinds of surroundings, have home-made tattoos and wear their pants down to their knees. They're often very unattractive as well.

Smart people probably stick to just the stealing and lying part although you do catch glimpses of the smart kind that think that they're smarter than those charged with keeping society safe, if you're in the habit of  watching Dateline.

Those often commit the bad kind of crime sometimes while in pursuit of the spoils of the good kind of crime.

That's a bad admixture. You can't do good by doing bad.

But I now realize that there are lots of good reasons to lead a certain kind of criminal life.

1. You make people feel better about themselves

People are so often much too hard on themselves and often suffer from inferiority complexes. Some have the whole thing figured out and just hang out with even more pathetic people to look good by comparison.

Being subjected to the bad kind of criminal activity let's those with a sense of inferiority know that there is someone even less deserving than they for our world's limited resources. Unfortunately, that kind of activity is often associated with very unpleasant things.

Like violence.

But being subjected to the good kind of criminal activity spurs aspirations, the need and desire to improve their own lots in life by seeing that there is another way to break the chains. There's nothing like a good example to spur people on to bigger and better things.

Seeing a hacker profiled on 60 Minutes makes most people believe in themselves.

If that moron could do it, so can I. And I won't get caught, either.

Not only do you feel better about yourself, but you inject your entire defeatist personna with an air of much needed confidence.

Beyond that, if asked to "forgive" a criminal who has wronged them, what greater feeling can anyone have than the magnanimity to provide grace to those that have fallen?

2. There's no time clock

The only thing you need to keep an eye on is your bank balance. That becomes your internal clock. Don't feel like playing criminal with your buddies today? No problem, take the day off. Want to sleep in this morning? Guess what? No problem.

Raining outside? Hetl, I'm not getting my new Crocs wet if I don't have to.

Shower? I don't need no stinking shower.

Get the idea.

3. Society loves a successful white collar criminal

It's true. They really do, unless they were directly effected. Most people admire the fact that people that can enrich themselves without really breaking a sweat.

The "Why didn't I think of that" mentality is common to our species. Best of all, seeing just how easily it can be done leads others toward developing even better techniques to separate people from their assets.

That is the basis for how we advance aqs a society. Unfortunately, the Chinese seem to be outdoing us at the moment, especially when it comes to the integrity of the companies that they take public.

But then consider who you admire more? The person that inherited their wealth, the person that made others toil to an awful extreme and under terrible conditions on behalf of their bottom line, or one that just siphons off other people's money?

Would you rather be America's next successful white collar crime czar or a tele-marketer? Seriously, which one really belongs in jail?

Wouldn't you rather see Bernie Madoff putting his skills to good use outside of jail and perhaps just cram 20 telemarketers into his cell instead?

4. You feel better about yourself

Not only can you check off "Other" or "Consultant" on those forms that ask about your job industry, but you can also choose any professional degree you like, any annual income and any net worth figure when completing surveys or polls.

Want to feel better than you did yesterday? Forget the Zoloft. No problem, just fill out a new form, maybe get yourself a nice new glitzy business card.

Watching your neighbor leave early in the morning for work and then getting home 12 hours later just reinforces that good feeling. That and the ability to hack into his unprotected wireless network while he's gone.

5. Stronger Family Relationships

Study after study shows that the more time parents can spend with their children during formative years, the better the outcome.

Kids that are able to routinely eat dinner with their parents have been consistently shown to be less likely to abuse drugs or alcohol.

The kids that I grew up with, whose fathers were always at home? No doubt they went into the family business and are passing the lessons learned to their loved ones over a nice plate of pasta and mussels.

6. Expanded personal horizons

There's nothing like a taste of success to move you toward seeking even more success. This is not your typical same old, same old 9 to 5. In the good kind of criminal life there's incentive to do well and to reach for even greater rewards. As you do so and as your enterprises thrive, along with your professional credibility comes social responsibility.

Patron of the arts, supporter of worthwhile charitable causes and other activities that support society, particularly as government support dwindles, are all part of the successful navigation of a career in good crime.

During the process you also learn things that you never learned in school, including evolving talents to meet the needs of the moment. In no profession does necessity translate into invention quite as efficiently as in a life of crime.

7. Improved strategic planning

If you look at the data on retirement planning, it's clear that we as Americans have no clue how to plan for the future.

Choose a life of crime and strategic planning becomes your middle name. Escape routes, alibis, Plan B, and so many more considerations before executing a plan. In essence, everything you do is lived out as if a three dimensional spreadsheet.

Those unprepared to deal with strategic planning are doomed to failure and may as well just work for a living.

These 7 reasons alone are compelling enough to get most people to start on their road toward change.

I haven't even mentioned the popular trickle down theory and how all of society benefits from your creation of personal wealth. Money and the time to enjoy spending it benefits all of us. Restaurants, department stores, pasta and mussels delivery boy. Everyone gets their piece.

Beyond the obvious reasons to consider re-inventing yourself are purely financial incentives that are more than just icing on the cake.

Anyone that's had a workplace 401k knows just how bad those are and how limited the investment choices can be. Together with contribution limitations, there's no denying that the self-employment tax deferred plans are so much more favorable.

Of course the ability to itemize your business related tax deductions are only limited by your imagination.

Need well manicured nails to stay at the top of your safecracker game? Simply take you deduction on the clippers and file. Panty hose over your head? Deductible.

Where do I sign up?

Since this blog is required reading in many elementary school classrooms, I want to be certain that it's clear that I'm not exhorting anyone to a life of "bad crime", but serious thought should be given to being the best you can be at the "good" kind of crime.

It's never too early to begin plotting your life of future plotting. 

Now if only there was a way to have all of these benefits without the laibility of prison.

How great would that be?

Wishful thinking.

By the way, what's your PIN, again?.