We're Number One !!

Here's something that we don't see very often.

A U.S. city, state capitol, no less, declaring bankruptcy.

That's almost as unheard of, as say, Athens declaring bankruptcy, except that the buildings in Harrisburg are in a greater date of disrepair.

That decision to do the unthinkable can't inspire too much confidence in municipal bonds, even though the city comptroller has indicated that they are still current on the General Obligation notes.

The cynic in me believes that the decision to declare bankruptcy isn't entirely coincidental.

With all of the world's attention focused on Greece and the EU, we're starting to feel a bit left out on this side of the pond, and if there's anything that we need, almost as much as oxygen itself, it's the spotlight.

I think that Harrisburg is looking toward Florida for its inspiration and wants that Andy Warhol moment in the sun.

Florida, as well as some other states, is challenging New Hampshire's hold on being the nation's first Presidential Primary state.

For some reason, it seems important for a state to be the first, probably because that's where the big campaign money goes, as serious candidates need to get their toehold early or fall into the abyss.

And that spending blitz isn't just restricted to media campaigns.

Take for example the tremendous boost just given to the New Hampshire hospitality industry as Mitt Romney, in return for an early endorsement, agreed to provide Governor Chrisite with an unlimited supply of McRIb sandwiches when it is re-introduced onto New Hampshire's McDonalds' menus.

FIrst out of the box has its benefits in most every competitive arena.

No doubt that Harrisburg didn't want Greece or Italy going first. You just know that when that first one goes, the rest will just domino.

Harrisburg simply didn't want to get left in the dust or ash heap that their $300 million trash incinerator bond had them headed.

Sure, those are quasi-nations within the framework of the European Union, but in an "America FIrst" sense of indignation, Harrisburg did what so many other municipalities around the countyr just didn't have the nerve to do.

No one strives to be #4.

Besides, how else does a relatively sleepy backwater state capitol get its share of attention and maybe eco-tourism, which is not to be confused with eco-tourism. Instead, think "Keynes to the City" as being an eco-tourists most favorite guided tour through bankrupt Harrisburg.

There's no special formula or way to predict who will demonstrate the nerve to take on the unknown. It obviously takes a crisp understanding of risk and reward ratios.

I'm sure that every X-Games participant goes through an extensively elaborate algorithm to determine the appropriateness of their next humanly implausible action.

Sometimes "nerve" can be a funny thing.

There was a time that I had the kind of nerve that didn't mind letting it all ride on a single horse race or spin of the roulette wheel. But during that same period of time, I would break out in tremors at the idea of executing a stock trade on my own, much less look at the paper losses.

But then something happened. I don't have any clue just what it was, but it all changed.

The entire risk-reward perspective had become turned on its head.

These days, I can't stomach the idea of losing even a quarter in a slot machine, but am not really moved by a six figure paper loss in a single day.

I've been functioning like that for quite a while, but today I seemed to take a step backward.

With the market continuing to climb for no real reason, here it was, mid-week, the time that I usually like to grab some remaining pennies on the table. I was still delighting in the fortuitous timing of Alcoa announcing another set of disappointing numbers only to have the disappointment well cushioned by a continuing euphoric market.

Well done, Klaus.

This time, despite the fact that there were a number of opportunities that I would have normally taken, I found myself selling only Goldman Sachs and Time-Warner calls.

I struggled with the decision to sell calls on Sallie Mae and Mosaic.

I mentioned Mosaic yesterday as it was the target of a potential takeover rumor.

Sallie Mae, on the other hand, has just showed some nice strength going into earnings next week.

Yet, I couldn't find it within me to make the sales..

I'm rarely undecided, but the "FOMO" hit again.

Fear of missing out. I was worried that I might miss a quick upside move in either and leave a lot on the table.

The other day I read a nice piece by Phil Pearlman, the resident staff psychologist at StockTwits.

His blog title, NetFlix is on Tilt, examined the tendency to overcompensate for stock losses, using a poker players' analogy.

Admittedly, I know knothing about poker, but I liked his take on "Tilt".

For me, avoiding fear, greed and envy were always primary requirements for keeping your head above water. I always looked at those as raw human emotions, but "Tilt" didn't quite fit that category, but it was also worth avoiding. When asked, Pearlman confirmed for me that "Tilt" was not an emotion.

Still, I was left with the feeling that some kind of emotion has to be responsible for causing one to enter "tilt mode"

The tendency to do stupid things in order to erase other stupid actions isn't an emotion, it's just part of human DNA.

In my case, I had nothing stupid in my near past that needed to be compensated for, but I felt that if I went on with my usual modus operandi and sold the calls, I was going to be left out of the game. There's nothing worse than watching that big shiny ball roll down the playing surface and not being able to do anything to get back into play.

I understand that kind of "tilt", but I also get Pearlman's kind, as well.

Neither is good for long term survival.

By the time the market closed on Wednesday, half of the index gains were gone, and in hindsight, I should have made the sales.

Is "regret" an emotion? It's also just another one of our traits, but it is related to envy. Envious of what could have been or just regretful for what never was.

In the meantime, word came across that Slovakia pulled it together and its Parliament endorsed its role in the expansion of the rescue fund.

For another few days, Greece is spared from what everyone believes is the inevitable.

But it doesn't matter.

Thanks to Harrisburg, American pride is restored.

From a grateful nation, thank you for taking on an unnecessary municipal project, passing the blame onto a previous city administration's cronyism and faulting pressure applied from the State House for making the ill-fated decision.

Can you say "tilt"?

A real leader would have blamed it on the Greeks.

But at times like this, a grateful nation will take any winner as it own.

Here's to Harrisburg.

First in our defaults and first in our hearts.

Invest like TheAcsMan

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What Buddy Holly Teaches Us

Special thanks to Josh Brown (Reformed Broker) for reminding us that February 3rd was the anniversary of when the music died.

Sometimes I think I'm like that kid in "The Sixth Sense".

"I see connections". That's not quite as spooky as seeing dead people, but just the same, some of the connections can be pretty tenuous and call reason into question.

In this case, though, the connection happens to be to a dead person who now appears very much alive, as Natalie King Cole has released paternal DNA testing indicating that Buddy Holly was her biological father and will soon be releasing a music video duet of "Oh Boy".

But what in the world does Buddy Holly have to do with stocks, investing or the markets? So little, that if I didn't bang out this blog right now, the moment the idea popped into my head, there is no reasonable way that I would remember the concept or connection 3 minutes from now.

It all started with a simple Tweet from Josh Brown, author of The Reformed Broker website.

I have no connection with him, in fact, I think he may have even blocked me from posting to his Twitter account, due to our onetime irreconciliable differences over Darfur.

But he pointed out a great Buddy Holly tribute album with lots of very impressive contributing artists. How could you not want a Buddy Holly song covered by Cee Lo Green?

Being who I am, I scanned the list of artists with one filter in mind, but the search turned up nothing. Maybe he was still with the rest of us sitting a very extending Shiva for Clarence Clemons.

That prompted me to dust off a couple of 35 year old concert venue renditions of Buddy Holly songs by Bruce Springsteen and then caused me to allegedely post links to them on this site.

I say "allegedly" because it may be against the law to have done something like that. Despite great admiration for both Springsteen and Holly, an equally prestigeous named law firm might pursue me for something.

Allegedly. Good luck finding them.

Anyway, Buddy Holly was truly an amazing guy. A walking and talking cultural contra-indication, he was a Texas Boy in the 50's, playing to racially mixed audiences and performing with musicians who couldn't get in the front door in many parts of the country. Interestingly, The Big Bopper also couldn't get in because of his girth.

The fact that his wife's name and that of my Sugar Momma are the same played no role in the strength of the connection.

Another of my favorites, Don McLean paid Buddy Holly homage, at the expense of Elvis. Entirely coincidentally, the blog "The First Time" from just a few days ago featured Roberta Flack, whose own song "Killing Him Softly" was a tribute to Don McLean.

As Kurt Vonnegut used to write, "And so it goes".

Had I not seen Don McLean in concert the night before the SAT's, maybe I would have had three Harvard degrees.That undergraduate degree would have taught me to never begin sentences with either the word "But" or "And".

No regrets, though, as that is a recurring investing theme of mine.

I say that after having just lost Google to assignment, far below its Friday close. And then there was Visa and before that Green Mountain Coffee Roasters.

Okay, maybe some small regrets. Unfortunately, my vanishing memory banks can't seem to erase those memories.

Buddy Holly showed that there were lots of different ways to break out of the stereotypical mold and create a new far-sighted and visionary path.

He also helped re-invent an entire musical genre, much like I will need to recreate my portfolio today, as nearly 40% has to be replaced due to assignment.

I didn't need a plane crash to realize that there were alternatives to buy and hold, although, sometime this week, I will pay some tribute to a Buy and Hold guy (if I can remember).

It did, however, take the untimely death of my financial advisor, who when we first started our relationship, was still known as a "stock broker". I discuss him at length in the Option to Profit book, which I obviously plug at every opportunity.

Today, I will be figuring out how to redeploy about 40% of my portfolio, following assignments of Freeport McMoran, Google, Halliburton, Sallie Mae, Rio Tinto, Transocean and maybe a few others.

I will likely buy back Sallie Mae, Transocean and Rio Tinto and follow through with the recommendations that I Tweeted on Friday afternoon regarding Sunoco and Time Warner, in addition to whatever else remains in or is added to the portfolio.

Of course, I'll look to sell call options, always being satisfied in the 2-4% monthly gain per stock. Dividends, small capital gains and options premiums, whatever it takes to scratch out a respectable living.

In a way, it's like the small venues that Buddy Holly played, because in his barely year of fame, he hadn't yet gotten to the big times, which for Rock and Roll, hadn't really come of age yet anyway.

Or as I like to look at opportunity costs, "You didn't miss them anyway".

He was obviously a risk taker and I am slowly getting into that frame of mind, at a time when the financial guys are saying that those of my age should "slow down".

Anyway, I just read a short article that seemed to say that approaching retirement only 25% of holdings should be in equities and the rest in annuities.

Can you say "WTF" on the internet?

Would Buddy Holly put his money into annuities? Elvis maybe. The Jester? Never.

Screw annuities. Just to slow down that aging process and as a thumb in the eye of those thinking that I should be slowing down, I've started selling more and more put contracts. Even though I've done that for a few years now, as part of my less than 5% speculative piece, it was always with very low cost issues, like Citibank, Sirius and YRCW. Now I'm branching out, slowly working may way up the price chain with Harbin Energy, Yahoo and Spreadtrum Communications recently. Maybe Google next?

I don't think so. I may see connections, but I'm not a lunatic.

But it is fun. It's not what I'm supposed to be doing at this age, but it is all a frame of mind. And besides, that frame of mind is both figurative and literal. I love wearing the big glasses and checkered jacket. Probably the only person who will see me in my lucky trading garb will be Sugar Momma and the UPS guy.

Sugar Momma has been looking askance at me lately anyway as the last 3 or 4 texts I've sent her have mistakenly included the word "tit", instead of "it". Proof reading was never one of my strong suits, but coming on the heels of the blog entry, "How my WIfe's Bra Saved us Money", now she's not so certain that those were simple auto-spell mistakes.

Although the UPS guy has learned not to ask me questions, I'm sure he'll be able to hear the Buddy Holly tunes that will be streaming today and he'll probably say something to the effect of "Man that's so loud, I can barely even hear your annoying wiener dog barking".

That was the whole point.

Today, as we start another options cycle, I'll be replaying "That'll be the day the Bear Market Died" all day long and thinking of all the connections that are so obviously there.

Don't you see them?

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