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  • Fear And Loathing On The Marketing Trail, 2014 [View article]
    Well, we all 'strut and fret our hour upon the stage'-some play the knave and the fool, others the mild and meek, some the dramatic-it's impossible to truly recognize and appreciate our biases. As humans, we've studied the great works from Plato to Kant; we have made enormous strides in evolutionary biology, psychology and bio-chemistry. But, to continue from the master: " 'tis a tale told by an idiot, full of sound and fury..Signifying nothing."
    No one has said it better, and perhaps no one ever will. So, we note that the world has changed dramatically since the Industrial Revolution, and in my opinion, political centralization, and by proxy, its various appendages (central banks), are but an obvious byproduct.
    Existential anxiety? Malaise revisited? It's all another chapter in the 'tale.' What character do you want to play?
    Enjoy your writing Ben.
    Aug 8 09:53 AM | 2 Likes Like |Link to Comment
  • More Signs A Market Bottom Is Forming [View article]
    In my world, I don't contemplate tops or bottoms-just regression and probability. Aside from that though, the recent downdraft was initiated by the professional money managers. The behemoth long-only guys suddenly went from buying the dip to protecting the year. I detected a lot of smaller players reaching for those inverse ETFs. In my opinion, the retail player is learning to use available tools to protect themselves from the pros. Of course, the cash balances are the ultimate variable-so, if the big dogs all panic at once....
    Aug 7 11:46 AM | 1 Like Like |Link to Comment
  • Think Strategically About Income During Market Volatility [View article]
    Rather than selling a cash secured put, one might consider adding a lower strike long put. This is far more present value oriented and clearly defines risk/reward. It also allows much more portfolio flexibility.
    One quick example of flexibility, particularly at a mild level of volatility, is the ability to both collect the premium on the long put, while rolling out the short put for more premium (assuming a market decline). In conjunction with that strategy, one can duplicate the spread-but moving down the risk curve via the lower price.
    These strategies require patience and planning. This is not for 'daytraders'-a longer-term objective is required. I also wouldn't dismiss selling calls on spikes-provided that one is in tune with their basis. Some can sell in-the-money calls, new holders of shares might want to consider spreads-even when they are otherwise 'covered.'
    Note: My comment is simplistic. Some level of financial acumen required-but worth contemplating.
    Aug 7 11:37 AM | 1 Like Like |Link to Comment
  • The Good News From A Bad Friday [View article]
    There are more tools for the average player to utilize. For instance, someone complained about being long TNA. Without using options, one can buy TZA and decide time and proportion. Say I'm long 100 shares of TNA. If I bought TZA at 15 and sold it at 17 (assume 100 shares or 'x' amount) I'm better off than simply holding TNA. So, TZA works like a de facto short call on TNA. Regardless of what happens to TNA, my strategy is forever superior to an equal portfolio that simply did nothing.
    The key is knowing your alternatives,and executing.
    Also, it certainly appeared that thousands of small players were doing this. I got the distinct impression that large players were bailing to protect the year results (whereas they previously bought small dips). So, the way I see it is that many retail guys are getting hip to mitigating downdrafts. Congrats to them!
    The real question is not so much what happens per se in this crazy world, but rather what do the big dogs do? Rest assured that the big dogs watch the other big dogs. They are pack animals. They are also bargain hunters.
    So, what's next?
    Personally, I would cash in on at least some of the insurance/hedge returns. The decision then relates to whether to implement more hedging-or allocate to an eventual rebound. In this context, expect a choppy pattern-it's a natural byproduct-but it creates opportunities to trade both long and short. I don't get the feeling that the decisions reflect "risk on/off" as characterized the market a few years ago. Again, you can just 'see' fund managers getting caught up in the 'protect the year' mindset. After all, we are approaching the latter half of the year.
    Aug 2 11:22 AM | 3 Likes Like |Link to Comment
  • Short Sellers And Seeking Alpha [View article]
    Yes, since the time we developed a pre-frontal cortex, our predilection has been for clear skies, great health, harmonious relationships and a happy dog. We are wired to both resent and fear spurs under our saddle-even to the absurd extreme of blaming our horse for his evasive antics.
    The same chemicals that created fight or flight responses hundreds of thousands of years ago still control our emotive complex. Indeed, as has been stated, we've met the enemy-and he dwells within.
    Life's lessons are not readily learned. Remaining objective and dispassionate when confronted with a loss is, as has been well-documented, stirs up a witch's brew of noxious chemicals. We are loss averse to an extraordinary degree. The anguish can be so great that we can hardly bear the suffering. Yet, without that pain, our ancestors would not have survived.
    As long as there are markets, there will always be Enrons. There will always be insiders that benefit from superior knowledge. The seasoned poker player knows that he will win and lose-sometimes he just makes a dumb mistake-sometimes he recognizes a superior player and bets accordingly. In every thing we do, from choosing a route to work, selecting a gap wedge or lob wedge, making a presentation or visiting a dentist-we make use of the one tool that we are blessed with-the grey matter that announced the theory of relativity and that will send men to Mars and beyond.
    But, we are not yet capable of pure rationality. Prospect Theory and subsequent studies about how we make decisions is both illuminating and a bit concerning. We are too quick to be victimized by word-spinning and logic-chopping. Our mental calculus eludes the sabre-tooth monster but fails us in our response to Monte Hall's problem.
    The market is but a manifestation of human decisions-in essence it is perfect for a game- theory perspective. One can devise minimax strategies, or establish a complex matrix, utilizing a blend of different strategies at different time points or zones. But, at the end of the day, there are professionals, very good amateurs, decent players and rank beginners. And, of course, there are the perpetual hackers. The pro can play offense or defense, and is prepared for adversity. He actually thrives on adversity and relishes the fight. Our loser constantly complains about the weather, that his opponent was 'lucky', the greens were too fast, etc.
    But when it's all said and done, Judy Collins had a great observation-'I've seen life from both sides now...I don't really know life at all.'
    So, the light at the end of the tunnel is not a snorting bull nor a snarling grizzly bear-those diversions that occupy the mind are simple amusements along the way-I'm afraid that light belongs to the Grim Reaper.
    Aug 2 10:46 AM | 2 Likes Like |Link to Comment
  • On the hour [View news story]
    Yeah-just thinking the bears ate a few of the weaker bulls and headed for a nap.
    Aug 1 02:22 PM | Likes Like |Link to Comment
  • Thursday's Stock Market Gets A Wake-Up Call [View article]
    Hi Peter-excellent insight as usual. I guess that ivy league school education made your parents proud.
    My take, and I think others feel the same, is that the market is now somewhat analogous to recent weather patterns. In essence, storms seem to unleash a bit more fury and wreak a bit more havoc. So, we seem to have these Mt. St. Helen moments.
    That's an analogy-not a correlation, of course. But we 'seed' the market storms with technological tools, and our perception of global and centralized responses by central authorities. The one eternal constant is that market players, as a whole, have never learned to 'be prepared.' I keep thinking that rationality will eventually make at least a modest appearance-but I'm now confident that I'll never live to see it.
    Aug 1 10:51 AM | 1 Like Like |Link to Comment
  • Short Sellers And Seeking Alpha [View article]
    I had a really good history teacher in the 8th grade. We spent a lot of time discussing the bill of rights-you know-freedom of speech, assembly-those sorts of ideas.
    Jefferson said 'The price of liberty is eternal vigilance.' We are not that far removed from The Inquisition, and sad to say we've murdered innocent people for practicing withcraft.
    We do have laws against libel and slander. But any attempt at censorship will always have a putrid smell. As humans we are so hopelessly biased, yet we have our moments when we reach for ideals that transcend our own pecuniary interests. But for that brief moment of transcendence, we fail all those that have come before us, and all of those yet to be.
    Aug 1 09:23 AM | 7 Likes Like |Link to Comment
  • Comp sales decelerate at Whole Foods Market [View news story]
    Didn't know it was down AH-until I read this. My short calls were looking ugly (still are on my screen). Looks like red will turn to green in the morning.
    I have been short in-the-money calls as I couldn't understand how in the hell this stock was flying thru interstellar space.
    Jul 30 09:51 PM | Likes Like |Link to Comment
  • Why St. Joe Shareholders Will Inevitably Be Disappointed [View article]
    It seems like a 'new' JOE article pops up every 13 months-same themes, same comments, same conclusions. The area is discussed, 50 year plans are cited, but, alas, the sand continues to trickle through the 'hour-glass'.
    "So goes the days of our lives..." the man said.
    At what point in time should I mark my calendar to assess the success/failure of this company? What about August 1, 2030?
    Incidentally, by far the largest 55+ retirement area is The Villages, Fl. They pull people from all over the USA-even the world. They continue to buy land with an insatiable appetite, and to sell thousands of new homes annually. Currently, they are building several new medical facilities and are becoming a destination treatment center for geriatric issues (naturally). This juggernaut is the most amazing building machine I've ever seen-and I've seen a lot. Even at it's hottest peak of building, the Florida panhandle is no match. They don't need a 50 year plan-they just keep repeating what they've been doing for the past several decades. One family controls everything, so they don't have to placate a bevy of diverse local politicians.
    Can the panhandle grow? Absolutely. But JOE has not demonstrated any competency beyond the ability to take the gift of history and randomness, and simply do the obvious. Many other large real estate players are now firmly entrenched in this market. Proof? Simon Property Group with its Pier Park project.
    But so what as to all of this. How does one make $ tomorrow on any of this?
    Jul 30 09:43 PM | Likes Like |Link to Comment
  • The Crisis May Be In U.S. Small-Caps [View article]
    My guess is that we have a 'tug of war' at this level. This is a very different market than anything I've ever observed. And I started in this business by managing a pension fund for a large privately held company back in 1981. While some people continue with the traditional M.O., others have devised algos and trading strategies that have absolutely nothing to do with Finance 101. But, that's not all. Corporate strategies have pushed the reshuffling of the balance sheet to new and strange dimensions. All of these strategies seek to minimize costs and maximize shorter term returns. New technology and computer power play a very large role.
    Tax inversion, spin-off, off- shore bank accounts, change in corporate form, repurchase agreements, long-term issuance of debt (100 years). It's revolutionary and transformative. Throw the Fed in the mix and let's slide down the rabbit hole.
    Jul 29 09:39 PM | Likes Like |Link to Comment
  • Zillow + Trulia, And The Big Cover-Up [View article]
    I'm not an anti-trust lawyer (but it was one of my electives). And, I'm generally not surprised. BUT THIS IS ABSOLUTELY AMAZING! Where is the FTC?
    Jul 29 09:31 AM | 5 Likes Like |Link to Comment
  • Announcing SA's First Outstanding Performance Award Winners [View article]
    While you folks have been having a great discussion, my TZA call earlier (sell TZA 16 calls expiring this Friday), has minted cash. A couple of grand in less than an hour-more cash to the humane society. But by all means, go ahead and have a full discussion. (Yeah, I know- a bit facetious, even a trifle sarcastic-just trying to retire before age 30).
    Jul 28 01:43 PM | 1 Like Like |Link to Comment
  • The Crisis May Be In U.S. Small-Caps [View article]
    On this day (July, 28 2014) folks are buying TZA hand over fist. This is obviously to stymie the small cap dip. Funny thing is that all of this activity has created a 'pinning' impact where both sides are at a stalemate. I actually find this a bit fascinating because now ALL players can immediately protect a long position. After all, if people are truly 'rational' the immediate and obvious strategy would have been to buy TZA. And, that's exactly what happened.
    Now, does one hold TZA; and if so, for how long? I earlier suggested selling the weekly TZA 16 calls (which I think spiked at 50, where I made a lucky entry). I'm already out at a quick 10%.
    If you now have $100k worth of TNA and $100k of TZA, what have you accomplished? Yes, that's good only as long as TNA dips more. My suggestion is to sell calls against a reasonable percentage of TZA, just because you probably bought it on the uptick in response to a declining share price of TNA. Selling calls against TZA will 'most likely' provide a greater yield at this point. You don't want to sell calls against TNA at this point. I don't see it dropping below 65-if it does, it will signal a major over-all market sell-off. On the contrary, look to sell LEAP TNA puts (remembering that shorting TZA calls and selling TNA puts are opposing tactics). BUT PLEASE DON'T PANIC OUT OF A ONE-DIMENSIONAL PLAY AT THIS POINT. Yes, if you're simply long TNA you've been bleeding so far this morning. Just be patient and hope that it goes lower! Then you buy more! This is how you make money in this game.
    Jul 28 01:33 PM | Likes Like |Link to Comment
  • Direxion will roll out 3 new leveraged funds tomorrow [View news story]
    And a joyous sound went out through the land, glasses were raised, the masses gazed up above, filled with a new sense of wonderment-even the animals made boisterous noises of contentment.
    Jul 28 01:13 PM | Likes Like |Link to Comment