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convoluted

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  • This Is The Most Critical Time For The Market Since 2007 [View article]
    Well, I'm bullish, except when I'm bearish-and I'm bearish except when I'm bullish. But, all in all, I'm neither bullish nor bearish. I just enjoy the lowly job of selling tickets to the patrons filling the seats in the coliseum. I just want everyone to have a good time, bet on their favorite gladiator, and leave with contentment in their hearts. Some will win, many will lose-but it's all in the game. For the game will continue, and the crowds will roar. A secular bull up against a cyclical bear-or do I have it backwards? Fools on the left, jokers on the right-do we have rooms for you tonight? Yes, of course. Check out? Well, any time you want (but you can never leave).
    Mar 28, 2013. 10:07 PM | 8 Likes Like |Link to Comment
  • The Market Rises Through The Gaps [View article]
    Daytraders and daydream believers, oh what can it mean-Yes, the straw is spun into gold while the vampires go about their business.
    Another reason to utilize an assortment of option strategies.
    Mar 28, 2013. 09:43 PM | 1 Like Like |Link to Comment
  • The First Bell For Equities Has Rung [View article]
    "Ask not for whom the bell tolls, it tolls for thee..."
    Mar 28, 2013. 09:28 PM | Likes Like |Link to Comment
  • Apple Won't Just Roll Over And Die [View article]
    Over the past several weeks, I've been short AAPL via bear call spreads. I thought I was tempting fate to keep doubling down the last few days, but I suspect some smaller funds are over loaded with AAPL. I suppose I should get a real job-too late already retired. This has been way too easy- Will continue to be short until I sense an equilibrium. I think AAPL is a great company, and have several of their products. But, a hot stock can get too much love, and no passion can be continuously sustained without some respite.
    Mar 28, 2013. 03:07 PM | Likes Like |Link to Comment
  • BP - The Resolution Of Legal Issues Will Be The Catalyst To Propel The Stock Higher [View article]
    Good point-any decent news from Europe will provide an assist. BP also held by many older US citizens. BP bought Gulf Oil several years ago. It may well be the best bargain in the equity cosmos. That's why it takes two screens to look at my options positions on BP. It takes a lot to get me excited about a stock these days, but BP is an exception.
    Mar 27, 2013. 09:59 PM | 2 Likes Like |Link to Comment
  • BP - The Resolution Of Legal Issues Will Be The Catalyst To Propel The Stock Higher [View article]
    BP came close to 40 the other day, but has recovered. Part of the decrease may have been the legal wrangling. To the extent that any stock represents reality these days, I suppose you could say that the legal issues are 'priced in.'
    I have several different types of option plays on this stock, because the algos will push the stock up as litigation eventually concludes. I don't really care about the 5% because the leverage from the option positions will dwarf any missed dividend accrual. Furthermore, simply being long the stock is still (a) risky and (b)requires suboptimal use of capital.
    But briefly, I have LEAP bull call spreads and short put LEAP spreads as well. I also utilize shorter term bear call spreads to collect premium and to hedge the longer, more bullish plays. In addition, I have a series of ratio backspreads which will goose returns in a big move up. I watch BP daily, and notice that it moves with macro events-as all stocks do-but I also detect some degree of very short-term trading. Option premium is reasonable and bid-ask spreads ok. Weeklies also make this a tradeable stock.
    A small investor could simply buy a LEAP call and let it ride. If BP does get a pop, the increase in the option will far and away offset the lack of dividend via holding shares.
    In fact, one can buy the JAN 17 2015 40 CALL for 4.70. Looks like some 1,700 of those were bought today. So, you can control 100 shares of BP for $470. The price of 100 shares would be $4,228. Further you could sell the April 20, 2013 42 strike for .87, which would be, in effect, a dividend surrogate. In fact, you could end up selling more calls against your LEAP position, so that you amortize the cost. HOWEVER, you would cap a potential big gain-so I wouldn't encourage that strategy-for this stock. After all, the 'rational' reason it's not at 55 is due to the lawyers. The moment a final settlement is reached-BINGO! I'm anticipating that my gas bill will be funded the rest of my life as a result of a settlement. But, I'm also fully aware that hell can freeze over too.
    Mar 27, 2013. 09:21 PM | 2 Likes Like |Link to Comment
  • Bernanke's Bull And Why I Hate QE [View article]
    "Masquerade! Paper faces on parade.
    Masquerade! Hide your face so the world will never find you
    Masquerade! Every face a different shade
    Masquerade! Look around there's another mask behind you...

    Masquerade! Seething shadows breathing lies
    Masquerade! You can fool every friend who ever knew you
    Masquerade! Leering satyrs, peering eyes
    Masquerade! Run and hide but a face will still pursue you."
    From "Phantom of the Opera."
    Well, such great writing deserved a little music from one of Broadway's greatest productions. I thought about creating some lyrics with Bernanke as the Phantom of the Economy- but maybe later.
    Mar 27, 2013. 05:27 PM | Likes Like |Link to Comment
  • 3 Ways To Avoid The 'Rigged' Stock Market [View article]
    "I see the bad moon arising
    I see trouble on the way.
    I see earthquakes and lightning
    I see bad times today.
    ...............
    I hear hurricane's a blowing
    I know the end is coming soon.
    I fear rivers overflowing
    I hear the voice of rage and ruin."
    CCR
    Come what may, remember that the Third Little Pig fortified his portfolio with puts and calls. The first two little pigs were too busy watching Honey Boo Boo, and diversifying their straw allocations-with the blessing of their broker (the wolf at the door).
    Mar 27, 2013. 01:09 PM | 1 Like Like |Link to Comment
  • The Evident Folly Of The Pseudo-Rational Marketplace [View article]
    IBM or IMF?
    99.999999% of investment advisors are afflicted with a pathological bias-or as might be said, they know not and know not that they know not.
    HAL 9000: "All these worlds are yours, except Europa. Attempt no landing there."
    Mar 27, 2013. 12:44 PM | 1 Like Like |Link to Comment
  • Are The Markets Rigged? [View article]
    LIBOR is the one on your list that is actually 'illegal.' It's ok for the Fed to confiscate 20% of your net worth-that's not actually 'rigged.' Silver has certainly been manipulated in the past, but I would cite oil as the most manipulated commodity of all time.
    The machinations of fiat money via central planning has reached unprecedented levels. Again, though, it's not 'rigged.' "Staged" might be more apt-everyone knows what's behind the curtain.
    Copper, on the other hand, might be cited as being the most truthful indicator-at the moment.
    In addition to $85 Billion a month, corporations are using cheap money to buy back stock. Yes, a lot of corporate insiders are selling, but it's only human nature to book some gains now and then.
    It's not illegal that 48 million people are on food stamps. Nor is it illegal for an unprecedented number of people to be on disability. Note that the folks on disability aren't counted as 'unemployed.' The government follows the universal truism of lies, damn lies and statistics-but again, that's accepted protocol. You have to read between the lines.
    So, I don't know if I would use the word 'rigged.' Perhaps, 'pathetic', 'nauseating,' unsustainable,' would be a better fit.
    Mar 27, 2013. 12:13 PM | 1 Like Like |Link to Comment
  • The Case For Shorting The American Economy [View article]
    "I've been walking these streets so long
    Singing the same old song,
    I know every crack in these dirty sidewalks of Broadway
    Where hustle's the name of the game
    And nice guys get washed away like snow in the rain..."
    Glen Campbell- "Rhinestone Cowboy"
    Well, you can't be a cowboy if you're afraid of horses, but you can try to match your personality to the temperament of the horse.
    Mar 27, 2013. 11:42 AM | Likes Like |Link to Comment
  • 3 Ways To Avoid The 'Rigged' Stock Market [View article]
    A reference to Foundry I guess. Yes, there is a busy slate of insider trading investigations.
    When it comes to making decisions, I'm very much influenced by Karl Popper. Popper maintained that one shouldn't expect government to solve problems-the best to hope for is that it doesn't drive civilization over a cliff. Thus, it has to be constantly monitored, and we see how divisive, if not corrupt, it can get.
    The words of John Locke utilized by Jefferson (life, liberty, pursuit of happiness) are great and noble concepts. And, our lofty ideals about fundamental fairness have great appeal. But as I study many a 'quaint and curious volume' of evolutionary biology, I see 'tit for tat' played out across many dimensions of our world.
    Human history is antagonistic to the idea of a 'level playing field.' The fact that layers of governmental bureaucracy exist is testament to the fact that even defining a notion of fairness, and seeking to implement same, is exceedingly difficult. Just take a look at the body of law dealing with due process and equal protection of the laws. But, without the law of man, the law of the jungle would quickly assert itself.
    Mar 27, 2013. 10:01 AM | Likes Like |Link to Comment
  • 3 Ways To Avoid The 'Rigged' Stock Market [View article]
    Mercuryvalue and tenofwands-I like both of your comments. If I come close to making a cut to play in a Champions Tour event, I'm happy. But golf has a system that allows all skill levels to play and be competitive within their handicap group. Yet, I've observed countless numbers of players throwing clubs, moving the ball in the rough, etc. Pin positions, uneven lies, a gust of wind-even the bev cart girl often gets blamed for an 'otherwise' great shot.
    Managing money for a living requires that one be a 'pro.' It's not so easy to make excuses when you're forced to send quarterly statements and field phone calls. And, being approached on the driving range by a large NFL offensive tackle, inquiring as to how you're doing with his money can instill a bit of focus. If you can give a thumb's up, so much the better.
    But, Joe Handicap and Joe Retail Trader-Investor (or 'market participant' to be inclusive) must manage his money within time constraints and tactical limitations. The good news is that a high handicapper can make great progress. So, I agree that the retail investor has great possibilities-greater now than at any time in the history of markets.
    The caveat would simply be, as Clint Eastwood said: "A man's got to know his limitations.." Confronting one's bias and myopic perspective is THE greatest impediment to success-in anything-but certainly in an arena that often panders to the evil twins, fear and greed.
    At the 'end of the day' human evolution is messy, unpredictable, often violent, sometimes tempered with great compassion, and man's tools are often designed to maximize the odds of survival. Understanding the history of man allows one to better understand the current system of jurisprudence, and the particular history of the subject in question. Thus, it is a mistake to consider or contemplate the 'market' without an understanding and appreciation of the history thereof.
    In the heart of the jungle, as night approaches, the lion has no opinion. Likewise, the gazelle doesn't bother with opinions. As the night lingers, the drama played out is ancient, yet very real. For millions of years, morning reveals the winners and losers. It is what it is.
    Mar 27, 2013. 09:33 AM | 1 Like Like |Link to Comment
  • Covered Call Trading Vs. Buy-Write Trading Part 2 [View instapost]
    Hi Jeff! It's basically finished, but I'm incorporating some suggestions. Problem is that few people read anymore. Fortunately, I'm not a starving writer-or maybe I should be.
    Hope things are going well.
    Mar 25, 2013. 10:13 PM | Likes Like |Link to Comment
  • 3 Ways To Avoid The 'Rigged' Stock Market [View article]
    'Rigged' is a nebulous term. The phrase typically used in securities law is 'scheme or artifice to defraud.' There are thousands of pages of securities rules, which are interpreted by various regulations. Securities case law is full of judicial decisions that represent both civil and criminal securities practice. Additionally, there are various scholarly journals that discuss a wide array of market and securities issues. The Department of Justice also has jurisdiction in some areas, and of course, the states have a multitude of state blue sky laws.
    The SEC is currently looking at dark pools, high frequency traders, and most recently, wash sales. Wash sales have been discovered to exist and operate for no purpose other than to give the appearance of trading-but the concern is that this activity will deceive investors. Pump and dump is still an issue, and inconsistencies between US law and various foreign securities laws can be substantial.
    That people like Madoff can bilk innocent investors out of millions indicates both the complexity of markets and the vigilance required to preserve market integrity. All things considered, the view seems to be that the SEC is doing a better job. Of course, I'm sure that some can make the case that they are understaffed and underfunded. Nonetheless, there are watchdogs in place.
    Mar 25, 2013. 09:16 PM | 2 Likes Like |Link to Comment
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