Hi Pezz, This is the season to do “I told-you-so” and to boast, and so I will play. Equity investment has for the most part, in the aggregate, been dead money for the year, per Collapse script. Reason: simple, there is a connection between today’s write-offs and profit implosion and yesterdays phantom profits (S&P reported earnings per share went from $10 to $56 between 1992 and 2000, while National Income and Profit Account went into a meandering but serious slowdown). The S&P is just a Enron, fractal scaled up.
The Collapse is a script, intricately played out in exquisite sequence, to entrap the unwary, ensnare the brave, fool the gullible, and kill the unfortunate. The script sequence may reward the few, the fast, the lucky, and the really smart. I am not one.
In the meantime, many are ‘turning Japanese’, first by pathologically and repeatedly predicting the bottom, which by definition, unlike the Collapse scripted sequence, only happens once, and by betting again and again on the prediction, resulting in most falling by the wayside on the road to wealth nirvana.
The fiction of productivity increase, garnishing the fraud of executive compensation, laced with the equity cult and soaked in leveraged liquidity will not fail to encourage many to bet, once again, again, until no more.
To keep the fiction alive, the officialdom is doing the only things they can, monetary loosening, fiscal spending, encouraging further dis-savings, raiding the pensions and lockbox, robbing Japan, and talk up a storm on the goodness of another SUV.
So, zero rate financing is working its temporary magic, and global liquidity deluge is and will continue to fuel the operation of Hynix’s around the world, enforce the survival of the weakest, encourage the start of more capacity of all flavors in China, ensuring the profitability of none, and reduce the cost of all technological gadgets towards that of a colour TV set. It will also cause a walloping round of service economy and housing inflation (or, more correctly now, none-deflation), followed by nothing when capital becomes shy and long rates go up.
Watch the housing market and the dollar. Watch them closely.
I must cast my vote either for the lift of hope or for the weight of financial gravity, and I see no reason to change my ballot cast earlier.
In the meantime, I must save resources, make maintenance money, prepare to fight another day. Here is one way … (watch out, here comes the boasting bits):
On free money, by luck, it looks like I will get to keep my USD 5/share premium on a USD 20 stock, possibly get delivered the stock at USD 20, averaging USD 15, or, better still, not get putted, and just keep the free money.
Message 16216750
“I have NEM short December Put/Call (20/22.5) options positions”
and revealing a loser position …
Message 16640103
“January SWC Put 20 (yup, an apparent mistake)”
The case study on SWC, now at USD 17.6 … is still a mistake, but a very manageable one, mostly offset by the rich put premium …
Message 16416723
and on NEM, sometimes a mistake, but overall, a winner …
Message 14319022
“But I will be taking in another tranche of Newmont Mining in September at $25 while the market price is now $18.5, via short Puts exercised against me, but as I had collected $4/share in put premium when I shorted, I have no complaints. I now have a bunch of NEM January puts w/ $15 strike shorted, and thus the premium will cover the paper loss on the September puts.”
This long time on-going game with NEM and SWC is almost as fun as on-line combat with a shrapnel launcher against Maurice with a Rocket Launcher, and beats tech shares per risk/reward, and Q any and all days.
Message 15152323
… rehashing an old but still current boast made to Sir Auric Goldfinger, about a classical “Timberland” and “Lands End” approach to making money.
Chugs, Jay |
