Friday, August 31, 2007

Preach Back!

I was out at friend's house last weekend in Paxton, Massachusetts whereupon he and his wife told me about one of their crazy neighbors. They said he was an "environmentalist" who actually gave my buddy sh*t for mowing his lawn with a gas-powered mower. Putting aside the countless inanities implicit in such thinking, how much gas does a lawn mower actually burn? I think I used six gallons of gas in the past year and a half at my old place - which had a similarly sized lawn.

Apparently the lunatic cuts his lawn with a hand-mower.

I told my buddy that I should have parked my globe-heating Chevy Suburban in front of the environmentalist's lawn and idled it for four or five hours just to rile the Moron up. And that would on top of the least 15 gallons of war blood I burned on the 160 mile round trip to the cookout.

What would be even better, would be to preach Jesus to him every time you saw him. I sincerely doubt he would like YOU throwing your personal religion up in his face...

This tactic has the added benefit that almost all extreme environmentalists are religious-phobic pagans. "Jesus" will likely strike the same nerve that SUV's, non-recycled plastics, and inorganic food agitate.

Here's the globe-heating, Mother Nature-raping mower that I make my kids cut the lawn with.

Fossils Can Boogie Too

I think this is called a "mashup". Someone dubbed the hip music over the square dancing.

It doesn't matter whether or not you think it's stupid - I FOUND IT FUNNY!!!

Family Dissolution

About a month ago I went to a family reunion on my dad's side. Attendees were mostly my dad's cousins and their families. I was about to meet several of my second and third cousins for the first time.

I got there a little wide-eyed; I was curious and scared at the same time. What if one of my distant cousins was a girl I recognized from "the bar"? What if they were extremely odd or something? Meeting the full panoply of your DNA pool can be a discomfiting experience.

Turns out they were just plain rude. They had no interest in even shaking my hand, never mind talking to me - their flesh and blood. For the most part they just splintered off into little groups and watched the Red Sox while I counted the minutes until appropriate early departure.

They have the gathering every year - I'll never go back.

Devil's Advocate - If they have it every year, why was it your first appearance?

Well, this is my grandmother's family. Unfortunately, she became estranged from her four siblings decades ago. Consequently, my dad and his brother never really knew a swath of their aunts, uncles, and cousins - even though they all lived in the same city. It was a darned shame to say the least.

Now I grew up with six cousins very close by. We saw each other on an almost daily basis. I couldn't imagine how my father could grow up with "no cousins".

Maybe five years back, my father got invited to this annual cookout. One of his long lost cousins reached out to him and he has eagerly attended every year. There's more to this story but I need to move on.

After my early departure from the cookout, I was not only relieved to be out of there, but I had a really bad taste in my mouth. For one thing, I already have plenty of apathetic first cousins - so I need more sour third cousins like I need another hole in my head. For those of you that think it weird to have a relationship with third cousins (kids of your parents' cousins) - think again. I have two third cousins on my mom's side that I only met when I was 11 and we became relatively close despite vast geographical distance. Where there is a will, there is a way.

Now we are at the crux of my post - my first cousins.

We are all between the ages of 25 and 35. Most of us live relatively close. We all get along fine. The next fight will be the first, ever. Yet outside of weddings, we can never get together as a group. I have taken it upon myself to plan, organize, invite, and entertain but I am lucky if ANY of them say "I'm in".

Devil's Advocate - Maybe it's you? Maybe they don't like you?

Anything is possible on this overheated planet. But it's not like they shut me out and hang out with each other - I think.

As I said above, I find this incredible since we are all the same age, all live close, and all get along. If we can't get together, then pray tell what family can?

I have boiled to a point of frustration over this. For example, I sent out an invite for my daughter's first birthday and all my cousins said they couldn't come. Actually, they don't say they can't make it right away. They hold the invite in their pocket without committing, waiting to see if nothing better comes up that weekend. I generally get "Regrets" emails 24 hours before the event as usually, something better always rears its head. What these ignoramuses don't understand is that you have to PLAN a party; you have to shop and design a menu based on how many guests you are having. If I am having 15 people, steak is an option whereas for 30 guests, I incline towards Easy Cheese, Ritz crackers, and hot dogs.

My poor little one wanted to come to her first birthday party. Whatever, it happens. Maybe it was a fluke of a bad weekend. Who knows? So we rescheduled it. Yet again, all of my cousins played the same script - late or no responses, "too busy", etc. Yada yada yada.

That's a surefire way to get me riled up. Tell me that YOU are busy. I work thirteen hour days raising my two kids AND try to trade the financial markets at the same time. I run four websites and, occasionally, I need to eat, sh*t, shave, and shower. Don't tell ME you are busy - you shiftless sluggards.

I have thought long and hard about this. I have tried everything including guilting my extended family to occasionally meet up. It's been to no avail. Of course I can't force people to care about something that's apparently meaningless to them. Yeah, a bit of my angst is from the personal ingratitude I feel for doing the heavy lifting: the planning, the preparation, running the family website, etc. But they are not just blowing off me and my kids, they are blowing off everyone else who actually does come to these events, namely their dying grandparents, their aunts, their uncles. To top it off, they are blowing off each other. I stand alone in a crossfire of apathy.

So now I am done. I am writing off a lot of them and I am doing it they way I do EVERYTHING - with a clean conscience.

My whole life I was always puzzled to learn that some older guy I knew (e.g. a friend) hadn't spoken to his brother or sister in decades. Or about someone who never, ever, visited their grandparents or other specific relatives. Many times there was a bit of a feud or perhaps these relatives never got along in the first place. I simply could not relate to any of this. In my entire family, everyone got along swimmingly - we still do and it makes this incipient chasm so surprising.

What I have noticed is that in many families, there is a linchpin, an organizer, a buffer if you will that binds everyone else. One of my golf buddies had his mother pass away a while back. Since she died, he, his brother, and his father essentially severed all contact. Apparently she was the glue. This goes for social groups as well. Remember how Elaine and George couldn't hang out without Jerry? I wish I could remember what episode that was from.

All my irate contemplation has morphed into enlightenment. I needed my wife to point out the following to me - Family dissolution is a function of wealth. My mother's family came to Massachusetts almost 50 year ago from South Africa. Obviously they had no money and were "working poor" for quite a while. Hence they all lived close by. As they climbed the wealth ladder, people started moving further out to chase better opportunities. My siblings and I were particularly cruel to our parents. My sisters live in Phoenix and Michigan; my brother lives in Alexandria,Virgina; and I have only recently been back near my parents in Massachusetts - albeit through a quirk in Mrs. C-Nut's job.

The same goes for my wife's father. He was an Italian kid in Brooklyn. Eventually he made his way in the construction biz (no jokes, please) and moved out to Long Island - leaving his family there back in the borough.

It bothers me that my kids won't grow up as I did - living in a sea of their cousins, aunts, uncles, and grandparents. As y'all know I am not one to blindly idealize my upbringing either (think homeschooling, deferred adulthood, etc.) but I am quite sure that young kids profit from getting yelled at by several different family voices. ALSO, young parents profit from having "free help" just down the road as well!

But really, what's to worry about? My father didn't get to raise me the same way he grew up either.

Jack Welch maintains that all good businessmen should lay off their worst 10% of employees - EVERY SINGLE YEAR. It's a philosophy that my wife swears by as well. Now if only the lawsuit-phobic company that she works for would allow her to shed 4 of her 40 employees each year...

Anyway I think Jack's creative-destruction creed should be applied to more than just your employees. I think one should probably throw out 10% of your belongings each year (ok, maybe 5% every two years); I think everyone should probably shed one out of every ten friends each year or so. Pretty much what I have discovered is how healthy purging is for all matter of things. Make new friends, start new hobbies, go different places. Because, before he knows it, someone surrounded by old things, old ideas, and old friends will fossilize ahead of his time.

Ta ta my rotten family members...I'm divorcing you!

Hey, if Jimbo can marry Peter in this loopy state, why can't I divorce flesh and blood?

Wednesday, August 29, 2007

Dumb As Dish Water

Submit Thyself to Google

I use Google for email now. Why use an email account that's dependent on me keeping the same ISP like Comcast, RCN, Verizon, or Time Warner?

Google will also store your "docs and spreadsheets". So I uploaded all my important files to my gmail account. These are for the most part dynamic files so I will only update them through the web now. No longer do I have to worry about a fire or water damage in my house. No longer do I have to worry about my hard drive blowing. No longer do I have to periodically write my files to a cd - and store them. (I tried to do it every two months.)

Of course my blogs are hosted by Google.

My videos are housed on youtube, owned by Google.

Also, I started using Google Alerts to research commodities. Since I know very little about them, I created alerts like "cotton trading", "sugar trading", etc. and my inbox is getting inundated with news stories and blog posts that I would otherwise not so easily find. In just a few weeks I have learned a ton about my new hobby/investment. I would recommend using alerts for any subject one is interested or invested in.

I also have an alert for "captiousnut" so I can stay on top of what the Lilliputians are saying about me.

Google, in a sense, is just like the Microsoft Windows of yesteryear. They keep adding so much functionality that it's a veritable chore to keep abreast of it - never mind utilize it all.

Be not afraid, submit thyself to Google.

It's free!

Wednesday, August 22, 2007

Suicide or Hands-Full Distraction?

Eddie Griffin, a former NBA player died the other day. Apparently he drove his car into a moving train. He had a tumultuous short-lived playing career; had been treated for alcoholism recently; and had problems way back at Seton Hall (which led to his early entrance in the NBA Draft.)

Here's my blurb on him from last July:

Now this is funny, if not a tad on the vulgar side.

Suit: NBA Player Watching Porn, Drunk Before Crash

(CBS) MINNEAPOLIS On March 30, Minnesota Timberwolves center Eddie Griffin was drunk and masturbating when he crashed his luxury SUV into a parked Suburban outside a store in Minneapolis, according to a lawsuit filed Thursday by the man whose Suburban was hit in the crash.

Several of the 911 callers that night said Griffin was drunk. One witness said Griffin told him he was watching pornography in a DVD player mounted on the dashboard of his Cadillac Escalade SUV when he struck a Chevy Suburban parked on University Avenue Southeast.

Obviously it's only funny because no one was seriously hurt.

What's also humorous is how the wire service manifests its anti-SUV bias. Note how a "luxury SUV" crashed into simply a "Chevy Suburban". Since when did a Suburban stop being stigmatized as an "SUV"?

The guy obviously had some personal issues. I guess I should feel bad for mocking him.

I am not quite sure, but I think he may have in fact been the top-rated high school player in the country his senior year. It's really amazing how many "can't miss" athletic prospects never do anything.

Could Michelle Wie be next?

Tuesday, August 21, 2007

$4,300 Trash Cans - A Pagan Tax On Believers and Non-Believers Alike

Solar-power compactors press the mess in Boston

They're boxy and green and, at first glance, don't even look like garbage cans; as Mayor Thomas M. Menino demonstrated their use yesterday, some people downtown mistook them for mail drops or traffic-light switch boxes.

They are Menino's latest idea for keeping the city litter-free: solar-powered, self-compacting trash receptacles. Delivering a rant about overstuffed trash cans, while trying to scrape gum off the bottom of his shoe at a Downtown Crossing unveiling, Menino described the virtues of the new devices. They need emptying only once or twice a day, not the 15 or more sanitation worker visits required by some downtown trash cans. They don't spill. They smell less. And, they hold some 150 gallons of trash, about five times more than a standard city receptacle.

Developed by a Jamaica Plain inventor, they are powered by photoelectric panels, which supply power to motor-driven compactors inside. Workers extract neat, 40-pound trash bricks instead of trying to manhandle the messy contents of an overflowing can.

"I think they're great," Menino said.

The city has placed 50 of the $4,300 machines in neighborhoods and hopes to buy more as it gauges how much it can save in labor costs.

The 4-foot-tall containers announce "TRASH" in four places and feature several images of a person tossing an item into a can. Even so, some passersby cast quizzical looks yesterday at the machines, which could easily be mistaken for drop boxes for library books or postal packages.

The town of Natick apparently has a solar powered trash compactor that cost $500,000. Turns out, it's a good place to exercise patriotic dissent and set Memorial Day flags on fire.

BOSTON -- Natick police said they were searching for whomever stuffed decorative American flags in trash receptacles around the town square and set them on fire.

The burning flags were in a solar-powered trash compactor, which is valued at about $500,000.

These Earth-worshipping pagans have essentially ruined the color green - so much so that I have seriously thought about pulling the green crayon out of my son's crayola box.

Monday, August 20, 2007

Michael Vick - Vengeance is a Bitch...

...chewing you to pieces.

For those of you reading this in another generation, Michael Vick was the star quarterback for the Atlanta Falcons. Today he pled guilty to crimes concerning organized dog fighting. He may well do some time in jail.

He's sure to be mentioned in a future Deranged Dog People blog post.

I Usually Try to Keep My Blog Clean...

...but am making an exception here. I hurt myself laughing at this one.

Small Investors Shut Out Of Commodities

WhiteMan brought up the salient point that the fees were too high for indexed commodity funds. He's right. Here I will illustrate why they can charge so much. Quite frankly, commodity contracts are too big for a small investor to buy a basket thereof.

Just consider the four I bought last week. One mere contract of each represents the following dollar investments:

Sugar - $10,500
Cocoa - $17,800
Cotton - $28,500
Coffee - $44,500

Add them up and you get a $100,000 investment. How much money does one have to have to justify gambling 100k?

Well, I don't think most investors should have more than 20% of their assets tied up in commodities. That implies that in order to have enough dough, just to buy the four I bought last week, an investor should probably be working with a 500k portfolio.

Here come the qualifications:

Unlike options and equities, coffee and cotton CANNOT go to zero. Gold and oil will always retain value. Therefore, on that level, it's somewhat less risky to buy them than other financial assets.

BUT, they do have carrying costs and do compete with technological breakthroughs. For example, cotton competes with low cost man-made fibers like rayon. Even diamonds have technically lost value with the development of moissanite (see CTHR).

I don't even want to talk about margin as it can be as low as 5%-10% for some commodities - so one could theoretically buy this $100,000 basket for under ten grand. BUT with such a low investment, obviously a 10% dip would wipe you out. This is the lesson of today's housing debacle - one's purchases should be based solely on your long-term financial means NOT what some dopes are willing to lend you.

Commodities are volatile instruments. Just in the one week that I purchased my little basket, here is their performance:

Sugar - down 4.1%
Cotton - down 4.6%
Cocoa - down 5.9%
Coffee - down 4.3%

So again, forget about margin and focus on total dollar risk.

Bear in mind that the minimum basket of my example only has four basic commodities in it. A true broad-based commodity basket needs oil, precious metals, lean hogs, soybeans, wheat, corn, oats,...

This is why "commodity pools" exist. Small (and big) investors need to pool their monies to sit at this high stakes table.

Friday, August 17, 2007

What to Wear...

...when your wife or life-partner has chores for you.

(Yes, there is a dude in his camies hiding on the couch. Click the picture to enlarge.)

Flight To Insanity

For those of you not paying attention, financial markets have been in turmoil these past four weeks. The Dow has shed over 1,000 points and Nasdaq has had a near 10% correction. All of it (ostensibly) stemming from hiccups in the mortgage market.

Everything is going down, down, down. Commodities and even gold THE hedge (theoretically) against all monetary crises for the past 4,000 years.

One asset that is rising amidst this storm is the US Treasury market - and it makes zero sense.

It's deemed a "flight to quality" by sheepish clowns everywhere - but from where I sit, it's purely insane AND I am shorting heavily into it.

Let's go back to June when the long bond got smacked and its yield touched 5.40% (up from December's low of 4.50%). That idiot Bill Gross was calling it the end of a 25 year bull market in bonds. Thankfully I covered my short at that plateau (of course I re-established it at better, albeit lower than today, prices).

I agree with him in principle that bonds are about to wither and die, but in trading markets, timing always reigns supreme.

I believe this uptick in the 30-year presents the "whacking" opportunity of a lifetime. It's profoundly irrational that petrified credit buyers are fleeing one bubble (mortgages) for another, even bigger, bubble (30-years).

If Gross, and yours truly, are correct that bonds are entering a prolonged bear market, then this insane rally is begging to be shorted into - and that's what I have been doing.

I see the bond like I saw California real estate in '04-'05. Anyone not irretrievably myopic could see that "Fruit and Nut Land" was a fiscal and social disaster on the brink. Screaming real estate prices were a godsend to wise Californians looking to move out - and many did.

On other blogs I have recently made the point that the best way to play a bounce in equities is to short the long bond. I think its ceiling is firmly in place - with socialists ascendant, built-in tax increases coming (AMT, expiring low rates on capital gains and dividends, etc.), protectionism in the air, rising commodity prices, deflating housing (which is inflationary), ticking entitlement bombs,...)

Take a good look at this long term chart.

It sure makes "reversion to the mean" a very scary thought for many - although a pleasant thought for me and my fellow shorts.

Tuesday, August 14, 2007

More Marketing Misnomers

Bright Horizons is of course a daycare chain.

This morning I saw a sign for one in nearby Hingham and was taken aback by their marketing slogan.

Family Solutions?

That sort of implies that 'Family' (small children) is a problem, does it not?

Monday, August 13, 2007

I Am Now Officially A Commodity Investor

After much mental flirtation, I finally pulled the trigger. This past week I got long sugar, cotton, coffee, and cocoa. I bought out-month futures and plan to roll them over indefinitely.

I fully expect the commodity market to pull back right in my face - because this is what ALWAYS happens - so I only bought a little of each and will look to buy more on substantial pullbacks. (Actually, a notable exception was Google which never pulled back; I had to chase it and average up in it.)

Ideally, I was waiting for a hiccup in Asia or world markets to furnish a cheap entry point - see my old post - but obviously I have succumbed to impatience.

I had recently been trying to convince a few of my dear acquaintances to get some long commodity exposure and in the process I realized that although I was shorting bonds, and playing the long side of silver, gold, and oil, I didn't quite have enough exposure myself. The arguments for buying grains, metals, energy, etc. are quite compelling, even if not as outright speculative investments, but as diversification bulwarks against other depreciating assets. Commodities have a purely negative historical correlation with stocks, bonds, and real estate. Here are some bullet points I grabbed from googling commodity guru Jim Rogers.
  • From 1966 to 1982, stocks and bonds floundered while commodities soared. This historical fact escapes probably 98% of today's "long term" stock investors who mistakenly believe that "averaging" into mutuals each month and each year is a can't-lose strategy.
  • In the 1970s, nobody knew what a junk bond was. In the 1980s, they of course took off as an asset class. The same goes for mutual funds. Twenty-five years ago, they were an unheard-of financial instrument. Today, nobody talks about commodities but this burgeoning bull market will arouse and legitimize interest in them as sound investments.
  • Yale University recently did a study, and the Wharton School at the University of Pennsylvania determined that in the past 45 years, you'd have made more money in commodities than in stocks, with less volatility and a better inflation hedge.(link)
  • The commodity bull argument is a simple one of oscillating supply and demand. Corn, oil, lead, etc. go through periodic cycles of over- and under-investment. Since planting, mining, and "E&P" (exploration and production) take so long, commodity bull markets have all lasted at least 15 years. If it started in 1999, then history suggests we have at least another 7 years. Just think how much money was to be made in the latter half of the Nasdaq bubble or the housing bubble...
  • Let me re-frame that last point. What it means is that when say oil spikes from $30 to $50, because of the inherent logistical issues with drilling and exploration: permits, fighting with environmentalists, redeploying equipment, etc., it takes a very long time for supply to react to higher market prices. So a commodity bull market chugs with freight-train-like momentum.

First, here are multi-year charts of the four commodities I recently bought: cotton, cocoa, coffee, sugar.

Rogers asserts that in the context of a commodities bull market, all commodities will make record highs. So clearly, if that premise is true, the plentiful upside is easy to see on the charts.

Now here are some others for your edification: wheat, oats, and corn.

As always, click on any of the charts to enlarge them.

Jim is very bullish on the agricultural commodities for a host of reasons. You can see that the last three charts exploded recently. Corn's rise is being "blamed" on ethanol mandates. Whatever. If you are long, then who cares what academic-types are musing.

Despite the cornucopia of information that is the World Wide Web, I have had a really hard time trying to research commodity trading and investing. I couldn't even find a decent blog on the subject. Though I am a rank amateur in this particular field, I will start to post more regularly on the subject. I will post what I learn if for no other reason to help other aspirants.

My commodities/futures account is at Interactive Brokers and I am quite happy with it so far. I researched others but didn't really get a good vibe from any of them. If anyone has a better recommendation, please inform me. Interactive is primarily an electronic brokerage firm - a WalMart, so-to-speak, that has been hammering away at brokerage commissions for years. As best as I can tell, they aren't looking to lean on customer order flow like most of the firms that show up in the "paid" search results for "commodity trading" and whatnot.

Here is one good website that can serve as a reference of sorts for introductory commodity info.

And here is another that I have used for years for basic charts, trading information, option volumes, etc.

Jim Rogers admonishes investors in all his interviews, "Do your own research". So I am; nonetheless I will do my best to pass on what I learn.

Note how many people know what "756", "Bonds", "Hank Aaron" represent and mean. But how few of us know where sugar comes from, its price history, or its economic fundamentals.

One understanding can possibly make you rich whilst the other can, at best, distract you from your poverty.

So in the process of trying to interest my friends in commodities, I really only bulled myself up. The same thing happened when I wrote that Google Price Target 3,000 post - by the time I was done, I went out and bought some more at I believe $375 per share (Google is currently trading $515)

Sunday, August 12, 2007

Worst Marketing Image Ever

I was in Hingham Center the other day and I saw a little storefront advertised as "Brewed Awakenings". Turns out it is a chain.

Right away, I understood that it had to be a coffee shop but I could not quite stomach the name.

For me, it evoked memories of my father's formidable early morning flatulence.

To boot, there seemed to always be coffee, being prepared or consumed, as a backdrop as well.

Perhaps these scars explain why I never drank coffee?

Friday, August 10, 2007

I Have To Brag

I just rented a house in the small town on the South Shore of Boston. There are only about 7,000 residents in this tony town. Tony, because, let's just say that in the ten pages of real estate listings here for sale, by page three they are already over $1,000,000.

Oops. I just re-checked that. Now million dollar homes start on page four. Darn that sliding real estate market!

Anyway, since last Friday when I pulled the moving truck up to my new abode, I have literally been walking on water. Obviously, we knew this new rental house was nice, otherwise we wouldn't have even considered it, but we really had no idea how great it was until we got settled in.

I am going to list its attributes:
  • 2,175 square feet, 3 bedrooms, 2.5 baths.
  • An expansive two-zone driveway with a glass basketball hoop.
  • Brand new modern kitchen, granite counter tops, island, bar, two sinks, high-end GE appliances, wine cooler. Double sinks with disposals. A trash compacter. Cathedral ceiling.
  • Recessed lighting and dimmer switches in every room of the house. No need for lamps!
  • Hardwood floors throughout - except in the two kids' bedrooms upstairs.
  • 13 skylights!
  • Master suite with its own bathroom. The shower has 6 nozzles shooting water from all directions. Large jacuzzi tub. Ornate, high-end stone tiling throughout. (No bidet.)
  • Also the master is enormous - large enough to accommodate my office, exercise machine, and it has French doors going out to the deck. The closets are also "California" in design.
  • The washer and dryer are almost commercial sized.
  • There are speakers wired throughout the house. Just last night I hooked up the stereo and television to it. (Will just use the digital music channels from Comcast.)
  • The living room is also massive - large enough to make half of it my kids' playroom. It also has a 100 year-old working fireplace beneath an elegant modern mantel.
  • Electric outlets galore - every 5 feet or so.
  • The detailing in this house is amazing. Brand new fancy molding throughout. The living room and master suites are sunken. The interior staircase is extra wide. The exterior doors have huge (stained) glass inserts.
  • The flow is ingenious. The kids' bedrooms are above the middle of the house, leaving the most important rooms: kitchen, master suite, and living room not only insulated from them (for when we throw loud bashes at night) but also, it allows these rooms to have high ceilings and skylights.

Now for the crowning jewel...

Attached to our kitchen and master suite, overlooking our acre of green grass, we have a 936 square foot deck!!!

That deck is almost twice as big as our old apartment in Brooklyn (519 sq ft).

Of course it has built-in benches, a fireplace, ....

You get the picture by now. This is a "CRIB"! Right down to the cable TV hookup high above the jacuzzi.

Why is the house so nice and so cheap? Well, for one thing the owner, er inexperienced landlord, underpriced his rental. He probably could have gotten $500 more per month than he asked for.

The house is so nice because the owner lived in and renovated the house for himself. He's a mortgage broker who made a ton of money over the last ten years. He told me that in his first year in the business(1996) he made $165,000. Mind you, that was well before the greatest real estate boom even got started. Unfortunately, it appears that he got a little "high on his own supply" and is saddled with too much property and too much debt of his own - hence his house became a rental.

So how did we score this phat pad?

Well, starting in February, when my old landlord told us he wouldn't renew our lease, my wife and I started an EXHAUSTIVE real estate search. We effectively made a 35 minute radius around Boston and considered every single town. First, of course, we looked to buy a house. After a prolonged search, both on the web and in the car (with my two unhappy kids), we ended up bidding on two homes next door in Hingham - with one bid being live right up until we signed our current lease on July 2nd.

Once the first house that we bid on stalled, we were resigned to renting and attacked the rental market with similar gangbuster zeal. By my count, I physically visited rentals in about ten different towns - to say nothing about all the phone calls, emails, brain-picking, and web surfing that consumed all of my precious free time.

It was a long, stressful journey. So if anyone DESERVED to land a house as nice as we got, it was us.

Never mind all the money we will have saved by continuing to rent...

As I mentioned in a previous post, renting for $2,500 per month is financially equivalent to buying a house for around $416k at today's rates. And, as I also noted, this house is worth around $700k on the market today.

Hopefully my family and I are happy in this small coastal community outside of Boston BECAUSE if we don't like it here, we are going to move back to New York. It's not like we found five towns that we think we could call home for the duration. This was it.

There was nothing as brutal as the last six months we spent in residential limbo. This is my fifth home in the last seven years. I am starting to feel like I am in the witness protection program or something.

This place is so nice I hope we can stay here for at least two years and let this real estate market shake out some more.

Saturday, August 04, 2007


Been spending the better part of the last couple of weeks moving to my new RENTAL on the South Shore. I am renting a place that is (theoretically) worth 700k for $2,500 per month. A rental rate of that level is equivalent to buying a house for about 416k - so I ask y'all...why the heck would I buy in today's market when I can rent for 40% cheaper?

Will be back pontificating shortly.

Wednesday, August 01, 2007

Crazy Trading Day - NASDAQ 100

Even though I drove over 100 miles today to drop my kids of at their grandparents' house, made a Walmart run, and happen to be in the middle of moving (all by myself) to a new house, I did manage to make 25 trades today.

Every uptick was a sale and every downtick was a scoop. These are the days traders relish. Click the graphs to enlarge them. I have included a chart of the futures and of the ETF - since I wasn't sure which was more illustrative.

I got back to my PC around 3:15pm and saw that the market was rolling over. For a second I thought about getting long but ruled it out because I will be moving the next two days and will have considerable difficulty trading with 1) no internet connection and 2) my computer in a box. All I had to do was merely think about buying AND REFRAIN and the market levitated in my face. As you can see, the N100 Futures jumped from 1925 to 1960 in the last half hour of trading.

Some old trader I knew philosophized thusly,

The market always moves in the direction that generates the most pain...

That essentially means that a stock will rise until most of the shorts have covered and a stock will fall until many of the diehard longs have had enough and bailed.

Now consider today's late market spike. You just know that thousands of intra-day traders were getting lamped down at 1925 and likely taking their losing medicine. THEN, all of the mutual fund market-on-close buyers got jammed on the spike to 1960.

See how the market managed to sodomize hose everyone?

One day when I was working down on the PHLX the market was getting absolutely clobbered. Like this past week, it was getting smacked every day for quite some time. On that particular day, the market was down a few hundred points and there was real pain everywhere. (We used to refer to it as "getting hurt" for individual traders. "Blowing out" meant going bankrupt for either an individual or a trading firm. And whenever the market moved violently, those expressions dotted the pit scuttlebutt.)

BUT, similar to today, the market made a spectacular rally in the last hour or so and finished up nicely. Some guy in my trading pit started bragging to me,

PitIdiot - I called my broker and dumped a ton of money into my mutuals today.

I waited a few seconds and let him bask in his ignorance; he was sticking his chest out and feeling like a genius....for the moment.

CaptiousNut - You (expletive) MORON, YOU BOUGHT THE CLOSE. It doesn't matter that the market was down 400 when you called your broker.

That was just the type of Captious service that I provided for my fellow traders back then on a daily basis.

Lastly, since I have to get back to packing...

Though I got walloped in July shorting the market - losing 40% of my trading capital - I managed to make back three quarters of that money in the last few days. That's as big, and as rapid, of a bounce-back I've probably every had. Usually when I get "hurt", it takes a long time to get the money back because I naturally scale down my size in those situations. I am pretty flat today outside of a massive, for me, short position in the 30-year bond.

Oh, I almost forgot - I shorted a little Nazzy on the close at 1964. Perhaps I was selling some delta (long exposure) to my old buddy from the floor?

UPDATE - I just covered the short at 1958 (11:30pm). As much I want to trade up a storm tomorrow, I can't risk the distraction from my moving chores - at least that was the directive from my wife.