Gmail is now blocked from our office computers as it consumes toomuch bandwidth, so it was not until I arrived back at my abode I foundthe ridiculous email being circulated entitled 50 things girls need toknow about guys..A veritable laundry list about whatsecretly,sensitive touch feely types men really are, who could neversurvive without the aid of a woman.I was so inspired by this genderblending pyscho-babble, I decided to share my true feelings and listmy own version of things women need to know. Being male and able tostate a point without useless verbage, heres the 25,down from 50,things women really need to know:

1. be naked often
2. bring scotch
3. make sure its the right brand
4. no talking during the game unless its a request for wild sex
5.I dont want to know your friends.
6. my friends dont like you but I dont care as long as you zealously practice #1
7. You re still not coming with us when we go drinking.
8. Inviting me to one of your family gatherings is an invitation todisaster..unless they are all literate drunks as well
9.No, I dont think I drink too much.
10. If you dont like the fact that I smoke, the door is at the bottomof the stairs. Please give your key to the next girl
11.If you hear me talking about margin calls the proper response is tostrip and make me a drink.
12. same with getting kings cracked by aces.
13. I dont care if your mother likes me..in fact I d prefer she didnt.
14.Yes, you look fat in that dress..take it off and get over here.
15.do not put light beer in my refrigerator
16.If Im hungover..you re on top
17.there is no such thing as too much sex.they dont wear out ya know.
18. Acording to the actuarial tables, I only have around 11,315 moredays to go.Why are you still dressed?
19.Please do not invite your sister and her newbaptist/mormon/temperance union founder over for dinner.It wll not endwell no matter how nice a guy he is.
20.Yes, I really bet the house.get busy packing would you.
21.Oral sex is not yucky or for special occasions. It is mandatory and now would be a good time to start.
22.Yes, in fact I am having another drink.
23.When my friends call drunk at 2am, I am going to answer it. I do itto them all the time.
24.If you suffer from PMS,please go visit friends until it passes
.25.The proper way to discuss your feelings and our relationship is to be nude and proffer a drink before commencing.That way I can stare atyour nether parts and drink enogh to drown out your whining.

Growth versus value..buying high pe justifiable? Great question. lets look at a real world example.For the high pe component I ll use the current darling google. Google trades at a market cap of 123 billion dollars and produces 2.7 billion of operating cash flow. The consesnus analyst survey for goodles forward growth rate is 30% a year for the next 5 years.at this rate the cash flow grows to 10.02 billion giving us an earnings yield on our original investment of 8% not too shabby. Except that if we focus on just buying good companies at great prices, at todays price for google we can buy all of:
American eagle outfitters..aeos
symantec..symc
netgear..ntgr
helen of troy...hele
temper-pedic ...tpx
chesapeake energy...chk
ftd florists...ftd
valor communication...vcr
barnes and noble..bks
international game..igt
lexmark...lxk
nucor...nue
jakks-pacific...jakk
charlotte russo...chic
bebe stores...bebe
h and r block...hrb
harley davidson...hdi
korn-ferry...kfy
king phrama...kg
tribune..trb
gannett...gci
career education...ceco

this portfolio of comapanies from the start generates over 13 billion over operating earnings.in 5 years of growing at just 10%..and all of them have a consensus estimate of that or better, in 5 years they produce over 20 billion of operating cash earnings...twice what the rapid growing goole is producing, an earnings yield of 19% on orginal investment. Looking further out if google continues to grow at 20% a year and our portfolio of finance, energy, media,insurance,education,retail,motorcycles,persoanl services,gaming and technology companies slows to 5% a year, the eranings crossover where google outearns the cheapies occurs in the 11th year. This assumes that none of the 10 billion or so of excess operating earnings was reinvested profitably over that period of time. a most unlikely suggestion in my opinion.it alos implies that no new competotor to goole such as CRUSTY slows google growth rate.

the grinch

Every spec
down in specville
liked trading a lot
but the grinch
who lived just north of specville
did NOT

The grinch hated trading
The whole market, each and everyone
He didn’t even think it was fun
It could be he had bought up some losers or a flamer
Perhaps he had been trading on tips from old cramer
Maybe he had a socialist daddy and mommy
But mostly I think he was just a damn commie

But whether it was his purse, or just his mind that was a wreck
He stood there before the open hating each spec
Deep in his cave he hated each one he could see
And dreaded the open of the NYSE
For he knew that the specs down in specville below
Were ready to trade and try to prfit from order flow
And they re checking their charts and running their stats
Look at them trade the filthy damn rats
He snarled to himself that this really must stop, they must trade no more
I must find a way to keep those trades from reaching the floor

For at the open he knew


All the specs, the girls and the boys
Would holler and yell, and make all that noise
They would yell and they would holler as they keyed up a trade
Or as the market moved, Mozart and cole porter would be played
The noise, the noise, the noise, the noise He could not stand
They were just too loud as they picked and they panned

And after they would sit down to plot the next day
Each of course doing it a different way
They would count and they’d plot, they would graph and they would chart
10qs and 10ks,stats and TA would be taken to heart
they would talk and they would chat and beat each idea to death
the grinch would hate traders until his last breath



but what he hated really the most of it all
was the buying, the selling of both large cap and small
trading of options and futures and forex and grain
winners bought smiles and losers bought pain
but they bought and they sold, they sold and they bought
all day long each other and the markets they fought

they would trade! and they would trade! And they would trade!
Every damn day the trend they would fade
The more the grinch thought of the specville and specs
He knew these markets he must wreck
For centuries he thought I ve put up with it now
I must stop traders from trading!..but HOW?

The he got an idea
An awful idea
The Grinch got a wonderful awful idea

I must dress up and get into town
I ll tax and I'll regulate and close them all down
I ll write movies and books, and even tv shows
And show all the people that capitalism blows
I ll talk and the talk and look just like a spec
And from inside their system I ll wreck

So headed for Dc to wreck the whole fed
While passing through MD he saw two specs,Tim and old fred
Sitting in a dock bar arguing about stuff they had read,
Talking about stocks and girls and swilling down beer
The grinch snuck around the two quickly with fear
Thinking “though Im the grinch my livers not strong
Starting with those two would really be wrong”

On his way to Chicago to give the merc and the cboe a whammy
He ran into another spec of some note, little spec pammy
Nothing to see here he said, no need to even look
Run away now, little spec pam, and perhaps I ll have andy beal write you a book
He saw them all there,Jason and ryan and brian and all the other chi town speculators
They were all there, the breakout boys , the arbs, and even trend faders
He closed the cboe,closed the board of trade, even the merc home of the spooz
He closed them each, he closed them all,now they cant trade, they cant win, they cant even lose




Now to new york to close out them all, the nyse,amex and even the pits that trade oil
There was no one, not even one spec who could the grinchs grand plan foil
No more of this trading, no more of this buying, none of this selling
No more screaming in the phone, no one in the pit yelling
I ll take their computers, their charts and their graphs,why..I ll even take their stats
Ill take their colorful trading jackets, flaming pink pants and even their lucky trade hats
No more systems or averages, I ll leave nothing not even a candle stick or even a band
There will no more trading, we ll remove all the profit and all will be grand
No one, no man, no woman or spec these markets will be saving
Why,Not even krisrock with all his ranting and raving

I ‘ll close them all all over the land, and do without a single care
Even in Weston, I ll close down the bold one they call chair
And even spec steve and Duncan and doc, the dude and young tim
From the east to the west, Europe and even the pac-rim
I ll stop all this trading and close all the markets I find
No more of this profiting from your courage and mind
No more coaxing reward from great risk
Because all the markets,all of them, away I will whisk

And the specs will fall quiet all over the land ,no trading no more
Not even carstens or florida dan,no on the wire , not on the floor
Not even the two professors, not ross and not the bbq voodoo
nothing even the gambler or the listmaster can do
From rollert to sogi, from Nigel to ari and lackey back to young ott
From zussman to rudy, fromm north to south, east to west how silent they will have got

Back to his cave toting his load went the grinch
Closing these markets was really a cinch
I have the numbers,their charts and their q’s, theres nothing to count anymore
I ve taken their systems and books,closed the web and even the nyif store
No more brokers,buyers or sellers, no funds neither mutual nor hedge
No breakouts ,flags, stochastics,%r flags or patterns..not even an ascending nor descending wedge
No roe, roi,,current assets,debt to equity,no ratio of p over e nor value of book
No trading slips, no order screens,trading desks, all the these I closed or I took

He looked down from his cave at Specville as morning was breaking while evilly humming
Because soon the specs would rise and see no trading day was forthcoming
They are just waking up and I know just what the will do,they will stand their and sob
Now they cant trade, they cannot sell nor buy..they might even have to get a real job
And that’s sight and a noise I must hear,So he stood with his hand to his ear
It started out low and started to grow,first a slight murmer but now near a roar
Bbut the sound wasn’t sad, there was no sad sobbing, and the grinch shook to his core
Because all thos psecs down in specville were
TRADING!!!!!!!!!!

How can this be thought the grinch, how can they put in an order
There are no electronics, no internet, no brick,and no mortar?
I took their charts, their graphs,their stats and fundamentals
There are no markets, not stock, not bonds, not oilt not even grains nor even lentils
But the sounds of the market across across the land, a thousand bida t a half, sell the jan sevens
The specs of specville were buying and selling, the sound rose to the cave and beyond to the heavens

How can this be he pondered for hours,that trading goes on withoutall their stuff or their places
And then it dawned on the grinch as clear as the focus on spec faces
Perhaps trading wasn’t just noise and pointless selling and buying
But perhaps about the courage of specs to take risks, risk falling but keep trying
Perhaps trading was about providing markets to feed one and to feed all, a way to earn profits, to learn and to grow
That all the specs in spec land had learned to love risk and studied their craft with great care
Learning that the meaning of life,was just perhaps, about the courage to live and the courage to dare
That spec bet on the markets was really a bet on themselves in ayn randish type fashion
That these specs of spec ville lived unlike most others, they lived with great passion

They say the grinch burned his communist manifesto that great day
And rushed right down the mountain and entered the fray
Sold a few bonds, bought a little oil and went long a few spooze
He learned out to trade, he learned how to win and he learned how to lose
He learned how to arb, which trend to follow and which trend to fade
Into the trenches he learned the meaning of life and learned what it meant to TRADE
He learned to never quit searching nor trying,That living was learning
That traders,especially in specville, use their heart and their wit to do all their earning
He would have highs and he would have lows, win great victories and suffer great blows
Somedays flush with piles of cash, others having to count his fingers and toes
But our grinch learned that day, and went on to a life spent as a hard working trader
Out of his cave to a mansion he moved and thought that all in all nothing could greater!!!!!!!!!!!!!!!!!!!

Lacks brilliant post this morning started many of the wheels turning in the Melvin noggin today,especially the need to be aggressive yet patient. It would seem to me to be one of those ah-ha statements that contains several layers of truth.In markets, in poker and in just about every area of life I can think of, its is aggression that wins the day.but unchecked aggression also contains the seeds of sudden and complete annihilation. One of the places where aggression is the order of the day for victory is of course, Military warfare. But then I think of the civil war and all the battles lee and longstreet won by playing great defense and aggressively defending their position on the high ground. It was only on the attack they were beaten, first at Antietam and then again at Gettysburg.Again, some historians suggest that had Lee listened to old pete and swung around to the high ground, abandoning Gettysburg but blocking the union army from the capital, the north may well have sued for peace. In the revolutionary War, Washington and the colonials nipped at the heels of the British, only attacking when they had clear advantage and surprise. Had he met them full scale on the battlefield early in the war, he would have beaten resoundingly and all the founding fathers hung in the courtyard of Independence Hall. In World War two it was the pure attacking aggression in both Europe and the pacific that won the war for the allies. But not until the gears of the US war Machine were at full force, with factories spewing out machines and ordinance did we retaliate in any strong fashion. The first landings in North Africa were almost a year after Pearl harbor. The first counter attack in the pacific was in August of 1943 at Guadacanal, nine months after the Japanese surprise attack. We were aggressive, but on our terms, at times and places of our choosing with the strength to back our play.As for agression unchecked with no plan or patience..well just google “custer, general george”. The new craze of televised poker features the pure aggression needed to be a winning poker player. They show the check raises,all in bets and stunning calls that are the hallmark of a great poker play. What they don’t show, however is the 500 hands the great ones folded to get into position to make the aggressive play.It takes not only aggression but patience and buttocks of iron to make a great poker player. Ed Gross wrote a brilliant piece on this subject called overlay?play(I think its in the archives and it is a good piece to read) on the list a few years back outlining how he sized up the room and looked for the edge before he played. I have hung around just enough casino card rooms in my time to see the new tv poker fanatics walk in thinking they can play like Layne Flack or daniel Negreneau and sit down at a table way above their limit and get crushed by being loose aggressive and trying to make good tv instead of playing winning poker. We ve seen in markets a thousand times. A guy tries to get too big and crashes and burns. Regardless on underlying trends, valuations, stats they plunge in up to their necks thinking what they learned in B-school or the success they had being accidentally long in a bull market(please see 1995-1999) meant they actually knew what the hell they were doing. I see guys trying to squeeze the last juice out of extended markets such as high yield and emerging market debt and levering it to the sky to make it work rather than waiting for the spot.hedgies are laying 10 times leverage on risk arb deals with a 1% spread trying to get back the juice of bygone years on this overtraded market. They may want to check in with the convert arb guys and see how that worked for them.In my mind one of the smartest plays out there is to sell puts on an individual equity you would like to own at the lower price. It does not make sense to just sell the puts any time but on down days when the volatility and pricing of the puts is at its highest( I am far from an option genius. Vic, Phil and many other here are MUCH better at options that I could ever think of being.but this DOES make sense to me overtaxed little value guy brain). In other words, wait for the spot and then be aggressive. How do most people put on this trade? Pretty much any old time regardless of price and rather selling as many puts as they are willing to own stock, they sell them to limit of their margin balance. Improper aggression applying a good idea at the wrong place and time and its “hi, uncle , Ned..I ah have a slight problem here…couldya help a brother out?” I don’t think time frame matter here either. Those of us who have been in the Weston trading room have marveled at how Victor sits and waits, and waits and waits…when it hits his spot, however he is as aggressive as anyone I ve even seen..lessons learned as Lack pointed out, From 40+ years of studying markets.There was reference earlier this moth to studies of whether waiting until the market has a down month or not matters concluding that the difference was so slight as to not matter. True enough on the face but irrelevant if your holding period is less than a year as I suspect is true of most on the list. In individual stocks there are countless studies show as the works of charles brandies and joseph piotroski that buying shares of reasonably financially strong companies after a large decline has a dramatic positive impact on returns.If your time frame is a week, buying after 5 straight up days might not be such a great idea..likewise selling after straight downs is probably not a well though out move. My point..yes be aggressive but know your market, your time frame and your entry point. Being aggressive isn’t maxing out your margin level on every trade but only doing so when you have the clear cut, well defined edge for it to make sense. One must also realize that there is a time and place to realize that waiting and aggression isnt working. You were wrong on the trade. If theres an ace on the board and someone re-raises you it might be far wiser to fold those pocket queens instead of pushing all in.Likewise, slow playing a strong position with the thought of building a pot gives an opponent a chance to draw out on your aces. Just as many times I ve bought a few shares of a stock I knew was a good selection with the thought of adding more later only to have it taken over at a massive premium and I miss a chance to really score.If you have the edge and you know it, get your money in.If it becomes clear you re wrong at some point. Get as much back out as you can. Swing around and take the high ground,rebuild your strength until the next opportunity comes along.It always does. This simple thought..be aggressive..but wait until you have the clear edge would seem to apply to all areas of our lives(and I mean all areas, anyone wishing to have a discussion of the ill effects of the aggressive pursuit of the wrong woman need only stroll to the seedy dock bars of Maryland and purchase the author a tumbler of fine irish for a PHD level education in the subject. For the reverse, and the many benefits or aggressive pursuit of the right woman I suggest talking to Jason Thompson,lackey or Kevin Depew. Jason will take scotch but kevins to his discredit will want bourbon. Lack doesn’t drink so I think you may get off cheap there). Every move forward I have made in my life has been because I saw the chance and took it,like cortez burning my ships on the beach so that was in fact no retreat.Most of my regrets have to do with opportunites I let slip and didn’t pursue hard enough as soon as I saw them thinking the window would be open forever.It didn’t. Many thanks Lack for pushing these thoughts to the forward in my feeble brain.

monday

the energizer bunny rally keeps going

todays range..st 1265 to 1270
longer terms both still at 1180 to 1275

we are much closer to top of ranges than bottoms and vix is aproaching levels associeated with past sell offs

morning

no change in loner ranges..today short term is 1257 to 1237

Each year at this time as we all begin to think…at least those of us here inthe United States of the many joys of thanksgiving, those joyous reunions offamilies that damn near always end with cousin Roy and Uncle Bob bashingeach other about the head and face with turkey legs over some long forgottenslight and Aunt Edna tippling off the better part of your expensive whiskeystash, whilst those apples of our eyes, the wee ones fling mashed potatoesand peas at each other with great abandon, those delightful moments offalling asleep watching the pitiful Detroit Lions play on the onlynationally televised game they ever appear in, too stuffed with obsceneamounts of food to even reach for the remote, instead lying there, pantsunsnapped, a great turkey bloated island of a creature..this gloriousholiday of overeating, alka seltzer and grand hangover creation. To saynothing of the joy of getting to our destination…7 hour drives in snow andrain, bumper to bumper traffic and construction zones, airports seethingwith frustrated humanity and helpful personnel so delighted at working thisholiday they are only too pleased to assist by telling you EXACTLY whereto go; yes then, the Joy of the Season is upon us .In spite of these many happy journeys and gatherings it is a day or a timewhen it is good to reflect upon those many blessings and wonders that havebeen bestowed upon us, through friends, family, Democracy, markets and to begrateful for the spark of unbridled humanity that runs in all our veins Ispeak here more of the humanity that Ayn rand wrote of than the give tillhurts and the bleed some more that the word humanity seem to be defined astoday. Each of us has been a gift called life and a chance to learn,experience, achieve, fail, to taste both the dust and the glory that islife. That in and of itself is reason to be thankful.In addition to that, each of us have more to be grateful for..a and along
books, a particular moment or place that has touched out lives. I know I do.I am thankful that I grew up in a time and place where a 16 year old boy/mankicked out of his parents(with great justification I might add..look uphoodlum/idiot/heathen and you have the start of the story of my teen years.My mother threw me out. How she found the restrain not to beat me to a pulpand feed me to the neighbors dogs I ll never know) could work mornings as adishwasher, afternoons as a cook and go to night school and break the traphe had set for himself, take a job as a traveling salesman and leave theghetto behind, spend 5 years knocking on doors, learning about himself,about people, how to sell, to communicate, traveling one end of the countryto the other in an experience I would not trade today for anything as itformed the core of who I would become. I am grateful every day that I amblessed and graced by whatever powers the universe be it pure mathematics orthe Irish-catholic God ( I was much scolded for not typing the Deity’s namein caps in a previous post. I ask said Deity for her forgiveness and correctmy error here)of my youth with two children, a daughter of 21 years, abeautiful child whose laugh is so quick and smile so bright one would neverguess how bravely and fiercely she fought the illness that has plagued herthe last few years, a bright, determined young woman who for reasons thatescape me most day loves her father and brings much laughter and happinessto his life, and has impressed him with her determination to overcomeobstacles and steer a course through life that she has chosen and will notwaver from: the lanky shaggy haired 17 year old boy(how can they see withtheir hair like that) who is the proverbial class clown, too quick wittedfor his own good at times, who has proven to be a hard working young man of",1]
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the way, the earned gift of intellect family, friends, great music, greatbooks, a particular moment or place that has touched out lives. I know I do.I am thankful that I grew up in a time and place where a 16 year old boy/mankicked out of his parents(with great justification I might add..look uphoodlum/idiot/heathen and you have the start of the story of my teen years.My mother threw me out. How she found the restrain not to beat me to a pulpand feed me to the neighbors dogs I ll never know) could work mornings as adishwasher, afternoons as a cook and go to night school and break the traphe had set for himself, take a job as a traveling salesman and leave theghetto behind, spend 5 years knocking on doors, learning about himself,about people, how to sell, to communicate, traveling one end of the countryto the other in an experience I would not trade today for anything as itformed the core of who I would become. I am grateful every day that I amblessed and graced by whatever powers the universe be it pure mathematics orthe Irish-catholic God ( I was much scolded for not typing the Deity’s namein caps in a previous post. I ask said Deity for her forgiveness and correctmy error here)of my youth with two children, a daughter of 21 years, abeautiful child whose laugh is so quick and smile so bright one would neverguess how bravely and fiercely she fought the illness that has plagued herthe last few years, a bright, determined young woman who for reasons thatescape me most day loves her father and brings much laughter and happinessto his life, and has impressed him with her determination to overcomeobstacles and steer a course through life that she has chosen and will notwaver from: the lanky shaggy haired 17 year old boy(how can they see withtheir hair like that) who is the proverbial class clown, too quick wittedfor his own good at times, who has proven to be a hard working young man of
caused so many family dinners to turn into affairs of hysterical laughter ofthe table pounding, lung wheezing variety( this is occasionally problematicif said dinner is a public establishment),who in spite of his tough guydemeanor will still give his old father a hug in front of his buddies andtell his old man he loves him. He has inherited a tad too much of hisfathers love of the good times and long legged beauties but there isgreatness in him.I am thankful that in a world of second chances my father,, he of the StJohns degree and seven languages who walked out in a drunken stupor when Iwas six found the raw courage and sobriety to walk back in when I was 16.That a man whose fall from grace extended all the way to the streets couldfind a redemption that made him a legend among the drunks of Baltimore forhow many he eventually helped on the road to recovery before he died so damnmany years ago. He lost everything, even his very self but found his wayback, recovering his dignity, his family and his self. He has been gone forover 22 years now and I still regard him as the bravest man I ever met alongthe path of life.I am thankful that my mother lived in a time and a place where when findingherself alone with 4 children in a tenement, one dollar to her name, tooproud to take welfare or assistance, armed with nothing but her intelligence, determination and love for her children she could carve a life for us all.Where all the presents came from at Christmas time and birthdays on thesalary of a data entry clerk with all those mouths to feed came from I allnever know. She worked on through it all, a chronically ill daughter withasthma and assorted complications so bad Johns Hopkins Doctors made a careerof studying her case, a son with a wild streak who fought and stole, in and",1]
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a thrifty nature for all his tom foolery, whose impressions and antics havecaused so many family dinners to turn into affairs of hysterical laughter ofthe table pounding, lung wheezing variety( this is occasionally problematicif said dinner is a public establishment),who in spite of his tough guydemeanor will still give his old father a hug in front of his buddies andtell his old man he loves him. He has inherited a tad too much of hisfathers love of the good times and long legged beauties but there isgreatness in him.I am thankful that in a world of second chances my father,, he of the StJohns degree and seven languages who walked out in a drunken stupor when Iwas six found the raw courage and sobriety to walk back in when I was 16.That a man whose fall from grace extended all the way to the streets couldfind a redemption that made him a legend among the drunks of Baltimore forhow many he eventually helped on the road to recovery before he died so damnmany years ago. He lost everything, even his very self but found his wayback, recovering his dignity, his family and his self. He has been gone forover 22 years now and I still regard him as the bravest man I ever met alongthe path of life.I am thankful that my mother lived in a time and a place where when findingherself alone with 4 children in a tenement, one dollar to her name, tooproud to take welfare or assistance, armed with nothing but her intelligence, determination and love for her children she could carve a life for us all.Where all the presents came from at Christmas time and birthdays on thesalary of a data entry clerk with all those mouths to feed came from I allnever know. She worked on through it all, a chronically ill daughter withasthma and assorted complications so bad Johns Hopkins Doctors made a careerof studying her case, a son with a wild streak who fought and stole, in and
associate the all around great guy I am today with this misguided waywardyouth).She worked until eventual retirement as highly placed computer expertfor the State of Maryland Judicial system, just in time for my stepfather toslip into Parkinson’s related dementia. She cared for him as well until hedied. She is a woman of fierce determination and strength. I don’t know howin the hell she did it but all four of us are still here, and even when wedon’t thrive, we survive. She passed much onto her children, the chiefquality being that I cannot imagine one of us going quietly anywhere, muchless the good night.I am thankful for books, my loyal companion and friend for many a lazyafternoon and many a dark night. Without my deep love for reading andlearning I am still a dishwasher and fry cook living on the back edges ofBaltimore. Books taught me to want, to dream, and then provided me theknowledge and skill to chase down those dreams and desires. My small condois crammed with books. The garage would make a librarian swoon with desire.Much of who I am and what I have comes from books. One of my earliestmemories was Mom taking us all to the bookmobile when it came to the localgrocery store and loading up on books. The staff of the bookmobile hated us.They way my mom, sisters and I read meant the inventory had to be replacedmore often than any other bookmobile in service. Mom never edited ourchoices. Hemingway, dick Gregory, hunter Thompson, the Illiad,malcom x,Faulkner…I read them all before junior high(Harold robbins too but I alwayschecked those out when she wasn’t looking). Mom didn’t care what we read aslong as we read.I am thankful for music, that backdrop of our lives.For Mozart andBeethoven, for Johnny cash and merle haggard, for jimmy buffet and jerryJeff walker, for guns and roses and motley crue, muddy waters, pinetop",1]
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out of juvie facilities(yes that was me in case you find it as so many do toassociate the all around great guy I am today with this misguided waywardyouth).She worked until eventual retirement as highly placed computer expertfor the State of Maryland Judicial system, just in time for my stepfather toslip into Parkinson’s related dementia. She cared for him as well until hedied. She is a woman of fierce determination and strength. I don’t know howin the hell she did it but all four of us are still here, and even when wedon’t thrive, we survive. She passed much onto her children, the chiefquality being that I cannot imagine one of us going quietly anywhere, muchless the good night.I am thankful for books, my loyal companion and friend for many a lazyafternoon and many a dark night. Without my deep love for reading andlearning I am still a dishwasher and fry cook living on the back edges ofBaltimore. Books taught me to want, to dream, and then provided me theknowledge and skill to chase down those dreams and desires. My small condois crammed with books. The garage would make a librarian swoon with desire.Much of who I am and what I have comes from books. One of my earliestmemories was Mom taking us all to the bookmobile when it came to the localgrocery store and loading up on books. The staff of the bookmobile hated us.They way my mom, sisters and I read meant the inventory had to be replacedmore often than any other bookmobile in service. Mom never edited ourchoices. Hemingway, dick Gregory, hunter Thompson, the Illiad,malcom x,Faulkner…I read them all before junior high(Harold robbins too but I alwayschecked those out when she wasn’t looking). Mom didn’t care what we read aslong as we read.I am thankful for music, that backdrop of our lives.For Mozart andBeethoven, for Johnny cash and merle haggard, for jimmy buffet and jerryJeff walker, for guns and roses and motley crue, muddy waters, pinetop
and frank sinatra,waylon Jennings and david allan coe, handel and vivaldi Ihave cried bitter tears to a backdrop of sad music, celebrated victories toraucous rock and roll, romanced to the strains of water music, danced thenight away to hot blues, and reflected life’s mysteries to sweet rollingwaves of jazz. It has been a constant of my life and I cannot imagine lifewithout the ongoing soundtrack.I am as always grateful for the spec list and the chance to grow and learnthat my 5 years here have offered. I have learned much, grown much andprofited in more ways than can be explained form my participation in thisunique experience. Each of you have added to my base of knowledge andunderstanding and I am truly grateful.I am grateful for:James lackey, the wild free spirited kerouac of the list. The day trading,drag racing, tank driver, he would be dead in a fiery explosion while tryingto simultaneously race at 200 ph and day trade the spooz without thegentling touch of his wonderful wife Jennifer. A post from lackey is like aChristmas present. To sit and talk with him and his beautiful bride givesone a glimpse at life’s possibilities.Fred Crossman, the irascible opinionated Chicagoan who has become a fastfriend and partner, for all the shared nights we ll never remember withfriends we will never forgetFor Rush Street, 5th Avenue and the Vegas stripFor ed gross, the trader nee poker player who has taken all the chances Iwished I had when I was younger and made them work for him. Were I as smartand good looking as him I would own the damn world. We talk several times aweek and its like a glimpse at an alternative lifeDock bars and fast boatsFor Jason Thompson, he of lumbering grace and amazing intellect. I lookforward to spending time with Jason as I always walk away smarter and",1]
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perkins and john lee hooker, for miles davis and john coltrane, cole porterand frank sinatra,waylon Jennings and david allan coe, handel and vivaldi Ihave cried bitter tears to a backdrop of sad music, celebrated victories toraucous rock and roll, romanced to the strains of water music, danced thenight away to hot blues, and reflected life’s mysteries to sweet rollingwaves of jazz. It has been a constant of my life and I cannot imagine lifewithout the ongoing soundtrack.I am as always grateful for the spec list and the chance to grow and learnthat my 5 years here have offered. I have learned much, grown much andprofited in more ways than can be explained form my participation in thisunique experience. Each of you have added to my base of knowledge andunderstanding and I am truly grateful.I am grateful for:James lackey, the wild free spirited kerouac of the list. The day trading,drag racing, tank driver, he would be dead in a fiery explosion while tryingto simultaneously race at 200 ph and day trade the spooz without thegentling touch of his wonderful wife Jennifer. A post from lackey is like aChristmas present. To sit and talk with him and his beautiful bride givesone a glimpse at life’s possibilities.Fred Crossman, the irascible opinionated Chicagoan who has become a fastfriend and partner, for all the shared nights we ll never remember withfriends we will never forgetFor Rush Street, 5th Avenue and the Vegas stripFor ed gross, the trader nee poker player who has taken all the chances Iwished I had when I was younger and made them work for him. Were I as smartand good looking as him I would own the damn world. We talk several times aweek and its like a glimpse at an alternative lifeDock bars and fast boatsFor Jason Thompson, he of lumbering grace and amazing intellect. I lookforward to spending time with Jason as I always walk away smarter and
above himself gives me hope.Rainy nights and good brandyFor the Cheesehead by way of Cincinnati for reminding me at times themeaning of friendship and thatall life’s obstacles merely hide yet anotherchance for love and redemption.For Kris rock. One rarely thinks of kris and subtle in the same breath untilyou realize that his tirades and attacks have made you rethink, defend andremake your own thoughts and conclusions for the better.Steamed crabs and afternoon baseballFor Kevin Depew with his gamblers mind and graceful southern attitude. Onecannot spend a more delightful and entertaining time than in kevins companyat a Kentucky racetrack..unless his delightful wife Lila comes along.thenone approaches perfection in the dayFor all of you who lose to me so gracefully in spec list fantasy baseballeach year…For Kim zussman and his relentless though provoking research and elegantwayscolleg football and the resurgence of Notre dameKen Smith and his occasional reality checkthe armed forces of the US who gained and preserve my freedomsRoss Miller and his intellectual exuberancegood wine and better scotchThe voodoo prof for his intellect and sense of markets,economic and barbequeTom Ryan for his gracious friendship and excellent taste in whiskey. Tom andI usually only talk when one of us in crisi..then we re the first number weeach dial. A gentleman,scholar and true friendChesapeake bay sunsetsFor the current incantation of the one true love of my life who doesn’t giveup no matter what dumb ass stunt I pullFor the wizz with his sharp mind and razor wit. The scholar, mathematicianand trader whose staggering brain power hides a shared loved of pulp novelswith short barreled 38’s and long legged dames, back alleys and hip flasks",1]
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smiling. One cannot ask more from a friend. The fact that he married so farabove himself gives me hope.Rainy nights and good brandyFor the Cheesehead by way of Cincinnati for reminding me at times themeaning of friendship and thatall life’s obstacles merely hide yet anotherchance for love and redemption.For Kris rock. One rarely thinks of kris and subtle in the same breath untilyou realize that his tirades and attacks have made you rethink, defend andremake your own thoughts and conclusions for the better.Steamed crabs and afternoon baseballFor Kevin Depew with his gamblers mind and graceful southern attitude. Onecannot spend a more delightful and entertaining time than in kevins companyat a Kentucky racetrack..unless his delightful wife Lila comes along.thenone approaches perfection in the dayFor all of you who lose to me so gracefully in spec list fantasy baseballeach year…For Kim zussman and his relentless though provoking research and elegantwayscolleg football and the resurgence of Notre dameKen Smith and his occasional reality checkthe armed forces of the US who gained and preserve my freedomsRoss Miller and his intellectual exuberancegood wine and better scotchThe voodoo prof for his intellect and sense of markets,economic and barbequeTom Ryan for his gracious friendship and excellent taste in whiskey. Tom andI usually only talk when one of us in crisi..then we re the first number weeach dial. A gentleman,scholar and true friendChesapeake bay sunsetsFor the current incantation of the one true love of my life who doesn’t giveup no matter what dumb ass stunt I pullFor the wizz with his sharp mind and razor wit. The scholar, mathematicianand trader whose staggering brain power hides a shared loved of pulp novelswith short barreled 38’s and long legged dames, back alleys and hip flasks
Victor, first for creating this list, and for allowing me to be a part ofthis great community of minds. He has offered me access to ideas andphilosophies that have made my life better, my mind stronger and eventhickened my wallet. He has done more for me than time or space allow and inspite of our many differences has proven himself a friend of the highestorder on more than one occasion. His generosity of spirit and intellect isunlike any I have ever seen before. His story alone, of success, defeat andcomeback is inspiration enough. The fact that he has allowed me to walk inthe company of giants such as those found on the list leaves me speechlessin gratitude.For all those who I have not mentioned. All of you who shared ideas, shareddrinks, baseball games, football games, long talks, research reports,sportsthoughts,poker lessons arguments discussions,scholarly papers, jokes,smiles,hearts and minds. Each of you who takes the time to post your ideas,no matter how much I disagree with them. To all my spec list friends andacquaintances I say happy Thanksgiving.I raise my glass to all of you and to all the possibilities life offers.",0]
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Victor, first for creating this list, and for allowing me to be a part ofthis great community of minds. He has offered me access to ideas andphilosophies that have made my life better, my mind stronger and eventhickened my wallet. He has done more for me than time or space allow and inspite of our many differences has proven himself a friend of the highestorder on more than one occasion. His generosity of spirit and intellect isunlike any I have ever seen before. His story alone, of success, defeat andcomeback is inspiration enough. The fact that he has allowed me to walk inthe company of giants such as those found on the list leaves me speechlessin gratitude.For all those who I have not mentioned. All of you who shared ideas, shareddrinks, baseball games, football games, long talks, research reports,sportsthoughts,poker lessons arguments discussions,scholarly papers, jokes,smiles,hearts and minds. Each of you who takes the time to post your ideas,no matter how much I disagree with them. To all my spec list friends andacquaintances I say happy Thanksgiving.I raise my glass to all of you and to all the possibilities life offers

monday

still well defined range on intermediate and long term of 1180 low,1260 high

short term range very,very tight at 1248-52. looking for a pullback in near term despite todays up move. we re due for a sell off of at least a small order

morning look

short term1225 to 1250
mif term 1175-1250
long term same

lot of stength this am on news of csco takeover of sfa and hpq earnings..tech very strong going into weekend

a look at the option spread trades I was tracking to see how well the method worked

jakk and bks expired worthelss..kept .75 credit on jakk, .55 on bks

would be long intc at 26.50,gps at 19.50 ,cce at 21.50 likely put hele at 19 this week..undewater on everything put but all rallying currently...

need to write puts for much longer than front month for approach to to be valid I think

mkt crashed through short term range top today.. will be interesting to se am work to see how this sets up tomorrow.would have exited trades at 36-37 area.. a nice 9 point gain from yesterday but a good 4 points shy of the close level

nov 17

yesterday a nice little rally off open,settled back into mid range but buying at the open would have been a good trade...nothing changed as far as 9intermediate/long term...caution called for and would be looking to sell calls or ust take profits

today


short term 1227-1236
intermediated 1175-1250
long term 1175-1250

note that ranges are lowering and volatility is not helping here..need a spike over 16 in the vix to show any type of buying opportunity

morning look

short term//
low end 1230 high end1238...be long the open

mid term 1170 low, 1250 high...much closer to high end, caution needed..look to sell calss, take profits in individual stock posiitons

long term..low end1080, high 1270..ditto above
oil lower, bonds higher,low inflation numbers, record high in foreign purchasing of us secuties,volatility at low end of range.

fairly positive backdrop for the day so far

morning look

the stock market

Should be closed today. It’s Veterans Day. In November of 1954.the Congress of the United States and then President Dwight Eisenhower passed legislation changing Armistice Day to veterans Day, day set aside to remember and recall the millions of American men and women who served in the armed forces of the United States of America. Banks are closed, schools are closed and in yet another example of the bond market being smarter than the stock market, the bond market is closed to honor the sacrifice of our veterans. The stock market however is open.

We close on new years day, to celebrate the flipping of a calendar page, nurse our hangovers and watch football. Is this flip of a page and college bowl game extravaganza more important or central to our way of life than the men who stood on the green at Concord and Lexington, filled musket barrel with trembling fingers as the crouched behind the barrier on bunker hill as the British came ever closer? Is the need to reflect on the passage of time and set resolutions we will break by weeks end more important then those who crossed the Delaware with Washington or those who survived the long endless winter of Valley Forge? I don’t think so but we re closed on new years day.

We are closed on Martin Luther Kings birthday. There is no denying the Rev. Kings important contributions to the civil rights movement in the United States. But is honoring his achievements and sacrifice more important than honoring those who charged the low stone wall at Fredericksburg and were cut down in row after bloody row? Is it more important to honor one man than the thousands who endured the hellish cross fire and tangled underbrush of the wilderness? More important the honoring those who out of ammunition wheeled downhill and charged to break up the confederate attempt to flank the union army at Gettysburg and turned the tide of the war? More important than the Irish Brigade perhaps, who endured Bloody lane at Antietnam, the wheat field at Gettysburg and charged into the murderous guns of Maryes Heights at Fredericksburg? Than the thousands who served the Union Army from first Bull Run to Appomattox? I don’t think so but we re closed on Rev Kings Birthday.

We re closed on Presidents day. There is no mistaking the contributions of the men who have led our great nation. But are they as individuals, more deserving of a holiday than the millions of men and women who they have ordered into battle in such strange places as Chapultepec and Bayamo? More important to honor the leaders who set safe in Washington while young men and women sailed to Cuba  the phillipines, china and Tripoli on their orders?I don’t think so but we re closed on Presidents day.

We re closed on good Friday, a religious holiday not celebrated by the entire populace of the United States. Is it more important to honor one faith when how many thousands of Jews,hindu, Buddhists, followers of the old native american gods, and yes even Muslims have gone to such places as Belleau Wood,the Argonne forest and Montfaucon? I don’t think so but we re closed on Good Friday.

Memorial Day we re closed.As we should be to honor those veterans who gave the ultimate sacrifice and lay down their very lives in defense of their nation. But isn't it equally important to honor those who survived the agonizing defeat at pearl harbor, the blazing sea and sky battles of midway, climbed the beach barriers at Tarawa, slogged the valleys of the canal against a deeply entrenched and desperate foe, the marines who partook in the daring raid of the Makin Atoll, the sailors who survived and carry scars from Leyte gulf, the Philippines and the china sea. I think so but we re not closed on Veterans Day to honor the brave survivors who defended our nation.

Ditto on Independence Day. But is it more important to recall the reading of the document that gave birth to our nation in the sweltering July Heat of 1776 than to recognize all those who have kept her free since then? Is it more important to celebrate the start of the nation than those who stormed the beaches of Normandy under the guns of the Nazis, who marched up Sicily , or those who were massacred at Malemdy, or were encircled at Bastogne? It is important to honor the birth of our nation and the bravery and wisdom of our founding father but isn't it as important to recall those who fought to keep us a free nation in places such as Casablanca, Algiers and the Kassarine Pass? I think so but the market is open on Veterans Day.

We re closed on Labor Day to honor those who toil and use the skills and sweat to build the American Economy. But is that more important to honor their labor than those who have preserved their right to work by storming ashore at Inchon, who fought and captured Pyongyang, or endured the merciless cold and Chinese swarms at the Chosin reservoir, or those who endured the long icy retreat.I don’t think so but we re closed on labor day.

We re closed on Thanksgiving, and it is good for to pause and reflect all the good things we have because we live in a free democratic nation.I love thanksgiving. Mountains of food, oceans of wine, football, and no need to buy anyone a gift. It is one of my favorite holidays. But it it more important than honoring those who served that nation in such exotic places as Da Nang or Quang Ngai Province orKhe Sang? More important than remembering those who were sent out on patrol through the dense dank jungle knowing that ambush and sneak attack by a determined foe was likely before the daylight returned, or those who served at forward fire bases under constant attack and in permanent danger of being overrun by the VC or NVA? More important than recalling the bravery of the pilots who were shot down and spent years in hellish prison cells or even bamboo cages,suffering deprivation and even the cruelest forms of torture? I don’t think so but we re closed on thanksgiving.

We re closed on Christmas as well. We close to celebrate the birth of a god not every American believes in but I do recognize that the Judeo-Christian ethic runs deeply through the United Sates but is this day more important than those who have fought through the decades to preserve our religious freedom, both on our soil to repel the British and secure our freedom, to preserve the union in a nightmarish brother versus brother, the hideous Civil War, expanded the young nation across the great plains and into the west, protected us in two terrible foreign wars against dictators and fascists, who served where sent on two controversial campaigns against the specter of communism  or protected our allies and energy supplies in two gulf wars? Is Santa Claus more important than men like James Lackey, exhausted, dirty with mouth and ears full of sand driving his tank across the sands of Iraq  or the thousands there today in Fallujah and Iraq who leave the compound each day on patrol, putting on their armor and choking back mouth drying, bladder spasming  fear to face the terrorists in the streets of Baghdad. I don’t think so but we re closed on Christmas.

In our nations history, millions of men and women have entered out nations armed forces. They have many reasons to do so, some out of real patriotism, some because of lack of opportunity, and more than a few to escape jail time for some misdemeanor given the choice by small town judges across America. Some hope to do four years and move on, or accumulate enough for college and move on, some do the full 20-25 years and make the Military a life and a career.Some are sent to war,others serve in such exotic, interesting places as Fort Huachuca, Az, The DMZ in Korea,Yuma Arizona or perhaps fun filled White Sands new Mexico. They are young men and women who leave hearth and home for a wide variety of reason but for one unified purpose..To defend the United States of American and all of our rights and freedoms. We close the stock Exchange for political and religious reason and there is nothing wrong with that but is it more important than the young people staring across the fence at Guantanamo Bay, or those young men and women who give up ivy league educations and top flight careers to enter the brigade, the long grey line or another of our nations service Academies? Is it more important to honor these occasions than to honor those on the wind swept plains of Kansas guarding our prisons and enemies at fort Leavenworth? Are any of these more important than honoring our military, from the join chiefs of staff down to the newest recruit? I don’t think so but the stock market is open on Veterans Day.

All good posts must, of course always have stats and numbers. Can’t leave those out.


Civil War, Union Army 360,222 dead,275 174 wounded
WW One 58,480 dead, 189955 wounded
WW two 300,000 dead, 300,000 wounded
Korean Conflict 33686 dead 103284 wounded
Vietnam 58156 dead,303704 wounded 2338 MIA
First Gulf War 293 dead, 1000 wounded
Current conflict, 200 dead and counting
Number of us military Veterans 24.5 million
Current active duty US Military 1.5 million

But the stock market is open on Veterans Day.

update and add

jakk expired and bks trades working nicely..gap coming back in as it acclerates below 17.50,two expired ,

long intc and cce above mkt, jakk expired worthless.Had we done the intel trade out to october it would have been very profitable..more, not less time seem to be indicated in these trades

add
hele

sell one nov 20 2.85
buy two nov 17.5 1.1
.65 credit

weekend update

For the true sports junkie of the couch oriented variety, This past weekend came very close to nirvana. The last weekend of baseball season with at least 3 races going down to the very last game of the season. As I don’t really follow those fellows over in the fastball throwing sissy pitcher hitting league , I was focused very tightly on the d@@ned Yankees against those &^%*(*&^% get a haircut for gods sake reprobates and renegades from Boston as well as the how did they get in this Indians of Cleveland for the wild card slot. Two very good baseball games later the Yankees had won the division. Using the same sort of logic he uses to defend drawdowns to his investors trend following baseball maven declared the sox co-division champions even though under the rules, The Yanks had the title. Unfortunately for those of us who think Boston would make a lovely museum and should be uninhabited except by curators and tourists and under no circumstances should be allowed possession of something as dangerous as a major sports franchise, much less a winning one, Cleveland slid from sight quicker then crossman sliding down the back side of a rush street Saturday night.

Now, the baseball picture alone would have been enough to satisfy a sports fan. However just like a set of late night steak knives and food choppers for 19.95..but wait there’s more! College football all day and into late Saturday night. Maryland remembered how to actually play the game , much to the fat fridge’s satisfaction, Navy escaped duke with their first win of the season, Notre Dame continued to bask in the divine light of touchdown Jesus and thumped Purdue in a convincing fashion, Alabama beat Florida for the first time since the internet bubble and Joe Pat shut the critics and age phobic fans up for at least one more week. For a while there Saturday it was hard keeping up with all the highlights, pitch counts and point spreads as the tv went from station to station with an effect not unlike that of a strobe light. When finally dragged off the couch Saturday evening to go out by the current incantation, I innocently selected a dinner destination that had a big screen tv visible from the dining area. Perfect evening along the shores of the bay, we dined at the crab deck where to my delight I found the scallops broiled in sweet butter are the perfect accompaniment to Brady Quinn touch down passes. Those specs coming into town for the Navy game next week will be able to sample the decks wares for themselves, along with several other notable eateries as well as establishments of less than reputable distinction.

Which, of course, is where we went next. Now that the frenzy of bikini season is over and the hordes of bikers and sun drenched curio seekers has faded, Red Eye dock bar has once again become a locals joints with great wings and a spectacular view of the narrows..and television sets mounted all around the walls. As the sun faded into the night, casting a pink-purplish glow along the dancing waters speeding through the cut between Eastern bay and the Chester River. As we joined a few friends there and engaged in the partaking of light libations and held forth with deep intelligent discourse on the state of the world,politcs economics, interpersonal relationships deep into the night, I was able to sneak a few peaks at the screens to see Roy Jones JR prove that accepting a loss graciously is usually the start of a losing tradition and Glen Johnson reaffirm that even he doesn’t have a flashy name, he is one hell of a fighter. The quick downfall of Roy Jones is one of the more puzzling events in recent boxing history. After being an unbeatable near immortal with lightening speed and heart stopping power, he has suddenly become an average fighter of very limited skill. He called himself a true champion after the fight, saying that like the true champion he is, he may yet fight again. He’s 36 and looks to have lost enough of his skills to continue getting beat and tarnishing his for now hall of fame legacy. Be satisfied, Roy that you are among the legends of the sport but pay time its homage.

As the evening waned, the bar bill climbed and the days battles, clashes, fights, dramas, nail biters and must wins came to a close and the conversation reached new heights of barley inspired intellectual depth, I reflected that for a sports fan, it had been one of those rare perfect storms. Baseball in its waning glory of seasons end with the playoffs looming, the college ball season far enough long that games now had an ever-intensifying importance and several major fights all on the sameday..and a Sunday of NFL and Nascar looming.



Sunday, the ravens finally found someone they could beat..But then again beating the jets right now is a lot like mugging a cripple. Eli manning came into his own, his brother regained his form, Michael Vick continued his injury streak and Marvin Lewis demonstrated just how great a football coach he really has become. There were the usual plot twists, long gains, spectacular catches and all the violence and fury that is the NFL. But the real excitement Sunday was not in a football stadium but in the middle of Alabama at a place called Talladega. 43 cars, 800 horsepower engines restricted back to 500 using carburetor plates running in one big 190 mph pack. One mistake leads to catastrophe..And there lots of mistakes this Sunday. Cars were flipping, flying through the air, in one case doing a weird ballet spin on its nose down the front stretch. Bump drafting, tapping the guy in front of you to speed both of you up, is a science. The late Dale Earnhardt was a master, as is his on Dale JR ..Jeff Gordon and Tony Stewart are pretty good at it. The young guns are perhaps not so good and the day was filled with some of the more incredible crashes in Nascar History. It was breathtaking, edge of the seat racing culminating by Dale jarret becoming the 4th oldest driver to win a NASCAR race. Simply a brilliant day of long passes and fast cars.

As I sat ruminating at the end of the day several thoughts flashed across my mind foremost being, Melvin you have got to get off this damn couch more and I’m low on scotch and smokes again. But there were several other thoughts worth pondering from a spec point of view as well.

Adversity does not become defeat until you allow it to so. The Yankees were horrible the first part of this year. Dale Jarred had not won a race in two years. The Indians were 10 games back at the All Star break and almost snuck into the playoffs. Notre Dame entered the season unranked. Joe Paterno was written off as an over the hill also ran. In every case they stuck to what they knew they could achieve and beat back the critics and the bad times to find victory.
Things change (ever changing cycles). To win, one must be prepared to change and adapt to conditions. The Yankees used 16 starting pitchers this year as they scrambled for the combination that worked. Bump drafting works on the straight-aways. In the corners it leads to 10 car accidents and airborne machinery. Conditions change. One must always be aware of this and continue to adapt ones style.
Just because you succeed at the lower levels does not mean you will achieve instant success. After a spectacular college career it took Eli Manning two miserable seasons of failure, futility and hard work to establish himself as a great quarterback. The very young Cleveland Indians team faded when it counted most, giving into a pressure they had never felt before under the September lights. A one lot trade who scores some winners does not necessarily have what it takes t o run a 100 million hedge fund, At each new level there’s is a learning curve that must be climbed through hard work and practice.
Winning is indeed a habit. Once you learn to lose with grace its difficult to win. The Yankees expected to come back and refused to accept they weren’t good enough. Notre Dame was written off after several sub par seasons. But the fans and administration knew they had a winning tradition to uphold and did what they had to in order to deliver a winning g program back to the school.
There are some things we cannot change and fighting that will lead to spending some serious time with your face on the canvas. At 36, your body changes enough that no matter how much you train or practice, you just don’t have it anymore. Jones Jr was one of the greatest fighters ever in my opinion. But he’s a tick slower and not quite as fast as he once was. Its time to quit. There will be times in your trading and investing career where fighting conditions that exist and cannot be changed. The hard part is recognizing those times and avoid becoming a Ray Leonard getting beat up by has beens and never weres.




To win you have to be able to play both sides of the ball. It is said that great defense wins football games. That’s only true if you offense is good enough to score. The Colts have had the best offense in football for several years, the Ravens the best defense. Defensive weakness on the part of the colts and the ravens horrific offense kept them from winning it all. Tony Dungy has figured that out and built a great defense to complement Peyton and the boys. Brian Billick has not. The Colts are 4 and 0, the Ravens lucky to have played the New York Cripples and escape with a win, are a terrible football team.


In between all of this I did manage to complete three books worth mentioning. School days, the new Robert parker continues the Spenser tradition. The last of the hard-boiled Private eyes, Spenser continues to be a tough, smart witty private eye as quick with a quip as a right cross. Probably no lessons for a lifetime but a great read as only Parker can write. EL Doctorows The march tells the tale of Sherman’s march to the Sea through the yes of soldiers, generals, fallen artistocrats, slaves and ner’do wells. If he had resisted the urge to bring all his characters together in one giant reunion of warriors, doctors, and conquerors and conquered this book would be an immortal classic. In spite of this one flaw it is a great read and one of the best civil war novels in some time. Last, Busting Vegas, the latest from Ben Mezrich is a great story of one of the MIT blackjack teams and the adventures, dangers and wins they faced along the way. Specs who like gambling books will like this offering.

One final lesson from the waning moments of the weekend. I finally got the call telling me my oldest friends father had lost his battle with pancreatic cancer. I spent many evenings and drank many martinis in his company and will miss him greatly. He was a man of grace, with style and achievement who worked hard and lived to his own standards and values. In his life I am sure there are many things to be learned but I have not enough space for that here. But in his passing he leaves one great lesson that is not reinforced often enough. Death comes to us all and in spite of our bravado few of us will embrace it willingly. Life is shorter than we realize and must be lived while we have it in such a manner to satisfy our souls. There is learning to be done, greatness to be achieved, books to be read, love to be made, obstacles to over come, friends to embrace, symphonies to be listened to in awe, rock and roll nights to be enjoyed with abandon. Life. One per customer.Make of it what you will.

august brings

So, the first full weekend of the new season is behind us. A glorious weekend of sports including college football, the NFL and Yankees red sox. Coupled with some good books mentioned earlier, a full bottle of Famous Grouse, the reappearance of the on/again current incantation of the one great true love of my life, great weather, great bands at the plastic cup emporium and dock bar for nighttime pleasure, and it makes for an incredible weekend for the lazy sports fan and man about. cant call in town so we ll go with waterfront.

Much had been written by many, including myself on the many corollaries between baseball, life and markets and doubtless when spring returns with its air of hope and renewal I shall write another such. But for now it is September and word such as G%^^&%ed, talent less, weak armed no brained, steroid-ridden, clueless and hopeless have replaced beloved as the adjectives for the Baltimore Orioles. Now in 4th place in the division, a comfortable 16.5 games out of the lead the birds have an outside shot at finishing above 500. I put the odds as approximately those of the second coming happening at high noon on the pitches mound at Yankee stadium in the 9th inning of tonight’s Yankee-marlins game. Rendered even more unlikely as it is an away game. The only ray of hope left in the season is that the yanks or crossmans Indians can get a run going, get into the playoffs and beat those myth loving curse breaking self professed idiots from beantown. I hate those guys. Sosa’s Collapse, Palmerio's fall from grace, steroids, payrolls and the worst commissioner in the history of the game have left a somewhat sour taste in the mouth for Americas pastime. Doubtless, the affair shall be renewed after the long winter, if not in time for the word series, then after a long winter’s absence. But for now, along with hank JR and his rowdy friends, I’m ready for some football.

Not a bad start to the year so far. Navy, although dropping two, has played well in losses to Maryland and Standford, two big time college programs. Maryland gift-wrapped a game for the Clemson Tigers after dominating the entire game. Already this year in the college game we have seen spectacular upsets with tiny Tulsa beating mighty Oklahoma, Florida State breaking the Miami curse, Texas taking out Ohio State. Most importantly of all Notre Dame and the Fighting Black Baptists seem to be back on the trail to glory knocking off Pitt and the then #3 ranked Michigan Wolverines. College ball with all the pomp, the rivalries, the bands, the colors, the glory of one states mutated freaks attempting to overpower another’s genetic misfits is one of the greatest inventions of American sports history. Attend a Navy game with me someday and experience college athletics at its finest, or a Notre Dame Game in south bend, a Harvard –Yale match up and it is easy to get caught up I the game.

Ah..But the NFL, the modern day reincarnation of the Roman coliseum games, a high-speed mix of strategy and violence, mixed with loud rock and roll and scantily clad women gyrating for our viewing pleasure. It gets no better than this. and the opening weekend did not disappoint. Brady proving the above average athletic ability, intelligence and above all team work gets the job done, manning proving the extreme intelligence and ability s the stuff of legends, the potential rebirth of the cowboys from Dallas, the first fade of Brett favres bright star,saban proving that oh yeah..He can coach in this league, the annual implosion of the new york jets, the fierce Monday night game between the Atlantic Falcons and the Philadelphia soap opera…a great starting weekend for the game. The emperor has decreed. Let the game begin, gladiators to the field, nubile females to dance in the wings and all of Rome shall be amazed!!!!!!!!!!

Football, I think, has even more correlation to markets and life than baseball. It is the dull boring stuff, endless practice, off tackle runs and power sweeps that soften the defense for the down the field aerial spectacular. In life and markets, it is studying, learning, reading the filings, setting up the stats tables that make possible above average success Those who live and die on the long ball. air lamonica and the raiders of the 60’s, air corrayl and dan fouts chargers in the 80s,the legendary dan marino will win some spectacular games but never win the title and will suffer spectacular reversals of fortune along the way. Those teams with good passing, strong running and well thought out game plans will become dynasties..The packers, steelers, cowboys, 49ers and today’s Patriots.

Innovation pays off but the edge will dissipate. The Redskins of Joe gibbs, the 49ers and bill Walsh’s west coast offense, buddy ryans 4/6 defense and the bears of 1986,the dolphins of 73-74 and that incredible running attack driven by don shulas game plans. Your edge however will dissipate. The whole league now runs the west coast and everyone knows how to defend it. The 4/6 took the league a year to eliminate the advantage. The key players, a csonka and kiick of the dolphins, riggins and the hogs of the skins will get older and no one else can adequately replace them n the scheme. One must always look for a new edge. See convert arb, stat arb, risk arb,distressed,tax hedging,pairs trading et al. Once your edge is public knowledge and the first book or article appears, your edge is already dissipating.

Risk and reward is perfectly defined on the football field. Going for it on 4th and inches can lead to continued possession and a scoring opportunity or loss of the ball altogether. Where you are on the field and time on the clock factor huge in the decision. Doubling down a losing trade, using long options instead of the underlying, taking the huge risk to keep in the game depend a lot on where you are in the market and your own life cycle.

One must play good, or at least adequate defense to win championships. Your ability to put up 30 points a game is meaningless if your defense allows 45. An investor or trader who gains 100% this year but lose 50 next is even for the period.

It’s all here. The superstar funds who seem to do it all right and win a lot..the colts, the patriots, the eagles, the falcons..They have different approaches but for now seem to dominate the game( appaloosa,citadel,SAC), the middle of the pack who just muddle along ..the bengals, the browns, the cardinals, the redskins(mutual fund mangers), the disgraced who return for big money..Ricky Williams(the fat man),the super mo-mo with great offense who flash glory but lack of defense causes the ugliest of crashes..Kansas City Chiefs (driehaus et all..the mo-mo boys).Those whose incredible defense keeps them always in the hunt..Baltimore ravens(marty whitman,bob Rodriguez).A legendary coach who has one bad year, is discredited and returns to glory..marty Schottenheimer whose redskins debacle was followed by a division leading year with what was supposed to be a bad football tem, the chargers.(draw your won conclusions).

Football has a time limit, the game cannot last forever. There are rules. If you break them, you will be penalized. To take the large risks you must first set up the basics. If you panic when behind, you will lose. There is pain involved in the game. I f you duck out of bounds to avoid the hit, you will be replaced by some willing to take the risk for the reward of the extra 2 yard s and a first down. There are boundaries that cannot be exceeded without a (at least temporary) loss of forward progress. If you cannot defend what is yours you cannot win. If you can’t take a sack from a steroid crazed 270 lb linebacker, shake it off and get behind the center for the next play your career will be very short. Innovation gives edges. Edges fade. As soon as you score, you must be prepared to defend. Excessive celebration before the final whistle blows is an infraction..

And one final

It is always better with half dressed beautiful women cheering you on.

rock on

When the schedule for wolf Trap Park for the performing arts came out back in the spring, my live music junkie buddy called and we reviewed the list of offerings as always..not much this year I wanted to see as opposed to years past when I would find myself there once or twice a month. As we went down the list, one unusual offering struck my eye and I agreed to go in on a block of tickets..Cheap trick and Alice Cooper two of the hardest rocking bands of my misspent youth. Seemed like a good idea at the time. As I sat on the beltway last evening,tired,a little grouchy in the stop and go traffic, trying to peer around the endless line if 7 story SUV’s to get some idea of when traffic would break. I silently ..Okay not so silently ,cursed myself for buying tickets to an aging rock star show. Over the past few years I ve been to several of these dinosaur reunions only to discover they just don’t have it anymore..cant hit the notes..beach boys,meatloaf,crosby stills and nash, or the only member of the original band is some dna from a hair caught in a guitar string..Ala skynard or little feat. I was stuck in traffic, out 200 bucks for tickets and had entirely too much blood in my alcohol system for the whole thing. Arrived at wolf trap( a world class summer venue offering a great variety of summer shows..everything from a cole prter review to ..well..Alice Cooper), secured a location in the super double top secret quick escape parking lot, popped a becks out of the cooler and begin to correct the chemical imbalance that had me snarling at the leather clad grandmas heading for the show with face painted grandkids, sniveling little brats done in coopers mascara and tears get up when they should be home listening to barney sing I love you. I waited for my fellow aging rocker buddy…one of the most musically aware guys I ve ever known, a walking rock and roll encyclopedia but at 46, fresh from a stent implant, overweight and starting to be follicly challenged he looked the part of a ex rocker trying to recapture the 70’s.The beer was helping but I cant say I was looking forward to the rest of the evening. Sometimes, I m just wrong. Cheap trick came out. They may be 50 but this is still the band you want playing your kegger. Rick Neilson no longer wears the beanie propeller hat and his trademark jumps are now only 6 inches instead of the two feet he used to leap while playing..But he can still play. In his familair suit and tennis shoes, he bantered with the crowd, flirted with women in the front row and hit some of the hottest guitar licks in rock and roll. Pederson on his patented 12 string bass still lays down a thundering back beat, bun e carlos still has licks and robin zanders voice hasn’t changed in 30 years. They were always one of the best live bands and they haven’t lost it at all. Surrender, want you to want me,flame..they hit them all and if I closed my eyes it could be the late 70s at the old Baltimore Civic Center..absent of curse the old familiar hemp scented cloud that was a trademark of live shows in the less regulated days of my yute. Okay, not bad as we filed up for the mandatory intermission beer refill, that was worth it. We ll suffer through whatever weak effort cooper puts up and the night will still be worth it. Sometimes Im wrong twice in one day. This cooper show was far better than the ones I saw 30 years ago. Although seeing a 57 yr old open the show with department of youth Aah ah we're the department of youth just me and youth We talk about this whole stupid world and still come out laughing ha ha Was a little disconcerting but his road band was young, played very tight licks and coopers voice is if anything stronger than ever grinding out his dark vocals.. This show was classic Alice Cooper..Wears a straight jacket during the ballad of Dwight fryer, is whipped and slashed during go to hell, hits the youth anthems of 18 and stuck between high school and old school I`m stuck somewhere between high school and old school I can`t decide between my rules and your rules Nails the raw powerfully dirty sexuality of feed my Frankenstein and lace and whiskey (something of a Chesapeake slim anthem and them song So I yell out for some kind of angel To come down and rescue me Be as soft as you can Put a drink in my hand I'm as scared as I ever could be Gimme lace and whiskey Mamas home remedy Double indemnity Fills me with ecstasy La-aa-aace and whiskey ) It was all there. Well played loud rock and roll. Themes of sex,violence and the dark side incarnate. He is guillotined to death at the end and emerges reincarnated in silks and top hat for the encore. The only sure way to tell he had aged was during band intros when he introduced the demon nymph that prowled the stage with whips and knives and very little clothing(god, I love rock and roll), at one point slashing alices throat with a disdainful sneering smile, we discovered it was his 20 something year old daughter. The us tour is just kicking off and all dates thought sept include both acts..the best tour schedule is on cheap trick .com. If you ve got a little rock and roll left in you.. Catch this one

add

rnt @ 23.19
cce @ 22.14
wfr@ 16.52

sell the cce sep 22.5 for .6
buy 2 20 puts for .05
credit...50

call spread for nov also attractive..buy the 22.50 for 1.10
sell the 25 for .3

stock above 25 .80 goes to 2.50...not that high for year however is 23.92...

rnt no options

dont see any great way to put on wfr using options.options lok pricey and spreads are high..stock just had a huge secondary with private equity firms cashing out so that should take the pressure off but I d be jumpy with this one.

add dg @18.79..no good option plays here at all but stock is at buy level

assorted ramblings

As I have had frequent houseguests over the past two weeks, I finally got around to cleaning the joint. The primary activity in this endeavor: clearing the stacks and piles of books around the apartment. During the course of the project I found a copy of EdSpec and put it aside to put back on the bookcase. Naturally it remained on the table for the duration. Last night, after a typical mid Atlantic August weekend of fast boats, loud music, cold beer and hot women, I found myself sitting on the couch, a nightcap in hand, perusing the pages of this classic once again. As always, it triggered many thoughts, especially the section on market ecology.
Many talk of how closely the market follows nature, with predators (hedge funds, large traders) and prey (the public, mutual funds), the inevitable cycle of boom and destruction, those who feed off the destruction (short sellers once a decade and distressed funds), those whose existence depends on their ability to nimbly dance around the large dangerous beasts (sharks and pilot fish, the oxpeckers that flit around rhinos) that remind one of arbitrage traders. Perhaps not perfectly but to a large degree, nature is replicated in the stock market.
So here we are now, in the sweet spot. The grass grows lush upon the plains, the forests verdant and full of life. The grazers are well fed and the herd grows with plenty of food and positive 410k statements. The predators feed with ease picking off the weak (dollar shorts and bond shorts). We've been here before many times. The careful observer and participant knows that at some point, the fire (geopolitical event), the flood (sudden spike in interest rates) or sandstorm (oil prices) could come along and wreak the traditional havoc needed to sustain markets and ecologies alike for the long term. The undergrowth must be burned off lest it choke out the forest, the herd thinned lest they eat themselves into drought. It is the way of nature.
I examined market selloffs and storms over the past 30 years. In every case, there was an event, a warning that allowed one to seek higher ground. The April '87 interest rate spike, the US Air takeover in '89, H#llary's healthcare and the Fed in '93, falling earnings in '00 are a few examples. The browning of the grass portends a fire (slipping earnings), the darkening sky (Fed tightening) a possible storm. In virtually every major selloff, the market was in fact high by traditional measures (price to earnings, price to book, dividend yield etc). However (and this is where a lot of the current "market too high" crowd is off base) they had been that way for sustained period of time. Just reaching overvalued is not enough. Something has to happen to upset the balance. I originally thought prices would tell us, that the first 5% down month in the market preceded further sell offs. As Primal Scream would say: wrong. With the exception of the 2001, the market has been higher six months after a 5% decline in every case since 1980). The grass grows too high, the predators too fat; nature will correct but not until there is fodder for a fire, or sufficient moisture buildup for storm-causing flood. The fact that it's going to happen does not mean we should take all our money out and start starving today. Today, we continue to feast, we watch the skies. We map out the trail to higher ground for a fast exit, we guard our stockpiled reserves. But we feast while we can. We observe the Fed, the supply of IPOs, and may other factors, but we stay long until the storm approaches. The feast most often continues long after the gloomy boys slipped a few dinner rolls in their pockets and left the party.

Of late on the list we have discussed eBay practices, the usual mix of reports and ratios and even a smattering of bbq (although with some of the froo-frroo things you guys do on a grill I surprised the voo-doo prof has pulled up on his Ducati and confiscated your charcoal..remember...dip it, paint it, burn it, eat it) but very little of two subjects that were an integral part of the original charter and mandate of the list…books and music. Last year when I put out a call for book talk we got a great response and all added to our reading list to our mutual benefit so I thought I d try it again...with a twist. We all read non fiction and finance all the time. History, biology, markets, economics…we have it coming out of our ears. So lets try something different, again hopefully to the enjoyment and benefit of all. I suggest we all take the time to list the 3 authors we read STRICTLY FOR FUN. I'm talking lazy day in a hammock or rainy Sunday at home and the cable is out, Relaxation and escape type stuff...guilty pleasure reading. In addition, to bring music back into the fold lets each list two recordings we consider classic, must own recordings...any genre. I suggest we omit Atlas Shrugged, Fountainhead and Don Quixote. We all already know those are the best fiction reads for specs. Naturally I'll go first.The undisputed all time favorite read is the John D MacDonald Travis McGee series. Taking early retirement aboard the busted flush ( a houseboat won in a poker game at the Bahia Mar Marina) next to his economist friend Meyer, McGee finances his life of leisure by recovering valuable items lost for a percentage. Soaked in Plymouth gin, bikini clad women with the morally casual attitude I do so adore, Travis goes through life his own way picking up a few bruises and a deep water tan along the way. Amazingly for what could well be considered trashy mystery novels by some there are life lessons contained herein. Travis McGee is the embodiment of independence and using ones brains and skills to earn his own way, asking nothing of on one ..and check out these gems.You can be at ease only with those people to whom you can say any damn fool thing that comes into your head, knowing they will respond in kind, and knowing that any misunderstandings will be thrashed out right now, rather than buried deep and given a chance to festerI do not function too well on emotional motivations. I am wary of them. And I am wary of a lot of other things, such as plastic credit cards, payroll deductions, insurance programs, retirement benefits, savings accounts, Green Stamps, time clocks, newspapers, mortgages, sermons, miracle fabrics, deodorants, check lists, time payments, political parties, lending libraries, television, actresses, junior chambers of commerce, pageants, progress, and manifest destiny.Education is something which should be apart from the necessities of earning a living, not a tool therefore. It needs contemplation, fallow periods, the measured and guided study of the history of man's reiteration of the most agonizing question of all: Why? Today the good ones, the ones who want to ask why, find no one around with any interest in answering the question, so they drop out, because theirs is the type of mind which becomes monstrously bored at the trade-school concept.There are 21 Mcgee books in all. Lots of open water, cold gin, beautiful willing women adventure and even a few meals for a lifetime.Second. In keeping with my generous nature I'll leave the Robert Parker books for Crossman to select so I'll go with the Randy Wayne white doc ford series... Doc Ford is a quiet man, wishing only to be left alone collecting samples for his Sanibel marine biology company, selling to labs and schools, conducting experiments with tarpon and sharks, living in the Dinkins bay marina with the eccentric collection of fishing guides and live aboards such as Tomlinson the new age guru and perpetually stoned genius who is docs unlikely sidekick…a peaceful existence until someone Doc cares about is threatened... then he reverts to the Marion Ford trained by the government as a covert operator and assassin. Full of roustabouts, boat bums, high adventure with some science and romance thrown in they are probably the modern day equivalent of the Mcgee series... with a bonus factor... white is a damn good writer and uses his skills to weave brilliant stories that are a pleasure to read.My last selection is the guiltiest of literary vices. All of The WEB Griffin books. Griffin is not a writer. He is a storyteller and a masterful one. He writes primarily war stories and he is a master. Clancy may know the technology but Griffin knows the stories. I've read every thing he's ever written(33 books so far) and always buy the new ones on release day. To date my favorite series are the corps, a serial novel over 10 books so far of WWII, not the Korean conflict. The characters are the manliest of men capable of killing the enemy, advising the president and winning the dame without spilling a drop of famous grouse over ice( and yes his writing is where I discovered this now household staple... maybe not a lesson for a lifetime but damned good scotch). The Badge of honor series set in the Philadelphia is probably the series I d choose second but all the books are good stories. Griffin keep his histories and timelines accurate and weaves such luminaries as Roosevelt. McArthur and Wild Bill Donovan easily into the plot. The men are brave and determined, the women are beautiful and saucy, the stories, while not great writing, are great reading.Now music... first the album I consider the greatest rock and roll album ever recorded. Bob Dylan's Blood on the tracks. Its poetry, poetry written during a time of self introspection and failed romance. The music here is primarily acoustic and the lyrics poetic geniusShe lit a burner on the stove and offered me a pipe"I thought you'd never say hello," she said"You look like the silent type."Then she opened up a book of poemsAnd handed it to meWritten by an Italian poetFrom the thirteenth century.And every one of them words rang trueAnd glowed like burnin' coalPourin' off of every pageLike it was written in my soul from me to you,Tangled up in blueMy last musical choice... Miles Davis, Kind Of Blue. This record defines jazz as far as I'm concerned and strikes me as a painting with musical instruments. The band with Cannonball Adderly and John Coltrane on sax and Bill Evans on piano is a who’s who of the 1950’s and 60’s American jazz science... tough call between this and birth of the cool but kind of blue gets the final nod.

testing bands+range expansion

bks..36.75
intc...26.20
gps....19.80
jakk...16.05

using option spreads
gps
short 1 oct 20 @.90
long 2 oct 17.50 @ 20
.50 net credit


intc
short 1 sep 27.50 @1.40
long 3 sep 25 @.20
1 net credit

bks
short 1 oct 35 @.95
long 2 oct 30 @ .20

net credit .55

jakk

short one sep 17.5 @ 1.55
long 2 sep 15 @ .4

net credit .75

all the stocks have positive expectations when previously hitting the same std deviation points, expanding range on the down move and decent fundamentals and liquidity

used mostly in the money options to short as the stocks are beaten and look poised to advance, which would cause a contraction in premium if they rally back aove the strike. the worst case in all of these is that the stock stays between strikes and we get put stock slightly above market

in intc we would own stock at 26.50 if it stays between 25 and 27.50

in gps we own stock at 19.50, the bottom of the 8 month range.

in bks we own stock at 34.50, the support point

in jakk, we own stock at 16.75..about 7 times reaffirmed earnings

should any of the stocks crack,we re long 100 shares and short 200,giving us a back up the truck trade.

romance and markets

Found this in a forgotten collection of disks...forgot I had even written this few years ago after the first Spec Party I attended...never posted it but it seems worth sharing..and if not...hey thats what the delete key is for

Romance..the word itself carries a multitude of images and benevolent moon and dancing stares, discrete champagne rendezvous with lovers. The word is used to describe movies, individuals, couples, lifestyles, literature, music. It can be found in descriptions of Shakespearean sonnets and on lurid covers of cheap novels full of heaving bosoms and torn corsets, in movies filled with angst and heartbreak We think of the great romantic pairing, Tracey and hepburn, Napoleon and Josephine, Lancelot and guinvere, Humphrey and Ingrid, and of course harry and sally. Romance can mean adventure, exotic travel, a waterfront view.The term conjures different images from different people from the romance soaked dreams of the oprah watching frustrated housewives to the adventure travels of the jet set..ask a hundred different people,get a hundred different answers. Ask the same person on a different day and the answer can change...strolling hand in hand with the one you love on Monday, floating down a river with Huck and Tom on Tuesday, the tarmac with Rick and Renault wistfully watching the departing Lisbon plane on Friday..Romance is a basic ingredient of the well lived life. Romance conjures many things essential to the essence of life, the soaring words of a Shakespeare, the earth soaked love of yeats, the hedonistic joy of a wilde, the soaring tones of a Bach, a Beethoven, the sensual mutations of handels Water music, the longing in the first glance in anew loves eyes, the sensation of a first kiss, the world itself enveloped in a space that contains only two and yet somehow everything.many images, many thought, many identities.

The one that is the most striking and yet the most overlooked is one that has occurred to me several times and sees worth exploring.. the romance of the markets and those of us who dwell there. It is easy to see the knight so of old and James bond as romantic..but speculators?To explore the word and the connections more closely, first we must look at the words themselves. Turning to Miriam Webster and his revising associates we find many definition for each that are worth examining as they apply to the world those of use who dance with the market mistress each day.

Main Entry: 1ro.mance 1 a (1) : a medieval tale based on legend, chivalric love and adventure, or the supernatural (2) : a prose narrative treating imaginary characters involved in events remote in time or place and usually heroic, adventurous, or mysterious (3) : a love story b : a class of such literature 2 : something (as an extravagant story or account) that lacks basis in fact 3 : an emotional attraction or aura belonging to an especially heroic era, adventure, or activity 4 :
LOVE AFFAIR

Main Entry:1 : consisting of or resembling a romance2 : having no basis in fact : IMAGINARY3 : impractical in conception or plan :
VISIONARY4 a : marked by the imaginative or emotional appeal of what is heroic, adventurous, remote, mysterious, or idealized b often capitalized : of, relating to, or having the characteristics of romanticism c : of or relating to music of the 19th century characterized by an emphasis on subjective emotional qualities and freedom of form; also : of or relating to a composer of this music 5 a : having an inclination for romance : responsive to the appeal of what is idealized, heroic, or adventurous b : marked by expressions of love or affection c : conducive to or suitable for lovemaking 6 : of, relating to, or constituting the part of the hero especially in a light comedy

Main Entry: ro.man.ti.cism 1 often capitalized a (1) : a literary, artistic, and philosophical movement originating in the 18th century, characterized chiefly by a reaction against neoclassicism and an emphasis on the imagination and emotions, and marked especially in English literature by sensibility and the use of autobiographical material, an exaltation of the primitive and the common man, an appreciation of external nature, an interest in the remote, a predilection for melancholy, and the use in poetry of older verse forms (2) : an aspect of romanticism b : adherence to a romantic attitude or style 2 : the quality or state of being romantic- ro.man.ti.cist

Again to our friends at websters:

Main Entry: spec.u.late 1 a : to meditate on or ponder a subject : REFLECT b: to review something idly or casually and often inconclusively 2 : to assume a business risk in hope of gain; especially : to buy or sell in expectation of profiting from market fluctuations transitive senses 1 : to take to be true on the basis of insufficient evidence : THEORIZE 2 : to be curious or doubtful about : WONDER synonym
Main Entry: spec.u.la.tion: an act or instance of speculating : as a : assumption of unusual business risk in hopes of obtaining commensurate gain b : a transaction involving such speculation Bottom of Form 0

Speculators are by nature and in being a strange and unusual breed of people. We have chosen a path that would seem predestined for failure. All the studies seem to agree, if on nothing else, that 90% of all speculators fail. Most of us are educated people with a good grasp on life and the concept of risk versus reward, and yet we eschew the normal life in favor of chasing dancing red and green blips across an electronic landscape full of dangers and dragons that would turn St George white with fear. Perhaps along with Joyce s Stephen hero, acutely feel the insidious dangers which conceal themselves under the guise of extravagance but are convinced also that a dull discharge of duties,neither understood or congenial,was far more dangerous and less satisfactory.Each day we assail the summit, charging in full view of the world aspiring to the mountain peaks of success while in constant danger of the ever present pit of Monday morning margin calls have all known the feeling of pride in a good trade that turns sour with a single utterance from a defense secretary starting with that contrarian killing word regrettably ( for an excellent description of this event from a specs point of view, see Victor Niederhoffers education of a speculator). The world and all the studies in history predict our failure before we click the mouse or call the floor to enter our first trade. We are universally vilified in the press. Blamed for the near collapse of the bank of England, the crash of 87 and the Asian meltdown of 1997( it is interesting that speculators are so hated by the mainstream, it was the champion of the downtrodden and exploited, author John Steinbeck who pointed out : I don t know where speculation got such a bad name since I know of no forward leap which was not fathered by speculation)..And yet, here we are, chasing the numbers across the screen, speculators speculating.

There is of course, something quixotesque about the average speculator.. I'm talking now of the individual risking his funds and his future primarily, not the slick young men and women trading the seemingly limitless funds of Goldman and Salomon but the individual trader or fund manager who stakes his all and own on his trading and analytical abilities. We tilt against the windmills of academic thought, of traditional beliefs and against the odds of the market mistress herself. Our quest is for knowledge, for gains, for independence, and of course for wealth. The original don was out of course to better the world and right wrongs..not the usual aim of a speculator although some, notable Soros and templeton have used enormous portions of their wealth to attempt to reshape society as the believe it should be and assist others in improving their lot,,,but these activities would seem to be secondary to, not the central point of, their speculations). Like the windmills on the plains of la mancha, all is not as we see it in our endless calculations and study, and we are battered and beaten for the mis seeing. But like the good Alonso, we pick up to live on and fight another day. There are those who would drag the Mad dons of the market back to the center.wives, in laws, friends and neighbors, back from our foolish tilting against the odds and the gods, but for some of us, the windmills of the market are preferable to the safety of the ordinary.Although most of the successful specs I know are above average in intellect, education, and life experience and could easily hold down high paying, lower risk corporate jobs, the vast majority choose not to. There seems to be a mindset among speculators, that since I share, I think I can attempt to describe.

It would seem to be something along these lines, taken from a letter to a friend in response to the question of why I was always out on the edge taking risks with my money,and my life.

All the mundane grinding of the day to day gathers into a long trail of nothing.. not remarkable, not remembered at all or recalled at any time. Yet so many live this way each day, cocooned in their safe little cabins of mundane averageness, they trudge the roadway of life, a dry, dusty road with only the occasional water stop where warm tepid water is passed out by bored looking minions and guardians of the path, dressed as bosses, as parents, priests and ministers, politicians and rabbis, murmuring promises of some strange unknown unexplainable reward down the road..they've never experienced it or been past their own little water stop but they promise if you keep moving, following the form in front of you, not stopping, no exploration, suck in the dust, eyes upon the dull brown of the path, somewhere, somehow down that road something better awaits all the while off to the side of the road those souls who recall the passion and spirit of adventure they were born with and refused to have it beat out of them by so called normalcy, have found that just off the side of the road, through the gray bleakness of the concrete walls on that dusty road, are beautiful glens and hollows, with spreading tress with shade and lush sensual green grass, and music plays soaring, Beethoven s 9th, handles water music, vivaldis 4 seasons, and james brown ,sinatra, its all their off to the side, and wine is sipped and food is plentiful,..its right there, just to the side of the road..you can hear the music as you trudge along, but so many just keep walking, paying the mortgage, mowing the lawn, going to church, avoiding sinful sex, listening to top 40 and watching a very brady sequel and jerry springer. Or that girl reruns. Reading stephen king novels as literature and may angelou, when over in the glade they read Shakespeare, baudelaire, joseph conrad, ernest hemingway, they watch the old film noir movies and the great romantics, bogart, cary grant, talent and script not just half dressed bodies and violence impersonating art I mean as nice as half dressed bodies are what good is one on the screen without one in your arms?What is it that drives some of us over the wall, to recognize that life is not a dull dreary drudgery, that the intent of whatever benevolent deity created us did not intend this dreary, thirsty trudge, but that the road was only the path we took from glen to glen from quiet dell to raucous valley? There is risk in going over the wall..It is topped with the razor sharp wires of loss, heartbreak, poverty, pain..The water passers have seen to that. But isn t the risk of losing it all, betting it all on love, on lust, on poets and on poems better than this? Anything lost going over the wall can be regained,, I've proven that. I have been impaled on the wires many times, been rich, been broke, bet big, won big, lost big, been loved, been lost..but each time I find healing in the glade, healing for my body, healing for my mind, for my soul. There is peace in the arms of a lover, the words of a song, the ring of Shakespeare s words, the musings of joyce, the touch of a woman s lips and the sparkle of her eyes. To find the glades, the valleys, the love, the lust. The passion, the romance we must be willing to assume risk, to swallow it and let it dribble down our chins so what,; What are we risking? A lifetime of walking down that dusty road, living on the lukewarm spittle passed out by the water keepers of society. Fine, I will risk it. For me, it so ver the wall, risks be dammed. Play the music, fire up sinatra, lets dance to a little James brown, and lets drink, smoke,, drink the wine of life and spill on each other, winestains on our shirts and smiles on our lips..lets shoot craps in the alley, read Shakespeare by the pond,lie on the beach at dawn watching moonbeams skip the surf like scattered handfuls of diamonds leaping in the foam,lets get drunk and read EE cummings.lets kiss,make love..lets dance,lets sing,.lets savor the moments that make up this erotic, romantic, sensual incredible cornucopia of life that some wonderful god(dess)has laid before us sure we have to walk the dusty road one in while, me have to raise kids, pay for roofs and food .and it s the only way to the next valley so we walk a little ways, but always aware of the soft songs and delighted laughter to the side

I do not meant with my words to create an image of speculators as carefree sensualist who eschew work in favor o of play or looking to live on the quick score. For most, even those who have hit the big one a multitude of times, speculating in financial markets is a kind of love affair, We cannot imagine not doing it . And far from the image of the wild eyed Diamond Jim carefree amoral speculator created in literature and media, speculation is work. To develop the theories and approaches, the patience and the discipline necessary to successfully trade in the financial markets requires a work ethic that would make a 19th century new england Protestant green with sinful envy.If romance is as defined above in main (3), a love story, then speculation is romance. For you cannot do this for very long if you do not love it. The stress, the emotional swings, the long hours and tedious research would drive one quite mad without an underlying love of the gyrations of business and finance. I have known many super successful traders and investors. All worked long hours, were capable of losing all track of time while researching a new idea or theory,and truly love what they do.I believe it was Churchill who said that a mark of success to go from failure to failure without a noticeable lack of enthusiasm. This seems to be a trait of successful tradersLike any truly good love story, there are periods and times of heartbreak. Virtually all of us have danced with or fallen into the pit of the Monday morning margin call. The greatest among us, Soros, niederhoffer, robertson, Jones, have tasted the ash of the big fall. The misadventures of Michael Marcus, the reclusive currency mega trader described in the first edition of Schwagers market Wizards in his early trading adventures show an amazing resilience to failure, an uncanny ability to take blows that would shatter mere mortals. Like Ali in the foreman fight, successful speculators seem willing to suffer shattering blows and yet continue to learn,grow and pursue their chosen craft.

Perhaps along with the great violinist, Igor Stravinsky we have come to understand that we learn chiefly through our mistakes and pursuit of false assumptions, not by exposure to fonts of wisdom and knowledge.I suspect it is our love of the game and belief in ourselves and the romantic, wonderful nature of life and the universe possibilities and probabilities that starts us back on the path, unable to stop anymore than the Don could stop his mad search for Dulcieana. Or yeats Mad aegnus could stop searching holly land and hilly land for her, wherever she had gone.In fact our love affair with the markets often strains other love affairs in our life. It takes a rare breed of man or woman to be married to or committed to a speculator,esecially in the early days. It is perhaps easier after success and the park avenue apartment and long island estate but even then they live with the knowledge that it can disappear in a blink, and that often their companion will leap up from a romantic dinner with a eureka and run to the bloomberg and the spreadsheets as an idea comes to fruition.

Most of us would be better waiting until we find a spouse along the lines of a spec spouse who wrote the following during this during a particularly tumultuous time in the markets:Memo to All Spec Spouses:>>It has come to my attention that some of you are getting a bit nervous>over recent events in the market and inadvertently transmitting such anxiety to>your trading partners. CEASE IMMEDIATELY!!>As has been noted many times on these pages, emotions can play a >powerful role in trading decision-making. Terrible market declines >sorely test the strongest trader and can shake one's self-confidence. >This can be a recipe for disaster by prompting a trader to throw in the towel just before >the market turns in his favor.>>At this point the worst thing a loving spouse can do is further erode >your trader's confidence in himself (or herself). He needs a clear >head and calm surroundings to fully concentrate on the problem at hand and focus on >the proper direction forward. Suggestions of trades he could have made >on the close yesterday or queries about the amount of liquid capital >available to the household today are generally not helpful.>>Rather you should marshal all your resources to show your trader that >you have confidence in his ability to do the right thing. Remind him >of all the times in the past that he has snatched victory from the jaws of defeat >by doubling up at the bottom. It is sometimes helpful to let your >trader know that you love him no matter what and that material things have never >meant a lot to you (although this can backfire on traders who pride >themselves on being good providers). Intercept the phone calls of >worried friends calling to see if you are ok. Make sure the children play quietly and are >extra nice to Dad. Distract him after the market is closed and let him talk about >it without offering advice.>>And be sure to remind him that so long as he has enough chips to play >tomorrow he can always make it back...>>Respectfully submitted,Spec Spouse

Other qualities needed for a speculators spouse are found in the reply of Jennifer lackey, the wife of a wild eyed day trader and race car aficionado, James lackey of FloridaYour message sounds to be from the heart of an actual trader. As a traders wife, I have always been supportive, even when the times have been tough. And believe me, we have been through some tough times!!! I bite my tongue every time he has a bad day, and comes home saying the same thing he said 2 days before, " I'll NEVER hold overnites again!" And what do you think he does the very next day?....With a great excuse of course, "but honey, I know the whole world is crashing....trust me! So, last nite he holds overnites and at 2:30 A.M. he wakes up in a panic attack, because everything IS crashing, only nothing is in his favor. By 9:30A.M. he's got fever blisters forming from nerves because he's trying so hard not to blow up. The good thing about blowing up is knowing that once you recover (sometime in the next year) you have learned so much of what you should have done and what you should never do again. I trust him totally and let him know that if he comes home and says "Honey, I lost $50,000.00!", I just say " That's O.K. honey, you'll make it back tomorrow." And he does! Jennifer Lackey(AND ADDED NOTE>>LACK>>YOU LUCKY SOB>>TM 8/13/04)

Such individuals are of course , as rare as successful speculators themselves. However one has only to watch Yale Hirsch and his wife and they way they still look at each other to understand the possibilities.Most of the specs I have met tend to be passionate people, passionate about more than just markets, but life, people, theories,ideas, politics,music..in short everything.

The majority that I have know are also somewhat sensual in their approach to life. History tends to bear this out with episodes and sexcapades of great traders being legend among industry insiders. Stories of the lecheries of the early robber barons traders and modern great alike abound. Even the grandfatherly renowned Ben graham ( call him the original value investor if you like. As near as I can tell from his writings and autobiography he may have taught careful analysis, but in practice he appears to have used his skills to speculate on liquidations and arbitrage type situations) was so well known as a ladies man that friends and associates were loathe to leave their wives in a room with him. The first fixed income derivative was apparently developed by Casanova, who was also know as a speculator, mathematician and gambler.The board of trade and merc alike are riff with reported and rumored sex scandals over the years.Amazingly, beyond the chapter on sex and speculation in victor book ( if you don t recall it, I highly suggest rereading it..it is educational, enlightening and entertaining as hell. ), there is very little written on this topic. There are thousands of books on speculation, and thousands more on sexuality. no one it seems has et been brave enough to explore the correlation of the two. Anecdotal evidence supplied n the after hours sessions now known as spec list after dark tend to bear out the conclusions of the passionate and sensual nature of traders and speculators. Over Famous Grouse, makers mark( the bourbon drinkers in the room, tasteless heathens that they were are reminded to once again thank Susan for that generouscontribution) and a bottles of wine left from that days dinner, the conversations in a well rounded room including options traders, distressed securities speculators, futures traders, stock guys and at least one psychologist, from 6 states and at least 4 nations that I can recall expounded with fervor on their beliefs on everything under the sun. As the libation intake increased, the ribald and sensual views of several were expressed in no uncertain terms.

Although not thoroughly researched or studied, this small microcosm of the universe tend to support the theory of speculators as romantic and sensualists underneath the calculations and theorizing.It is in the definition of romanticism that I find the truest comparison to the life and motivations of speculators. The life of a speculator does seem to me to be a school of philosophic,artistic and literate one. Universally the specs I have met, the ones still around after the bust, the ones with the commitment drive and discipline to survive have adopted a view of the world and philosophy that serves them well Thomas Hampton in the PBS series, I hear America singing, defined the romanticist thusly:

Embracing the unknown and unafraid of the contraries of human existence, the Romantics overthrew the philosophical, artistic--even geographical--limitations of the Enlightenment. The quintessential Romantic figure was the Wanderer, literally and figuratively journeying in search of new lands, new places in the imagination, and new vistas for the soul. Exotic lands, the amorphous world of dreams, the dark terrors of the psyche as well as the dizzying heights of creativity and the dazzling beauties of Nature--these were all waystations along the Romantic quester's route.

The throw off of convention and the search for new ideas, new vistas in common theme among those who trade the markets. It takes enormous imagination, creativity and focus on self to make a living this way.It was George Bernard Shaw who observed that all progress is the unreasonable, therefore all advances are the result of the efforts of unreasonable men, Thomas huxley who postulated that all advances in natural knowledge have involved the absolute rejection of authority. Successful speculators set there own terms for how they choose to live, and they are outside the bounds of the normal corporate advancement, commuting, television watching norm.I am continually amazed by the output of specs away from the markets. Seemingly the intellectual curious nature of the average spec takes them down many fields and paths, the results being numerous books being written, paintings commissioned, artists sponsored, companies developed and life s enhanced. Many are accomplished musician finding a similarity between market patterns and musical ones. There have been psychological discoveries, scientific advancements in math, chemistry, biology developed by those whose intense intellectual curiosity takes them not just to the markets but done every possible path the human mind can explore.

Examining the parallels between romantic literature and the life of a speculator that the pure romanticism of speculating for a living,becomes, to me, the most apparent. N the world of finance and trading all of the great themes of romantic novels are played out daily, and the all the stereotypical heroes and villains are present. We have kings, would be kings,fallen kings and pretenders to the throne. For every Rockefeller and Soros, we have a Livermore, a Daniel Drew and a Boesky, giants for a short time felled by their own visions or corruption. We have alchemists attempting to spin gold from flax, would be wizards with complex formulae, characters of the unlikely names of gann, merriweather and citron are among the many who have declared that they and they alone knew the secrets of the market mistress only to find spray painted bars of lead in the vault at the end of the day. The grand wizards, those smart enough to know alchemy is a sham but still capable of issuing definitive statements of laboratory success that may or may not work in the real world, men such as fama, french, samuelson, sharp and malkiel, We have our prophets of doom and gloom, the witches of grant,abelson and feschback continually stirring the cauldron of falling prices and imminent collapse, knight errants such as lynch and bogle out to save the common man from his underinvested plight --hell we even have jesters ala cramer (okay the guy has a reputation as a good trader and astute observer but his maniac behavior and outrageous statements brand him jester) and glanville. All the lords and ladies of the grand court are present in the speculators world.One of the common themes of romantic literature is the seagoing man pirate and privateer, a them that transfer well to discussions of speculators and speculation. Not because speculation is an inherently evil practice or robs and pillages society as one might think ( in fact without speculators, the concept of democracy and free market has a life span of something like two days), but because the motivations are similiar.I suspect many of use who now speculate would have been adventurers ,privateers and pirates had we been born in a different time.

But as the troubadour of palm trees and south seas, jimmy the other buffet sings, the cannons don t thunder, theres nothing to plunder in a modern society. A desire to build wealth outside the norms of society to live as one chooses. Thomas Cochrane the inspiration for Horatio Hornblower and o Briens jack aubrey was know for his daring, his willingness to take a stand against the odds. There seems to be some credence to the story that he chose the sea after his along with his father s intellectual curiosity and experiments bankrupted the family estate. His curiosity led to develop numerous weapons of war over the years, and his boundless thirst for adventure cause his life to read as a heroic novel.it is this boundless quest for knowledge and spirit of independence and adventure is similar to securities traders today. Sir Walter Raleigh was trained in the law but his drive for success and adventure led him to become a privateer and explorere.captain jh callie was a retailer who grew board and joined the Navy to escape the everyday.Stede bonnet was a respectable merchant and planter who turned to piracy, some say out of an aversion to respectability, while others insinuate that it was to escape a nagging wife.men of earlier times took to the seas to seek fortune, or perhaps fame. It was a hard life replete with dangers and arduous tasks but allowed an escape from the ordinary and mundane and a chance for great riches. In days of yore they galloped the Spanish main and sailed the blue Caribbean under letters of marque, chasing galleons and sloops.

Today, men of adventurous commercial spirit and a romantic heart chase markets, dodging margin calls rather than cannonballs, tracking market movements in shades of red and green rather than skies of red at first light, sighting emerging patterns and trends rather than far off masts, but the spirit of fierce independence and desire for achievement outside the ordinary is similar.

Another of the common themes of romantic and adventure literature is that of the solitary man, the man standing outside the norms of society, making it on his own terms and in his own way. The works of Louis L amour, particularly the sackett series show this sprit of adventure , the tremendous self belief, a desire to explore new lands, build wealth and climb the summit of life on ones terms. Jack schaefers Monte Walsh is a masterpiece of the genre, exploring the themes of live lived as one desires,not as one is told. By developing a special skill set devoting the time and effort to become a master at his craft of cowboying and horse breaking, Monte lives as he chooses, not as others dictate. His fanatical devotion to his craft and to his close circle of friends are traits observable today in trading rooms from weston ct to san diego ca and all points in between.In literature, the solitary soul is often on the prairie, in the forest of the old west, or perhaps the middle eastern trade routes of the middle ages, seeking, learning,exploring the world and himself. Toady with the notable exception of Bo and those few like him, I think the solitary dreamers and seekers are found behind quotrons and bloombergs, living outside dictated societal terms, surrounded by close and devoted groups of friends and associates learning about the markets, about the world and most of all about themselves.

Perhaps I have reached too far describing the speculator as a romantic, the tradecraft practiced by them as a romantic one. Certainly the mathematical and studious nature of speculation would not seem to be the root of a romantic soul. However among those I have had the extreme pleasure to know and associate with over the years, the common traits seem to be a boundless optimism, well developed self belief. A vision of the world as a wonderful exciting place worth exploring and celebrating.They are willing to risk themselves, their capital, their mental and emotional security on the strength of their thought s and their ideas. They the develop discipline required to embrace risk and tend to see danger as opportunity.They cherish art, literature, music,science and seemingly all intellectual endeavors and practices. They refuse to be told how to live and eschew the mundane for the possible and celebrate live at every turn. And that, to my mind, is romantic.