On Bruce Springsteen, the dark side of town, on how to trade when you are on a downtown train: a true story

One of the lessons I learned early on, as a salesman on the road, returning from a long trip of selling computer software...driving in the winter...in a black hearse...just for the advertising attention...is that one should never listen to Bruce Stringsteen for more than two hours...ya those were the old days when I just placed the boom box on the front seat, with the cassette player positioned just so....and listened to those old mournful songs about the death of his hometown in Pennsylvania... The moral I took from this for stock traders...on Friday...is that on a long downhill train...when all the ticks are down...buy on the close....

The Barbell Strategy of Investment

In the book "The Black Swan" there is a long discussion of the traditional investment theory of "portfolio management"----in a time of crisis, traditional theories of "portfolio management" are not effective because...in a moment of raw panic, such as in 1987 or recently in 2007....everything goes down....and mutual funds provide NO hedge.... The only thing that works was shown pretty dramatically in the Wisconsin Pension Fund during the crisis of 2007-2013...even when participants that 50-50 split between fixed and variable, they took large reductions in pension income reduction.... The "Barbell theory" as described in "The Black Swan" proposes 90% in fixed or very conservative and 10% in very agressive speculation such as options and very high growth stocks. That is the theory...we will see....stay tuned.

Reduce Your Basis---Monetize the Math

For very conservative investors, reducing the basis by covered call writing can be a way to increase profits...So..whether it is by dollar cost averaging, or call writing...getting that basis lower increases the probability of profit.

"The Future is Wide Open" and other funny stories

Whenever my family leaves town, or at least in the old days when the kids were in the back of the Ford Aerostar...we used to insert a cd of Tom Petty's greatest hits, and the first number or so was the song with the line "The Future is wide open." It was kind of a soothing ritual...and during times of stress...like leaving for college...leaving for a job...etc, etc,,,well to summarize...we wore out the cd...I am not sure statistically whether we did indeed reduce the amount of stress...we did not have a proper test group...but still....here is my review of the concept. Whenever we listened to the song, as the older guy in the group, I just wondered whether anyone had really tested just how wide open the future was....and then last week, I heard a presentation in which a guru said that the stock market pundits who say that one should "never limit your upside" are simply full of "xxxt"....The truth that the money pros all know is that one "ALWAYS" limits the upside, and takes the other side of the transaction, making oneself the banker, not the river gambler....writing calls, shorting...anything but gambling on the eternal upside.... So there it is,,,about the "Future is Wide Open"....and now I think of Tom Petty as a financial guru...I do need to get another cd so I can never forget the message....

Charts Describe the Past; Options Speculate on the Future: Do not confuse the two

Whenever one reads a written piece of promotion from a Wall street firm, one usually finds the disclaimer, "Past results to not imply future performance." And one might wonder why this is so...because it is required to tell investors that the past is gone...done...and yesterday does not matter... Someone needs to tell those chart guys the above paragraph....all the chart guys seems to think that they seem to know....trust me..they don't...and legally cannot....make a note of it.