Yogi's Den

Ch-Ch-Ch-Ch-Changes…

Yogi and Boo Boo — Tue, 31 Jul 2012 11:52:58 +0000

The past month has found me with little time to write. Unfortunately (fortunately?) there are only 24 hours in the day. I’ve been involved in learning and trying to integrate strategic options trading into my portfolio. It’s been a month of seven day work weeks that on some days seemed to be endless.

There is one thing that never changes in this business. The business is constantly changing. Technology drives it forward. Markets change. They get more and more efficient and liquid.

I made several portfolio changes yesterday. Friday’s bond move really scared me and was the only signal I needed to liquidate the majority of my leveraged mortgage REITs. During the market bloodbath of 2008 and early 2009, I had purchased a significant amount of bank preferreds at a substantial discount to par. All but one ($RBS) never missed a dividend payment and they all appreciated from 2 to 5 times. When the $RBS stopped paying dividends, I rolled the proceeds from the shares, which had tripled in price, into a couple of leveraged mortgage REITS. Two years of outsized dividends and healthy price appreciation are quite enough.

Time to get back to work.

Yogi’s Saturday Morning Cartoons – Top Cat

Yogi and Boo Boo — Sat, 07 Jul 2012 15:21:56 +0000

Today’s cartoon comes to us from Hanna-Barbera studios and ran on ABC Wednesday evenings from 1961 to 1962. There were only 30 episodes produced, which were produced in color but originally broadcast in black and white. This episode, “All That Jazz”, was originally broadcast October 11, 1961. Enjoy.

http://www.youtube.com/watch?v=BrWVacIsf_A

References: http://en.wikipedia.org/wiki/Top_Cat (Who the hell references Saturday morning cartoons?)

In Defense of Flatness

Yogi and Boo Boo — Sun, 01 Jul 2012 21:24:22 +0000

First let’s get some bookkeeping out of the way. I closed my long $TNA position on Friday, along with my short $QID 35 August and $VXX 18 August calls. All three positions were posted nearly real time inside of the 12631 trading service chat room. The positions were opened on June 24 and returned 13.3%, 42.19% and 44.95% respectively. I finished the day up 1.1%, the week up 2.8%, the month up 3.6% and the quarter up 5.0%.

All three months of the quarter were in the black, but the first two were relatively subdued. I finally cleaned up the disastrous $TVIX trade. The ticker is now on my do not trade list. The product is very broken and does not have options. I have no one to blame but my self for the trade; I was not monitoring it properly when the price decoupled from its NAV. Three other trades are depressing my performance this quarter, $PCX, $TBT, and $UNG. I’m still long term positive on both $TBT and $UNG and writing premium against them. $PCX on the other hand is dead to me. I’m writing what I can against it, but I doubt it will ever be a winner. I’ve reduced my net cost to 4.21 from 5.12, and the position now is about 1% of the total portfolio.

I’m going into the week about as flat as I ever am, with a cash position of over 20%. I’ve got capital freed up, and I’ll be ready for whatever happens in the overnight session and tomorrow. I don’t see much edge one way or the other right now, so I’m happy to be flat. Good luck trading.

Yogi’s Saturday Morning Cartoons

Yogi and Boo Boo — Sat, 30 Jun 2012 13:06:13 +0000

Rocky and Bullwinkle were one of the truly great cartoons of the early 1960′s. The next time you’re watching Mad Men, consider that the kids (the sophisticated ones at least) were watching Rocky and Bullwinkle while their parents were downing bourbons and oysters Rockefeller. The show was filled with references to the cold war, and brought the high art of punning to a children’s audience.

http://www.youtube.com/watch?v=_14Jz9kUnQU

Busy, Sloppy Morning

Yogi and Boo Boo — Thu, 28 Jun 2012 11:26:03 +0000

It looks like it’s going to be a sloppy morning. Europe is down. U.S. futures are currently down, but off their morning lows. We got down to and tested 1316. I’m thinking that’s enough to keep the ex-uber-ance [sic] down to manageable levels and should give us some fuel to go higher still. I’m still looking at a target of about 1,350 on the S&P futures.

The “Supremes” will be performing at 10:00 AM, ending their 2012 “Keep Me Hanging On” U.S. Tour. The ObamaCare set is the one to watch of course. I doubt it will have anything but very a short term effect on the stock market. Rumor has it that Antonin Scalia will perform a couple of numbers from “Lady Sings the Blues”.

On a personal note I made no new trades or adjustments yesterday. One of my slowest days of the year. Still watching Merkel and Euro land for market bombs, but I doubt they’ll have a big impact right now.

Status Quo?

Yogi and Boo Boo — Wed, 27 Jun 2012 11:31:23 +0000

Yesterday was a pretty slow day for me. I made only one trade. I added a one half position of $EXK at $6.25. It looks like it might still be early, but it hit my buy point and I bought some.

Futures look OK this morning, but I’d prefer a down opening to scare the mythical weak hands. I don’t think we’ll see S&P futures sub 1,300 on this cycle, but I don’t think we see a giant rally either. I’d be content with 1,350.

Last evening I commented in 12631 that this market required some different tactics than usual:

“… if you’re going to trade in this market it’s very much a slow down and hurry up market. Be really slow when entering positions, and hurry up and take profits when you get them. No fear, but no greed either.”

Barring some wild action, it looks like I’ll be taking it easy again today. Largest trading positions: $TNA $TBT $UNG

Redemption

Yogi and Boo Boo — Tue, 26 Jun 2012 10:58:56 +0000

I had my shot at redemption yesterday. I did not hesitate. Yesterday I wrote of my disappointment at not taking profits in my $TZA position. It bothered me all weekend. Why? I have no idea why. It was just another position.

The position was super-sized large for me, about 15% of the portfolio when it was closed out. Profitable? Yes, an 11.9% winner, 12.45% when option premiums taken in are included. Another position closed. Another contribution towards filling the hole caused by $TVIX. Move on.

The daily grind of trading for a living is unlike any other business endeavor. I live in a sylvan paradise. My work environment is like no other. I have no clients making demands. No peers, subordinates, CEO’s, CIO’s, or CFO’s asking that their pet project be moved up the queue.

Redemption.

Disappointing Performance

Yogi and Boo Boo — Mon, 25 Jun 2012 10:15:14 +0000

I was quite disappointed with my performance, or lack thereof, on Friday. I should have taken my profits on my profitable $TZA positions. It matters not that this morning the futures point to what might be a lower opening. One of my goals is not to have any monthly drawdowns. It’s late enough in the month that I should just take the money and run.

Yogi’s Saturday Morning Cartoons

Yogi and Boo Boo — Sat, 23 Jun 2012 13:08:13 +0000

I originally planned a post on yesterday’s action. That will come later. Instead enjoy this Saturday morning cartoon for your viewing pleasure:

A Complicating Factor

Yogi and Boo Boo — Fri, 22 Jun 2012 10:40:22 +0000

One of the things that keeps bothering me about the current environment is the lack of a clear front runner in the presidential race. This will make the presidential second election cycle in a row where we have tremendous macro uncertainty weighing on the market participants, and now we have a too close to call election.

I’m not a macro trader any more. I try to only pay attention to my trades, managing them, managing my risk, and taking profits. I do like to see the market rally into the election. Normally the market will rally when it’s figured out who will be the winner. I think this time it’s too close to call and might be right up to November. I just woke up to three new polls. Two were dead heats. One, Bloomberg, showed the President ahead by 14 points.

Contrary to everything you may read in the press, I don’t see much difference to the markets regardless of who wins in November. I’ve had great years trading regardless of the party in power, or who the president is. It will be a sideshow that will confuse the investing public who should be reading iBankCoin instead of trying to get investment advice from Suzi Ormand.

I’ll still be watching for that election trade. It’s normally an easy ride that the media misses, always trying to attribute every market move to news or policy or some other crap. It’s just once the uncertainty of the election is over, the market can move on to divining the next “big thing”.

http://www.youtube.com/watch?v=q94l-H59nWM