Monday, June 26, 2006
(10:33 PM) | Aryeh Rafah:
Varia, Misc, and "Shit and Garbage"Scrolling through Weblog archives, I've discovered the last phrase in the above title, and am well pleased. The problem is that, having now identified a category under which the vast majority of blogospheric writing falls, how do we classify the remaining 1% of posts?
Anyway, I was just writing to say that I met a lovely woman today on the street - someone I suspect many of the writers and readers here would describe as "grandmotherly" - and I met her because she was wearing a Miles Davis t-shirt. It was a Birth of the Cool shirt. None of that Bitches Brew stuff, thanks very much. I did not get a date, however.
Also, I'd like to prod people here, obviously an intelligent lot, to reconsider prevailing attitudes towards the markets. Now, my father was of the left-wing angry contrarian sort, and I gladly inherited a lot of that, well, you know:
Alvy Singer: You, you, you're like New York, Jewish, left-wing, liberal, intellectual, Central Park West, Brandeis University, the socialist summer camps and the, the father with the Ben Shahn drawings, right, and the really, y'know, strike-oriented kind of, red diaper, stop me before I make a complete imbecile of myself.Anyway, either you're saving for retirement by sticking first editions of Anti-Duhring under the mattress, or you're trying to get some money. (Or you're not saving at all, which puts you in with the majority of Americans, whose savings rate is -0.1%.)
Working long hours down at the docks is one way, and stock market magic is another. I've mentioned the latter before. To drive the point home, one more example worth bragging about:
Walgreens, you know, the drugstore, was scheduled to report earnings today, and there was a general sense that they'd have good news - largely because the new prescription drug benefit enabled lots of seniors to buy pills last quarter they otherwise couldn't've. So I and the friends who listen to me bought some options on Walgreens last week at $0.10 per share. (1 options contract equals 100 shares, so one can get significant leverage without buying all that many contracts.) Sure enough, today's report was fantastic, and for the expected reason. I sold my options today at $0.50/share, which is obviously a 400% profit return in just two days. Recall that the historical average return of the broad market is about 10% a year.
Now this is unusual to be sure, but I've also seen returns on trades this year of 159%, 156%, 63%, 48%, and so on, and (because I know you're wondering) my worst trade so far this year is down 19%, but has until January to recover and has a very good chance of a major bounce in late August. I should note that I'm not a particularly intelligent or prescient person.
The moral of the story is: a little research and just a touch of risk tolerance can go a long way.