Disclaimer: I am not an investment advisor. When I describe my own trading activities, it is not intended as advice or solicitation of any kind.

13 September 2012

Thanks, Uncle Ben!

It's been a very long time since my last trading/investing post. I've continued to ride my CSMACO position (long SPY since May), and made a few covered call trades (Microsoft, Canadian Dollars were both good ones the last few months). And the Collaboration is Good trade has signaled an entry now and then in S&P Futures. Some I took, some I didn't, thanks to the distractions of moving across the country. I've also made some bearish bets on Salesforce.com (what is their revenue model really?) and Apple (haven't you hipsters run out of money yet?), which have not worked out too well. I trimmed back some of my poorly performing gold-related positions to offset some gains in other things immediately before the gold rally resumed - figures. But I still have a moderate stake in gold, so all is not lost. Overall it's been a tough but slightly positive quarter, but the trading has been pretty muted, and nothing interesting enough to write about.

But when it became clear, a few days ago, that the Fed was almost certainly going to announce a 3rd round of quantitative easing (QE3) in the September FOMC meeting, I knew I had to take a leveraged stake. Unfortunately real life kept me from finding time to enter a position until the last minute, but the market gave me the courtesy of a downtick on Sep 10th. This let me get a pretty good price on a sizable chunk of SPY calls, which I held through the announcement today.

Everyone knew QE3 was coming, and just about everyone was sure it was today. But there is a kind of gun-shy quality to this market: it reacts some to the rumor, but it prefers to wait for the actual news before making a decisive move. Call it what you will, but I like to think of it as a confirmation rally.

Going into the announcement, SPY was just about unchanged from yesterday, and random-walking market movements had already given me a small return on the calls. Sure enough Ben Bernanke announced QE3 and made a lot of meaningless bluster about "doing whatever it takes", etc etc, designed to give the masses confidences that he knows what he's doing and he'll make your life better. He doesn't, and he won't. But in the meantime, the entire financial system rallied: stocks, bonds, currencies (not the dollar, of course), commodities. Every single thing on my watch list is green today, except for the VIX. The S&P chart looks like a bottle-rocket going off.

I exited half the position at twice the entry price, meaning that I have my initial investment out and future proceeds are all profit. QE rallies usually take a few days to play out, so I'll hold the other half for a little while and see if I can improve the return a little.

09 September 2012

Happy 1992

Ah, 1992. The year I graduated from Alma College, left my home state of Michigan and my college sweetheart, who had another year to go, and jumped into the hustle and bustle of Chicago life. The economy wasn't great back then (either), and I felt very lucky to have scored a job at Andersen Consulting (now Accenture) in their DCS/Logistics product division. I was going to get to write COBOL! W00t! I think I had about 3 weeks between graduation and my first day, and I mostly spent them looking for a place to live (I chose northern Schaumburg, for no rational reason that I can see now). The rest of the year was spent riding the Metra back and forth, working as many hours as I could trying to make ends meet in an apartment I could barely afford, wearing a suit and tie every day so that I could sit in front of a computer for 10, 12, 14 hours straight. There was no time for metal, but I aim to change that now, only 20 years later.

Black Sabbath: Dehumanizer - Dio's back! He's still my favorite Sabbath lead singer, and he does his customary great job on this one. As usual, Black Sabbath is defined by its lead singer. Comparing this album to TYR (1990) is sort of like comparing Iron Maiden and Motorhead - completely different sounds.
Iron Maiden: Fear of the Dark - I always enjoy a new Iron Maiden album. This one came with a bonus disc, apparently with B sides and live versions. There's a crazy song called Roll Over Vic Vella done to the tune of Roll Over Beethoven, very un-Maiden-like, and an extended 7-minute rant in heavy British style with an acoustic blues guitar riff in the background. The main disc, though, is standard Iron Maiden fare: foot-tapping metal about personal foibles and other random stuff.

Pantera: Vulgar Display of Power - This is Pantera at its best. The brown rhythm guitars, the power-filled cadence, the furious lyrics, it's all here. Pantera took the formula they developed in Cowboys From Hell (1990) and refined it, turning them into the heavy metal band an entire generation of disaffected teenage boys identified with in their darkest, angriest moments. To say this album rocks would be doing it a disservice. It destroys.

Megadeth: Countdown to Extinction - The first Megadeth album I ever bought was Youthanasia (1994), and I was looking to branch out from Metallica so I would have more variety. I was somewhat disappointed by what I felt was an arrangement that was too melodic and lyrics that were too political. This album feels like a turning point between the early enraged Killing Is My Business that rocks, and the watered down Youthanasia that seems to be simultaneously catering to a wider audience and getting some kind of message (I don't know what) across. The next album to appear on this list will be Cryptic Writings (1997). I hope someone pissed off Dave Mustaine in those intervening years and he went back to his earlier style. We'll see.

Danzig: How the Gods Kill - Danzig continues his trend of sounding like Jim Morrison, if the Doors were a lot heavier and started playing about 30 years later than they did. The song I most clearly recognized on this album, of course, was Dirty Black Summer. But they're all cut from the same cloth. Danzig is generally a little too quiet and muddy for my taste, but it was a nice change from Megadeth and Pantera above.

Motorhead: March or Die - Another Motorhead album that sounds remarkably like all the others. This one is notable for having the iconic Hellraiser and a cover of Ted Nugent's Cat Scratch Fever that sounds better than the original, in my humble opinion.