A Funny Thing Happened To Me On The Way To Work . . .

It wasn't there.  Ok the building was there.  

 I got up and let the dogs out and woke up Man Child before checking the market.  We had a few orders we had to tighten up (basically if we place a limit order over the weekend, we go to the NASDAQ after hours website and see how the stock might open and adjust our limit orders appropriately.).  Went swimming and the water was almost perfect (a little warm) and the weather was balmy almost reminding me of the days I used to visit Tampa about once a month.

I Treated myself to a bagel and coffee while knocking off a couple more chapters in the King and The Cowboy.  It was about 5 to eight when we jumped in the car and headed to the office.  Now that was darn near normal.  As I round the corner and peered into our parking lot, I actually thought it was still Monday.  I had gotten my days confused and did not check my iPhone last night and forgot we had given the PADI Americas employees a bonus day off this holiday weekend.

It was very lonely at the office.  I had to decide whether to tell Devin or not.  A day with no meetings, no interruptions, and no Sherpa duties at home was almost too good to be true.  I sat at the office, cleaned up some e-mail folders as I was getting near capacity, but by 8:30 called my lovely wife and told her the good news.  She said to come home. 

As I drove up to the house she was leaving and informed me she had to pick up some horse supplies.  I was home alone with a sideways trading market.  I checked my to do list and chipped away at a few things, then Devin was home.

Together we went to the High School to get Jack squared away with the Football Paperwork, payments, medical forms, and uniforms.  It only took about 20 minutes.  I was actually excited to think I could get my blog done by 1:00 in the afternoon. 

Then my darling wife asked me if I wanted to go to lunch.  I lectured her about being so concerned about food and drinking.  I told her there are more important things in life than shoving food in your face.

My body is a Temple and the thought of putting food in it at midday was just disgusting.

After a tasty Caesar's Salad at Hanna's, I was thinking I could still get the blog done by two o'clock.  Then my lovely wife suggested we run to Fields Piano's to start shopping for the piano we lost in the flood.  Well, Fields is not right next door so we had the pleasure of driving in the pleasant Orange County traffic.

Once there was were greeted by about 400 pianos.  For the most part, all pianos look the same.  We looked and all kids of brands from Bob's Pianos to Steinways, but they all look pretty much a like.  Steve our salesman played them for as Devin has been away from the keys for a while and I only know the opening bars of "Chariot's of Fire".  It sounds impressive, but after three tries everybody figures out that is all you know.  

We found the piano we wanted, but the foot print was a little large for our living room.  Steve gave us a giant paper piano so we could go home and see if the 5'1" grand piano would fit.  We finally got home after Devin snuck in about two more chores.  And by then Man Child was ready to come home.

Jack had survived summer school an hour and half of basketball and 2 hours of football practice.  It was about 90 degrees on the field and a couple of boys lost their cookies, but not our man child.  Tired and a little sore he came in the house and had a grin on his face.  He liked it.  My son is a jock?  Who da thunk.

Today In The Market

Our guess on the durable goods order was off.  Instead of a surprise up we had a small surprise down.  That combined with very low volume made for a quiet day.  Scary news out of Portugal and later in the day Italy got ignored by the market because the energy sector popped a bit and a few volatile stocks like NFLX, AALP, and AMZN did very well today.

As we said it was quiet day.     

 I'm So Hurt

Yeah it was a real stinger.  In the month of June we had realized LOSSES of 14.1%.  The culprits were a total of 26 call and put options that did not go as planned.  We should say most did not go as planned.  We did have a few winners.  So another lousy month brings my year to date realized loss to 1.4%.  At the halfway mark for the year and a goal of 7%, we have a work cut out for us.  Our year to date unrealized gain is .29%.  Admittedly that includes some very impressive gains on bonds we have been carrying a few years.  Unfortunately we have some sizable long term call options on the VXX that are hanging over our head and will drag down the portfolio about 3% at the end of the year if the VIX does not get a lot closer to 40 than the 20 it is at today.  If we had just bought an index ETF or ETN, we would be enjoying am 8.5% gain this year.  That means that all of this hard work and reading has cost us 8.21%.

That brings up a good point.  One of our readers I spoke with today has a strong endorsement for the Elvis Show, "Viva Elvis" at the Aria Hotel in Las Vegas, Nevada.  That is not the good point, but in the course of our discourse we briefly touched upon how to invest a big chunk of money.  He mentioned mutual funds and I quickly pooh poohed (Financial lingo for exquisitely explaining the disadvantages) the idea.  Personally we do not like mutual funds because they are expensive, and they are too generic in our opinion.  The make of mutual funds can change over time. 

Don't get me wrong, we have money in mutual funds, but they are in our employer sponsored 401 K program and MFs are the only game in town for most 401 K programs.  Now having said that, my friend pointed out that most people do not have the interest and acumen to do the necessary homework to manage their accounts safely enough to minimize risk.  We realize we are a freak.  That is why most people, (70+%) loose money in the market.

Assuming that all of that is true and most people do not want to understand foundational fundamental theory, that is determining the intrinsic value of a stock and determining the value the market has put on that stock and managing the investments in said stocks as to make a profit or protect a profit, than mutual funds may be a solution. 

How ever if you go back to our comment earlier where all of our reading and hard work resulted in a return 8% below the market, than we would have been better of playing and index fund not a mutual fund.  We can show you thousands of mutual funds that under performed the market and even did worse than our1.4%. 

So our suggestion would be to look for a nice Index Exchange Traded Fund or ETF.  One of the most respected is VOO, the Vanguard S&P 500 fund.  Year to date it has about 7% gain and is a direct reflection of the S&P 500 performance.  If you are more of a value type investor you might look at VOOV, which reflects the S&P 500 but is weighted more on those index components that a re showing string value.  If you prefer the growth side of the street you might look at VOOG, which is heavier weighted toward growth stocks in the S&P 500.  (VOOG is performing the best of the three.)  These are all good alternative to mutual funds. 

Thanks Butch for making me think and read a little today.

Salve Lucrum