BAGAKOAA; 8 August 2012 Keepin The Faith

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August/2012

Keepin The Faith

 

Many of you liked the Olympic Post.  Thank you for the kind comments.  It has been hectic here upon our return to home.

 

Monday we had our annual appointment in Los Angeles for Jack's metabolic disorder.  His doctor is one of the leading specialist on the disorder known as MADD.  Not to be confused with DAM, Mother's Against Dyslexia.  The facility we go to is CHOC LA. 

 

The place is a zoo and you do feel a little like Holstein Frisian Cattle being herded from floor to floor only to arrive in an exam room with a World War II examining table and a painting missing from the wall.  (I especially found that intriguing as we saw thousands of beautiful displays of art all along the 5 Freeway leading to the hospital.  Why do graffiti artists hang from Freeway Over Heads and rapidly paint these amazing tags when they could book an appointment and spend a casual hour waiting for the doctor to show up and paint a beautiful mural in an exam room?) But I Digress.

 

The Dr. arrived and pretended to remember who we are, and did his exam.  The good news is, thanks to Jack being aware of some of his issues, his commitment to staying active over the last year, mom's intuition, and I am sure some help from the good Lord, he is doing well and his version of MADD is not severe.

 

If I sound cynical about CHOC LA it may only because when we first discovered Jack had this disorder, the top specialist in the country (Actually the world at that time.) practiced at the amazing Mayo Clinic.  Our three day stay there was like Disneyland for Healthcare. 

 

The way we were treated before during and after our visit was amazing.  You went from lab to lab either escorted or if comfortable on your own with people every few hundred feet ready and willing to help you find what ever you need.  When you arrive at the next lab, they bring up your data ion the computer and they know the patient including comments the doctor you just saw several a minutes ago comments.

 

By comparison, CHOC LA has a long way to go, but so do many hospitals.

 

We were pleasantly surprised as we made it back to Orange County in record time.  That allowed me to attend an event I was supposed to host at a beautiful home in Coto De Caza. 

 

The event was a fund raiser for Santa Margarita High School Football.  It was the last of four Guest Speaker events before season started.  Dougal and Ann who offered their home for the event and David Hanna of Hanna's fame were to cater. 

 

Upon arrival, just in the nick of time, I found a friendly face at the bar.  Kristin, on of our favs from Hanna's was there and suggested Dave had picked up the tab for the evening.  Thank you Dave.  He gives back so much to the community, it is one of the best illustrations of "How to achieve good karma."

 

Anyway the event which I was getting credit for co-hosting was to have Archie Griffin, former Cincinnati Bengal, the only two time Theisman Trophy Winner, and the only player to ever start four Rose Bowl Games, be our guest speaker.  I must admit I did not know who Mr. Griffin was.  I apologize to those of you who I told it was Archie Griffith. 

 

I was honored to have my picture taken with a great player and a great coach before the evening was over.  Coach Welch made it to the event, though he had been up since the early morning hours of the day dreaming up imaginative news way of tormenting his team during the agonizing ritual know as Double Days.  (People my age will remember them as being called Hell Week.)  Coach made an appearance and was genuinely humbled to meet Mr. Griffin.  Here was our picture.  It turned out a bit dark and I have corrected in Photo Shop yet.

  Griffin

Tuesday, (after a 27 minute brisk swim in front of the jets in our pool) was spent getting some financial issues in order and actually looking at all of the portfolios I ignored whilst away.  More about that later.

 

Devin had the unenviable chore to take Jack to the Department of Motor Vehicles to take his driver permit test.  She called me a couple of times to describe the amazing efficiency at which this government agency operates.  NOT!  After two and half painful hours, she texted "He Passed".   Now in our home that could have had something to do with a bowel obstruction, but I intuitively knew she was talking about his exam.  He can now drive with an adult who has a driver license.

 

I was thinking about going out and buying a limousine so he could start making an honest living.  After all, he can drive as long as there are licensed drivers in the car.

 

Last evening we made an amazing mandarin orange salad dressing over a baby leaf spinach butter lettuce concoction that was healthy and delicious.  I served it with a lime honey marinated chicken breast. 

 

For the salad

Salad  

Ingredients

       1/4 cup sugar

       1/2 cup pine nuts

       1 bunch butter lettuce, torn

       1 package (6 ounces) fresh baby spinach

       1/2 pound sliced fresh mushrooms

       3 cups (12 ounces) shredded Swiss cheese

       1 medium white onion, sliced

       1/2 pound sliced bacon, cooked and crumbled

       1 can (15 ounces) mandarin oranges, drained

      

POPPY SEED DRESSING:

       1/3 cup white vinegar

       1/3 cup sugar

       1/4 cup finely chopped onion

       2 tablespoons Dijon mustard

       3/4 teaspoon salt

       3/4 cup canola oil

       2 teaspoons poppy seeds

Directions

       In a small heavy skillet, melt sugar over low heat. Add pine nuts and stir to coat. Spread onto a greased sheet of foil; break apart if necessary.

       In a large bowl, combine the butter lettuce, spinach, mushrooms, cheese, red onion, bacon and oranges.

       For dressing, in a blender, combine the vinegar, sugar, onion, mustard and salt; cover and process until blended. While processing, gradually add oil in a steady stream. Stir in poppy seeds.

Pour dressing over salad and toss to coat. Sprinkle with sugared pine nuts. Serve immediately. Yield: 12 servings.

 

For the Honey Lime Chicken

  Chicken

Ingredients

       1 cup white wine

       1/2 cup honey

       2 tablespoons lime juice

       1/4 teaspoon ground ginger

       4 boneless skinless chicken breast halves (4 ounces each)

       1/4 teaspoon garlic powder

       1/4 teaspoon salt

       1/4 teaspoon pepper

Directions

       In a large zip lock bag, combine the wine, honey, lime juice and ginger; add chicken. Seal bag and turn to coat; refrigerate for 2 hours, turning once.

       Drain and discard marinade. Combine the garlic powder, salt and pepper; sprinkle over chicken. Using long-handled tongs, moisten a paper towel with cooking oil and lightly coat the grill rack.

       Grill, uncovered, over medium heat or broil 4 in. from the heat for 6-7 minutes on each side or until a thermometer reads 170°. Yield: 4 servings.

 

Ryan and Kristin joined us for dinner and it was a nice evening. 

Keeping The Faith

 

Billy Joel cut a song called Keepin The Faith in 1983 and it was on his Innocent Man Album.  It was nice to think of one of the lines of that song as I went from portfolio to portfolio, and I quote:

 

"You can get just so much from a good thing

You can linger too long in your dreams

Say goodbye to the "Oldies But Goodies"

Cause the good ole days weren't always good

And tomorrow ain't as bad as it seems."

 

It is easy for me to get cynical (used that word twice in this blog mmmm) about the market.  I can't figure it out and quite honestly I would not believe anyone who say they have.

 

Look at the trend indicator since I missed the last change to "market under pressure" on July 11th.  On the 19th the indicators moved us to "confirmed uptrend", then on the 21st, "market under pressure" again.  Only to got into true "correction" on the 23rd.  On the 26th we have a blowout day with a clean follow through indicating an new "uptrend" cycle.  So now you have a Green Flag Flying in the blog.

 

So why should you, the retail investor be putting money in the market?  Look at the last line in Joel's lyric.  "good ole days weren't always good and tomorrow ain't as bad as it seems."

 

IBD had a good article on Monday about how the retail investor never had it so good.  While the article starts out by reminding us of the near scare from the Knight's Capital debacle from last week and how it could have lead to another flash crash melt down and the fact that even grandma's 401 K and IRA are being manipulated by high frequency trading algorithms, it reminds us that the trader of today never had so much transparency and information. 

 

So may laws have been passed (possibly too many) since the 1990s to protect the average investor that we are actually well protected from much of the malfeasances of the last century.  While many find it hard to believe it is a good time to be in the market,  (I am not saying long or short just in a healthy trading environment.) it is an investor friendly environment compared to days of ole.

 

Technology has provided us a convince and a competitive playing field that allows us to trade in milliseconds at a very inexpensive value proposition that did not exist 10 years ago and does not exist in many global markets.

 

Now that I have you feeling oh so happy about the market, where should you have your money?  I HAVE NO IDEA?

 

I cannot say I have any "Core" investments at the moment. Yes I still have my BRK/A and quite a bit of XOM and AAPL.  In most of the accounts I am managing we are seeing mild gains of 2% or so.  Our loss and big gamble is on the VIX.  As a reminder, the VIX aka "the fear index" is a measure of market volatility as determined by comparing call and put options on the broader markets.  If there are more puts being bought (remember a put is a bear bet and a call is a bullish bet) the VIX index goes up.  If more calls are being bought, the VIX index goes down.  (Yes I know an over simplification to those who know better.)

 

We have been buying VIX's trading ETF called VXX in most of the accounts and have some very aggressive call options on the January 2013 VXX.  They are all in a significant loss situation.  In our primary account we are down 78% on this sizeable position.  In other accounts we see 50-70% declines on the VIX related positions.

 

Monday I decided to break one of my own trading laws and will attempt to catch a falling knife.  In this case its more like throwing my body under a falling machete.  I doubled down on all of my VXX positions that were the January call options. 

 

Here is my thinking, the ten year VIX index average is about 17.  It is trading one standard deviation below that average, actually closer to two deltas away from the average.  With all the noise out there (Europe, China, Syria, US Elections, US Cities and states going broke, eroding corporate earnings, to name a few) I can not believe we will NOT see some perfect storm of events that will nudge the VIX to its 10 year average or higher before January 2013.  (That is a double negative so yes I am betting we will see something to disturb the market.) 

 

If I am wrong, I will be licking wounds and repairing about 4 portfolios from the Salve Lucrum Portfolio Family. 

 

Now I have one trust account that I just loaded blue chip type stock throwing decent yields with dividend reinvestment.  Because it is a trust account I am limited as to the financial gymnastics I can attempt in this account.  It is currently up 2.4% after 5 weeks.  Here are the holdings in that account.  KO, MCD, BDX, ABT, PG, SYY, JNJ, MSFT, and INTC.  The account has about 10% cash and about 10% in each position.

 

Well that is 2052 words and enough for this fine Wednesday.                

 

 

Salve Lucrum

 

 

 

 

 

 

 

 

 

 

 

 

Brian Ireland
 
 
Since 7/26/2012
BAGAKOAA;

I am not a professional investment advisor. Anybody reading my blog and investing accordingly must be out of their minds. I have made more money than I have lost. There are many more qualified people than I to actually tell you how to invest your money.

BAGAKOAA=Boys And Girls And Kids Of All Ages

Salve Lucrum=Latin for Hurrah for Profit.

2012 Year Ending

Dow 13,073

S&P 500 1,358

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