BAGAKOAA; March 9, 2013 In The Early Mornin' Rain 

Post 798

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March/2013

According to Canadian folklore, in 1964 Gordon Lightfoot was saying goodbye to someone at an airport and the time of day and weather became the muse for this classic song. A Canadian couple, Ian and Sylvia, recorded it first, then the big hit came from Peter, Paul, and Mary. Lightfoot recorded it in 1966.

 

The introduction of this song, as recorded by Elvis, starts with the undeniable guitar playing style of James Burton. Elvis recorded this in March 1971 in Nashville and became a standard for his live appearances from that point on.

 

The song came to mind as it is Saturday morning, the rain is just breakin up, and it seemed an appropriate tune. Besides, "Singing In the Rain" wouldn't work because I don't dance.

 

The world wind trip to Utah was a success. Two takeoffs and two landings, just the way I like it. Dr. V. said my hand was looking good. My chicken soup bone hand had transformed to more of a chicken pot pie status.

 

He was quite impressed with my progress of motion. That should make my Princess of Pain, Krtisty, (PT extraordinaire) all giggly as she played a major role in my recuperation.

 

Whilst away, Devin, Jerene, and Dennis got a lot of moving done. Yes, Monday morning, is moving day.

 

I got back just in time for Veranda Time. Veranda time is a new name we have created for the end of the day when I prepare the drink of the day or go into the bowels of the estate and dredge up a bottle of wine. We then bring our drinks to the veranda, (Yes, we have a veranda. I like saying veranda. Cool word of Portuguese origin from the 1700s), and relax to the back drop of the setting sun.

 

The funny thing about this moving day, Devin wanted to move some cherished pieces and knick-knack personally, which is understandable. She did get a quote from Allied/Bekin to move the entire house. But as most of you know, Devin is not one to commence Veranda Time earlier in the day when she could be moving things she has already got a quote on moving. So the list of items she and her helpers have been moving has grown immensely. I am confident with a full weekend ahead of her, the movers will be paid handsomely to move a chair.

 

This week, as we mentioned all kinds of service people have been coming and going. It is really starting to pay off as the place, beautiful to begin with, is looking incredible.

 

There are lots of little surprises almost every day. Last week, our contractor was able to hunt down the brand and model of the master bath plumbing hardware. For the price, we could trade in the car we won at the raffle last year and pay for the hardware.

 

And Now a Word From Our Neighbors

 

As we drive in and out of our new community and the weather starts to warm up, we see a multitude of people walking and many have their dogs.

 

The first thing you notice is, there are no mutts. Seriously everyone had a pure breed or a pure breed derivative. Anything ending in doodle is cool right now. Labradoodle, spanieldoodle, shepard- doodle, Chihuahua Doodle (Ouch) all seem to be the rave.

 

What I love is how the owners react to having the pristine animals laying gunkers out in the beltways along the road. Now I am a poopologist, so I can determine exactly what is going on from a quarter mile away.

 

These folk, all dressed up in their Lululemon attire do not know what to do when Sparky lays the big one with 200 cars driving by. Some carry the "blue bag of sanction" with them but do not have a clue as to what to do with the bag.

 

I have actually stopped my car to see what some of these folk do when watched as their big pile of steaming junk sits on the lawn and they try and figure out how to open the "blue bag of shame". I got news for you, a blue bag is not the only tool you need with a tall stack of steaming gunkers.

 

Some look for a twig from a close by tree. Good luck with that! Others try and use the bag itself as a collection device. Yeah, that's gonna work. My favorite is the guy, usually a guy, who keeps walking pretending that Scruffy did not just shoot last nights kibble onto the lawn and drags the dog along mid-dump. "If I ignore it, I do not have to pick it up."

 

We have a neighbor in our old (current) neighborhood whose son is a master of this. He walks out in his hoodie smoking a cigarette, takes their dog to the corner CARRYING a blue bag, the dog dumps, he looks around, if there is no one there, he takes the dog inside, and drives away. I go our and pick up the neighbors dog droppings.

 

If you are wondering it is the same neighbor whose leak we discovered in our backyard and spent a fortune to address. God, I hope they read the blog tonight.

 

Oh What A Night

 

Today was great. I got to visit with my golfing buds at the club and fetch my some breakfast since we are officially out of food at our old house. Jack and I did a couple of loads of wine to the new house as Dennis and Mike from Long beach showed up to help with the last load.

 

It was weird taking all the wine out as it was just a few months ago we were loading all the wine back in after the flood. Ben and I spent many weekends cleaning 300+ bottles to get them back on the shelf.

 

I was halfway through re organizing my inventory when this new house became a possibility. Over the last 6 days, thanks to Dennis, Jack and Antonio and today Mike, all 700+ bottles of wine are in their new home, Chateau Cronin.

 

Today, for the first time Dennis, Mike D. and I had chance to walk the vineyard. Seeing the hundreds of buds on the vine was both exhilarating and intimidating, as I knew this would be my crop if handled correct. The tasting of the 2008 barrels showed me the incredible potential of this vine.

 

My buddy Dave Hanna and I will be looking for a consultant to coach optimal enjoyment out of this field, but there is a lot of homework and learning ahead of us. Perhaps we might see a few field trips to Napa and eventually to Yakima/Walla Walla in Washington (Destined to be the new wine capital of the world in 5-10 years.), to establish the "Hannin" Brand. Time will tell.

 

Dave has been busy at the restaurant. So busy, even I could not get in Friday and Saturday Night. Good on him, not many people give back so much to their community, so it's good to see him doing so well.


 

Too Much Of A Good Thing

 

While waiting for my buddies show up for breakfast today I had a chance to read most of Barron's, WSJ and IBD. What I took away was summed up nicely by Vito Racanelli. I will take intellectual property liberties by quoting, "The Dow Jones Industrial Average set an all-time high four out of five days last week. In poker, that's roughly equivalent to being dealt a straight flush."

 

All articles referenced this amazing milestone. Racanelli went on to say if the S&P 500 (aka the broader market) could replicate that feat, we could be off to the races.

 

The green flag is definitely flying. Even Porter Stansberry of S&A fame had to eat crow today and say some of his dire predictions were proven wrong. That does not mean he has abandoned his "End Of America" theme, just amended the time line a bit.

 

Cool thing about bears, if you wait long enough they are ALWAYS right. (Bob H., note the part about waiting long enough.)

 

If you are in the camp of an adjustment is due, read Steven Sears article in Barron's on how to play PUTs against good holdings. Again, (due to a couple of great Cabernets on the Veranda and couple of Cadillac Margaritas at Rosa's Cantina) I will poach from this weeks Barron's, "The strategy is simple. Sell puts 5% to 10% below the stock's market price. If the shares fall below the put strike price, you buy the stock. If the stock advances, you keep the premium. Naturally, you must have the cash to purchase the shares; otherwise your Treasuries would be sold to pay the bill." (That was assuming you had Treasuries in your portfolio to cover your option bet. In my case we have cash.)

 

You only do this with high yielding strong blue chip stocks. Our core holdings like, ABT, ABBV, BDX, CVX, KO, XOM, GOOG, INTC, JNJ, MCD, MSFT, PG, and SYY, are the type of stock you should consider.

 

If you want to play along here is an example. CAUTION, WHAT I AM SUGGESTING IS RISKY AND COULD RESULT IN YOU HAVING TO BUY 100 SHARES OF PG AT 72.50 A SHARE. THAT IS A CAPITAL EXPOSURE OF $7,250.00. YOU WILL NEED A MARGINABLE ACCOUNT AND SCHWAB LEVEL THREE TRADING OR EQUIVALENT.

 

I am executing a sale of May 18 72.50 PUTs at 64 cents a contract. In essence, for every contract I sell, I get 64.00 but agree to buy 100 shares of PG at 72.50 a share on May 18, 2013. If PG is below 72.50, I will have to buy the stock. If not, I get to keep the $64.00.

 

NOTE, doing the same thing with GOOG, and choosing a May 765 PUT, generates a $10.90 cent premium per contract but each contract obligates you to buy 100 shares of GOOG at $765 if it should drop that low. That is a $76,500 position.

 

The Week Ahead

 

I have not done this in a while because it is hard work and it is not read by that many. It is mostly an exercise for me to scan what is happening this week to make sure I have done my economic homework.

 

Monday

 

ZZZZZZZzzzzzzzzz quiet. Watch for URBN earnings. My guess is a beat, but more of retail guage. Another good retail read will be DKS, Dicks Sporting Goods.

 

Tuesday

 

Another quiet day. The ICSC-Goldman Retail report will be out and worth watching. Unless there is extreme bad news it should not move the market. In yet another retail read look to see how COST Costo reports. We are thinking a beat of the 1.06 a share. (Possibly a short term CALL bet if you can catch the March 16 100 call for below 3.50.)

 

Wednesday

 

We have the Mortgage Bankers Applications report which we expect to be good news. There is a retail report out and we got this way wrong last month, so we reluctantly think it will be good news. Business inventories should be down which is good news.

 

Thursday

 

Jobless claims and PPI, both should be good news. Look for a beat by ULTA the cosmetic retailer. This company has been on fire.

 

Friday

 

Today is CPI numbers and we should see a spike because of gas prices of late. It should not be an earth mover for the market, but the market might be looking for any catalyst to correct.

 

That was fun. Enjoy the rest of your weekend.


 

 

Salve Lucrum
Brian Ireland
 
 
  
Since 3/4/2013
Y to R 2/25/2013
G to Y 2/21/2013
Y to G 12/31/2012
G to Y 12/27/2012
BAGAKOAA;

I am not a professional investment adviser. Anybody reading my blog and investing accordingly must be out of their minds. I have made more money than I have lost. Except for a nasty VXX trade is 2012.   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.

 

Brian's estimate :

2013 Year Ending

Dow 14,361

S&P 500

1,610

 

2012 Year Ending

Dow 13,073

Actual 13,104

S&P 500 1,358

Actual 1,426

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