Wild, Wild Markets
By: Tim McPartland,
I was ‘holding the bag’ (underwater) on some short term (I’m talking 3-4 hours) Cisco Systems call options today and had determined my best chance of profiting on this speculation was to wait for Aunt Janet at 1 pm to come to my rescue–she didn’t disappoint as Cisco moved higher by 35 cents in 2 minutes and I exited my call options with a nice profit.
Now before you think we have gone bonkers we have written before that we toy around with some options on occasion–by toying I mean less than 1% of portfolio value being played with–not real money.
Today we watched as the Dow went from down 100-200 points to up 100-200 points in a flash–an extremely powerful move–while simultaneously the 10 year treasury went from a yield of 2.03% to 1.97%.–WOW, winners all around. While we hate the way the FED continually manipulates the market–we hate it lesswhen it puts money in our pocket. Let the markets determine interest rates–and they have spoken.
Switching topics we note that Sweden went more negative today with their repo rate now pegged at a minus .25% and their central bank has cranked up the printing press by a couple notches. Trying as hard as they can to whip up a little inflation–likely to no avail. The haves will party like it is 1999 and the have nots will drink cheap beer. Nothing new.
Lastly we were hoping for bargains in current issues in the days ahead since the new issue market has been so quiet, but it doesn’t look like that is going to happen as REITs and even MLPs bounced up today. Oh well, we are perfectly happy with where we stand portfolio wise and we can stay patient for a very long time as long as we are garnering 7-8% returns.