CheetahhhhhhhBlog Mark III

I flew out of Manila yesterday on Qatar Airways, which is supposed to be a “5 star airline”, or at least that’s what the commercials say. Now perhaps it really is 5 star in first class, however, I can tell you that in economy class, it’s just like any other airline. I spent a few hours laid over in Qatar, which looked a lot like Abu Dhabi. The only remarkable thing I saw in Qatar is that the ATM machines dispense riyals, sterling, euro, or dollar. Which is fun. I got myself a C-note greenback.

So I’m in Istanbul, in a nice hotel in the old historical district on the European side. First of all, it’s quite cold. I have been living in hot climates for a long time, so long that I don’t even prepare for cold weather, and so didn’t pack a coat or sweater. This morning I layered myself in several shirts and went wandering around. I was turning blue after about 30 minutes and eventually had to retreat back to the hotel. Old Istanbul is lovely. Hills with cobblestone streets. Lots of spring flowers like tulips and crocuses. The view of the Golden Horn is lovely, and out in the Mediterranean you can see islands rising out of the blue. I suppose just a little bit over the horizon must be Greece. Anyway I have only been here for about 15 hours but one thing I can tell you already is that Istanbul is no travel bargain. Maybe it was 10 years ago but now the prices are only slightly below Europe.

To be frank, I don’t think I’m smarter than anybody else. I think the only reason I am profitable as an investor is because I take the trouble to read the Wall Street Journal and Barrons. Indeed what I am about to say seems very obvious to me. Goldman Sachs has been charged with fraud, and a tidal wave of civil suits and suits from other countries, Germany especially, will soon hit. And Goldman wasn’t even the biggest dealer of these questionable derivatives. Actually Citibank, Bank of America, and UBS sold more than Goldman. So the tidal wave isn’t just heading for Goldman. I would say this is the calm before the storm. And one should note that a charge of fraud against a bank is a very serious matter. Furthermore there are pushes to tax big banks worldwide, talk of bank reform and derivative reform in the US and abroad, and we also all remember the clampdown of banker bonuses. I would not have 1 cent invested in banks or financials right now. This seems very obvious to me but banks are rallying on the stock market Monday and Tuesday. I think that’s a fool’s play because volume is low, so institutional investors clearly aren’t buying banks.

So things are on the move. I’ve been offered a job at the American University of Afghanistan. Pay is good though not as much as you’d think. And by this time next week I’ll be in Istanbul for my meeting. I am preparing a presentation on how I’d run the School of Languages. So far I’ve written 10 pages. Vanessa is going to do a powerpoint. In addition I just had an interview with my former employer, Chonnam National University. So things are on the move.

The kids have both had nasty coughs for about a week now. Hasn’t slowed them down from rascally behavior though.

This suit against Goldman Sachs is in the news. I was long GS until last Weds, I think it was, and made a small amount of money on their rise. Luckily I was not invested on Friday when their stock plunged 13%. Doubly lucky because it just so happens there was a total power blackout in Pasig City all night, and I would not have been able to do anything about my trades. Anyway I have a few things to say about GS. They are currently the most reviled company on the planet, having eclipsed Exxon and Halliburton and a few other corporate dirt words. This overlooks the fact that they’re probably the best bank in the world. The job of a bank is to make money. Goldman is a money-making machine. So essentially the SEC is charging Goldman with being Goldman. The crux of the accusation seems to be that Goldman perceived the housing market was going to go belly-up, and so they hedged themselves. This is, for some reason, taken to be bad. In truth any intelligent investor does exactly the same thing, including myself. I almost always hedge my trades. So Goldman is being hung out to dry for being intelligent and preserving its capital, as if this was a bad thing. Furthermore, when Goldman made these hedges against the housing market, it was readily obvious to anybody paying attention that the housing market was going to burst, and if you look back in this blog to 2006-7, I myself was warning you about this. And I’m not half as smart as the boys at Goldman. So what I’m saying here is that Goldman did the intelligent and obvious thing. I’d call this SEC case a bit of a witch hunt, if you want my blunt opinion.

This having been said, I should point out that the primary driver of the stock market of late has been politics, such as the Greek crisis for example. I’m shorting financials. Specifically I’m buying FAZ.

As always with any financial commentary, I could be completely wrong.

So I have my tickets and hotel for Istanbul. I go the Monday after next. I have been doing research on Istanbul and am actually getting really excited, so I hope this works out. Istanbul really sounds like a fabulous place to live. There is a thriving expat scene, which is something I have not had since Seoul. Also from what I can determine, salaries are not so low; they appear to be about 70% of American salaries, while the cost of living is a bit lower than America, and there is no tax for an expat. Also this would be my first real foray into administration, which is exciting simply because it’s something new. I was getting a bit bored with the classroom, though that may have been because of my negative employment experience in the UAE. Actually the one semester that George Mason actually was functioning, I really loved my job. So I try to keep perspective. Anyway I will say no more about this interview in Istanbul because I’m breaking one of my rules, and getting interested in a job before I have a contract in front of me. I hope I don’t regret breaking my rule.

Teggatz Enterprises had a gangbuster week. We made a grand in 6 days. A bit of a record for us. For all you day traders etc out there, perhaps this doesn’t seem so exciting. I don’t know. But for us it is, because our trades are highly hedged. In layman’s English this means we play both sides of the coin. While this makes life safer, it also means our profits are smaller. But not this week.

I have known for some time now that it’s difficult to be an options trader at the moment. I knew it wasn’t me, also. The problem is that volatility has gone down very low, because of government intervention. Because volatility is low, the price of options is low. When you’re in the business of selling options, this is bad. Anyway I knew there was a problem for… well, since February. This week in Barron’s they discuss the issue, which validates everything I have known for some time. At the moment there is nothing for an options seller to do. I have started making directional plays, actually, using vericals and single options. Generally I never trade directionally. In this market however, I am forced to adjust my ballgame. Don’t like it but nevertheless I made a grand in 6 days.

I have been pretty busy applying to jobs lately. The big news is that I am flying to Istanbul in about 10 days for an interview there.

A few days ago we went to see How to Train Your Dragon. This was Bug’s first movie and he thought it was pretty spectacular. Afterwards he said to me, “Thank you daddy for taking me to the big TV.”

Anyway this is a brief post, but Tristan is screaming and I need to eat something.

I spent years practicing and studying the markets. Years. My wife can attest to this. I have spent hours and hours, every day. For the last 5 years, I have had two jobs. Anyway if there is one thing I have learned, it’s to keep a steady hand. This is difficult when your money is at stake.

Here’s an example. You’re buying an expensive nick-nack at an antique store. The price is negotiable. If you get too excited and have that look of desire in your eyes, the salesman won’t accept anything except the highest price. If you keep a steady hand and are prepared to walk away, he will bend. If you start walking away, he will call you back, saying, “OK OK…”

The stock market is much on the same principle except the buyers and sellers are totally anonymous. The biggest struggle for me on a daily basis is remaining calm and detached. To do this I have a set of rules. My current position is with the Potash Company and my rule is is the stock goes down to 115, I will adjust the trade. Yesterday the stock took a bit of a tumble. This is no big deal to me as an option seller, I make money anyway, but a big move is dangerous for me. The stock went below 117 several times. I had to keep telling myself, “Steady, steady, it’s not 115.” Because that’s the rule I made before I bought the position.

Anyway I held on to the position because I was also following Warren Buffett’s advice to “believe in America” and actually I do, America is the biggest money-making machine in the universe and I’m glad to own a small piece of it. Anyway the Fed jobs report just came out and it was good. Not too good, which could prompt the Fed to raise interest rates, so from a trader’s perspective the report was perfect. Teggatz Enterprises may have dodged a bullet because a bad jobs report could have cost me. The market gets very hyper about the jobs report. Anyway back to my point, a steady hand generally pays the mortgage.

The stock market is closed today so I monkeyed around with Gizmo, and connected my Google Voice to Gizmo. It was a bit techy for my taste. Anyway you’ll notice the “connect to Google Voice” button on the sidebar.

I’m the kind of guy who buys technology the minute it becomes available. I’ve had a lot of gadgets when they were new and kind of James-Bondish. For example I had an iPod before everybody had an iPod, and I remember being in a small town in Peru, and all the guys gathered around me to gawk at it. Now, regarding the iPad. I really want one. I might just buy one if I get a decent job any time soon. I want it primarily for reading the Wall Street Journal and New York Times. The problem is I can do these things on my netbook or my Kindle, so I can’t currently justify the expense. But damn I want an iPad. The Wall Street Journal gave it a sparkling review, said it’s a laptop killer. I doubt that, just because an iPhone is a mini-iPad, and the iPhone lacks certain funtionality, although it is without a doubt the best micro-computer available. I love my iPhone. If they made an iPad with Mac OSX loaded, then I could see it as a laptop killer. But this is neither here nor there for me. I want it for reading the newspaper. Is reading the newspaper worth $500, though…? And another thing I know from having been first in line to buy gadgets many times before. Let me tell you. Give them 6 months and they’ll make some major improvements and drop the price. Wait and see.

Bug and I both have nasty sinus infections. Very painful. I dug out some old stores of Tylenol with codeine because I was suffering so much. Poor Bug has been rolling around and wailing at night. We are the only two in the household with the infection and we are also the only two who swim in the condo pool, which is undoubtedly a giant petrie dish of germs.

Tristan is spending a lot of energy trying to stand up. He pulls himself up onto his feet in his crib.

We’re taking Bug to his first movie tomorrow, this “How to Train Your Dragon” flick. Bug has been talking about it for a few weeks now and his current obsssion is dragons. I can’t say I’m terribly excited about it but I’m sure Bug will have a blast.