Some notes as I check in on the markets from the beach for the first time since Friday afternoon which might seem to some like an eternity ago.
1. Of course Gold is a currency. Not only is it a currency, but we’ve been using it for coins since at least 700 B.C. Here is a gold coin from Alexander the Great:
I didn’t weigh in on it this at the time Ben Bernanke and Ron Paul had their exchange but it still warrants comment. Either Bernanke responded the way he did for political reasons or because he has no sense of the central role gold has played in the history of money.
Of course, the response was political which serves as a perfect example of how deeply politics has distorted our federal decision making process.
2. Speaking of gold, it looks like I may finally lose my $GLD shares which I have been holding for a very long time. While in the 150s, I wrote the Aug 164 covered calls for a buck and change. I have written near dated covered calls on this position at least 20 times during the hold whenever it became extended shorter term.
This is ok with me if I lose the position as it has been a great run and I can live with missing what might be blow a off in the making. I may try to roll the options forward but this will depend on price late next week. I also might look to write puts to reenter the next time gold gets crushed and at some point it will, no hurry.
3. I’m getting spam emails from brokers with dire warnings and stale parables regarding how a broker should be prepared for these times before hand complete with pitch for funds. Ugh.
4. Huge rallies in this environment are not healthy and when they are accompanied by the collective mood swinging back towards a euphoric denial can be the most treacherous. Recall the 700 point rallies we had into the teeth of the credit crisis.
5. From 10,000 feet, it seems like there is only a small handful of guys out there who have a clear head here and a good plan. Joe Fahmy, Peter Brandt and Upside Joe are among them and there are a few more out there I am not mentioning but not too many.
During these moments, everyone is looking for someone to tell them what to think and do which is an anxiety defense.
6. I’m heading down to the pool to play with the kids. Its been a long time since I have had a break and it comes at a great time.