Last week I was reminded of the famous line from the movie Airplane, around the time the shit was literally hitting the fan, Steve McCroskey said “Looks like I picked the wrong day to quit sniffing glue.” I wasn’t reminded because of what looked like a beginning of a crash that could possibly be avoided like in the movie, but for two other reasons. I made the ill-timed (and possibly still wise) decision to not cover my long positions with covered calls immediately after being assigned. It seems I picked the wrong week to stop covering. Also, four months after my ACD surgery (2 discs removed from my vertebrae and then three vertebrae fused together using cadaver bones) I made another attempt to get off the pain pills. Last week would have been a fun week to stay high during the market’s fall, but I continued to wean myself during the week and yesterday I took no hydrocodone for the first time in months. I’m not making any promises for today as the pain is still here. I just decided that some days I’ll have to deal with it and hope physical therapy continues to help.
My back pains have a lot in common with being an active investor. Some days I just have to deal with the pain that can make me feel like I’ve made no gains over the previous few months. I’ll go into more details later this week on the specifics of the stocks I’m long on and have not covered. The point I’m rambling towards is that I see no reason to worry about the beating in the market last week, because I’m not here to time it perfectly. If I was one to worry about the down weeks of the market I’d spend my time picking in which CD I should invest. Instead, after viewing the chart I drew of the Dow last week I decided not to write any new naked puts until I saw a little pull-back or could figure which sector still had legs. I said I didn’t think we’d get more than a 500 point pull-back in the near-term. We got hit with 565 in one week. I was dead on the money with 20 minutes to go on Friday when the bottom fell out. I’ll get a chart up by tomorrow.
My wife told me of a friend of hers at work who said, “I knew I should’ve taken everything out of the market”. I don’t consider this guy as a very smart investor. Everything out? What if he did that before the mini-correction in February? He would have missed out on the fantastic run we’ve had since then. Instead it’s wise to pick your sectors more carefully, not sell all and run. Even my sick dog of a stock, NYX, took another beating early in the week only to gain 2.13 on Friday. I was tempted to take my losses there, but I’m in it for the longer term as I see better days ahead still. A drop like last week can only help those of us who remain invested as the punks will sell (or did already) and after we buy more at the lows, those sheep will come running back to the herd and boost our profits even more.
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