In Search of the Perfect Investment

Covered calls. The headline explains all.

You sell calls on stocks you own.

Your major fear is that your stocks will go up and get called away from you. You’ll probably still make a little money, but not as much as if you had held them.

In a volatile market like this one — down big one day, up big the next, then down big (today), this strategy  can make you shekels.

Just make sure to keep an eye on the moving parts.

My “experts” tell me we’re in an 8% to 10% pullback for all the obvious reasons. No one can predict this. There are three strategies:

1. Ignore it. Go play tennis.

2. Sell some covered calls when the market rises.

3. Put in limit buy orders for your stocks at way below where they are at present. You may pick up some bargains. The market is really bouncing. You can’t catch the lows. You need some low limit buys.

Sorry, America, but Trump Can Win. From Vanity Fair:

In a shocking reversal of fortunes-pneumonia-gate; deplorables-gate; and a more reticent Trump-the Republican nominee has emerged as a truly credible contender.

A couple of weeks ago, I wrote a mostly facetious article about six events that could occur to flip the polls in favor of Donald Trump over Hillary Clinton, and then I assessed how much each would matter. No single occurrence, apart from the preposterously unlikely event of Barack Obama endorsing Trump, seemed to have a ton of power on its own. Non-silly scenarios included the release of new and questionable Clinton e-mails, a month of passable behavior from Trump, and a serious health setback for Clinton.

What the column failed to consider, however, was the power of a few of these incidents occurring at the same time. We’ve now seen new unfavorable e-mail stories (this was inevitable), two weeks of moderately controlled behavior from Trump (the previous record had been about two days), and a genuine health issue for Clinton (a near-collapse during a 9/11 ceremony). We also saw a small but foolish gaffe from the Democratic nominee on Friday night, when she dismissed fully half of Trump’s supporters as part of a “basket of deplorables,” which she defined as “the racist, sexist, homophobic, xenophobic, Islamophobic, you name it.” At a time when Trump should have been further on the defensive, contending with almost comically devastating revelations about his approach to charity (more on that in a bit), he is instead pulling even with his rival.

Read the rest of the Vanity Fair piece here.

The rise of the American conspiracy theory.

A fascinating article by Damon Linker in The Week Magazine.

America’s presidential politics have become a dizzying scrum of insults and gossip that frequently veers into outright and angry conspiracy theorizing.

Blame democracy. It has killed our faith in “experts” peddling “truth.”

The democratizing urge to tear down established authorities and institutions in the name of equality, begun a half-century ago and accelerated by technological innovations in the decades since, has undeniably empowered a new form of post-rational authoritarian politics. The reigning liberal institutions of the postwar era, which strove for objectivity and fairness (while frequently, and inevitably, falling short of them), first came under assault during the 1960s from both the right and left. Though the left did more damage at first by attacking the liberal establishment on civil rights and the Vietnam War, the right (empowered by the very excesses encouraged by the left) soon got the upper hand.

The right’s early forays into radio, TV, and book and magazine publishing, artfully recounted in Nicole Hemmer’s new history of conservative media, began to expand greatly in the 1970s. The idea was to build a more democratic counter-establishment to tear down and replace the liberal establishment, which kept conservatives out of positions of political and cultural power.

Over the coming decades, right-wing talk radio programs proliferated, Fox News was founded, and a vast array of websites (including The Drudge Report and Breitbart) began serving as an alternative source of news and information for millions of disaffected Republicans. These outlets trained continuous artillery fire on the mainstream media, credentialized “experts,” and other members of the liberal establishment, relentlessly calling them out for apparent double standards, hypocrisy, and other signs of untrustworthiness.

The ultimate goal was to undermine the authority of these institutions.

The effort has been remarkably successful. But the result hasn’t been what most of those leading the assault on the establishment initially hoped or expected. Instead of a conservative revolution to replace liberalism, we’ve ended up with a tribune of the alt-right seriously competing for the presidency. To see why it’s turned out this way requires a brief detour into epistemology – the subfield of philosophy that studies knowledge and its foundations.

You probably haven’t been to the city of Timbuktu in the African country of Mali. You’ve never seen it and most likely have never met anyone from there. Yet I bet most of you – just about all, in fact – assume and accept that it exists. But why? You have no personal experience of it at all. The reason is that you trust the authorities who have told you it exists: the map- and globe-makers, the people who mention it on the news from time to time, the teachers and authors of textbooks who made passing reference to the city and its storied history in lessons you learned as a child.

Most of the things we claim to know about the world beyond our immediate experience are held in precisely this way: on faith, as a matter of trust in those who bequeathed that knowledge to us in the first place. We know that a man named Socrates walked the streets of Athens 2,500 years ago. And that matter is made of atoms, which are themselves comprised of sub-atomic particles. And that a water molecule is comprised of two hydrogen atoms and one oxygen atom. And that the eighth planet in the solar system is a gas giant named Neptune. And that the Earth circles the sun rather than the other way around. And so on through countless other facts and theories that we accept on trust.

Now how about this: We know that greenhouse gases are producing destabilizing changes in the Earth’s climate. And that human beings evolved from other species over millions of years. And that Barack Obama is a Christian. And that Hillary Clinton had nothing to do with the death of Vince Foster.

Large numbers of Americans deny those and many other assertions. Why? Because the trustworthiness of the authorities that make the claims has been under direct and continuous attack for the past several decades – and because the internet has given a voice to every kook who makes a contrary assertion. What we’re left with is a chaos of competing claims, none of which has the authority to dispel the others as untrue.

That sounds like a recipe for relativism – and it is, but only (metaphorically speaking) for a moment, as a preparatory stage toward a new form of absolutism. Confronted by the destabilizing swirl of contradictory assertions, many people end up latching onto whichever source of information confirms the beliefs they held before opening their web browser. Instead of relativistic skepticism they’re left with some of the most impenetrable dogmas ever affirmed.

What was once confined to UFO and Big Foot obsessives has now metastasized into the political mainstream and captured one of the nation’s two major parties – with the encouragement of some of its most prominent members. Who’s to say that Hillary Clinton isn’t suffering from a debilitating illness? Just “go online” and you’ll find all the evidence you need. What, you say she’s denying it? Of course she is: That’s exactly what we’d expect her to say!

This is what happens when the principle of democratic egalitarianism is applied to questions of knowledge and truth – when instead of working to reform institutions devoted to upholding norms of objectivity and verifiable evidence, critics turn them into a target for destruction altogether, transforming public life into an epistemological free-for-all in the process.

That things have degraded so badly is troubling. But it’s nowhere near as troubling as the realization that we haven’t got the foggiest clue how to reverse the damage.

Harry Newton whose “best thing” is his grandchildren. Here’s Sophie, 2, learning all about telecommunications, my old stomping ground.

The handset cord wasn’t long enough. But, what the heck, it’s a great photo.