2007 03 06 NLV Portfolio Year to Date Results

March 6, 2007 Year to Date Results

Commentary

Well that was a breath of fresh air! I mean the markets giving back about
25% of the losses they seized this year. If history is any guide (and it
usually is) the markets will climb back more slowly than when they dropped
in the first place. If we're really lucky, maybe, we'll break even by the
end of the month. That's assuming that what we're seeing is really not the
start of a bear market which could then take anywhere from six months to two
years before normalcy returns. Of course, in the meantime, we'd still have
to survive the markets falling yet more deeply. Hey, didn't I tell you kids
to strap in because it was going to be a bumpy ride?

I came this close to jumping into the market today but then caution overtook
me. I'd like to see a confirmation day tomorrow (with the markets again up
significantly) before I commit any more resources. So today again we found
our self just riding out the storm. It's boring but so is good health too,
when you think about it. <g>

Paper Profits Table

Closed Transactions Table

Put Trading Activity for Today
Generally, we want STO Premiums to be as big as possible and we was BTC
Premiums to be as small as possible. This would give us optimum profits. In
other words, we want to buy low and sell high, but with put writing its
always in reverse order. Note that all Premium, STO, and Profit/Loss Columns
should be multiplied by 100 to get the per contract
numbers and that all positions we enter into will always be for as least two
but probably more contracts per position.

Abbreviations: STO-Sell to Open; BTC-Buy to Close; AROM-Annualized Return on
Margin; S/L Tgt-Stop-Loss Target

Sell to Open (STO)
Symbol Expires Strike Premium BTC Tgt S/L
Tgt Sell By Date
None

Account Balance less Margin available to invest: 50.9%
Account Balance less Margin and Voluntary Reserve requirements available to
invest: 20.9%

Buy to Close (BTC)
Symbol Expires Strike STO BTC
Profit/Loss Days Held AROM
None

Comments or Questions?
If you have any comments or questions, please direct them to Leonard
leonard@irsdehassler.com

Disclaimer:
This is the fine print and is designed to protect me in these litigious
times, and until I get better wording for this disclaimer, you are under
notice that I am not selling my services nor any other product, nor am I
trying to induce you to trade along or independently, with me. I am merely
offering a journal, so to speak, of my portfolio's transactions and results
with the hope that you will glean information and educate yourselves in the
stock market in general and option trading dynamics in particular. Trading
in the stock market and in options involves substantial risk and much money
may be lost. Beginners, especially those with little or no understanding of
the stock market, lose most, if not all of their capital in a relatively
short time. In other words learn from me and my mistakes and if you want to
risk your money in the markets, that's your business and has nothing to do
with me. I am not your representative, broker, advisor or any other type
agent acting in your interests. As a matter of fact, if you want to invest
your money, I recommend you hire your own advisor other than me. I also
reserve the right to cease publishing this missive, or change its publishing
frequency at any time without further notice or liability to you.
Copyright (c) 2007 Leonard Mednick, MBA, CPA (Ret); Managing Member LIME
Holdings LLC

_________________________________________________________________
Don't miss your chance to WIN 10 hours of private jet travel from Microsoft®
Office Live http://clk.atdmt.com/MRT/go/mcrssaub0540002499mrt/direct/01/

2007 03 05 NLV Portfolio Year to Date Results

March 5, 2007 Year to Date Results

Commentary
"Next verse, same as the first. A little bit louder and a little bit worse."

This kiddy doggerel ran through my mind as I watched the DOW run up to 60
points or so plus during the early morning only to close at about 60 points
below the open! More money was lost in the market (I heard that 1 ½ trillion
dollars was lost in the global markets just this past week). That's Trillion
(a thousand billion) with a capital T making the loss equivalent to about 30
times the entire wealth of Bill Gates, the richest man on the planet. And
when you think about it, a trillion and a half dollars is probably in the
neighborhood of the aggregate wealth of all the people in the U. S. gone
Poof in only one week! I'm here to tell you that as a patriotic American, I
did my part contributing to this economic black hole, as well. <sigh>

In between the market high and the low today there were lots and lots of ups
and downs. The financial types call this frequent up, down, and wide price
movement, "volatility" which they equate to a measurement of "risk". The
more frequent and the wider the movement, the higher the volatility and the
higher the risk.

Indeed, each stock, each option, each index etc.; in fact any series of
numbers has a volatility attached to it that can be measured mathematically.
The statisticians call this volatility "Standard Deviation". Volatility is
neither good nor bad, it simply is a property of a series of numbers but it
has some very interesting properties of its own.

First, the higher the volatility, the higher the probability that you can
make a lot of money in an investment, or lose a lot of money. Second, when
you know the volatility of a stock, you can determine the probability with
whatever precision you want as to how much you can probably win or lose on
your investment! We won't go into the math here but if you want more details
on this simply send me an email.

Now if all other things were equal, what you've just learned would be of no
use because on the average you would lose just as much as you won over a
long period of time no matter whether volatility was large or small. But all
other things are not always equal. Some companies have better managers, more
efficient production processes, stronger patents, more creative ad agencies,
and so forth. These factors are descriptively called "the company's
fundamentals". The chances are that if you can identify companies with good
fundamentals, that their volatility would land their stock prices more often
to the upside then to the downside. And there, my friends, is our investment
edge.

When you pick the stocks that give you the edge, the probability is strong
that you will win more often than you lose, and that your average wins will
be higher than your average losses. This brings to mind another doggerel
that I learned playing poker several years later called the Gambler's
Prayer. It went like this: "Dear God, just give me an edge and I'll take
care of the rest." Or maybe it went like this: "Dear God: just let me break
even; I need the money." Or maybe...Awww. Fuggedaboudid! <g>

Paper Profits Table

Closed Transactions Table

Put Trading Activity for Today
Generally, we want STO Premiums to be as big as possible and we was BTC
Premiums to be as small as possible. This would give us
optimum profits. In other words, we want to buy low and sell high, but with
put writing its always in reverse order. Note that all Premium, STO, and
Profit/Loss Columns should be multiplied by 100 to get the per contract
numbers and that all positions we enter into will always be for as least two
but probably more contracts per position.

Abbreviations: STO-Sell to Open; BTC-Buy to Close; AROM-Annualized Return on
Margin; S/L Tgt-Stop-Loss Target

Sell to Open (STO)
Symbol Expires Strike Premium BTC Tgt S/L
Tgt Sell By Date
None

Account Balance less Margin available to invest: 50.9%
Account Balance less Margin and Voluntary Reserve requirements available to
invest: 20.9%

Buy to Close (BTC)
Symbol Expires Strike STO BTC
Profit/Loss Days Held AROM
None

I think now there's a strong chance that the market has spent its energy on
the negative side. All it takes is for people to begin realizing that what
just transpired the past seven days or so has been mainly due to panic. The
fundamentals of the stock market still seem to be on the plus side; nothing
changed significantly since two weeks ago. With this thought in mind,
depending upon how my screens come out and how the market is at about one
hour before closing, tomorrow, I may just jump in again by opening up new
positions and/or closing out old positions in my portfolio.
Comments or Questions?

If you have any comments or questions, please direct them to Leonard
leonard@irsdehassler.com

Disclaimer:
This is the fine print and is designed to protect me in these litigious
times, and until I get better wording for this disclaimer, you are under
notice that I am not selling my services nor any other product, nor am I
trying to induce you to trade along or independently, with me. I am merely
offering a journal, so to speak, of my portfolio's transactions and results
with the hope that you will glean information and educate yourselves in the
stock market in general and option trading dynamics in particular. Trading
in the stock market and in options involves substantial risk and much money
may be lost. Beginners, especially those with little or no understanding of
the stock market, lose most, if not all of their capital in a relatively
short time. In other words learn from me and my mistakes and if you want to
risk your money in the markets, that's your business and has nothing to do
with me. I am not your representative, broker, advisor or any other type
agent acting in your interests. As a matter of fact, if you want to invest
your money, I recommend you hire your own advisor other than me. I also
reserve the right to cease publishing this missive, or change its publishing
frequency at any time without further notice or liability to you.
Copyright © 2007 Leonard Mednick, MBA, CPA (Ret); Managing Member LIME
Holdings LLC

_________________________________________________________________
Don't miss your chance to WIN 10 hours of private jet travel from Microsoft®
Office Live http://clk.atdmt.com/MRT/go/mcrssaub0540002499mrt/direct/01/

2007 03 02 NLV Portfolio Year to Date Results

March 2, 2007 Year to Date Results

Commentary

If you're keeping up with the news at all, you know that the stock markets
have, to put it gently, not been friendly to investors, me included, as the
tables below will attest. Yet, as I'm writing this report (2:20 a.m.
3/5/2007) the latest news headline from the AP, about 30 minutes ago was:

Asian Markets Plunge Across Board
Nikkei Tumbles for 5th Day; Europe Opens Lower
So this is what investors will be waking up to in the next few hours. Last
week it was China's 9% fall that had us (globally) all atwitter. This
morning it'll be Japan (Nikkei is the name of the main index for the Tokyo
stock exchange, akin to our DOW or S&P 500 depending upon your point of
view) that'll probably knock us for a loop, again.

All this hullaballoo seems so senseless to me. China's index fall last week
was because of some internal edict given by the Chinese government, since
ameliorated. The Chinese stock market, with all deference to a country four
times our size, is worth less than a tenth of our markets. Yet when China
sneezed last week, not only us but the whole world caught cold!
And Japan? Their issue is kinda esoteric. Basically, it has to do with the
fact that the Japanese central bank raised its interest rates from 0% (you
read that right, 0%) to ½%. That caused a lot of speculators in the Japanese
Yen, who had been able to sell Yen they didn't own (selling short) and buy
(going long) Euros, Marks, Dollars, Francs or whatever. In effect Japan for
several years has been financing traders at little or no cost to carry
foreign currencies in the traders' hopes that the foreign currencies would
appreciate with respect to the Yen. Now because it's going to cost a trifle
more to continue what has been a fairly profitable practice, you've got
these traders committing financial hara kiri and many in trading universe
following suit in lemming-like fashion, dragging down everyone else who, for
the most part, are baffled by these violent reactions.

>From an economic point of view, nothing has changed since two weeks ago! Our
economy, and the world's too as a matter of fact, is plugging along nicely.
Former Fed Chairman Alan Greenspan even remarked last week that as far back
as he remembers there has never been a period in time where there was no
recession in any part of the world simultaneously. And that's where we are
right now: no recession anywhere on the planet!

So I should be happy, right? Not really. That's because if these Negative
Nellies keep harping on the glass half-empty, and they keep marching off the
cliff in lock-step, they're going to drag guys like me along with them.
Option portfolios can only bend so much before they break under the
pressure. True, the bend is considerably more than a portfolio in outright
stock ownership possesses but unless the market finds its footing sometime
early this week, I will be forced to start liquidating positions rather than
take the chance on holding "just one more day" risking the total
annihilation of my account.

What it boils down to is that when aggregate investor psychology flips back
to a more normal level, all will be at one with the stock market universe
again. Then we can get back to the piddling issues like terrorism, global
warming, world hunger, rising oil prices, inflation, a collapsing housing
market, world peace, etc. These issues have been but a mere bagatelle when
up against the strongest financial engine ever giving us rising living
standards and greater economic opportunities: the American economy. And
"it's the economy, stupid" that should be driving markets not the
willy-nilly natterings we've suffered of late.

Paper Profits Table

Closed Transactions Table

Put Trading Activity for Today
Generally, we want STO Premiums to be as big as possible and we was BTC
Premiums to be as small as possible. This would give us
optimum profits. In other words, we want to buy low and sell high, but with
put writing its always in reverse order. Note that all Premium, STO, and
Profit/Loss Columns should be multiplied by 100 to get the per contract
numbers and that all positions we enter into will always be for as least two

but probably more contracts per position.
Abbreviations: STO-Sell to Open; BTC-Buy to Close; AROM-Annualized Return on
Margin; S/L Tgt-Stop-Loss Target

Sell to Open (STO)
Symbol Expires Strike Premium BTC Tgt S/L
Tgt Sell By Date
None

Account Balance less Margin available to invest: 51.6%
Account Balance less Margin and Voluntary Reserve requirements available to
invest: 21.6%

Buy to Close (BTC)
Symbol Expires Strike STO BTC
Profit/Loss Days Held AROM
None

Comments or Questions?
If you have any comments or questions, please direct them to Leonard
leonard@irsdehassler.com

Disclaimer:
This is the fine print and is designed to protect me in these litigious
times, and until I get better wording for this disclaimer, you are under
notice that I am not selling my services nor any other product, nor am I
trying to induce you to trade along or independently, with me. I am merely
offering a journal, so to speak, of my portfolio's transactions and results
with the hope that you will glean information and educate yourselves in the
stock market in general and option trading dynamics in particular. Trading
in the stock market and in options involves substantial risk and much money
may be lost. Beginners, especially those with little or no understanding of
the stock market, lose most, if not all of their capital in a relatively
short time. In other words learn from me and my mistakes and if you want to
risk your money in the markets, that's your business and has nothing to do
with me. I am not your representative, broker, advisor or any other type
agent acting in your interests. As a matter of fact, if you want to invest
your money, I recommend you hire your own advisor other than me. I also
reserve the right to cease publishing this missive, or change its publishing
frequency at any time without further notice or liability to you.
Copyright © 2007 Leonard Mednick, MBA, CPA (Ret); Managing Member LIME
Holdings LLC

_________________________________________________________________
The average US Credit Score is 675. The cost to see yours: $0 by Experian.

http://www.freecreditreport.com/pm/default.aspx?sc=660600&bcd=EMAILFOOTERAVERAGE

2007 03 01 NLV Portfolio Year to Date Results

March 1, 2007 Year to Date Results

Commentary

We're not out of the woods on this one, yet. There's a lot of waffling among
traders as to whether this market "correction" is a precursor to "the big
one" or if it's even a correction at all; just a "normal" hiccup. So unless
there's another catalyst type action somewhere in this wide, wide world, my
belief is that after the weekend, after we've all had a chance to catch our
breath, things will start settling down. Meanwhile, I'm not setting up any
new positions as that would be a pure gamble, not reasoned speculation.
This is my first time as a "portfolio manager" so I'm learning a lot under
fire. One of the things I learned today is that many of the professional
fund managers haven't undergone any 3 1/2 % one day corrections either under
their watch. At least they've probably undergone some vetting in past drops
under the wing of a mentor. That helps but its small comfort when you're
watching your portfolio disappear.

How Stocks and Options Differ in Each of the Market Phases
One of the things I've noticed is that stop/losses do not act the same when
they're placed with options. I think the reason is that options behave
differently than stocks do in almost every market phase. You'll recall that
stocks, assuming that you've bought them long, can only make money when the
market is up and lose money when the market is down. When the market moves
sideways (called basing, in market jargon) a stock neither makes nor loses
money.

Options, on the other hand, profit when the market is up a lot, up a little,
goes sideways, or even is down a little. The only time options lose big-time
is when the market loses big-time as well, like we've been experiencing this
week. I use a palm tree metaphor to help me picture this concept in my mind.
It's original and it's not a perfect picture but it helped me visualize the
concept when I first started actively investing in May of 2005. Without
going into all the gory details, imagine how a palm tree moves depending
upon the wind. If there's no wind, it stands straight and goes about its day
growing coconuts. It bends a little when the wind blows a little and it
bends a lot when the wind blows a lot. Usually that's all there is to it.
After the wind dies down, the palm tree snaps back and continues growing its
coconuts.

But every once in a while, a hurricane wind comes along causing the palm
tree to bend severely, approaching 90 degrees maybe, ripping away at the
fronds and coconuts, and at times even uprooting the palm tree. But after
the storm, most of the trees snapped back to the upright position; with
nothing but a few torn fronds and a few missing coconuts. A few of the trees
were uprooted or broke so they will never come back while the surviving
trees will eventually regenerate the missing and damaged fronds and regrow
new coconuts.

So what's all this got to do with Stop/Losses? This is what the palm tree
picture suggests to me. Assuming the fundamentals of the underlying stock
are ok, options are like palm trees in the wind. I know that I will
eventually make money so long as I'm not hit by a hurricane. So if I'm only
going to lose money in a hurricane, why do I need stop/losses short of a
hurricane?

Further, as I learned so emphatically in this downturn, stop/losses are
almost meaningless in a downturn as the price of the option gaps right
through the stop/loss settling, if at all, at a price far beyond what we had
planned on from the beginning. So just when I need the protection of a
stop/loss the most, that's when I get that protection the least.
I also noticed that short of the big, big wind and short of a company's
fundamentals going south, I can usually ignore the day to day price changes
as options by their nature head toward profitability absent those negatives.
In other words, I have to think of options on a longer term basis than just
a quick get in and get out, although if those opportunities arise, I can
still take them, thank you very much.

But even if I don't use traditional stop/losses as they're promulgated
everywhere I've read about them, I still have to have a way to determine
when to exit a position short of the expiration date. Here's where a few
ideas are formulating in my head. Yesterday I got an idea which I'm going to
try to formulate into numbers over the weekend. It'll be an indicator or
combination of indicators that alert me when prices seem to have gone too
far in the wrong direction according to some preset marker, preferably
deriving from probability theory.

If I can pull this off, it'll be as if some palm tree engineer came in, did
his measurements on each tree and then predicted just how strong a wind must
blow before the tree breaks. Remember, unlike stocks, which break the moment
it's price falls, options only lose if the underlying stock's fundamentals
break or the market's bottom falls out. I'm going to concentrate on the
latter this weekend. I'll tell you more with Monday's report.

Paper Profits Table

Closed Transactions Table

Put Trading Activity for Today
Generally, we want STO Premiums to be as big as possible and we was BTC
Premiums to be as small as possible. This would give us
optimum profits. In other words, we want to buy low and sell high, but with
put writing its always in reverse order. Note that all Premium, STO, and
Profit/Loss Columns should be multiplied by 100 to get the per contract
numbers and that all positions we enter into will always be for as least two

but probably more contracts per position.
Abbreviations: STO-Sell to Open; BTC-Buy to Close; AROM-Annualized Return on
Margin; S/L Tgt-Stop-Loss Target

Sell to Open (STO)
Symbol Expires Strike Premium BTC Tgt S/L
Tgt Sell By Date
None

No point opening new positions when I don't know where the market's going.

Account Balance less Margin available to invest: 51.9%
Account Balance less Margin and Voluntary Reserve requirements available to
invest: 21.9%

Buy to Close (BTC)
Symbol Expires Strike STO BTC
Profit/Loss Days Held AROM
None

Comments or Questions?
If you have any comments or questions, please direct them to Leonard
leonard@irsdehassler.com

Disclaimer:
This is the fine print and is designed to protect me in these litigious
times, and until I get better wording for this disclaimer, you are under
notice that I am not selling my services nor any other product, nor am I
trying to induce you to trade along or independently, with me. I am merely
offering a journal, so to speak, of my portfolio's transactions and results
with the hope that you will glean information and educate yourselves in the
stock market in general and option trading dynamics in particular. Trading
in the stock market and in options involves substantial risk and much money
may be lost. Beginners, especially those with little or no understanding of
the stock market, lose most, if not all of their capital in a relatively
short time. In other words learn from me and my mistakes and if you want to
risk your money in the markets, that's your business and has nothing to do
with me. I am not your representative, broker, advisor or any other type
agent acting in your interests. As a matter of fact, if you want to invest
your money, I recommend you hire your own advisor other than me. I also
reserve the right to cease publishing this missive, or change its publishing
frequency at any time without further notice or liability to you.
Copyright (c) 2007 Leonard Mednick, MBA, CPA (Ret); Managing Member LIME
Holdings LLC

_________________________________________________________________
Find a local pizza place, movie theater, and more….then map the best route!

http://maps.live.com/?icid=hmtag1&FORM=MGAC01

2007 02 28 NLV Portfolio Year to Date Results

February 28, 2007 Year to Date Results
Commentary
This is going to be a short commentary. You'll note that it wasn't sent to
you until after an hour and a half into the 3/1/2007 market opening. The
market was down another 200 points when I made some interesting observations
on my investing philosophy. I'll tell you all about them with the 3/1/2007
report, after I've had a chance to reflect on those observations.
Meanwhile I'm outta here and back to the trenches.
Paper Profits Table

Closed Transactions Table

Put Trading Activity for Today
Generally, we want STO Premiums to be as big as possible and we was BTC
Premiums to be as small as possible. This would give us
optimum profits. In other words, we want to buy low and sell high, but with
put writing its always in reverse order. Note that all Premium, STO, and
Profit/Loss Columns should be multiplied by 100 to get the per contract
numbers and that all positions we enter into will always be for as least two

but probably more contracts per position.
Abbreviations: STO-Sell to Open; BTC-Buy to Close; AROM-Annualized Return on
Margin; S/L Tgt-Stop-Loss Target
Sell to Open (STO)
Symbol Expires Strike Premium BTC Tgt S/L
Tgt Sell By Date
None

Account Balance less Margin available to invest: 52.2%
Account Balance less Margin and Voluntary Reserve requirements available to
invest: 22.2%

Buy to Close (BTC)
Symbol Expires Strike STO BTC
Profit/Loss Days Held AROM
PFE 01/17/2009 $20.00 $0.65 $0.86
-$0.21 37 -68.1%
Comments or Questions?
If you have any comments or questions, please direct them to Leonard
<mailto:leonard@irsdehassler.com?subject=Comments%20or%20Questions>

Disclaimer:
This is the fine print and is designed to protect me in these litigious
times, and until I get better wording for this disclaimer, you are under
notice that I am not selling my services nor any other product, nor am I
trying to induce you to trade along or independently, with me. I am merely
offering a journal, so to speak, of my portfolio's transactions and results
with the hope that you will glean information and educate yourselves in the
stock market in general and option trading dynamics in particular. Trading
in the stock market and in options involves substantial risk and much money
may be lost. Beginners, especially those with little or no understanding of
the stock market, lose most, if not all of their capital in a relatively
short time. In other words learn from me and my mistakes and if you want to
risk your money in the markets, that's your business and has nothing to do
with me. I am not your representative, broker, advisor or any other type
agent acting in your interests. As a matter of fact, if you want to invest
your money, I recommend you hire your own advisor other than me. I also
reserve the right to cease publishing this missive, or change its publishing
frequency at any time without further notice or liability to you.
Copyright (c) 2007 Leonard Mednick, MBA, CPA (Ret); Managing Member LIME
Holdings LLC

_________________________________________________________________
Play Flexicon: the crossword game that feeds your brain. PLAY now for FREE. 

http://zone.msn.com/en/flexicon/default.htm?icid=flexicon_hmtagline