A system is put in place to create efficiencies. That’s its role. It’s not there to help you find your inner child or to bring out your innate human potential.
It’s about being faster and cheaper and glitch-free.
A criminal justice system therefore attempts to deal with criminals and crime in an ‘efficient’ manner. An education system aims at ‘efficient’ indoctrination of facts and theories in its students. A healthcare system desires to kill disease and administer to patients with the utmost proficiency.
Because that produces savings. And savings means profits. And everyone’s happy with profits.
So what’s the problem?
The problem arises when the system gets too big, when it moves beyond a genuinely human-scale operation and turns industrial. At that point, individuals are ‘processed’ through the system and all sense of humanity is lost. Sure there may be a clerk or teacher or nurse in the building who still has a human touch, but by and large those qualities are weaned from workers, who are themselves extensively trained to work more ‘efficiently’.
On the edges, this means that individual souls are treated with contempt.
- Those with learning disabilities or attention deficits are drugged to make them less of a bother to efficiency-obsessed teachers.
- Medical patients who don’t quite fit the diagnosis or respond to textbook remedies are deemed ‘beyond treatable’, turned over to a ‘pain management’ protocol, and sent off to endure their fate ‘as comfortably as possible’.
- Troubled youth who turn to marijuana once too often are summarily dispatched to federal penitentiaries where they’re assigned to a life of confined chaos.
Because it’s the system that’s important, after all. The efficiency of it. Not the individual. And when the machine is humming along at peak efficiency, damn the outliers. The system wasn’t built for them, nor can it be expected to make exceptions for every man Jack who demands ‘special treatment’.
Gawd Help Us!
And that’s where we’re at.
It’s also, to a great extent, what’s behind the tremendous popularity of people like Bernie Sanders and Donald Trump.
A great many people apparently feel these two individuals represent(ed) a break from the increasingly ‘industrial’ treatment that we’re all subject to, and with them lay some final hope that the cold bureaucratic approach would end.
Anyone who has dealt with the current systems of justice, education, medicine, etc. for any extended period knows that in order for the average guy to get a genuine hearing, to plead his case or the case of a loved one as an individual in need of special consideration, he has to navigate an unthinkable amount of bureaucracy, fill out countless forms and serve them all to some faceless committee that won’t meet with him until a ‘professional review’ of his status can be undertaken.
If he has friends in the governor’s office, he’ll generally get to plead his case with a human being face-to-face. If he’s just a regular ham and egger, little chance.
It’s ‘the system’ that decides in the end. No single person. So there’s little true accountability, either. You’ll rarely if ever see a name appended to your ‘rejection of special treatment’ notice. It’s always the Department or the Institute or the ‘Committee to Further the Well Being of our Clients’ that signs off. Holding a single person accountable might, after all, impinge on his, you know … efficiency.
We’ll return to our efficiency-based trade directly after we address the following trades.
Move it, Huey!
You got it, bro.
We start with our February 16th trade. The letter was called Squeezing the Precious Metals’ Juice, and in it we recommended a trade employing GLD and SLV that cost $4.77. On the 7th of June we closed down part of the trade and were left with a single GLD PUT that expired worthless last Friday. Final score for the initiative is a loss of $2.50.
We lose ‘em once in a while, too, folks.
On the 24th of May, in a letter called System Signals Silver Sale, we urged you to sell ten (10) SLV August 16.50 CALLs, then trading for $0.53 each. Total credit was $5.30.
On Friday those options expired in-the-money, meaning we’re short 10 lots of SLV at $16.50 with the shares are sitting at $17.97. That amounts to a loss of $1.47 per option, less the original $0.53, or $0.94 per.
Now take a look at the chart –
SLV is in the midst of a freefall that we believe is likely to continue. If you can hold out, do so. We are. If it’s too painful, jump now. Either way, set a stop buy order at $19 to keep the losses contained.
We move now to a trade launched on August 2nd in a letter called Stock Market Superhero, in which we offered the purchase of the GDXJ January 41 PUT for $3.10 and sale of the QQQ January 108 PUT for $3.21. Total credit on the trade was $0.11.
The GDXJs are going for $3.40 and the QQQs for $2.04. Sell the former and buy back the latter and you net out $1.47 on nothing down.
And that feels good.
This Week’s Trade
Efficiency is something that armies do better than almost anyone. And the companies that supply them with weapons and equipment no less so.
That’s why we’re turning to one of the biggest defense contractors on the planet for our trade this week: Lockheed Martin (NYSE:LMT).
A look at the chart below offers abundant proof of this company’s ability to maintain a lucrative growth trajectory for shareholders. Take a gander at the stock’s three year, rising trend channel (in red) –
Yet at the same time, we’re ‘Feeling the Bern’ over LMT’s stock. We think she’s stalled for the time being, and we don’t like the ‘industrial’ feel of the company, to boot.
- The last touch at the top edge of the trend channel would indicate sideways to lower movement is imminent.
- The massive surge in volume (in black) would imply the same, and
- The two overbought RSI episodes of the last month on the daily chart corroborate both of the above (red insert, blue circles).
In short, the efficiencies are on hold.
Look for LMT to cool down for the next few months.- Content protected for Normandy Executive Lounge, Wall Street Elite, Executive Lounge members only]
With kind regards,
Hugh L. O’Haynew