Baguettes as junk food.

I’m craving a warm, somewhat crusty (but not too much), baguette. Alas, it’s almost midnight and all the boulangeries in Paris closed long ago. Baguettes have become my new junk food since I moved here. (What about croissants, you ask? Nice, but not as versatile.) In my opinion, the only thing that can possibly make me salivate as much as a warm baguette, that can also be enjoyed morning, noon, or night, and that pairs equally well with cheese, meat, or chocolate, is fresh, warm pita bread.

I just discovered that the french word copain comes from the Latin
cum pane; literally “with bread”. So, a true friend, according to the french, is therefore a person with whom you’d share your bread. (In Canada, a friend might perhaps be someone you’d let have the last beer.) That’s a big hint to the importance of bread to the collective psyche here. There have even been strikes in the past demanding the price of a baguette be capped and regulated by the government; though no mention of that (yet?) in the street demonstrations of late decrying the decline in “purchasing power”. One could be forgiven for thinking that the French invented bread, but it was probably the ancient Egyptians. However, few people have heard of aish baladi (the traditional pita bread), but everyone around the world knows what a baguette is!

Beautiful Life

Gui Boratto - "Beautiful Life".

An update on OptionMonster.com and NYSE: DUK

Shortly after my last post, I was contacted by Mike Yamamoto, the managing editor of OptionMonster.com. He promised to personally look into the discrepancies that I had pointed out. Within a few hours, the headline on the CNBC web site blog post was corrected, and today the incorrect stock chart for Duke Energy in the OptionMonster.com article was pulled down. Apparently, both were uncorrelated, completely separate errors. The CNBC post headline error (stating “bearish” instead of “bullish”, though the final corrected headline described the option activity as “extremely unusual”) was a simple human error by a staffer at CNBC. As for the erroneous DUK chart (which hid the fact of how historically cheap the DUK stock price had reached), I heard today from Mike that the source data, coming from TradeMonster.com, had an "errant data point" that probably "threw things off". In all, I was impressed with the speed and conscientious nature of the response provided by Mike who kept me informed as he looked into things.

On a related note, since my last post I decided to make my own speculative play on NYSE: DUK. Earlier this week, I opened a position using a bullish options strategy.

Is OptionMonster.com trying to manipulate Duke Energy (NYSE: DUK)?

OK, it’s time to let the cat out of the bag; I’m a part-time, highly speculative investor. It’s more of a hobby really, as I don’t allocate much capital to these investments. I read constantly, but do research only when my interest is piqued -- and trade even more sparingly.

One company that caught my attention this past week was Duke Energy Corporation (NYSE: DUK). This energy company (primarily in the business of delivering electricity) has seen it’s stock battered lately. In this all-around pessimistic economic climate, that’s no surprise. However, lately, in the last month, the slide has been even more dramatic, for no apparent reason. This is no AIG or GM, and there’s no high-risk leveraging in sight; this is an actual profitable company, with a dividend to boot.

I have no position in this company, and I wouldn’t have noticed it if it were not for a huge amount of April 12.50 call option buying this past Thursday (unhedged bets that the stock price, now around $12, will be higher than $12.50 by April 17th). Perhaps it’s that someone knows something (good news coming perhaps, as energy and electricity grid upgrades were on the list of Obama stimulus plan priorities), or perhaps it’s just an optimistic bunch of speculators who think this stock is oversold and is due for a quick rebound.

Regardless, that’s not so much the point. I’m taking the time to write this not because I’m trying to spread investment advice, rather to raise some curious observations on the reporting of DUK. OptionMonster.com (a company and web site run by the, now quasi-famous, two Najarian brothers who make frequent appearances on CNBC, in particular the TV channel’s “Fast Money” show) highlighted the anomaly in trading in DUK options early on Friday, however the chart Jon Najarian posted in the article was clearly not correct; it shows DUK stock hitting a multi-year bottom below $8 in early 2003. The last time DUK stock was below $8 was in the mid-1980’s. The stock did indeed hit a multi-year trough in 2003, on March 10, but it was at $12.32 – a price higher than the current stock price. (In case you’re interested, the last time the stock was at levels seen this week, you’d have to go back to 1989.) If you don’t believe me, just go chart it yourself.

Initially, I naturally thought that this was just a simple error on the part of OptionMonster.com. Now, I’m not so sure. Especially after seeing this blog post by Jon Najarian on the CNBC web site with the headline: “Options Traders 'Extremely' Bearish on Duke Energy”. Obviously this much call option buying (when not counter-balanced by put option volume) is bullish, not bearish. Another error? A simple typo, a coincidence, or is something else going on? To his credit, Najarian did describe the situation correctly in the blog post, speculating that it’s possible that some traders might think that this stock has hit bottom (thus, implying a bullish bet has been made). But, it’s the blog post title that gets indexed, it’s also what people scan when reading through headlines. Is it possible that the OptionMonster.com boys are trying to hold back investors from pilling into DUK so that they can have the time to lock in their own upside bets?

But, like I said, it could just be a coincidence: two erroneous slips on the same stock by a man who's reporting is usually spot on…

I cut the cord; here I am in Paris.

Actually, I’ve been here for a couple weeks now. Though, on many levels, I’m here a little prematurely given “little” details like: my funding source in France is now in question (I’m on my own dime up to now) and important work projects have not been completed back in Toronto (raising the blood pressure of several individuals). But, too many things related to my move were set in motion a long time ago. So I made the leap; both across the Atlantic, but also of faith, that it will all work out…

My first few days felt a little odd, partly because it was a period when most are typically travelling to spend time with family, and here I was moving in the opposite direction. But, I do tend to do things against the current. (It’s more fun that way!) My trip and arrival were quite relaxing. The only thing that didn’t go according to plan was with my excess baggage. There were some interesting times on the phone with FedEx. I kid you not, it was the cheapest option, but thank goodness I did my shipment through a logistics company in the UK who, in the end, were the ones left on the hook for the supplementary 88 euros fee, due to a mistake by FedEx France.

Minus a few luxuries I had in Toronto (like storage space, wood floors and efficient heating), my new place is starting to feel like home. Despite the fact that it’s winter, I’m really enjoying the view from my little rooftop terrace; quite a novelty since I’ve never even had a balcony before. Another bonus is that the coffee machine makes excellent coffee – despite my bad touch at making coffee.

Of course, having moved, I’ve been getting a lot of New Year’s best wishes. In general, the reaction I’ve received from my contacts can be summarized as follows: (a) “how exciting to be moving to Paris”, (b) “but get ready for a lot of administrative red tape”, and (c) “but those Parisians can be quite rude/snobbish”. I have to say that I disagree with all of the above.

First of all, although I was looking forward to the move, it wasn’t so much Paris as such (though being surrounded by my mother tongue for the first time in my life is quite novel, even soothing), but the idea of leaving Canada for Europe. I think I could be happy in any major centre; I tend to make my own happiness.

When it comes to comments (b) and (c), I think those are just stereotypes, at least from what I’ve experienced up to now. True, the French are the kings of paperwork, but it’s all quite logical as long as you follow the instructions. In addition, this particular way of doing things has spawned an industry that creates, arguably, the most beautiful stationery and accessories. Finally, there doesn’t seem to be any more rudeness here than in any other big financial centre (Toronto, New York, etc.). Anywhere in the world when one happens to catch someone at a bad time (e.g., late for work) one is likely to get a curt reply; that’s nothing particularly Parisian. The only difference, I suppose, is that many people from around the world actually come here, to a city, for their vacations. Perhaps that’s where the stereotype started. It’s naturally expected by vacationers that everyone should be a friendly, ad hoc tourist guide. Although some are, like in any population of humans, some people are just less social than others. At least here my neighbours say “bonjour/bonsoir” when I run into them in the hall/stairwell/etc.

And, on that note, bonsoir!