Last Friday’s promising heart attack on Wall Street has given way to a quasi-vegetative state that holds no particular opportunities for either bulls or bears. What to do? We’ll sit on the cost-free put spread that we legged on in the QQQs, but my hunch is that we may be glad we bought some cheapie call options on the side. That’s assuming, of course, that the aforesaid vegetative state does not persist until…spring…summer…autumn…? We watched some out-of-the-money January puts expire ingloriously, having purchased them with the rationale that a mere 2 percent decline in the underlying index would yield sufficient gains to pay the mortgage and a few other bills. In retrospect, we now know that a “mere” 2% was asking for too much. Also, in retrospect, we know that, when we had the chance, we should have shorted some offsetting puts on the 1% decline that actually did occur.

Although I agree with those who thinks it’s a good idea to always have a few put options in inventory, the sobering fact is that, since the 1987 crash,  there have been only a couple of times when buyers of puts felt something akin to exhilaration for more than 2.5 consecutive days. That number is off the top of my head, but can you recall a period lasting any more than a couple of days when it would have been a mistake for a put holder to take some profits? I can’t, and that’s why I’ve embraced the strategy of buying puts only in spreads where we have taken in as much in premiums as we’ve paid out.

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Why I Hate Disney

Yesterday I took a swipe here at Disney’s announced purchase of Pixar for $7.4 billion. I’m not optimistic that the deal will improve the fortunes of either company in the long run, even with Michael Eisner, a guy with the imagination and vision of an eggplant, gone. But who knows? Perhaps Roy Disney and his partners, the ones who had been trying for years to oust Eisner, will simply let Pixar do its thing. Whatever happens, it’ll be interesting to watch the least creative giant in the entertainment field attempt to synergize with one of the most creative companies.

My strongly negative feelings toward Eisner were inspired by the increasingly rancid garbage Disney has been turning out since he took the helm in the early 1980s. In the Fifties, when Walt Disney ran the show with an autocratic but evidently benign hand, the release of a Disney film was a major event in every kid’s life. These days, though, nearly every non-indie movie that comes from Disney studios is pure swill, with a plot that feels like it was written by a focus group, and third-tier actors who are barely up to television’s low standards. The only recent Disney film I can recall that showed some imagination on the part of the producer was the one where Vin Diesel was hired to guard some obnoxious suburban kids. This was casting against type, something Disney almost never does, and it worked as well for Diesel as it did for Disney.

Pure Eisner

But the company's most unpardonable sins have been in the field of animation, which Disney itself pioneered. A story in The Wall Street Journal last year explained how Disney’s bean counters had worked with the animators to come up with ways to drastically reduce the costs of making animated features. The main trick -- pure Eisner, from the sound of it – was to omit just a little bit of detail from each cel. I seem to recall that Eisner himself was quoted as saying that a missing brushstroke here, another there, would hardly be noticed.

Whether it was Eisner who said it or one of his lackeys, the guy should have been fired on the spot. The penny-wise, pound-foolish notion of skimping on artistic detail is the antithesis of the philosophy that created Snow White, Sleeping Beauty and other early classics. It is akin to Katz's Deli saying that substituting Oscar Mayer packaged meat for home-made pastrami would not be noticed by its customers. Yeah, right. As any avid moviegoer knows, Disney’s animated features long ago reached the point where they became pure Oscar Mayer. As for their soundtracks, metaphorically speaking, they did not even come up to the level of dog food.