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The Options & Spreads article that follows has been written by an expert who trades successfully for a living. He also offers a course on trading Options & Spreads. For more info on the course click here.

The following article is very educational, informative and well-written.


OPTIONS & SPREADS:
The Money-Eating Monster & the Jeweled Goblet

The tavern's Olde English interior clashed with the Bugaloo down Broadway recorded music. Chuck borrowed a few dollars from Jim over watered-down scotch. Chuck lamented, "I developed a system to bet the horses that was iron-clad. It couldn't lose."

"So what happened?" "The track opened." The old-time Prohibitionists campaigned to close down saloons not only because they served liquor but because they were regarded as centers of sin and vice. The rum barrel competed for attention against various peripatetics -- the woman of the evening, the bookmaker carrying his files in his hat, the securities peddler with satchel of gilt-edged paper.

Investment-selling laws have strengthened since then but beery mentalities have not. Blue collar and white sit on barstools and say to themselves, "The priests and philosophers live in an ivory tower but not me. I know the real world!" Yeh, right. A case could be made for the condemnation of saloons and sports bars as centers of unscientific thinking and rehearsal halls for make-me-wealthy clown shows. Just because three-shell-games and counterfeit stock certificates are no longer blatant on the table-tops does not mean much has changed.

With all due respect to the friendly bartender and the foamy, refreshing lager, public drinking establishments have a way of being part ivory tower and part bad filter. In the early 1800s, Dr. Samuel Hahnemann developed homeopathic medicine, based on his theory that "like cures like" if given in tiny doses. It was controversial at best but at least the mildness of the tiny doses improved on the poisons, purges and vomits with which the rival allopathic physicians attacked the human body at that time.

Mark Twain wrote that homeopathy revolutionized medicine by forcing the allopaths who condemned it to come up with things more rational. Alas, it degenerated or passed through a "bad filter" at the folk medicine level. To treat a case of rabies you used "the hair of the dog that bit him." It degenerated worse at the saloon level. The "like cures like" theory became a handy excuse to drink more. Problem drinkers and men looking to cure hangovers would ask the saloon-keeper for "the hair of the dog."

Now as then, the process worsens on the subject of money. Financial information gets mangled, wrong theories popularized, and bad tips worsened as they pass from barstool to barstool. You can't lose if you buy stocks and put them away. You can't lose with commodities if you invest seasonally. That options a sure thing because its underlying can't possibly . . . My barber cuts the hair of J.P. Moneybags and he said . . . My brother-in-law, the one whose shop went broke, told me about foreign currency options. That chain of tattoo parlors is expanding and selling IPO shares. In a few years, everybody in America will be illustrated from top to bottom.

The trader smart enough not venture money on the basis of handwriting-analysis or a horse parlor tout or the skirt-length theory of stock fluctuations cannot possibly be immune to every thing that is said. He seeks continually to grow and expand his knowledge and it is impossible not to take in some rubbish with the mental nourishment. He would laugh at a carnival swami gazing into a crystal but has no sure touchstone around people whose claims to being worldly-wise vary in validity.

More unfortunately, much good information gets filtered out on its way to the tavern or is just plain ignored there. The whiskey-colored "hair of the dog" had a cure rate of zero among firewater victims but facts never dimmed its popularity. Mountainous losses among horse-players are seldom mentioned with any candor there because hope and optimism mix liberally with the gin and vermouth. Likewise, when the talk centers on trades and investments, tonic fills the air as well as the glass--the excitement of tomorrow's alleged abundances!

Be the pirate. Drink up the rum today and scoop up the gold doubloons tomorrow. This is hardly a setting in which one mentions the various 90 percents: The percentage of futures traders who lose their skin, of out-of-the-money options that turn into scrap paper, IPOs and bulletin board shares yielding teardrops not dividends. Talk of spiced winds and full sea chests. Did you lose in the past? Hair of the risk-trade pooch will cure your financial ills.

My specialty is option spreads, which I think of as the profitable coffin warehouse between Fogarty's Sports Bar and the Crystal Decanter Cocktail Lounge. Spreads make gains off other people's money and transfer most of the risk to other people. Thus they produce cash on the casket lid from the hangovers, teardrops and corpses generated by the places next door. With risk trades as with distilled goods, people look at a full glass and see only delight, despite all the world's experience with bitter dregs libational and monetary.

Yet somebody always profits from the "Gee, that's too bad" that follows. Also from the "Some people never learn!" factor. In Great Britain of centuries past, pickpockets were routinely hanged at public executions. Meanwhile, pickpockets routinely operated in the crowds of spectators. Obviously, what was happening on that platform did not impress them much. They did not get the message or the lesson no matter how powerful the delivery. If you think of those "90 percent" futures and options loss statistics as financial public hangings, vast numbers of speculators are likewise unimpressed until they themselves go to the gallows.

Thus spread strategy amounts to casket-making-for-profit amid a milieu of "Never die!" optimism. Pour a drink of perpetual blue skies and write a check to broker for everlasting wealth. This article comes down rather hard on public drinking establishments, yet you need not be inside the Happy Hour Tavern to get snared by that type nonsense, some of it well-disguised. Verbal moonshine proliferates everywhere like so many hidden stills.

Thus, beer truckloads of hearsay and misinformation travel anywhere. "Casino stocks and their underlying options are going to make spectacular comebacks." So do sales pitches with sincerity added in the retelling. Just as a used car buyer before the first break-down can sound more enthusiastic than the seller, so can a neophyte trader sound more excited than a hard-sell broker or promoter.

Bad cures bodily and pecuniary can float far beyond the whiskey barrel, such as trying to make up what you lost by throwing good money after bad. So can ivory tower theories that fail in the real world but survive like dingy booklets on occult candle-burning. "Nobody loses on gold" or "You're sure to win on rebound if you keep averaging a loss."

Facts get mangled into fallacies when passing between barstools, but also between smoking room chairs, pinochle hands and Web computers. "W.D. Gann said in 1965 to trade against the trend." Interestingly, he said the exact opposite before his death a decade earlier. Old scams once as tattered as a bartender's wipe-rag undergo laundering and starching for new heavy duty. Another Ponzi schemes? The old gyp goes Internet? Day-trading is a more recent strain of wood alcohol currently piling up corpses.

Like the fruity aroma of brandy in a snifter, the sweet scent of optimism spreads through every alcove and ante-room of speculative trading. One could cite the dictionary definition of "optimism" but this particular distillation of the word better fits the definition of "conjecture": "inference from defective or presumptive evidence." Thus too often the trader is a pickpocket who infers fast future riches and defectively does not see the evidences of his hanged forerunners and cohorts.

I think of speculative trading as poison which, in daydreams and visions of tomorrow, promises to produce immense throngs of millionaires but which in actual practice does a rather bloody and extensive job of making sure the world does not teem with millionaires. I would not involve myself in it but for the advantage offered by spreading. Spread strategies are the homeopathic dilutions, which can render the venoms medicinal. If homeopathy was always controversial, even its enemies and skeptics admitted that it watered down plenty of very deadly stuff, also halted much bloodletting and leech medicine.

If the above lines make trading sound Medieval, they are also intended to make spreading sound real-life alchemical. Imagine that you buy a jeweled goblet worth $5,000. Mind you, I did not say that you paid that much, only that it is worth that much. Imagine that buying it gives you the right to create and sell a slightly smaller jeweled goblet for $3,500. The money from the latter sale is credited toward your purchase of the $5,000 item so you pay only the difference of $1,500 to own the original goblet.

Is there a guarantee you will profit? No, those wares could go up or down in value. So what advantage have you gained? Whoever bought an identical large jeweled cup but without selling one paid a full $5,000. Whoever bought the one you sold paid $3,500. Your investment of $1,500 is much less than either of theirs. You risk far less cash than they because (drum and trumpet fanfare) this spread strategy uses mostly other people's money.

Now hang a second set of banners at the royal banquet table for the following reason: The spread transfers most of the risk to other people. That you hazarded less than they by putting up less is merely page one. Let us say that the original wine-vessel slips in value to $4,000. Alas, $1,000 worth of bad news for the $5,000 player. Let us say that the other one drops to $2,000. A loss of nearly half for you $3,500 venturer!

Can you, noble knight, behold any good tidings in these sorrowful numbers? If yes, then hang another streamer on your lance. Of course, the difference or "spread" in value between the two goblets has widened to $2,000, no longer the $1,500 you floated. If you sell the one you bought and buy back the one you sold, your coin hath begot coin in the amount of $500 or an one-third profit.

So why is not every swain and varlet not a spreader? The talk at the alehouse was and is of fast, repeated doublings, of one bullion bar becoming five or 10 at a speed not irksome to those impatient. Numbers talked of around the foaming tankards usually resembled those of the brass telescope and star-chart rather than the counting house ledgers. Fie on one-third profit! Add zeros and move the decimal place to the right with every hiccup! More brandywine, please.

The non-spreading buyer of the $5,000 jeweled goblet portended something like a $10,000 or $20,000 return and with appreciable quickness. Were such a plundering by computation routinely possible, every lackey would hire a coachman. Of course, the valuable winecup that gives birth is fanciful. Quite real are all those traders who anticipate buying limousines with champagne faucets and end up telling sad stories by the beer stein. Also quite real are strategies whereby the speculator's quest for treasures can become the spreader's bankable profits.

Spreading can be done with futures and options, options being available in futures contracts, bonds, foreign currencies and a few other items including stock shares. Stock options have been my specialty since the Atlantic City casino shares boomed in the late 1970s. Recently I received a letter from a gentleman in Illinois, a trader of admirable experience. He wrote that he was interested in my calendar-spread theory but he did not use it because "something would always keep me back. In retrospect, I believe that it was your portrayal of not making fantastic profits on each trade. The gambler in me said look for the big profit. That will make up for the innumerable small losses that may occur."

I wrote a response, partly quoted here: "Being an option spreader requires, I believe, a mind-set markedly different from that of a "straight" options or futures player. A gambler views horse-playing as a road to possible quick wealth. A bookmaker views it as a money-eating monster.

". . . I believe that a spreader needs an attitude closely akin to this. In short, I would stay the hell away from options unless I could do things quite differently from 99 percent of the participants. Unless I could use mostly other people's money, which is what spreading (like bookmaking) involves.

What about going "for the big profit that will make up for the innumerable small losses" as you put it? That is what the horse-player hopes for when he bets a 50-to-one shot. He does this for years and only the pawnbroker profits. The wagerer wants to turn $100 into $5,000 in one afternoon so of course he scoffs at the bookmaker's or pawnbroker's 25 or 35 percent gains. Then come other bets to "make up what he lost." Gambling to "make up what he lost" is the years-long exercise in futility.

"Is it so shabby to be the bookmaker or the pawnbroker? The Gann Maxim says, "Handle speculation as a business, not as a gamble." Sounds great, everybody says, until they realize it means accepting realistic, business-sized profits instead of quick astronomical wealth. That a conservative, business-like approach still involves risk also discourages many."

So I continue to portray option spreads as the business-owner's cashbox, not the waterfall of gold into your pocket or the instant cut of the U.S. Mint. I apologize to those who want lots more. But look at the track record of those who wanted and expected lots more, and those who sold them secrets on "how to." The increase in "Make Big Money in Futures & Options!" commercials or the "Yen & Franc Fortunes" hype did not bring an increase in Lincoln Towncars.

However, do not be cynical. You know, of course, that casino presidents are popping head-ache pills and lamenting, "We're being squeezed financially because all those systems-players at the roulette tables are winning left and right." Every brokerage office has a domestic workers' placement service next door, so that the throngs of successful traders can hire a butler and a maid with their winnings. You knew that, of course. Where's the bourbon?

I spoke on the phone a while back to a writer for the rival "green pages" newsletter who talked negatively of Joe Ross. Tsk tsk. If you can't say something nice, don't say anything. Ross has become known as "Bahama Joe" since he left the country for "a more comfortable climate." No doubt, multitudes of people who paid handsomely for his methods made big fortunes and then drove him out of the country with their thank yous. I guess.

In the previous issue of CTCN, Dave Green reported quantities of obscenities on the Internet directed at the well-known Larry Williams. Also mentioned were a death threat against Kent Calhoun and proposals on the Web to flood his 800 number with useless phone calls he would have to pay for. Presumably, all these came from Cadillac dealers who lost business to other Cadillac dealers located beside brokerage houses, where the students of Larry and Kent and Bahama Joe keep buying up every luxury car in sight. Certainly. Bartender, this beer is flat.

So by what ways and means do I make horizontal calendar spreads "a business, not a gamble?" As mentioned, a spread is a buy AND a sell. I buy a batch of 10 out-of-the-money stock options and sell a batch of 10. The ones I buy and the ones I sell are either both puts or both calls. Also, both always have the same underlying stock.

The spread is called "horizontal" because the options bought and those sold have the same strike-price, making them even or side by-side on a paper diagram. They are termed "calendar" because the ones sold have a different expiration date from the ones bought--different months. Both are puts or both are calls, as mentioned, but people sometimes ask how I choose between the two. I prefer to place a call spread over an underlying stock that is gradually rising OR a point spread under one that is gradually declining.

Call options with strike-prices above that price of the underlying shares are automatically out-of-the-money, as are put options with strike-prices below the price of the underlying. Out-of-the moneys form the territory for this type of spread. Let us look, for example, at Microsoft as a possible underlying stock. Its share price peaked at 120 in December and has since inched downward. At the time of this writing, mid-February, it hovers around 100.

With the stock price so situated, call options with strikeprices of 105 or higher and put options with strike-prices 95 or lower both qualify as out-of-the-money. As mentioned, a spread with calls is a good idea with a gradually rising stock, puts with a gradually declining one. Since Microsoft occupies a downslope at this time, we look at put options with strike-prices of not more than 95.

Microsoft's stock symbol is MSFT and its option symbol MSQ, these among the details readily supplied by brokers. Today, MSQ put options with a strike-price of 95 and an expiration date of March traded for 4 points. Puts with the same underlying stock and the same strike-price but with an expiration date of April traded for 5¾ points. Alchemically, how could you buy a jeweled goblet, sell another, and cause quantities of other people's coin-of-the-realm to appear in the combination?

You focus on the gap or "spread" between the March (4) and the April (5¾), a difference of 1¾-points. I always buy and sell options in groups of 10. If you accept this configuration of MSQ 95 puts (and I am not saying you should) you would say to the broker, "Buy 10 April and sell 10 March with a debit of 1¾-points." The latter figure is the spread or difference. With such an order, the amount for which you will buy the April is open, as is the amount for which you will sell the March, but the difference between them is fixed at 1¾-points or less.

At the end of the trading day, you might get a "Nothing done" or a "Transaction completed." With the latter, if you bought a batch of 10 and sold 10 at the figures cited earlier, you would have bought 10 April options for $5,750 and sold 10 March for $4,000. The money you received from what you sold is credited toward the purchase price of what you bought, so that you pay only the difference (the "debit" or "debit spread") of $1,750 plus brokerage commissions.

In actual practice, the buy and sell amounts may be a bit higher or lower in transaction but the debit you mentioned when you gave the order of 1¾-points (a difference of $1,750 on 10 options bought and 10 sold) is the inviolable "gotta be." So stop and compare. Whoever bought the 10 March you sold paid $4,000. Whoever bought 10 April options identical to yours but without spreading, paid $5,750. Compared to your $1,750 -- more than double is March, more than triple is April.

So why did they risk so much cash? As in the saloon and the horse parlor, they envisioned tripling or quadrupling their money. Or maybe be punished and humbled by a mere doubling in a week. Recall the sad arithmetic mentioned earlier: More than 90 percent of all out-of-the-money options expire worthless. For a spreader, a 25 or 35 percent gain in a few weeks rings nicely in the cashbox. 30 percent in a month annualizes to 360 percent.

But this is too paltry for the two-cocktail math wizard formulating a dollar-multiplication theory or the roulette-player with a system in his pocket or the barfly who heard of a method. They call themselves businessmen but snub realistic, business-sized profits and if their results were concrete the grave-markers would-crowd the landscape. The hair-of-the-dog drinker manages not to see all those caskets of they who did likewise, a myopia shared by speculative traders who expect astronomical profits as if from a menu and at such a speed as not to keep a gentleman waiting.

In short, they expect etiquette from crocodiles. So what gives calendar spreading its teeth and thick hide? Time-decay. All options diminish in value with the passing of time, a fact perennially sorrowful to the straight option-buyers. However, this particular Grim Reaper swings its blade unevenly, coming down harder on the near-in-time options than on the far-in-time ones, even if the near and far-in-time are only a month apart. Thus as weeks pass through June and toward July, the August puts or calls may typically lose a full point in value and the Septembers only half a point, and the discrepancy tends to increase over time.

So the gap widens, increasing the spreader's dollars within that gap. 90 percent of the option-buyers watch gloomily as their investments shrink while the spread strategist smiles because they shrink at different speeds. Spreading is not risk-free but other people's money makes good armor, and in the calendar strategy it helps much that time-decay eats mostly at somebody else's end of the table. Thus the horizontal calendar spread often provides a systematized, business-like method for gathering the jewelry of those who would not settle for less than Fort Knox and fast.

A moment ago we looked at Microsoft put options with the possibility of opening a spread position using those particular months and strike-prices. Yet I did not enter into such a position and did not advise anyone else to. You might ask, "What formula of the alchemy lab or the cocktail bar was he following when he decided to make that U-turn? Did that alleged skeptic Donio read some broker's tea leaves?"

My reasons are not smoke signals but something more hard-edged. I recommend "handling it like a business" and like most business people, I measure. Like a jeweler weighing a gem on a carat scale, a lobster fisherman throwing back one too small, a bartender calculating the amount of gin in a Tom Collins, a navigator checking the sextant reading with the nautical almanac. So what ornithology chart showed that those Microsoft puts were a few feathers short of an eagle?

It requires no degree in calculus. In fact, I could etch it on a clamshell during dinner at a seafood house. A spread is, as mentioned, a buy and a sell, emphasis on the "and." Let us now stress "How much?" Sell what you do sell, i.e. the near-in-time options, for 3-points or higher. Make sure the difference between what you sell and why you buy, i.e. the farther-in-time options, is less than a point and a half. Let us say that you sell 10 January calls at 3¼ and buy 10 Februarys at 4½ a difference of 1¼. Or you sell a batch of July puts at 4 and buy the same number of Augusts at 5-3/8, a 1-3/8 difference--less than 1½.

Examples of the unwanted? The already mentioned Microsoft March trading at 4 and April at 5¾. At 4, the March qualifies as the sell?end of a spread, "3 points or higher" but the difference between the potential March sell and April buy tallies 1¾ points, too much for the less than 1½" requirement. A few days ago, IBM put options with strike-prices of 110 (the stock was at 116) included, March trading at 2-13/16 and April at 4-7/8. The potential sell-end measures too small--less than 3, and the difference or "spread" of 2-1/16 -- too much. Two thumbs down!

So what now my love? Wait--until early next week. This coming weak-end, after the third Friday of the month, the February options will expire worthless. Then into the new trading week, the May options of many stocks and in some instances the June will come into existence for the first time. Many shares now have puts and calls with expiration dates in February, March, April and then jumping to July and beyond. Early next week the Februarys having passed on, many Mays and some Junes will be born. I shall look to the price gaps between April and May for spread opportunities.

I found that usually the gold lies buried in the month beyond the month after the one you are in. In February, for example, the potential spreads exist in the after?March expiration dates, such as April and May. In July, look to September and October. This could mean waiting for the right opportunity, as I wait a week. With so many leaky boats and sinking boats on the sea of speculation, awaiting a sound, worthwhile vessel makes stay-alive sense. Look at all the watery graves of those who did not.

Everyone has heard the old story of the poker addict. "Yeh, I know this game is crooked," he whispered to a friend, "but it's the only one in town." This contains an implicit time factor. Continually itching to gamble, he would rather play in a crooked game right away than wait for an honest one that would give him a better chance of winning. The same with the futures & options "itch," with the trader too anxious to await the right opportunity. The "rest in peace" rate being as high as it is, stepping on a financial land mine does not speed things up.

Since I do not have a trade off the launch pad and in flight at the time of this writing, please note that I do not claim or pretend to. I say this in response to a letter in the previous issue of CTCN. With a skepticism I appreciate, Nick Brockbank in England disapprovingly cited another subscriber who wondered if the trades detailed in my articles were "all made up." To such a notion, my answer is twofold: First, the transactions described are real and straight from my personal brokerage account.

Second, do you suspect Carry Nation of selling drinks? For years I have been hostile in print to fatsos selling diet plans and gamblers writing "how to win" books to get back the money they lost. Even more hostile toward financial writers and seminar teachers who do not trade. They claim to know how to survive and win in high-body-count financial combat. Yet they stay off the battleground. Please, suspect me of beating my grandmother before you suspect me of being a financial writer who does not trade.

Over a year ago, a woman subscriber almost went into shock when I reported a losing spread trade in one of my articles. She said in a published letter she thought there was some unwritten rule that financial writers tell of their gains but never their losses. Apparently, she envisioned some Duffy's Tavern with the unwritten rule that nobody speak ill of such-and-such a boxer or ball player. Never bet against the home team.

She would have found nothing distressful in a hard sell-pamphlet that recently arrived in the mail: The Larry Williams Way to Wealth! Wall-to-wall testimonials about fabulous profits fast. The larger the gain reported by Larry's customers in Ohio or Oregon, the bigger the print and the brighter the colored ink. Buried in the back-pages footnotes is the fine-print warning required by law about "large potential risks." No big type, no vivid orange ink. Nor do the teardrops of the sorrowful 90 percent stain the pages.

Let us sip some absinthe, the strong, green wormwood cordial, and ponder reality. The tint of the liqueur brings to mind emeralds. All those dirty words on the Web must come from Cartier jewelers who cannot keep up with the demand. First those "mathematical formula" casino gamblers come in and buy up all the wares with their winnings. Then those futures & options seminar graduates enter with pockets full of cash and want more, more! Also, much of that Internet nastiness surely comes from fortune-hunting women turned down for marriage by those Fort Knox winners.

Sometimes the cocktail party stories settle on financial expeditions never heard from again. Josh Billings wrote, "A wise man profits by his own experience but a good deal wiser one lets the rattlesnake bite the other fellow." I have found with calendar spreads, the near-in-time "sold" end catches most of the venom. And the way I do it, the farther-in-time "bought" end of the spread is more than two-thirds other people's money and less than one-third my own. The "sold" end is all other people's money. While spreading is not risk free, these Hahnemann dilutions of my capital make fine anti-rattlesnake serum. To re-state: I would not touch options unless I could do so with mostly other people's money.

Mark Twain wrote, "The burnt child shuns the fire until the next day." At the adult level, this could explain why so many traders like so many horse-players have been getting burned again and again for years, include those playing to "make up what they lost." A good point but Twain on the minus side may serve as an object lesson, an example of someone not to emulate, as in areas of culture and esthetics.

Wise though he was, he possessed a streak of the yokel deeply ingrained which emerged when he visited foreign lands. In the May 12, 1910 issue of The Nation, Stuart Pratt Sherman wrote:

"Mark Twain was a self-made man, of small Latin and less Greek, indifferent to abstractions, deficient in historical sympathy and imagination . . . I confess with great apprehension that I do not much care for his books of foreign travel . . . He is the kind of traveling companion that makes you wonder why you went abroad. He turns the Old World into a laughing stock by shearing it of its storied humanity--simply because there is nothing in him to respond to the glory that was Greece, to the grandeur that was Rome . . . he laughs at art, history, and antiquity from the point of view of one who is ignorant of them and mighty well satisfied with his ignorance."

Sound familiar? In his column in a 1999 issue of the New York Post, William F. Buckley, Jr. wrote that he was invited to march in the city's Columbus Day Parade a few years ago but he turned it down because he "favored a de-emphasis of ethnic taxonomy among Americans." In other words, the one-culture Right Wing discourages proud Italians and lasagna dinners with Neapolitan festival songs. Also Greeks quoting Euripides and discussing archaeological findings in Crete. Also a Spanish guitar hinting an Aztec chant or echoes of the Alhambra.

In the January 24, 2000, issue of Buckley's publication The National Review, Richard Brookhiser warned of the chili-pepper incursions moving northward from South of the Border: "This is happening not just in California and Texas. The Rio Grande flows through every restaurant kitchen in New York City, and every upstate orchard."

Never mind that these people work hard. This is Norman Rockwell's America of apple pie and roast beef medium threatened by tacos and enchiladas. In addition to the kitchen, let us not ignore the bookshelf and the stereo. In that same issue of The National Revue, Richard Pipes laments that Americans today supposedly do not know history and heritage as well as did those of the Saturday Evening Post Era and other Golden Yesteryears.

A few pages later appears a two-page advertising spread: "Music & Memories! On Tapes and CDs." YesterMusic offers "Mairzy Doats--Hits from the Fun 1940s," also "Remembering the Fifties," also "Andy Griffith." If this is YesterMusic, where are Mozart and Verdi, Rachmaninoff and Debussy? On a lighter plane, where are ragtime, vaudeville songs, barber shop quartets? Too long ago? Conservative Book Club also occupies a two-page spread and offers 24 titles. Apart from The Federalist and The Anti-Federalist, hardly a volume goes back farther in time than Spike Jones and his City Slickers Band.

Presumably, they know their audience. I used to gripe about Right Wing reactionary "traditionalists" whose knowledge of "tradition" went as far back as Mickey Mouse and Lassie. Now I must amend that. It goes as far back as the later stages of Mickey Mouse and Lassie. "There is nothing in him to respond to the glory that was Greece, to the grandeur that was Rome." Bill Buckley avoided the Columbus Day Parade and his followers with rare exceptions avoid books by Benvenuto Cellini and Giorgio Vassar. God forbid the Adriatic Sea should flow through their cocktail soiree while they sing "Elmer's Tune" or the Andrews Sisters' "Rum and Coca-Cola."

It may sound like a tall order when I ask you, dear reader, to surpass Mark Twain, but it is not all that difficult. If you run across a published piece about archaeological artifacts found during the digging of the Rome subway, show a degree of interest. Do not demean like "one who is ignorant of them and mighty well satisfied with his ignorance." Recall the Gilded Ages art-loving cavaliers.

In Boito's opera Mefistofele, feel some sympathy for young Margherita when she sings in her dungeon that she poisoned her mother and drowned her out-of-wedlock baby. A girl cannot be expected to do everything right. Her aria about wanting to escape across a turquoise ocean to blue islands with perfumed air beneath swan's down clouds is music more rapturous than "Mairzy Doats."

Dalmatians no longer hurry after horse-drawn coaches but more survives than has passed away, more than cognac and brandy. In the painting of composer Robert Schumann at the piano, a patroness of the arts listens as her golden ringlets fall across damask petal cheeks. These have not diminished any more than has the musical score. But if the trader or investor does not give such things his attention, he cannot expect Riverboat Twain or Wild Bill Buckley to do it for him.

One more piece of advice: When sipping sparkling burgundy, do not accept any "hot financial tips" from a well-intentioned wine steward.


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