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Saturday, October 04, 2014

 

October Baseball

Though baseball is best played and watched in summer weather, the post season has always been an October phenomenon, even in the days when we went directly from the pennant race to the World Series.  With the modern multiple rounds of playoffs, the post season now stretches pretty much across all of October, and if northern teams survive, weather is an issue.  No matter though, the added intensity and pressure of playoff baseball makes for truly watchable and memorable games.  Already we have had several.  For one, the play-in game between Kansas City and Oakland was a classic.  Then we had the two extra inning thrillers also won by KC over the Angels.   Yesterday's Dodger Cardinal slugfest was continually entertaining (especially with Ron Darling and Cal Ripken Jr. providing color commentary), and the Oriole come from behind win in game 2 versus the Tigers provided great fodder for the second guessers (why did Ausmus remove Sanchez and how could they send Cabrera home with nobody out?).  And this is just the beginning.  I know people love football and it gets the big ratings, but I still say a lot of that is driven by gambling.  For my money, I would much rather watch playoff baseball.

But football goes on despite the Ray Rice and other incidents.  People shouldn't be surprised.  If you've got a bet down or a fantasy team (and who doesn't have either or both). you will be watching the game, no matter who's playing.  The Rice thing I don't really get.  Why does the NFL Commissioner have the responsibility to dispense justice?  It seems to me this is either a criminal matter or a civil matter, and if a case is to be pursued, it will need Mrs. Rice to press charges or to sue.  If she doesn't, then as a football matter, I'm not even sure that a suspension is appropriate, even though our sensibilities are highly offended.  Meanwhile, the abused spouse is probably steaming that her husband's considerable salary is not being earned and paid.  The effect is to punish HER!     

As long as we're talking sports, let's stop the useless chest pounding about the US performance in the Ryder Cup.   The Euro Tour is just about as good as ours and whoever the home team is in the Cup should be the favorite.  Our guys did what they could but really, how many points do you still expect old Phil to get at this point, or Jim Furyk for that matter.  As for the excuses that we don't play foursomes and that's why we always lose in that format, who does play foursomes?  No one I know of, and certainly not European pros.  For something that happens for one weekend every other year, an awful lot of ink is wasted on the Ryder Cup, in my opinion.
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On the other hand, unless you read the Wall Street Journal, there has not been nearly enough written about the horrendous tenure of Eric Holder as Attorney General, now mercifully ending.  He continued and even expanded on the recent unfortunate tendency of AG's to politicize the office that began with John Mitchell but was cemented by the awful Janet Reno during the Clinton years.  There are so many positions and cases where Holder and his team abused the legal system, due process and the Constitution, but the most offensive of all could be the current lawsuit in Louisiana where the US AG is actually contending that charter schools disrupt the character of (de facto segregated) public schools by allowing minority children to attend using vouchers.  Somehow, this is supposed to be violative of integration efforts?  Seriously?  The political calculus is such that the administration is so determined to go to bat for its teachers union supporters (and fearful of the success of vouchering programs) that it is willing to sacrifice the education of poor Black kids.

Even Holder's resignation has been timed to allow Obama to rush and steamroll his replacement during the lame duck session should the GOP win control of the Senate, as now seems possible.  Or maybe, the President will simply make another unconstitutional recess appointment.   When it comes to abuse of power, I wouldn't put anything past these guys.  Just look at how they've handled the IRS scandal and cover up.  If A Republican Treasury had ever held up progressive groups' filings for tax free status, you would have had a special prosecutor named so fast, it would have made our heads spin. 

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Speaking of the Senate, I was getting pretty concerned that the GOP would be unable to pick up the 6 seats they need to take control, especially after the Kansas (of all places) race turned sour.  That's where the GOP candidate is an octogenarian incumbent (Roberts) and had both an independent and a Democrat opponent until the Dems succeeded in removing their hapless candidate from the ballot.  In a two way race, this will be close, and, showing real character and conviction, the independent candidate says he will caucus with whichever party is in the majority.  Some I know consider Roberts on the way to defeat, but I detect a swing in his direction, similar to what is going on in a number of the hotly contested races.  Things are looking better in Iowa, Colorado, Kentucky (all but done), and even New Hampshire where Scott Brown seems to have caught up to Shaheen in recent polls.   In Louisiana, they are headed for a run off where anything could happen since money will be pured in by both sides if that race actually determines the majority.  However, recent polls show Cassidy leading Landrieu in the prospective two way race.  In Georgia, Nunn has lost her mojo and there is some hope the GOP can win that one without a run off.  On the other hand Michigan's a goner, Minnesotans are going to hold their noses and vote for Franken again (why?), and there are several other races too close to call.  But my guess is that at worst, the GOP will emerge with 50 seats on election night to 48 for the Dems, with Louisiana and possibly Georgia headed to run offs.

There are a couple of interesting governor's races to watch.  In blue Illinois, it looks like the Dems are in real trouble, and in even bluer Massachusetts, the air is again going out of the Coakley balloon, which is always fun to watch.  If any candidate deserves to lose any race for any position anywhere, it's Martha.
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We have written in this space many times about climate change and skepticism concerning the models purporting to prove that humans are warming the planet, and it's perhaps my least popular subject as far as readers are concerned.  So rather than continue to abuse your sensibilities on this subject, I will merely refer interested readers to an entertaining website I have discovered which covers the subject much better than I anyway: wattsupwiththat.com
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We saw Billy Joel's monthly concert at MSG Friday night, and it was great fun.  The Garden is just an exciting venue, no matter its acoustical challenges.  Joel will continue to perform monthly as long as he is able and they continue to sell out.  November and December are already sold out, so it looks like a second year is in the offing.  You can get tickets on Stub Hub but it will cost.
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One of the oldest market axioms is "Sell them on Rosh Ha Shana, and buy them back on Yom Kippur."  In fact that simple advice would have been very profitable for most shareholders this year, particularly if you started nibbling on Friday.  The market has been especially difficult on small company shareholders and gold bugs, and I've got significant holdings of both in the Redwave portfolio.  Luckily, I always take the long view, and see no reason for panic, though the Fed continues to do a stinky job and there's trouble all over the world, thanks to the incompetence of political leaders everywhere, not just here.  You've got to have your money somewhere, and though inflation seems low now, it's not as low as being reported (fracking and other energy sources are keeping energy input prices artificially low) and you can be sure that mattress money will be inflated away in the long run.  So we are really not making changes in the investment formula we have discussed here, and only minor changes to the buy./hold list.  We added Xylem (XYL) and Align Technology (ALGN), and will be fully subtracting BOLT thanks to a takeover offer.  Here are the transactions since our last post:

Purchases
Date          Symbol        Shares       Price            Comments
8/13            PQ             400            5.69            Tulane portfolio stock
8/22           TAI             100           20.78       Running out of Preferreds, this is an income fund   
8/22           LNN            50            77.82       Irrigation and Water play
8/29           EXPD          50            41.39       Careful on this one, it's heyday may be over
8/29           TIP              20            115.24      Inflation will rise again
9/3             CNRD        100            38           Big winner from Tulane
9/4             XYL           100             37.89     Accumulating position
9/10           BK.PR.C     100            23.13
9/12           KN             100             30.62     Formula buys it back - too soon
9/15           ALGN         50              54.91      Dental is outside of ACA
9/16          WFC.PR.P  100             22.52     
9/26          GIFI             200            17.87       Tulane Portfolio
9/26          ALGN           50             52.97      Accumulating
9/26          GLD            20              117.02     Averaging down
9/29          MAN           50               70.98      Employment play Value Buy
9/30          XYL            100              36.18      Accumulating position
10/2          TAI              100             20.29
10/03         B                 100             30.04       Value Buy

Sales
Date          Symbol       Shares      Price        Date Purchased  Price       Comments       
8/13           HZO           200          17.51        11/10/08         1.54      Love them 11 timers
8/13           NEM          100          27.10        11/22/06         45.29   A judicious loss
                                                                        3/26/07         43.78
8/20           NVEC          50          69.27         12/2/09          37.50
8/22           TMO            25         121.49        1/13/03          19.88   6 timers are good too
8/26           ADM            50           49.50        8/3/12            25.48   Ethanol profits         
8/27           KN              100          33.59        3/11/14          28.02    Nice company, timely sale
9/2            LNN              50           77.69        3/5/01             20      Didn't I just buy this?  Formula quirk
9/5            KNX             100          25.73       1/10/00            3.33     Gains take time
9/8            AWCMY      400            5.88       3/22/10             6.05   Lightening up on aluminum 
                                                                      5/5/10               5.40
9/11          BYD             200            11.42      8/6/14               9.52
9/17         LOW              50             53.71      6/27/05            28.30  
9/19         HIG                100           38           6/13/11              26.44
                                                                       8/5/11                24.61
9/25        BOLT              400           21.9864   1/26/09              6.96       Takeover offer at 22
                                                                        6/1/10               8.62

Monday, August 18, 2014

 

RIP - Robin Williams

Losing Robin Williams seemed to have a significant impact on people even before the details surrounding his suicide became generally known. I think it is that way with exceptionally talented people who also are plagued with sometimes debilitating conditions. In Williams' case, his history of addiction was well known and he made no secret of its impact on both his professional and personal life.   This flaw served to humanize him even as we were in awe of his otherworldly gifts. It also made an impression when he was able, as an actor, to transcend pure comedy and bring other dimensions to his movie roles, especially in movies such as Garp, Good Morning Vietnam, and most brilliantly in Good Will Hunting.   It may be that he realized that he really did not have much left in the tank given his health issues, and that realization would have been hard for him to handle. Still, it would have been nice to have him stay around for a well deserved victory lap or two.
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Obama and Kerry have done such a bad job trying to curtail the hostilities between Hamas and Israel that the US is now irrelevant. Any lasting peace deal is much more likely to be brokered by Egypt since neither of the warring parties trust this administration. Whatever happens, Israel must not prematurely end the mission but instead continue until Hamas is degraded as a fighting force and the rockets and tunnels are gone.  Whether that point has yet been reached is doubtful.

A good example of what happens when you stand down either due to lack of resolve, impatience, or political expediency is what's happening to us in Iraq.  Or Syria. Or Afghanistan. Or Ukraine. Etc, etc, etc.
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Louisville, KY, which is where I am as this is written, is an interesting town to visit, though certainly not as great a venue for a business trip as Seattle or Austin. But there is fun to be had. Fourth St. downtown is something of a disappointment in that there is little in the way of live music worthy of attention  and the bar scene, like Trix, is strictly for kids. But there is the Muhammad Ali Museum, the bourbon trail tours, and Louisville Slugger Park, the beautiful home of the Louisville Bats, a Reds  AAA farm team. The weather has been fine and many would not know the city abuts the Ohio River We are within walking distance of the bridge over the Ohio that takes you to Indiana (in fact there is a pedestrian bridge to Indiana).

As for food, it's pretty easy to abuse your diet here as in much of the south, particularly in the pub restaurants. We did have three or four excellent meals here and the standouts were Corbett's, Eddie Merlot, and Dr. Crow's. Corbett's is a charming old house turned restaurant about 20 minutes from Downtown and the food and service are impeccable. Even the appetizers provided for our cocktail hour were so thoughtfully prepared.   Eddie Merlot features very good steak and seafood in a setting nice enough to feel like it is out of place at the edge of the raucous Downtown bar scene. Dr. Crow's is by the river and certainly has more of a pub feel, but it is known for its steak and oysters and despite its large size, the service was quite good there too.

All in all, Louisville was a good meeting site and I would look forward to returning.
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The Mets have had their August swoon again which means September's games are unlikely to be meaningful. Still progress was made on several fronts his season. It looks like they are set at catcher for the first time since the Piazza days, and Murphy is now well established as a first quality hitter and a passable second baseman. The young outfielders look promising and we'll see next year who is worthy of a commitment like the team made to Lucas Duda this year.  Most promising is the pitching where the team is stockpiled with young starters and relievers.   Since it looks like most teams will be going to a six man rotation over the next few years, there is really no such thing as too much pitching.

Less bracing is the continuing decline of David Wright, especially offensively.  He has always had difficulty with pitch recognition, but now his uppercut is so bad he can't hit the fast ball either. Since the Mets are committed financially to both him and Curtis Granderson (also in decline), this figures to be a serious drag on performance for some time. Of course the other obvious problem is that Manager Collins has got to go because of his in-game strategic incompetence. It's way past time to give Wally Backman an opportunity
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Here are the recent stock trades. Keep in mind that this blog and it's author are not investment advisors so these are not intended as recommendations.

Purchases

Date      Symbol   Shares    Price            Comments

7/2        AGCO    50          55.59      Value Buy
7/9        FNFG     300          8.78    Zero Buy
7/9        TIP          20         114.66    Inflation around the corner
7/14      KN         100          29.50    Spin offs are popular
7/17      FAST       50           45.25    Quality company under pressure
7/18     TAI          100          21         We'll watch this one for a while
7/21      MAIN     100          31.74     Value
7/22      GE          100           26.10     Immelt's Turnaround at last?
7/23   BK.PR.C   100           23.45    Don't forget income
7/29    B              100            35.66    An old favorite
7/31    RAVN      100            28.92    Down markets mean bargains
8/4      IAU          200            12.52   Gold
8/5     BRS            50             72.98
8/6     BYD          300              9.52   It's a gamble
8/11   WFC.PR.P  100           23.25   Soundest of the big banks
8/11    AGCO        50             49.15   Average down

Sales
Date    Symbol       Shares     Price       Date         Price  
                                                           Bought      Paid

7/2        GHM         100        34.74      3/3/11       20.96
7/3        SHLM       50          41.34      9/22/06     23.77
7/9        ADM         50          46          8/3/12        25.48
7/9        ENI            200        17.48     2/10           21.39   European utility - UGH
7/15      AA             200        16.14     9/28/11      10.50
                                                           11/25/11      8.90    It took patience
7/25      AWC.MY  400          5.74      2/25/10      5.31
                                                            3/22/10       6.05
7/31      NVEC         50         65.07     12/2/09      37.50

When the markets are down, we tend to do more buying.  This market is precarious, but as Cramer says, you have to stay in the game. The rally of the last few days vindicated the formula yet again.  


Sunday, July 13, 2014

 

Obama's numbers in free fall


This comes to you from Boston, MA., following a very busy period that has seen few if any posts, for which I apologize profusely.  It certainly hasn't been for lack of material.

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The President's media friends are soft-pedaling it but Obama's numbers are in Bush 43 territory or worse.  But why shouldn't they be?  Is anything really going right with this Administration?  Even the better jobs numbers reflect part - time and low wage jobs, with little or no move by the long term unemployed to rejoin the work force.  But most of those have learned that they can make it without traditional jobs, living on unemployment, food stamps, subsidized or free health insurance and taking off the books assignments as they come.  The marginal benefit of having a regular full time job is not worth the downsides, so who can blame folks for making a perfectly rational choice.  But keep that in mind the next time you are asked whether you favor yet another extension of unemployment benefits.
As for increasing the minimum wage, I don't think that's a fix for much of anything.

Meanwhile, the Administration's failures are all too obvious. Its policies on the Mid-East, Russia and Ukraine, immigration, green energy and climate, etc. have all been shown to be fruitless at best, misguided at worst.  It has had no answer on the Benghazi and IRS scandals, where they appear more culpable by the day.  The Keystone pipeline project remains mired in progressive political hell, with Canada now fully prepared to sell its oil in Asia.   And recent Supreme Court decisions have indicated impeachable offenses in the areas of recess appointments and Agency discretion (notably, the EPA) where the Administration has ignored the rule of law and arguably violated its Constitutional responsibilities.

Not that the Republicans have any desire to start an impeachment round, having learned that it backfires when the President is a media darling, a la Bill Clinton.  Besides, the GOP has its own problems, failing to articulate a clear solution on immigration, and seeing its fracking allies tied to Oklahoma earthquake activity.  The GOP does look pretty good for the 2014 elections, but has yet to see a compelling candidate emerge for 2016.  I don't believe Senator Paul is a serious candidate, and if I had to guess, I would say the top two right now are Rep. Ryan and Gov. Kasich.  But it's very early for all that.
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On a happier note, I did get to see Counting Crows in Central Park, and that is a great summer concert venue.  Crows have a new album in the works, to be released in early September.
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The interminable easy money policy by the Fed has been criticized here before.  We think near zero interest rates have been doing more harm than good for some time.  Of course, we start from the premise that the dual mandate from Congress (minimize unemployment and keep the dollar stable) is a mistake to begin with, since we believe the Fed's job should be to keep the dollar stable.   In fact, the Fed has made matters much worse by targeting two per cent annual inflation as its definition of a stable dollar.  That is anything but since the dollar's value will be halved every 36 years at that inflation rate.  The Fed has now built that inflation expectation into the economy, and the statistics show that higher inflation is already occurring, though its effects are spotty so far.  But that's why I continue to buy gold and tips.

The WSJ printed an excerpt from an interview the Daily Princetonian recently conducted with former Fed Chairman Paul Volcker (who broke the back of the severe inflation of the 1970's).  Here are excerpts from the excerpts:

DP: Does high inflation matter as long as it's expected?
PV: It sure does,,,The responsibility of the government is to have a stable currency.  This kind of stuff that you're being taught at Princeton disturbs me.  Your teachers must be telling you that if you've got expected inflation, then everybody adjusts and then its OK.  Is that what they're telling you?  Where did the question come from?
DP: and to get back to the central banking a little bit, given the trade-off between inflation and unemployment-
PV: I don't believe that.  That's my answer to that question.  That is a scenario and a delusion, which economists have gotten Nobel Prizes twenty years ago to disprove.
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So what did you think of the World Cup?  Clearly New Yorkers were heavily into it and I imagine it was pretty much the same around the country.  I guess lots of people will watch tomorrow's final between Germany and Argentina.  I kind of expect Germany to win.  By the way, this final is more or less a Jewish nightmare, since Nazi hunters generally had to track their targets down in, you guessed it, Argentina.
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I hope you are watching 24, back to its old riveting self, thanks largely to a great, if somewhat familiar story line compressed into fewer episodes.  It should also be pointed out that the brilliance of William Devane as the President has carried the show this season.  Also, if somehow you missed True Detective,  HBO is rerunning the series and I believe for binge watchers, all six episodes are available on demand.
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Back home after a very pleasant three days in Boston, where the weather was great and there were lots of can't miss food options.  But still did not get to Fenway.  Next time, maybe.
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One reliable way for me to attract critical comments is to go off on my rant about the climate control freaks, who are panicked because scientists' models show that man's productive efforts are changing the climate (presumably for the worse?).  My objection is that the models do not nearly replicate actual earth conditions so in the absence of direct evidence and controlled experiments, no one can really say whether these theories are correct or not.  That the earth has been in a warming trend for a century or so is not in dispute (though it appears that trend has not continued for the last decade or so), only its cause.  That more and more articles get published supporting my skeptical position just feeds my obsession (and drives the true believers nuts).

So naturally it warmed the cockels of my heart ("who needs hot cockels" - Woody Allen) to read Confessions of a Computer Modeler by Robert J. Caprara in a recent WSJ op ed section.  Here are some excerpts:
After earning a master's degree in environmental engineering in 1982...my first job was as a consultant to the EPA.  I was hired to build a model to assess the impact of its Construction Grants Program...The computer model was huge - it analyzed every river, sewer treatment plant and drinking water intake in the country...The model showed huge gains from the program (in) water quality...By the late 1980's, however, any gains from upgrading sewer treatments would be offset by the additional pollution load coming from people who moved from on-site septic tanks to public sewers, which dump the waste into rivers.  Basically, the model said we had hit the point of diminishing returns. 
When I presented the results to the EPA official...he said that I should go back and sharpen my pencil.  I tweaked coefficients and recalibrated data.  But when I reran everything the numbers didn't change much.  He told me to run the numbers again.  After three iterations I finally blurted out, "What number are you looking for?"  He didn't miss a beat; he told me that he needed to show $2 billion of benefits to get the program renewed.  I finally turned enough knobs to get the answer he wanted and everyone was happy. 
I...assume he understood the inherent inaccuracies of these types of models.  There are no exact values for the coefficients in models such as these.  There are only ranges of potential values.  By moving a bunch of these parameters to one side or the other you can usually get very different results, often in line with your initial beliefs.  Surely the scientific community wouldn't succomb to these pressures like us money - grabbing consultants.  Aren't they laboring for knowledge instead of profit?  If you believe that, boy do I have a computer model to sell you.
The academic community competes for grants, tenure and recognition; consultants compete for clients.  And...many professors moonlight as consultants, authors, talking heads, etc.  I am not saying this is a bad thing.  The legal system is adversarial and for the most part functions well.  The same is true for science.  So here is my advice:  Those who are convinced that humans are drastically changing the climate for the worse and those who aren't should accept and welcome a vibrant, robust back-and -forth.
Those who do believe that humans are driving climate change retort that the science is "settled" and those who don't agree are "deniers" and "flat-earthers."  Even the president mocks anyone who disagrees.  One thing I have learned is how hard it is to convince people with a computer model.  This does not mean people are dumb.  They usually have great BS detectors, and when they see one side of a debate trying to shut down the other side, they will most likely assume it has something to hide, has the weaker argument, or both.
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The market has stopped its steady grind upward for now and the mood is pretty cautious.  Our formula has called for a lot of sales.  

Purchases   
Date    Symbol     Shares     Price     Comments

5/21      TAI           100       20.97      Rare fund purchase
5/21      NWBI       200      13.20       Value Buy
5/23      BYD         200       10.62        Zero Buy
5/28      IAU          200        12.23       Gold ETF
6/4        GIFI         200        18.48       Value - Tulane Portfolio
6/13      NVEC       50         51.15       Zero Buy
6/16      BK.PR.C  100        22.81      Preferred
6/20      GNE         300          7.30      Value Buy
6/24      ONCS      3400        0.60      Zero buy - our lotto ticket
6/26      WFC.PR.P 100       23.73

Sales                                                   Date Bought      Price

5/23      AWCMY   200         5.36          2/11/10         5.85
5/23      AWCMY   200         5.36          2/25/10         5.31
5/27      AA             100        13.52        12/9/08          9.46
5/27      AA             100        13.52        9/28/11          10.50
5/28      HON           50         92.28        9/16/11          46.99
5/28      KNX          100        23.82        1/10/00            3.33       Love them 7 timers
6/2        ECL             25        109.12       8/25/05          32.10 
6/4       AVSR         6600       0.0035      2005-2007    Lost 11,000 - You have to clean out the dogs
6/5         TFX            25        107.56       6/16/06          51.20
6/9        USAK         200        18.60        8/24/12           3.74
6/10       PCP             10       272.95       10/6/08            69   Quads require patience
6/13       PQ              400         6.43        11/22/04           4.46       Tulane portfolio
6/18       HUB.A         25      121.40        12/22/00          23.56
6/19       GENC         100       10.89         2/2/09              8.17
6/19       GENC         100       10.89         2/23/09            6.15      
6/23       GIFI            100       21.61         3/16/09            7.04   Tulane portfolio
6/26       SLB              25      114.87         5/12/05           34.05  SLB is best of breed
6/30       PQ               300         7.50         4/10/12            5.80  Tulane portfolio
      
                                                          

   



Monday, May 26, 2014

 

Kindergarten for $60,000 per year

There has been quite a brew-ha-ha concerning college commencement speakers and protests by students causing invited speakers to withdraw.  Such occurred at Rutgers, Smith, and most recently at my alma mater, Haverford College.  The list includes some pretty fancy finishing schools where you might think liberal arts, pre-law and pre-med seniors might be mature enough to listen for ten or 15 minutes to an eminent scholar, business or community leader with whom they might have differing views.  Alas, such is not the case, at least for the left wing progressive police who apparently believe the first amendment applies only to those who share their preconceived notions, or the propaganda force fed them over 4 years by a faculty with an agenda that supersedes the mere dispensing of actual knowledge.  

In Haverford's case, the target of extremist left-wing wrath was the former chancellor of Berkeley, of all places, wherein certain Fords objected to the methods used to terminate the mindless "occupy" demonstrations on that campus.  Security had been called in (to protect other Berkeley employees) and allegations were made that some of the officers got a little rough with a few of the demonstrators.  Quite properly, the then Chancellor called for an investigation of the security force, the results of which I don't know, but the Fords were not saying that the investigation was unfair or incomplete.  They were saying that before being allowed to speak, the Chancellor should make amends by apologizing and assenting to a list of demands.  Of course he would not do this and therefore opted out of the speaking engagement.  Haverford's first year President took his side, saying that the students' demands were inappropriate, but he was sorry that they were offended.  He could have gone on to say that the graduates instead could have merely voted with their feet and opted to skip the ceremony and receive their diplomas in the mail.  But he didn't.  We'll talk about that missed call next week during alumni weekend.

In the end, the President of Princeton filled in as a substitute and to his credit, pronounced the protesting students "immature," a very polite word for what they are.  At that, the students expressed their indignation and shock to be called such a name.  All of this was duly reported in the Wall Street Journal and commented on extensively in the op eds, presumably to the embarrassment of the College (and certainly the alumni).  If academic freedom means anything, it should allow for everyone's first amendment rights and we have commented in this space before about the offensiveness of campus speech codes (specifically at Dartmouth but pervasive almost everywhere).  That should go for the protesting students and also for guest speakers on campus.

By the way, if you want to read a really great commencement address, see the weekend WSJ or go to WSJ.com and take a look at William H. McRaven's speech at the University of Texas.  Entitled "Life Lessons From Navy SEAL Training," it will make your day and give you a lot to think about, especially if you've spent $60,000 or more per year on someone's liberal arts education.
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What a revelation it is to see GOP primary voters actually making intelligent choices to pick electable candidates rather than make such contests about conservative purity.  Liberal pundits misread these results if they choose to believe they are a rejection of the Tea Party or its ideas.  Instead, it is the inevitable marriage of the Tea Party with Republican conservatives, and in fact, Tea Party folks returning to their natural affiliation.  This gives the GOP its best chance to also capture the votes of so-called moderate Republicans (who are actually liberals in the classical sense of the term) and certain libertarians of an even less conservative stripe.

6th year elections (of a President's tenure) are almost always bad for the Chief Executive's party, and having endured a shellacking in 2010, Dems are right to be fearful of another one, which, if bad enough, has the potential to flip the Senate for at least two years (when some of those freshman Republicans are up for re-election in a Presidential year).  This administration's record is so bad, and it has been so contemptuousness of Congress and the separation of powers, that a loss of the Senate will be catastrophic for them.  It will be good for the country however, since Dems are set to move without super-majority support on all kinds of things in Obama's last two years if they retain the Senate..  One wonders whether Dems will regret scotching the 60 vote super-majority for confirmations if the GOP also wins the White House in 2016.  With a small senate majority, the precedent has already been set by the Dems for the GOP to nominate and confirm anyone they want in 2016 and beyond if they take the White House and the Senate.   
If the GOP does carve out a majority in November, look for Justice Ginsberg to immediately resign, citing ill health, and for the Dems to try speeding a replacement through during the lame duck session.

Once the GOP takes charge, if they do, look for heightened investigations into Benghazi, the IRS scandal, PPACA rule making, and the Federal Reserve.  GOP investigators will be so busy, they will hardly have time to spend denying climate change (no need, the weather seems to be doing just fine with that).

By the way, if you really want an environmental issue to worry about, forget climate change and start wondering what is happening to the bees of the world.  There is an alarming die off among bees, and though the cause is not known for sure, pesticides are certainly a candidate.  Bees are essential to pollination and therefore, essential to the very base of the food chain.  It won't matter how warm or cold it gets if there are no bees around.
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Hopefully the Ukranian election now allows that crisis to wind down a bit.  The Russians, if they are smart, will settle for the annexation of Crimea and for an agreement to allow some kind of limited self rule for the eastern part of the country.  The President, as I wrote, seemed to get off to a good start in handling this one, as he immediately invoked sanctions (weak as they were) and threatened harsher ones.  Unfortunately, that threat was largely a bluff and Putin called him on it.  The Europeans had even less backbone, so the result is what it is.  We have said many times before that as dangerous as it is to be our enemy, it is just as dangerous or more to be our friend, a lesson that won't be wasted on the Ukranians.
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 The Mets finally made a move today, firing their hitting coach and releasing a completely washed up Valverde, two moves that make sense but will hardly make the difference.  The players said the usual things they say when a coach gets canned, that he was a good guy and it was the players that didn't produce, but if he was doing a good job, then you don't need a hitting coach since the Mets can't hit, particularly with runners in scoring position (except for Daniel Murphy who can hit period).  The Mets continue to have to overcome the poor in - game strategy of manager Terry Collins and they simply don't have the talent to do that.  It is way past time for Wally Backman to be called up to take over for Terry.  At this point, it's largely his team that he prepared in Las Vegas, where he has a great record, so he might as well be the manager anyway.

The other thing that has to change is for Sandy Alderson to stop wasting money on retreads in decline like Valdeverde, Farnsworth, Chris Young, Curtis Granderson, etc, etc.  At least Bobby Abreu still has his hitting chops.  But the rest of these free agent stiffs (and Colon is another borderline member) we didn't need.
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So when baseball becomes too frustrating to watch, at least there is great New York jazz music to hear and see instead.  Last Monday, I saw one of the best shows I ever attended, an all-star tribute to the late producer Mat Domber at the massive (and sold out) Symphony Space on 95th and Broadway.  Performers included Randy Sandke and Warren Vache on trumpet, Harry Allen, Anat Cohen and Bob Wilber on reeds, trombones Wycliffe Gordon and John Allred, Dick Hyman and Rossano Sportiello on piano, Ed Metz and Rajiv Jayaweera on drums, Joel Forbes on bass Bucky Pizzarelli on guiitar and Becky Kilgore on vocals.  This ensemble of veterans and current jazz royalty seemed all in top form and the audience was suitably enthusiastic.  It should be noted that Cohen, Gordon, Hyman, and Jayaweera have all taken more or less regular turns with Birdland's Wednesday evening featured Louis Armstrong Centennial Band.

And I saw that band on Wednesday night for their usual terrific two sets, thoroughly enjoyed by a nearly full house dominated by tourists.  On Thursday night, I returned for a really fine set by vocal stylist Karrin Allyson, whom I had not previously seen.  I can heartily recommend that you look for her future gigs around town or at a nearby jazz club.  Her songs and arrangements are really spirited and well thought out and she knows how to show off her vocal chops to their best advantage (knowing that she doesn't have the tone and range of someone like, for instance, Jane Monheit).  Her version of the classic "Moanin'" was really memorable. I was sorry I could not stay for the second set, but did note that the first set was a complete sell-out.
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We have again adjusted the print format for the stock transactions to make it easier to read.  It's the least I can do for loyal followers who have now topped 21,000 page views of this blog.  Many thanks to all for your continued interest.

The market has been moving sideways, reflecting the economy and the geopolitical cross currents.  As always, it's important to take profits in accordance with our formula.  That led us to take a profit in AstraZeneca, a move that looks really good now that it appears that the Pfizer deal is not likely to happen.
BK.PR.C is a "new old" name, Bank of New York Mellon preferred stock.  

Purchases

Date     Symbol  Shares    Price

4/16/14  KN          100        30.53
4/23/14  KN          100        30.94
4/28/14  BK.PR.C 100        23.13
5/2/14    GNE        300        8.11
5/2/14    RVN        100        30.35
5/5/14    TIP            20        114.11
5/9/14    GLDD      300         7.56
5/9/14    BOLT       200        16.27
5/12/14WFC.PR.P 100        23.82
5/16/14 GNE          300          7.25
5/16/14 GHM         100         27.51

Sales                                                      Date       Purchased Price

4/14/14 USAK       200         17.40       8/24/12               3.74
4/17/14  KNX        100         24.26       1/10/00               3.33
4/21/14  AWCMY  400          5.00        1/22/10              5.99
                                                              2/11/10              5.85
4/22/10   USAK      200         18.91      8/24/12               3.74
4/28/14   DVN          50         70.63      4/4/12                 70.19
5/2/14      AZN          50         80.80      3/25/02               49.40
5/9/14      SXI            50         74.05      5/11/98               30.25
5/12/12    PQ            400          6.25      10/20/04               5.07
                                                              11/22/04               4.46    
 

Tuesday, April 15, 2014

 

"Vacation's" Over

After a month off from blogging, it's good to be back at the keyboard.  I wouldn't exactly call it a vacation, since there were weekend business trips to Savannah and to Orlando and then it was tax time.  But now we should be back to a weekly, or at least bi-weekly, schedule.  By the way, I was somewhat disappointed in Savannah.  In part, the weather was at fault, but the food options were nothing to rave about and the bar scene, even downtown, was pretty lame.  There were some better options in that latter regard on the river walk, and I saw one pretty decent cover band.  But it's not a town I would be rushing back to.

I really don't need to discuss Orlando again, although I have to admit we found much better food this time around.  Of course, we went to some pretty expensive spots.  Speaking of expensive, the most expensive taxi cabs in the world have to be in Orlando.  Seriously, it was 10 bucks on the meter before we even got off the hotel grounds.  That trip was during March Madness time so we saw plenty of B-Ball in the evenings at the hotel bar.  And then baseball finally started!  So that trip was too long (6 nights) but otherwise, OK.

Next stop is beautiful Albany, NY for two nights to end the month of April.  Let the lobbying begin!
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 Do I feel any differently about the President's performance now that Russia has annexed Crimea and is threatening Eastern Ukraine?  Well, on the one hand, no, since again, this administration has taken our defensive posture down so many pegs, we are really not in position to do much militarily.  So tactically, they haven't had any choice; strategically, this administration has been a disaster, which is what we've said all along.  The one tactical mistake Obama did make was promising to veto any stronger sanctions Congress would pass, which gave Putin the green light to do whatever he wants.  That position needs to be reversed immediately.  I know the Administration is concerned about the scenario where they strengthen sanctions and have Russia cut off Europe's gas supply.  But the only way we have  to back Putin off is to fire up the sanctions and we need to do that post haste.  Americans can do their part by not buying any imported Russian products.  I know Stoli is good vodka, but there are lots of others.  Let the Stoli's pile up on the shelves, folks.
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There was good news from the Supreme Court where Chief Justice Roberts seems to have his mojo back.  In a logical follow up to Citizens United, the Court ruled that the ridiculous overall limit of $123,200 on contributions an individual can make to all candidates in a cycle violated the First Amendment, which any high school junior could have told you (if they still taught civics in public schools).  Now, there is no way my contributions would ever be in any danger of hitting half that total, but that's no reason to deny someone else their rights.  Frankly, I would have been happy to see the Court throw out all of McCain Feingold, but they didn't need to go that far to decide this case, and the majority did indicate that they would welcome a case that gives them the opportunity to do that.  Of course, Dems howled that the decision would mean endless money in politics, but they really don't care about how much money is in politics as long as it's theirs to spend.  No one raises more money than the Clinton's and Obama and their bundlers.  So it's all politics.  Which is why the GOP is going to pursue the IRS scandal to the end.  That's all politics too and you know the trail ends at the White House someplace.
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Two interesting movies showing on Showtime that you may have skipped during their theatrical runs are The Great Gatsby and On The Road, each based on iconic novels by F. Scott Fitzgerald and Jack Kerouac respectively.  In recent polls, Gatsby has been frequently staked to the number 1 position among American novels of all time.  Fitzgerald, though, is notoriously hard to screenplay, ironic in that he ended his career writing screenplays.  The reason his books don't lend themselves to the movies is that in truth, they are largely psychological and introspective with surprisingly little action and not all that much plotting either.  There will be long descriptive passages and narrative insights, but really, it's the Seinfield of American dramatic literature, nothing happens.

At least in Gatsby, something does happen.  There are parties, both drunken huge ones and tension filled intimate ones.  There are lovers reuniting, would be affairs failing to germinate, and it all culminates in a tragic fatal accident and a murder suicide.  Probably more action than in his other novels combined, and all squeezed into what is basically a novella.  Yet, even with all that, the passages that we Fitzgerald fans love are still the moments of intimate dialogue and narrative insight.

The 1949 movie version with Alan Ladd is rarely, if ever seen on television, so most of us have little or no familiarity with it.  Running only 92 minutes, it is little remembered despite a pretty fair cast.  But the 1974 version, staring Robert Redford in the title role, Mia Farrow as Daisy, Sam Waterston as Nick, and a terrific Bruce Dern as Tom (a chilling performance) is well known.  It stuck pretty close to the book including all the memorable character building scenes and many of our favorite quotes.  The (mis)casting of Redford as the mysterious Gastsby is notorious.  I thought actually Redford played the part too well and was too true to the character.  A persistent criticism of the novel has been that the Gatsby character is not clearly drawn and at book's end, he is still the one main character we don't fully get, although Nick seems to think he does.  In that sense, Redford pulled it off.  At movie's end, we really don't know what to think of him either, except that he clung to the possibility of reclaiming Daisy regardless of the odds and that wry smile gave him a puncher's chance.  Nothing else seems to matter.  My guess is that Redford thought this was how he was supposed to play the part.  My main criticism of him is how slow paced his scenes all are.  He's even worse as a Director.  I mean, did The Legend of Bagger Vance really have to take that long?

The new version, directed by Baz Luhrmann, and starring Leonard DeCaprio as Gatsby, Carey Mulligan as Daisy, Tobey Maguire as Tom and Joel Edgerton as Tom, is much more entertaining than the 1974 version, even as it expands on and strays from the book a little without changing the characters or the plot.  The Director (and co-screenwriter) makes a lot of interesting choices, many of which work and a few don't.  Most obvious is a soundtrack overlaying 20's jazz with rap and other modern forms.  I thought I would find that much more obtrusive than it was.  The music certainly adds an element of fun and excitement to the big party scenes at Gatsby's estate.  Another interesting device is to have Nick tell the story after the fact from a sanitarium where he is recovering from alcohol abuse and other ill effects of his Long Island summer.  He returns to his writing, encouraged by his doctor who tells him that penning the story of Gatsby will be good therapy.  He does so, and brilliantly, and because of this device (where Nick is so clearly a stand-in for Fitzgerald), we get to hear some of our favorite narrative passages with the author's observations (which since they don't actually move the plot, we would probably not get to hear otherwise).  In prior versions, it was not so clear whether Nick or Gatsby was Fitzgerald's stand-in.  After all, Gatsby's story in some ways parallel's the author's, whose marriage to Zelda was put on hold until he struck gold with his first novel.  This could explain some of the ambiguity surrounding Gatsby's character, since Fitzgerald likely was not so keen on revealing so much of his own character.

Which brings us to DeCaprio's performance.  Certainly, DeCaprio is in the top echelon of current American actors, and this performance is transcendent.  For the first time, we are given a Gatsby we can understand, a cultivated personality with a purposely affected speaking accent, youthful (much more so than Redford), alternating between extreme confidence and awkward diffidence, and relentlessly optimistic, hopeful, and opportunistic.  We understand finally that he is very much the front man, subordinate in Wolfsheim's illicit bootlegging operation, since in this movie, he abandons Daisy in the middle of his party to take business calls. In the end, like Nick, we are left in admiration of his personality and his loyalties.  And as always, the energy and intensity of DeCaprio's performance make such a stark contrast to Redford's sleepwalk.

As for the rest of the cast, Mulligan is fine and Maguire is truly excellent in portraying the unworldly, naive Nick, so out of place in the East.  But Edgerton, as brutal as he is, fails to lend much humanity to Tom, and it was that aspect that made Dern's depiction of his brutality so much more chilling.

I did have a few nits to pick, mostly involving things that were missing which I consider almost indispensable.  Gone is the scene where Gatsby meets Tom and Daisy's child, the one irrefutable piece of evidence of their one-time love that can't be denied.  In the "74 movie,  Redford's sickly reaction to that meeting is one of his better moments.  Also, there is no witnessing of the Jordan Baker character cheating at the golf tournament.  In fact in this version, Jordan is a mere catalyst without any appreciable character at all.  In the book, Nick says he and Jordan "wearily began an affair" but there is not much hint of that in this movie.  Even Daisy's character falls a bit short in Luhrmann's script.  We never hear Di Caprio remark that "her voice is full of money," which was undoubtedly Redford's best line (and one of the book's most memorable).  Finally, a very moving scene (and enlightening as to Gatsby's history) in the book and the "74 version is Gatsby's father's arrival at Nick's home for the funeral.  That does not happen in the new version.  But these are quibbles.  Clearly this is the best Gatsby yet, and an entertaining one too.  If anyone wants to take another shot at Tender Is the Night, the message is clear - take some chances.
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On the Road is a disjointed mess of a movie, even though there are big names behind its production and a few big names in the supporting cast as well. That makes it faithful to the book, which, let's face it, is also a mess.  Kerouac struggled to get it on paper, famously discarding nearly complete versions, before finally sitting down and banging out the final version in no time at all.  This did not impress everyone, especially Truman Capote, whose opinion was "that's not writing, it's typing."  What Kerouac typed was really a US travelogue, finishing with a side trip to Mexico.  He depicted his own and his best friends' lives as generally unemployed artists, writers, and perverts who indulged in as much alcohol, drugs, and sex as possible.  The movie depicts this bohemian lifestyle which in the 1950's came to be known as the beatnik generation.  In addition to the above vices, there was a love of music, especially modern jazz, that is also central to the movie.  As in the book, there ain't much plot here.  But on some level it is fun.  I have never really understood Kerouac's idolization of his friend Neal Cassidy, the subject of the Dean Moriarity character, and in the movie, he is taken down a few pegs in the end.  There is some satisfaction in that, I think.  Less developed than in the book is the Allen Ginsburg character, though there are some scenes depicting gay and bisexual activities.

This is another book that is almost an impossible subject for a movie.  I was determined to stick with it, and if you do, there is some payoff.   But mainly, it made me want to go back to the book for another turn through the real thing.
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Here are the stock transactions.  There have been a lot of them.  March was a pretty good month, and we certainly wiped out that miserable January.  But so far, April looks real shaky.  Investors need to keep an eye on this market.  Most of the pros think we will end the year higher after a correction or two along the way.  I hope they are right.
 Buys                                                                                 Sales
Date        Symbol       Shares       Price                Date   Symbol     Shares   Price   Date Bought  Price Pd

3/5            SJM           25            99.16              3/5      GENC      200      10.91   2/2/09            8.17  
3/11          KN            100          28.02               3/10     AA          200      12.00   2/17/05        29.47 
3/14          PFG.PR.B  100         24.71                                                                   3/20/06        30.20
3/17          AGCO       100         52.40               3/12      PQ          400        5.35    4/22/09         2.91
3/21          KN             100         31.50               3/18     BYD        200       14.10   11/5/07       40.05
3/25          WFC.PR.P  100         21.98                                                                    11/19/07     38.25
4/4             KN            100          31.59                                                                    10/27/08      3.95
4/7             HSC           100         23.75               3/24     SFE        100        21.59   11/27/03       8.22
4/8             GLD             20        126.30              3/26     PWR      100        36.63    11/3/08        19.73
4/11            KN            100          31.35              4/2       AA         200        12.80     12/19/08     9.46
4/11           NVEC          50           53.44             4/2      CNRD     100        42.35     4/26/05       1.30
4/14           SBRAP        100         24.33             4/4       AWCMY 500         4.60     6/29/12       3.27

Yes, that's the right purchase price on Conrad.  We rode Boyd Gaming down a long way in the financial crisis until it started to recover.  It looked like it might no be able to service its debt there for a while.


                  
   

Wednesday, March 05, 2014

 

Richmond Musings

Coming to you live from Richmond, Virginia, it's Wednesday night!  One nice thing about the Richmond Weston is free use of their computers, and since I travel with only a blackberry, and neither a laptop or an i-pad, it is convenient to do blogposts otherwise. Also, the computer room is right near the bar!  It just doesn't get any better!

So our so-called President has been taking a beating in the WSJ because of the Ukraine and Crimea, and I have to say that's a bit unfair.  Anyone with even a passing knowledge of Russian history knows of their age old paranoia concerning their bordering countries, so Putin's move is no different from what the Czars would have done.  The fact is, what military response could the President have really brought to bear anyway?  I think the measured response by the West in threatening sanctions was just right, and by the way, it had the desired effect of tempering the Russian response anyway.  So the WSJ criticism in this case was over the top, and you know if I'm taking my favorite paper to task, I must be right.  This in no way absolves the Administration of its feckless failures on Iraq, Afghanistan and Syria, but I'm going to maintain my objectivity (ok, stop guffawing). 
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Movies are in the news this week since the Oscars were awarded, and as usual, I have not seen any of the movies considered yet.  Catching up on last year, I have to say Silver Linings Playbook was terrific, and DeNiro was positively hilarious.  Though Bradley Cooper played the heavy in Wedding crashers, his talent was clearly visible even then so it can't be to anyone's surprise that his talent is now recogized in Linings and this year's America Hustle.  Can't wait to see that since it also stars Jennifer Lawrence who was out of this world in Linings.  Also I loved Argo, particularly John Goodman and Alan Arkin.  But really, Ben Affleck is consistently underrated as an actor, and shows incredible promise as a Director.    When he is in a movie, it always seems like the best moments are his.  Think back to Good Will Hunting and recall two great scenes where he is fantastic.  First, where he 'represents" Will in a job interview, demanding a retainer, ending up by telling the hiring interviewers that they're "suspect," since they can't quite put together the $200 he asks for.  Then, the great scene with Will (Matt Damon) where he tells him that if "he's still here, he'll kill him.  You're sittin on a lotto ticket.  The best part of my day is when I pick you up and hope for a moment you'll be gone, no goodbye, no nothin'.  I don't know much but I know that."

Or those three unbelievable scenes with the new recruits in Boiler Room.  He's only on screen for those and a couple of other scenes, but it's enough to dominate the movie.  His understated characterization of Tony Mendez in Argo is just another example of how he does so much, by seeming to do so little.

As for this year's movies, I have a passing interest in seeing Gravity and Slave, but a real interest in American Hustle and Blue Jasmine.  And maybe the Dallas Buyers Club given how good McConaughey's speech was and how great his work on True Detective has been so far.  So we'll leave it there for now.
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Austin City Limits has been a great hour for over 35 seasons.  I have to say that if you grab a look at the recently played show by Arcade Fire, it's fun, even for us old-timers.  This is a band of 8 remarkable musicians, playing a wide range of instruments with intelligence and skill.  I enjoyed this band way more than I expected.

Another thing I loved recently, that I expected to not like, was 42, the movie about Jackie Roosevelt Robinson, who broke baseball's color line and in so doing, laid a significant marker in the civil rights struggle.  Besides doing that, Jackie was a great baseball player, a true Hall of Famer, who came to the major leagues at 27, leaving some of his prime years in the Negro Leagues. He was Rookie of the Year in 1947, and played only 9 more years, quitting in the 1957 post season when the Dodgers announced their move to LA and attempted to trade Jackie to the hated Giants. 

Robinson was an inspiration to so many people, including my Dad, who shifted his allegiance from the Yankees to the Dodgers when # 42 arrived.  On our three trips to Ebbets Field, in "55, "56 and "57, he still became so excited when Jackie reached base.  There was nothing like seeing Jackie dance to his lead, a total distraction for any pitcher.  Even toward the end of his career, in 1956, he won a World Series game  against the Yanks by stealing home.

Where most movies would overdramatize the racial aspect of Jackie's story, 42 if anything underplays it.  The vitriol that actually occurred was even worse than the movie depicts.  The scene in Cincinatti, where Louisville native Pee Wee Reese puts his arm around Robinson, quieting the crowd, is done beautifully in the movie, underplayed perfectly.

Also great in the movie is Harrison Ford's exquisite depiction of the Mahatma, Branch Rickey.  The Brown Dodgers was his idea, and his early move to recruit Robinson, Campanella, and Newcombe from the Negro leagues led to pennnants in 1947, 49, 52, 53, 55 and 56.  The Bums just missed in 1950 (by 1 game) and in 51 (the playoff loss to the Giants).  So he created a dynasty on a par with the Yankees of that era.  But that only goes so far in the telling of Rickey's story.  There are so many great anecdotes.  When he was GM of the Pirates, Ralph Kiner, perennial NL home run leader objected to the salary cut Rickey "offered."  When he threatened to hold out, Rickey responded, "we finished last with you, we can finish last without you."

On another occasion, Rickey quizzed a young prospect about his habits.  "Do you smoke?" he asked.  Yes.  "Do you drink?"  Yes again.  "Do you go out with strange women?"  Again yes.  "Judas Priest," Rickey bellowed, "you must have horns!"

Rickey liked for his players to be married.  He was convincing one player to change his status from single and offered him a bonus of $3,000 if he got married, real money in those days.  The player called him.  "Well," he said, "I talked to the one and only."  "What did she say," asked Rickey.  "She told me I should hold out for $5,000."

Rickey always said that "luck was the residue of design."  It's one of my favorite truisms.
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The world will miss Sid Caesar, one of the funniest men in history.  If you don't believe me, watch any of his shows from the 1950's.  Or Silent Movie.  Or Mad, Mad, Mad, Mad World.
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The WSJ monthly magazine is usually a ponderous waste of time, regardless of how great the models look, but the December issue has a great story on Ernest Hemingway's time in Cuba.  You can probably find it on the website.  It's enough to make me want to go back and reread For Whom the Bell Tolls and The Sun Also Rises.
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Here are the stock transactions:

Purchases:
Symbol       Date    Size           Price         Comments
PQ             2/13     600 shares    3.77             0 buy
TIP            2/18     20                111.95
PBCT        2/19     200                14.18          Value Buy
AGCO       2/10       50                51.83          0 Buy
WFC.PR.P 2/21      100               22.34  
L                 2/24      100              43.45          Value
EXPD         2/25      50                41.91           0 Buy
SBRAP      2/16      100               23.90         
AGCO        2/28      100              52.57           Value
NWBI        3/3        200              14.23           0 Buy
TIP             3/4        20                112.82   

Sales

CNN.PR.B 2/13      400               45.95           Off the buy/hold list 

Thursday, February 13, 2014

 

Oh, Snow. No Relief In Sight

Having battled my way into the office for three plus hours last week, the idea of another trip featuring trains that don't come, parking lots not plowed, and slick sidewalks and stairways did not appeal this morning, so instead, we did the technology thing and worked from home today.  The uncannily accurate weather forecasters were right about when this storm would come and when the snow would change to rain, so I assume they will be right that it will change back to snow tonight, with more snow coming Saturday.  Ugh. 

Back in the "real world," Janet Yellen has moved in as Fed Chair and promptly told Congress that nothing would change.  This pleased the stock market which always favors higher prices today and we'll worry about next year when it comes.  I call this the "Wimpy Syndrome" (I'll gladly pay you Tuesday for a hamburger today).  The good news is that she is continuing the reduction in bond buying, but the bad news is bond buying continues, and the Fed's accomodative stance that punishes savers by keeping interest rates artificially low has the ironic effect of starving the economy.  I guess the Fed's dominant Keynesians will never figure this out.  Luckily, our stock trading formula seems to thrive under these suboptimal conditions.

Congress did its part by abandoning any attempts to use the debt limit law to achieve budgetary discipline.  I guess no one gives a hoot anymore.  At least we have the Sochi Games to distract those who care about that.  Even I haven't been able to ignore a few of the nice moments from there, mainly the Opening Ceremony   (unfairly criticized because one of the Olympic Rings didn't illuminate, but really, who cares?) and the Russian Pairs figure skaters.  The best story I heard reported from the games was, as usual, from curling fans, noting the absence of alcoholic beverages at many of the locales (the Russians are appropriately paranoid about their extra mortality caused by alcoholism).  "Really," said one young fan, "how can you watch curling without some beers?" which strikes me as an eminently reasonable question.
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As interminably awful as the Grammy's award show was, Grammy's tribute to the Beatles was very entertaining.  If you saw it, you saw many of today's artists performing excellent covers of very good Beatle
songs.  As for the performance by Paul and Ringo, it was also fun to watch if not exactly an artistic triumph.  Fittingly, the Journal's excellent rock critic Jim Fusilli authored a retrospective last week called "Invading Powers" recollecting Beatlemania 50 years ago.  Here is an edited version:

"Sociologists who study the 1960's attribute much to the Beatles' arrival in America 50 years ago...Some credit the cheeky, high-energy quartet with being just the boost the U.S. needed after having endured the assassination of its president.  Others cite the band's seemingly instantaneous popularity as a sign of an emerging teenage consumer culture.  Such claims obscure a more fundamental question: In February 1964, were the Beatles any good?"
Fusilli points out that the Beatles were veteran performers by the time they performed on Ed Sullivan, at Carnegie Hall and the Washington Coliseum. They had performed almost daily since summer, 1960, and at the Royal Albert Hall twice in 1963.  They had also done two sets a day at the Olympia Theatre in Paris in the weeks before coming to America.
"By 1964, the Beatles were a tight quartet who could play pop, rock 'n' roll, rockabilly, and R&B with equal force and efficiency.  They had studied (and covered) their predecessors-but had developed their own sound: Lennon and McCartney gave the group two versatile, easily differentiated vocalists; and Harrison...was a lead guitarist with a feel for several styles.  McCartney wasn't yet the exceptional bass player he would become; Lennon provided color and support as a rhythm guitarist.  But with the savvy, rock-solid Ringo on drums, they were built on a platform of driving rhythm.  What distinguished the group, though, was its songwriting."  Here Fusilli recounts the early hits they wrote, McCartney's "Love Me Do," Lennon's "Please, Please Me," influenced by Buddy Holly and their first UK #1, the first two US albums, including "I Want To Hold Your Hand," #1 in the U.S. by the Feb. 9 Sullivan gig.
"They opened the Sullivan performance with McCartney's "All My Loving," which displayed the group's many talents in well under three minutes.  The meticulous, syncopated arrangement found Lennon playing triplets on rhythm guitar while McCartney, who sang lead, offered a walking bass line and Starr altered his accents on his snare drum as his cymbals sizzled.  After adding tidy country licks on the turnarounds, Harrison played an eight-bar interlude at the bridge with nods to rockabilly.  A cleverly crafted pop gem, "All My Loving" was delivered with confidence and an infectious elan born of experience."
"After performing "Till There Was You" from the Broadway musical "The Music Man" - perhaps as a bone thrown to Sullivan's traditional viewership - they played another compact gem: the Lennon-McCartney composition "She Loves You."  As on the recording, the live reading was driven by Mr. Starr.  Two and three part harmonies delivered the lead vocal, which built to the twin hooks: "woos" and "yeah, yeah, yeah!" Lennon played folk chords on electric guitar, thus enriching the mid-section and freeing Harrison to add colorful filigrees.  In front of more than 70 million viewers, the quartet knew they were on their game.  At the midway point, Lennon, who had been relatively static in contrast to McCartney's bubbly exuberance, exchanged a smile with Harrison.  High on his platform, Mr. Starr continued to bob behind the cymbals.  His fills and the rumble of his kick drum and toms made the performance."
"The Beatles returned in the second half of the show with the Chuck Berry-influenced "I Saw Her Standing There and "I Want to Hold Your Hand," but by then notice had been served.  ...The Sullivan audience saw that the band could deliver the hits with authority and charm.   Two years after Mr. Starr joined them, the Beatles were...a self contained group capable of writing, arranging and performing increasingly challenging and ever-engaging rock and pop of the highest caliber.  Were they any good?  Oh yes.  And they were going to get better."

My view - The Beatles in 1964 were a competent rock band.  Harrison and McCartney were learning to play their instruments and eventually would be very good.  Starr was an underrated drummer, largely because his technique was unconventional.  As vocalists, they were exceptional, particularly McCartney.  And they had three great song writers.  McCartney and Harrison wrote outstanding melodies, and Lennon's lyrics were the strength of his songs.  And they were outstanding arrangers too, an ability not recognized enough.  If you want to know how to end a record, listen to the Beatles.  Only rarely do their songs fade out.
It is interesting that "I Saw Her Standing There" is still so fondly remembered.  That was the "B" side of the "I Want To Hold Your Hand" 45 RPM single (remember those?).
Those were fun days and the music world was really on fire.  As Beatle songs became more sophisticated and broke new ground, it was common to downplay the early hits, but  they have survived anyway.
You can read Jim Fusilli's reviews in the WSJ every week, as if you needed yet another reason to read America's greatest newspaper.

 By the way, one other thing little remembered.  Several months before Sullivan, Jack Paar ran a film of the Beatles playing in a European concert, which for many of us, was the first time we had heard of or seen them.  They were shown singing "She Loves You" and it was that rare song you love the first time you hear it.  After that, those of us who had seen it were primed and when DJ's like Murray the K and Cousin Bruce Morrow started promoting the group, Beatlemania was lifting off.
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For those who heard the State of the Union and are anxious to start their MIRA, my advice is forget it, and buy a lotto ticket.  Obama's brainchild has little or no appeal for anyone I can think of.  Investments will be limited to low interest Federal debt, and the accounts themselves must be rolled into Roth IRA's as soon as there is any appreciable money in them.  In short, anyone who thinks this will be a retirement solution is dreaming.
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 WSJ's Dorothy Rabinowiz has long been a voice in the wilderness defending  those railroaded into court and even prison by out-of-control DA's and AG's and other accusers in the wave of trumped up child abuse cases from the 1980's and early 1990's.  Most of these cases were built on the "testimony" of young children, who were persuaded that their teachers, schoolmasters and even parents had abused them.  They were extensively coached  by these accusers, often making the most ludicrous charges and describing impossibly absurd abusive acts.  The most infamous of these trials was that of the Amirault family,which owned Fells Acres nursery school in Massachusetts.  Ms. Rabinowitz kept after this case until finally the family was exonerated and released from prison, though the DA's, led by the current Massachusetts AG, Martha Coakley, have never acknowledged their innocence.  Violet Amirault and her daughter Violet served 8 years in prison before their convictions were overturned.  Her son Gerald was finally paroled after 19 years  The child accusers were almost as much victims as they, never actually being able to separate what was true from what they had been programmed to believe.

Ms Rabinowiz resumed her crusade last week, this time in defense of Woody Allen, who was recklessly accused by his ex Mia Farrow, and her adopted daughter Dylan who became convinced that Allen had abused her when she was 7.  Dylan recently renewed those charges.  Rabinowitz' take is illuminating.  "It's impossible to read Woody Allen's reply to charges that in 1992 he molested his and Mia Farrow's 7 year old adopted daughter, Dylan, without being struck by its haunting echoes of the words of countless people accused of such crimes.  He had thought that the charges were so ludicrous he didn't think of hiring a lawyer, he reported in an op ed for the New York Times on Sunday.  He had believed that "common sense would prevail."  He had "naively thought the accusation would be dismissed out of hand."  It was the kind of naivete evident in virtually every person known to me who had been falsely charged...convicted and sentenced to long prison terms on the basis of testimony from children coaxed into making accusations.  Accusations made, at ages 5,6,or 7, that many of them would continue to believe fervently were true, into adulthood."

Allen said in the op ed, wrote Rabinowitz, that "After Mia Farrow accused Mr. Allen of molesting Dylan, Connecticut police called on the Child Sex Abuse Clinic at Yale-New Haven Hospital to investigate.  The investigators' conclusion was indisputably clear.  :Dylan had not been sexually abused by Woody Allen.  She had made the accusation, the investigators said, either as a response to stress or because her mother had coached her to do so, or a combination of both.

So how are we to know the falsely accused from the true sex offenders every community fears?  That's a hard question, but for starters, there should be corroborating reliable evidence to convict.  The Penn State cases are an example where the evidence meets that reliability test.  But Woody Allen?  Are you kidding?

One might also consider his primary accuser, Mia Farrow.  Farrow's good works on behalf of world youth notwithstanding, her life's record is largely one of rank opportunism starting with her goofy marriage to Frank Sinatra.  Her relationship with Allen secured her standing in his ensemble movie casts.  Allen's own life choices represent some odd twists and turns, but his talent has been undeniable, and if anything, his desire to be a private person speaks for itself.  Self promotion is not what Woody's about.  His longstanding friendships and the desire of his cast members to work with him again and again put the lie to the monster characterization Farrow would assign him.

I think Rabinowitz again has this right.  It's a shame that Woody's reputation has been so unfairly tarnished.
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Here are the transactions since the last post:
Purchases:
Date          Stock symbol       Shares           Price      Comment
1/17              ONCS               4200       0.4725        Our lotto ticket paying off?  Bought a few more shares
1/21              WFC.PR.P          100      21.31
1/21              SJM                      25       97.80          Still a value buy even at this price
1/27              GWR                    25       90.03           Zero buy, Small RR performing big
1/28               IAU                     200      12.20          The "other" Gold ETF
1/29              GIFI                     100      20.97           Value in the "Tulane Portfolio"
1/31              AGCO                   50       53.89           New name meets the value criteria
2/3                SBRAP                 100      24.75           Another good looking reco from full service broker
2/5                NEM                    100       21.30           Maybe it finally bottomed
2/7                FNFG                   300       8.45             Zero buy, trying to consolidate its aquisitions
2/10              PLP                       100      21.25            Best preferred stocks are in the insurance sector
2/11              AGCO                   100      51.27            Value Buy, building the position

Sales
1/15               B                            100      39.31            We paid 8.3125 on 3/22/99
1/21             DBD                         700      34.90            Took Diebold off the hold list; took a small loss
1/21             BEAM                      150      83.40            paid 62.75 in 2006, 52.88 in 2008
1/21             BEAM                      150      83.40            paid 76.62 in 05, 21.52 in 09

We sold BEAM to the arbitragers; the company is being sold to Suntory.  On Diebold, we just don't think its products have much growth potential in the US, and management doesn't seem to be able to achieve its international potential.  We found AGCO in the WSJ daily list of dividend increases, and noted price to book of less than 2 and debt to equity less than 0.7.

Neither redwavemusings nor its author are investment advisors and the securities mentioned here are not to be considered recommendations since they may not be suitable for readers.   


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