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Tuesday, September 25, 2007


New York endures UN chaos

If you could not hear it, I would urge you to read the transcript of the President's UN speech today. I am sure he will be criticised for being undiplomatic, even blunt, but I would challenge anyone to find a word in the speech that was not true. He simply called a tyrant a tyrant and a thug a thug. He challenged the UN to live up to its principles and its charter. The Orwellian doublespeak that passes for diplomacy at the UN is enough to make one take the position that we should save our dues and tell the UN to pack up and find another country in which to hold its meetings.

Instead, President Bush simply enumerated the ways that the UN could realize its potential to help the world solve its many problems. So the Cuban delegation walked out. I would be disappointed if it didn't and perhaps am concerned that more delegations didn't leave. Perhaps they don't take Mr. Bush seriously.

Contrast that scene with the circus at Columbia University where Iran's President spoke yesterday, revealing himself yet again as a crackpot, at best. It would be funny if the geopolitical situation were not so dangerous. Equally absurd was Columbia U's President, who after insisting that Ahmadinejad be allowed to speak, totally insulted and embarrassed him during his introduction. Fittingly for a US campus, the speaker's most offensive line seemed to be his claim that there were no homosexuals in his country.

To cap the week's nonsense, when Ahmadinejad took his turn to speak at the UN, the US delegation walked out. Beautiful.

Meanwhile, the presence of all these political bigwigs in NYC creates an awful traffic mess, with police escort sirens going off all day, as if the City didn't have enough traffic issues what with the hole on Lex and 41st St. still being repaired. Even the subways had issues this morning, and the police presence down there (to randomly check bags, etc.) is a little disconcerting. So goes the 21st century, amidst the war on terror.

The Presidential candidates have all found it necessary to propose a health plan, and not one has even hinted at any imaginative solution. Maybe they should take a look at the rw musings archives. One thing is for sure - a really comprehensive public plan is going to be difficult, if not impossible, to pay for without rationing service.

On Monday, I sold 100 shares of Shaw Group at 57.38, originally purchased for 10.90 on 9/13/04. Then yesterday morning, I was greeted with the news that PWI was being sold, giving me a chance to wipe out the loss I had in that stock. I sold the 200 shares from my taxable account this morning at 25.75 (a bad market order) that I bought in two pieces - 100 shares on 8/2/06 for 31.46 and 100 on 4/27/07 for 20.09. This afternoon, a better limit order executed to sell 500 shares from my IRA for 26.29, purchased in 4 pieces at an average price of 24.41. The stock paid a monthly dividend so all in all, it wasn't a bad investment. That raises a fair amount of cash, probably putting me on the buy side for a while starting next week. But first, it's off to D.C. for a weekend business meeting.

Sunday, September 23, 2007


Richmond Musings

Richmond, VA is an amazing city. There is a true downtown, including the state capital with the usual accoutrements - suitable office buildings for lobbyists, law firms, hotels, etc. - and also a terrific restaurant/bar section, small by NYC standards, of course, but high in quality. Unfortunately, this area was badly flooded some years ago, but reportedly, it is pretty much restored. Surrounding the city is Broad Street - a very long avenue accessed at numerous exits by Route 64. When you are driving on Broad St., it feels like Jericho Turnpike on Long Island or Route 1 in South Florida - an endless succession of strip malls, restaurants, car dealerships, etc. Also off Broad Street are the Corporate Parks and the hotels that serve them. In other words, suburban sprawl.

Beyond Broad Street are the residential developments, some of them very high rent. One can see that Richmond is a comfortable place to live for the climbing business executive - enough culture (thanks to UVA) and action to qualify as an "urban environment" but still quiet enough so as not to feel like a big city, and a comfortable, moderate climate to boot. It's also a decent environment for singles - not Atlanta, of course - but lots of reason for hope.

It was encouraging to see the Senate dispense fairly perfunctorily with the Dems' efforts to curtail the Iraq war effort, and also to see the growing backlash against the MoveOn.org left wingers. I am also reading about dissension in the al Queda ranks. The war on terror will have more twists and turns than the world's longest bobsled run, so we needn't get too excited about any of this. But it's always great (and a little surprising) when Americans find their backbones.

On to more trivial items - Mets fans are breathing again after about a week of what constituted a near death experience. caused largely by their exhausted bullpen, not to mention the Phillies' outstanding threesome of Rollins, Utley and Howard. Somehow, the Mets stitched together 3 straight against Florida and a 4-3 road trip. They come home for the rest of their games, needing only to go 5-2 to clinch the division. If worst came to worst, and they couldn't do that, they now also have a strong edge for the wild card, since San Diego's remaining games are on the road. Meanwhile, it looks to me like almost every player in baseball is worn out or injured, and somehow, managers are going to have to rethink the style of play currently in vogue. Mostly it goes back to the way pitchers approach hitters. Instead of going after them and throwing strike 1 and strike 2, we have all this nibbling with the inevitable results that starting pitchers don't go deep enough into games, relievers are overworked, there are too many pitches, too many hits, way too many walks and HBP's, and everybody ends up hurt and tired. This came about because expansion diluted pitching, but by now, we should be getting back to some kind of balance. It also didn't help that the current trend in new ballparks is to smaller fields so more home runs, more walks, etc.

The team that figures out that it is better to go after hitters, and give up the occasional no one on dinger, is the one that will preserve its pitching staff and reverse this trend. So far, I don't see too many takers.

A great example was in today's game, with the Mets leading by three going into the bottom of the 8th, when the usually reliable Aaron Heilman tortured us loyalists by walking the first two hitters. He was very lucky to emerge at the end of the inning with a one run lead (thanks to an outfield assist) since both walkers came around to score. In the "old days," no self respecting pitcher walked anyone with a three run lead late in the game.

It's ulcer city for managers, fans, etc. but it provides further evidence that baseball is still THE game, the most riveting sport, so much better than football, which has not yet attracted my interest. Though I am aware that the Giants and Jets accomplished an unbelievable parlay today, each winning for the first time.

One last baseball thing - a lot of guys are getting boosted for NL Manager of the Year, but if Lou Pinella doesn't get it, there should be an investigation. That Cubs team didn't even figure to contend, let alone win the Central. What a job!

On Monday, I sold 200 shares of Conrad (what again!?)(CNRD) at 15.80 (also from the batch purchased 2/9/05 for 2.25). Now it's a 7 timer, and continues to defy all those staid investing "rules" (don't buy low priced stocks, don't average down, etc. etc.). Then on Friday, I sold another 100 shares of BRLI (BioReference Labs) for 33.32, originally purchased for 9.07 on 5/20/02. About the only tip I have ever received that proved profitable.

The market action is making it look like we have had a correction, and that the bull trend is still in place. Maybe yes, maybe no. A lot of fundamentals look stinky. There is still a credit crunch, consumer spending looks weak (and energy prices are hurting), commodity prices are up indicating inflation threats, and the dollar is weak, possibly forestalling any further rate reductions by the Fed for awhile. On the other hand, one could argue that increasing demand from China, India, Latin America, etc. means that future recessions will be shallow and short, if they arrive at all.

It all makes me glad that I have a mechanically driven formula that drives my transactions, or else I might go crazy trying to figure out what to do.

Sunday, September 16, 2007


Village Musings

I had a different experience going to Bar 55 on Christopher St. in the West Village last Thursday night to see Katie Bull but mainly because the keyboard player in her very competent backup quartet was Frank Kimbrough, about whom I have been hearing good things. Most of the "songs" were Katie's compositions, and neither the material, nor the electronic keyboard Frank brought to the gig showed him to best effect. Actually, the tunes seemed to be mainly excellent vehicles for the tenor sax player, who I think was Jeff Lederer, and who did extremely well. As for Katie, she may in fact be talented enough, but I was put off by her relentlessly pretentious songs and sometimes embarrassing scatting experiments. But at least she seemed to be having fun.

The Village is still the Village and if you pay it a visit, you should be prepared for its unique and strange sights. However, Bar 55 is totally unpretentious with no cover on Thursday, only a two drink minimum per set, which did not seem to be enforced very aggressively. I could be persuaded to return, but I'll want to do a better job checking out who I'm going to hear.

I rarely go to the movies (Bourne was an exception) preferring to see them at home on cable or DVD. So I finally saw The Departed and I can certainly understand it winning all those awards, and finally a Best Director for Martin Scorsese. Scorsese seems to have an endless fascination with violence and organized crime, and I guess this has held him back with the Oscar voters. One would hope he will move onto other things for the balance of his career. Certainly all of the featured players gave excellent performances, but Scorsese should get credit for getting Martin Sheen to play it straight and true and for avoiding an overacting contest between the two young stars, Damon and DeCaprio, both of whom pulled off the difficult task of playing infiltrators, and making the natural contradictions involved believable. Maybe it actually helped them keep their perspective playing opposite Jack Nicholson whose over-the -top character allowed him to chew up the scenery in another of his truly memorable roles.

I still think Scorsese has never topped Taxi Driver, and I loved Casino, while Raging Bull has its advocates, but this one was in the same category.
If anyone is quoted as often as Yogi Berra, and had as many genuinely funny lines, it was Winston Churchill. One of his more serious comments, though, followed the famous appeasement conference when Chamberlain and his French counterpart delivered Czechoslovakia to Hitler. The Prime Minister, Churchill famously observed, had been forced to choose between war and dishonor. He had chosen dishonor but would also have war. He was right of course, and this elegant evaluation of the failure of appeasement as a policy should be remembered by all those who lack the stomach for taking on the Islamo-fascists of our era.
Count me as one of those shareholders who really doesn't feel my companies need "help" from these activist investors looking for companies to change tactics and strategies to "increase shareholder value." For example Barington Companies Equity partners has been harassing Lancaster Colony's (LANC) management about selling certain of its under performing businesses. I bought LANC because it is one of those conglomerates I like that feature slow, steady growth, and consistent if unspectacular financial performance. Barington owns about 5.33% of LANC, an important position, but certainly far from controlling. To Barington's partners, I make the following simple request: if you don't like management or the company's businesses, sell your position. Your distractions are not helping, and most of the shareholders like the way the Company is constituted now.


On Wednesday, I bought 800 more shares for FSI International (FSII), continuing to average down in the face of all reason and logic. Now I have to pack for Richmond and three nights, all expenses paid so I can attend a Corporate seance.

Tuesday, September 11, 2007


Don't give up on our troops and the surge

It was with good reason that the Founding Fathers determined that once Congress declared war or authorized the President to conduct military operations, it is the Executive branch that prosecutes the war (with the President as Commander in Chief) and conducts foreign policy. Can you imagine if the Congress had some executive role? With the likes of Murtha, Pelosi, Dodd and the hideous Senate Majority Leader Reid in charge, how could we ever expect to have any credibility in the world? Frankly, it doesn't help that Republicans Hegel and Warner (both retiring) have gone wobbly, and that the Bush people emphasize the withdrawal timetable (without committing to it) to appease the left (it won't). Better to emphasize the major point of General Petraeus's report (as WSJ and redwavemusings readers have been reading for weeks or more) that the surge has been working, that it should not be unwound on any timetable but rather based on its success level, and that even the Sunni insurgents have now joined us in fighting al Queda, whom they now recognize to be the worst of evils. If Congress was responsible, they would simply be supportive - that's the way to support the troops. They are undermining them now, and I would not hesitate to use the "T" word to characterize certain members and their supporters such as Moveon. Sorry, that's pretty blunt, but the truth hurts.

If we turn Iraq into another Vietnam, snatching defeat from the jaws of victory, the USA might as well turn into another France, and just cower in an isolationist corner from now on. We will have no compelling role in what Norman Podhoretz in his brilliant WSJ op ed piece today called World War IV (the Cold War being number III). This is not about whether you love or hate the President, it's not even about whether the move into Iraq was correct strategy or not in the anti-terrorist war, it's about the fact that our men are there now, they have drawn al Queda to the battleground in large numbers, and the opportunity is there to deal the Islamo-fascists a great defeat. Turning tail, as the D's would have us do, just doesn't make sense now that the battle has turned our way.

Of course, one of the disconnects here has been that shortly after the shock of 9/11/2001 wore off, and seeing how that issue made the President more popular, the D's determined there was no real war against terror after all. They decided terrorists should be prosecuted as if they had disturbed the peace or committed some routine felony that our courts should dispose of, after giving them all the rights of U.S. citizens. One can only hope they watched the reruns today of that horrible day and rethought those positions, but of course, that's impossible, it's all about power and winning back the White House.

The two senators who had it right from the beginning were McCain and Lieberman (now an outcast in his own party) and they still have it right. They knew Iraq was the right move, but correctly questioned and criticized the Bush administration concerning the size of the troop commitment. Here are excerpts from the recent op ed they wrote in my favorite newspaper. Regarding the report by General Petraeus, they wrote "We hope that opponents of the war in Congress will listen carefully to the evidence that the U.S. military is at last making real and significant progress in its offensive against al Queda in Iraq.

"As facts on the ground in Iraq have improved, some critics of the war have changed their stance. Congressman Baird, who voted against the invasion, wrote after returning from Baghdad: 'The people, strategies, and facts on the ground...justify changing our position on what should be done."

" while critics are right that improved security has not translated into sufficient political progress at the national level, the increased presence of our soldiers is having a seismic effect at the local level. Thanks to the changed security calculus, the Sunni Arab community - which was largely synonymous with the insurgency a year ago - has been turning against al Queda from the bottom up, and beginning to negotiate an accommodation with the emerging political order. Sustaining this political shift depends on staying (on) the offensive against al Queda - which in turn depends on not stripping Gen. Petraeus of the manpower he and his commanders say they need.

"The Bush administration clung for too long to a flawed strategy in this war, despite growing evidence of its failure. Now advocates of withdrawal risk making the exact same mistake by refusing to re-examine their own conviction that Gen. Petraeus's strategy cannot succeed and that the war is "lost," despite rising evidence to the contrary. The Bush administration finally had the courage to change course this year. After hearing from Gen. Petraeus today, we hope congressional opponents of the war will do the same."

It only took one week of the regular season to remind me why I am not much of a football fan. Both the Jets and Giants looked awful, and they are both banged up with key injuries after only one game. And I am already bored.

On September 5, I bought 100 shares of Avistar (AVSR) at 1.20 and the next day, bought another 1600 shares for 1.31. Obviously this was a "0 buy" and a bungled execution, thanks to starting off with a limit order (wouldn't you think I would know better?) so an explanation is in order. The idea was that when buying 1700 shares, a few cents difference in price would matter, but naturally, hardly anything executed Wednesday at the limit price. So after the order expired (and another commission became inevitable), I put the rest in at market and got the high price I deserved. Just to make the experience perfect, the stock traded as low as 1.15 today. I guess I should be forced to write on the blackboard 100 times, "I will use market orders." Yesterday, I bought 100 shares of Manpower (MAN) at the depressed price of 63.96. This price is discounting the possibility of recession and its impact on employment, even temps. I am not sure we are going into recession (though I acknowledge the possibility) and even if we do, it's questionable that Manpower's business will really be hurt as much as people think.

Tuesday, September 04, 2007


Max Roach; TV Golf; Funny Political Bedfellows

When Max Roach passed away a couple of weeks ago, Jazz lost perhaps the last of its founding generation of superstars. It was Roach who was the drummer of choice for the Bebop bands of the forties and fifties. He was in The Quintet that played Massie Hall (with Parker, Gillespie, Mingus and Powell), and the CD of that concert should be in every jazz collection. Then, he created history as a co-leader with Clifford Brown of a band that was destined to be the greatest in jazz history until the auto accident that ended Brownie's life in his early 20's. I'm not sure Roach ever fully got over the loss of his macro talented partner, but he went on to build a career as perhaps the greatest drummer ever (#1 on the redwavemusings list), and to make his artistic and spoken statements that profoundly impacted the civil rights movement. He worked until a few years ago when Alzheimer's disease made that impossible. Max Roach was a truly great artist and a very important American.

This was not just a beautiful Labor weekend to be out at the beach or the golf course, it was also a pretty good sports weekend, especially now that the Mets are back to playing well, tennis is in full flower at the Open, college football games count (too bad for Michigan), and we had one of the truly great golf telecasts with Tiger Woods and Phil Mickelson trading bombs like two heavyweights, supported by a cast of outstanding, if more anonymous, contenders. This time, Phat Phil won out, but not before giving his fans the usual indigestion in the form of a double bogie that sliced his lead in half, just as Tiger started to do his thing. When they got to the Par 3 16th and both made spectacular birdies, NBC's blunt spoken commentator, Johnny Miller, was moved to exclaim, "if you don't like this and it doesn't get you excited, switch to the tennis!" There was no chance of that, of course, certainly not on my tube. Then Phil capped it off with yet another magical up and in for birdie on 18. Great stuff.
If the music world faced its sorrow at losing another of its giants, and sports provided the drama, politics, as it often does, provided the comedy. The Republicans in high dudgeon, all but excommunicated poor Senator Craig for the crime of ...whatever it was he may have been up to in the bathroom at the airport in Minneapolis, when unfortunately the object of his interest turned out to be an undercover cop. I guess I agree he has to go, if only because it appears he might be too stupid to be a Senator. Then there was the amazing revelation that one of Senator Clinton's big fundraisers turned out to be wanted for some old theft, though one has to believe that his fundraising tactics couldn't quite be on the up-and-up either given the incomes and assets of those contributing low four figure amounts to various Democrats and Hillary in particular. Hillary graciously gave the money that Mr. Hsu donated to charity, but not the money that he raised. So she keeps the bulk of the money and that still leaves her at risk for the next shoe to drop, but somehow these fundraising snafu's never quite stick to the Clinton's.

We've also got Senator Thompson trying to revive his campaign on the Republican side, the only Presidential try in history to peak before it even officially started.

Finally, we have the NY Governor and the Senate Majority Leader continuing their Hatfield McCoy feud while nothing gets done and the Assembly Speaker waits for them both to self destruct, when he and Attorney General Cuomo expect to pick up all the pieces.

While all this was going on, the all but forgotten lame duck President Bush decided to pay a surprise call on Iraq, since no hurricanes threatened the US mainland. It was also a chance to demonstrate that the troop surge is working, no surprise to WSJ or redwavemusings readers who have heard about our progress there for months. Apparently it was news to Democrats, who while grudgingly admitting progress, continued to make the "essential" point that such progress in no way justifies the original decision to start the war in the first place (which most voted for at the time).

GIven all this hilarity, wouldn't you think someone could write a decent sitcom anymore?


So anyway, you still have to keep making investment decisions, even as the summer wanes. On Wednesday, I bravely bought 100 shares of Centex (CTX), homebuilder best of breed, at 28.38. Today, I sold 100 shares of Kaydon (KDN) at 50.91 on the opening, a decision I made last night, and stubbornly refused to change in the face of a pre-opening downgrade this morning. The shares were purchased 9/21/01 for 20.25.

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