Tuesday, July 31, 2007
Political Comedians
| The market slump last week, which resumed today, has both fundamental and technical underpinnings. Caution is required, and the formula we have revealed in recent posts, was designed around a cautious outlook, by maintaining a large cash position, making most buy decisions based on balance sheet strength, and steadily taking profits as they come. Nonetheless, one should not be complacent, since in a bear market, the only defense would be to sell everything. Hardly anyone does this before it is already obvious that you are in a bear market - too late. So my investment decisions will continue to be guided by my formula discipline, and the hope that I will fare as well or better than in the 2000 market break. Of course, this could still prove to be a "correction," and not the end of the bull market. ------------------------------------------------------------------------------------------------------------------------- Politics would be hilarious if there were no serious consequences, and sometimes you just have to sit back and let yourself be entertained. So the internecine war of words between Dems Hillary and Obama has a lot of us in stitches, particularly since many feel that they will ultimately share the ticket. All the fuss is over a hypothetical debating point about whether and when you "negotiate" with dictators. It's also great to hear commentators quote the wisdom of JFK, as if that answers the question for all time. You will recall that in one of his frequent oratorical catch phrases, Kennedy responded to questions about his cold war tactics by saying "We will never negotiate out of fear, but we will never fear to negotiate." Nothing like a non-answer that sounds definitive. Hillary and Obama need to work on that, I think. Then there is the circus playing out in NY politics, where somehow, the arrogance of the new Democratic governor's staff, in using state police "information" to try to smear Republican Senate majority leader Bruno, was outed by the new Democratic Attorney General of all people, Andrew Cuomo. Of course, Cuomo wants to be Governor someday, so what's the problem in embarrassing Governor Spitzer, who naturally claims all this was dreamed up by his staff without his knowledge. This, of course, registers about the same score on the believability meter as President Bush does when he says that the firing of the US Attorneys was all Attorney General Gonzales' idea, but he's still a great guy who should keep his job. That whole carnival has led to the Dems calling for yet another Special Prosecutor, with an endless budget and a seemingly unlimited agenda. I'm not sure what that's going to accomplish with the Administration moving into the later stages of lame duck status. So it all reeks of the same plot lines as the World Wrestling Federation, but without the good humor. ---------------------------------------------------------------------------------------------------------------- Perhaps the only thing more embarrassing was Senator Russ Feingold's appearance on the Fox Sunday morning news show. OK, I'll give him props for going on the show in the first place, where he figured to have a tough interview, but his tired and hysterical ravings about the alleged offenses of the Bush Administration were ample demonstration for why he lacks much of any credibility on any topic I can think of. ------------------------------------------------------------------------------------------------------------------- We'll get to Investments, Part V soon, and also go to work on analyzing candidate Guiliani's health care solution, but for now, we'll simply report that I bought 200 shares of Harleysville National Bank (HNBC) on Thursday for 14.08. Then on Monday, I bought 500 shares of Hauppage Digital (HAUP) for 4.96. My history with HAUP is an interesting illustration of the formula as its price has gone down and up over the years. Early in the year, I was selling shares in the $8 range and for as much as $8.95 last February. With the recent fall in price, HAUP was a "value buy" this week. |
Tuesday, July 24, 2007
Investing - Part 4
| On June 23, 1992, I called my broker and put in a buy order for 200 shares of a company he had never heard of, Dell Computer. The order was executed at a price of $15.75. I had read about Dell in Forbes Magazine, an article that described its then unique approach to selling personal computers direct to consumers. The idea of a cheaper clone of an IBM computer, that could be shipped back for repairs if necessary, made a lot of sense to me. I also thought that the approach would work with corporate buyers as well. Pretty soon I changed employers, and was now in a position to influence the purchase of computers for our company. Though our orders would be small, I was concerned that there was an inherent conflict between my small investment and my job responsibility. Besides, I knew it would be best for my company to make its purchases from Dell and wanted to make that recommendation. Since the stock was up anyway, it seemed that I should sell and remove any taint of conflict. On August 11, 1992, I sold the 200 shares for 22.50, making about a 35% gain net of commissions in the month and a half I owned the stock. I then felt at ease introducing my company to Dell, and within a couple of years, Dells were springing up throughout the Enterprise, but by then, we were hardly unique in that regard. Since Dell was off the buy list, because of the conflict, I never looked back until some years later, when I realized that a small fortune had gotten away that August. The stock split 2 for 1 six times between October 1995 and March 1999. At its peak in 2000, the stock traded for nearly $60 POST SPLITS! So if I had kept my 200 shares, which would have been 12,800 shares after 6 splits, my initial $3,150 investment would have grown to about $750,000. Putting aside any other reasons for selling, I realized that I had to do something about the sell decision. I remember being pretty smug about that not insignificant short term gain I made at the time. I think my broker's comment was that "no one ever went broke taking a profit." Thanks, coach. Even if I hadn't sold then, is there any reason to believe I would have kept even a few shares for the bulk of that joyous ride that went on for almost 8 years? And if I had, would I have been able to act once the market broke in 2000? I didn't really think so, looking at things objectively and knowing the emotions I go through on every sell decision. When the 2000 market break hit, most of my portfolio took the same brutal beating everyone else's did, but I was very lucky since the bulk of my assets were in my former company which was taken over in 1998 at a favorable price, and I had kept a lot of cash going into the market top. Another buyout or two got me through the market break with gains overall, but I realized a few things that I wanted to change: I needed both a buy discipline and a sell discipline, but especially the latter; I had to take the emotion out of my trading decisions. I needed to pay attention to the risk in the portfolio; diversification was not enough. I had to force myself to buy some stocks with sound balance sheets to go along with the growth issues I had bought during the tech run-up. I needed to unwind all my option positions, and stop all option transactions, both hedges and speculative bets. I needed to figure out a way to keep the portfolio changing while still emphasizing a long-term strategy. That meant more frequent but smaller transactions and required the use of a discount broker. I needed to incorporate my newly found appreciation for carrying a cash balance as the ultimate hedge against down markets. So the formula was born and evolved to meet these objectives. In short, it is a mechanical black box that allows for my stock selection ability to come to the fore while recognizing my inherent weaknesses as a trader. Most of all it is logical in its formulation to meet the above objectives while driving a tendency to buy low and sell high, which is the goal of every investor. You can review it to see how it meets these objectives by going back to part 3 of this series. As in most exercises, serendipity plays a big part in the success or failure we achieve, more than most of us care to admit about our successes. There are so many tales analogous to the Dell story I could relate that illustrate good trades and bad, good fortune and bad, and perhaps in some other post, I might include one or two. I'd rather discuss them in person over a vodka martini. These stories are not unlike the "big fish that got away" or the "time I made a hole-in- one," etc. Usually dull for everyone but the narrator. One more thing about serendipity - we all know that Branch Rickey famously said "Luck is the residue of design." So the final goal of the formula is to put luck in my corner more often than not. We are getting a good test this week, but over my investing years, I would say luck has been more favorable than not. There will be one more post in this series where I answer readers questions already received and try to anticipate others that readers may have. Then it will be back to more important things: politics, international conspiracies, popular culture, martinis, education, health insurance, wine, sports, golf, poker and oh yes, did I say martinis? ------------------------------------------------------------------------------------------------------------- Today, I bought 700 shares of Sirius Satellite Radio (SIRI) for 3.19, clearly a "0 buy" as the smallest position in the portfolio (before today). Before anyone even gets to send me an e-mail to ask how this dog can possibly still be on the buy/hold list, the answer is that it will be as long as Mel is in charge, and I do think the merger with XM will be approved, removing the cost pressure because of the current competition for talent. Remember, redwavemusings is not an investment advisor, neither is its author, and you should not assume that the securities mentioned here would be suitable for you (or anyone else, for that matter). |
Sunday, July 22, 2007
Pleasant Summer Days' Musings
| Sorry, but the next investment post will require some preparation, since I'll be relating the DELL tale and other stories, as well as answering readers' questions on "the formula" pouring in via e-mail. So this time we'll talk about the usual investments and pop culture, a welcome break for those readers not particularly oriented to the world of finance. In that regard, I must convey my admiration for Ms Rowling of Harry Potter fame. Not only has she sustained the interest of the world's readers (of all ages) through seven fairly long novels of fantasy, she has managed to engage even those like me who have not read her books in the outcome of this fantasy. The early reviews of the finale in the series are about enough to make me wonder if I shouldn't do a fast catch - up. Anyway, she has ended the series on an appropriately high note and I suspect the world will hear much more from her in the future. ------------------------------------------------------------------------------------------------------------- Today being one of those too few, yet wonderful days on the Eastern Seaboard when it was warm and dry, but not hot, I got to sit outside for a few late afternoon, early evening hours with the stereo blaring and vodka martinis and newspapers at the ready. (Yes, I missed a wonderful come-from-behind Mets win - who'd a thunk it?) One of the albums I ran through (again) was my Louis Prima collection, sort of getting me in the mood for this coming week's Feast of St. Rocco. It reminded me again, amidst the fun of the wild and crazy Prima Vegas nonsense, of the great talent of his one-time spouse, the still working Keely Smith. She just had this pure tone, always in tune and swinging, despite her deadpan personna which was part of the act, of course. What a shame to have been too young to have seen them work together in person. -------------------------------------------------------------------------------------------------------------------- |
Nice story in the weekend Journal about Elizabeth Edwards on the campaign trail despite her critical illness. Too bad the liberal media seems incapable of producing anything similarly sympathetic concerning someone attached to a Republican campaign. Sorry. Just my paranoia showing, I guess.
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Hillary is taking a beating for almost everything she says, and for everything she doesn't say about Iraq, and most of the criticism is coming from her left. Of course, it makes you wonder who those folks want to see as their nominee. For all the talk about the assumption that the Dems will take over the White House in 2008, can you think of anyone in that party other than Hillary who could expect to beat any of the three leading GOP candidates (or even Fred Thompson)? Other than the dark horse I have continually promoted, Bill Richardson, I don't think either Obama, Edwards or any of the other minor candidates would be a favorite in the general election. Hillary, borrowing from Bill's playbook (which she probably wrote), defies the conventional wisdom by refusing to move left for the primaries, keeping her eye on the general election, assuming she will be the nominee. This is her only path to victory and she understands that. She also understands that some credibility on the war will be a requirement for the next President. This is a woman who should never be under estimated.
So in the end, the Moveon.org crowd will still fall in line behind Hillary, and she knows it. If there are enough upsets in the primaries to allow Richardson to emerge as a compromise candidate, you might be able to criticise Hillary's strategy. Otherwise, it's her nomination to lose and she is doing the right thing to position herself in the middle to give herself the best chance in the general. If she is the nominee, I predict another election night cliffhanger vs Guiliani.
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The market had its ups and downs last week, but the formula did its normal thing. On Thursday, I bought 200 more shares of Peoples United Financial (PBCT) for my IRA at 17.51. Then on Friday, I sold 100 shares of Shaw Group (SGR) at 60.02. It was just a month ago I sold 100 at 45 and change so this stock has really been moving. This is why the formula was set up to sell in increments ( just like we buy in increments). I thought I got a great price in June, but you just don't know what's going to happen next, and if you think you do, you are kidding yourself. What I do know is that we bought this stock for 10.90 on 9/13/04, and we'll take a 450% gain in 3 years every time.
Tuesday, July 17, 2007
Cortland, NY; Investments Part III
Thursday, July 12, 2007
Investing, Part 2
| Before we go back to the stocks, a few quick words on Iraq. It was an eventful day because the first report card on the surge was released and it accurately portrayed a mixed picture of some progress amidst continuing carnage caused by suicide bombs, IED's and, a steady flow of weapons and fighters from Iran, Syria and Al Queda. Naturally the media played up the negative. The House Democrats, responding to their base and, in particular, the Moveon.org crowd, quickly passed a resolution to bring the troops home on deadline on a narrow party line vote (only 4 GOP defections and 10 Democratic defections). Of course, this bill is probably headed for defeat in the Senate, since there are not enough GOP defectors to give the Dems the 60 votes they need (with Johnson out sick and Lieberman voting nay, the Dems have at most 49 of their own votes). Even if it passed, the Dems could not override the President's veto in either house, so this is merely a political show to soothe the base. What it does do is create four very negative impacts: it undercuts and dispirits the troops and our military leadership; it causes our Iraqi partners to doubt our commitment; it provides hope and comfort to the enemies; and it encourages terrorism by showing weakness and division. Sorry to be so blunt, but these are votes that will surely come back to haunt all of those who have reduced this war to a political football. It also reflects the lack of intestinal fortitude in the American people, particularly the Baby Boom generation, a point that has been made here many times before. The current aggressive strategy needs more time as the surge, such as it is, has only been fully in place for less than two months. And, as Senator McCain and others have pointed out, the correct response would be to add 60,000 more troops, not bring home in defeat the ones already there. --------------------------------------------------------------------------------------------------- Now it's back to my stock picking strategy. As stated in the last post, I am always on the lookout for interesting companies, finding them in my reading, but also in the course of everyday life, as I see products and services that are best in class and represent profitable opportunities. Though I do not believe in stock tips relative to short term special situations, I am willing to listen to advice from people I respect or who are in position to know a company from the inside. These experts might be speakers at a meeting, they might be columnists like Ken Fisher in Forbes, or my full service broker. Yes, I do have one though he understands that I will make very few trades with him. However, when he recommends a stock to me, if I act on it in a taxable account, he gets the order. He knows his main role is to consolidate our joint account holdings and handle the consolidated account if something happens to me. Otherwise, he knows most of my trades will be with the discount broker, and he understands that makes sense since I make all my own decisions. When I find a company, that, as Cramer says, is only the beginning of the process. I need to learn more about it, its management, strategy and financials. Also, you can glean a lot about a company by finding the answers to a few simple questions. Is the company overcompensating its top executives? What are the recent insider trades, buys or sells? If they are sells, are they at least option related? Is the Company over leveraged (too much debt)? Who are the independent Board members? Does it look like they are management cronies or do they have the ability to look out for shareholders? How does the company treat shareholders? Does it pay a dividend and what is the history of that dividend (annual increases are best)? All of this information can be easily obtained from Yahoo Finance or from a number of other services (such as my discount broker, E Trade). I don't pay a lot of attention to the earnings statement or P/E ratios. My feeling about earnings is that they are frequently managed and always variable. I like Fisher's price/sales ratio better as a valuation tool. I pay much more attention to the balance sheet than the income statement. You will see that the two most important valuation tools in my formula are the price to book value ratio and the debt to equity ratio. I want to buy stock that is actually worth something and that is not overly leveraged. However, the decision as to whether to put a stock on my buy/hold list is usually not impacted by the financials (unless they're gross). I have to believe in the company and its strategy. If I do, I assume the financials will improve, and that's when Wall Street will pay me off. So the buy/hold list is always changing, however slowly. Maybe 10 or so companies a year will be added and a similar number might come off, either through mergers, or because their strategy changes, or simply because I lose confidence and belief in what they're doing. The common theme is that the reason I put them on the list is no longer operative. And sometimes, I just get annoyed like anyone else. There was an insurance holding company I had on my list many years ago, but when they stone - walled it when questioned about past race based underwriting practices that resulted in price discrimination, I decided that that was a company that I could no longer invest in, in good conscience. They were very profitable, treated shareholders well, and had a great business outlook, but their core values, as I perceived them, didn't cut it for me. So it was off the list, even though I knew I was cutting loose a very profitable company. If I remove a company, I sell my whole position and never look back. The symbol comes off my Yahoo portfolio list. As for the new companies, the actual buy decision comes out of the formula, which you finally get to see on the next post (another "cliff dweller" as former Mets manager Wes Westrum used to call them). If all this sounds like it takes too much time or effort, or if it's not fun for you, well I would direct you to the nearest index fund manager who will be happy to take your money and provide near market returns every year with pretty low expenses. You would have done just fine today, believe me. Individual stock accounts are only for people who enjoy that kind of thing. Life is too short to waste on avocations you don't love. Question from a loyal musingsreader: "Please define what you mean by a long term and a short term investor. " Long term investors buy stocks with the idea that they are likely to hold them for two or more years, and are willing to be patient waiting for their stocks to move. Short term investors buy a stock hoping to see some movement within weeks, pick off a few points, sell, and maybe wait for it to go down and then buy it again. Short term stock players really have a trading mentality. They buy special situations and they get bored if nothing happens to their stock within a month or so. In that case, they are likely to sell and look for something else that might move more quickly. I'm not talking about day traders - but their mentality is not that different. I have always perceived of myself as a long term investor, willing to see a stock lay there (like a latke, as my very first broker used to say) or even go down, before being rewarded. Long term investors really hate to pay taxes, and especially short term capital gains taxes. The only thing they hate more is losses, and if they have a common fault, it's that they will sit with a losing position forever, waiting to get even or ahead. Though I was always fairly lucky with stocks, I made mistakes like everyone else and tried to learn from them. There were three factors that caused me to realize that I needed a formula to take the emotion out of my decisions. One, I always had trouble with the sell decision. For most investors, it is much harder than the buy decision. Second, the market break in 2000-2002 convinced me that when stocks were overvalued, I needed to be directed toward higher quality stocks with healthier book values and less leverage. Third, was my analysis of what I call my Dell Computer episode. We'll start with the Dell story next time. The oldest Wall St. adage of all is to buy low and sell high. Of course, that is not very helpful advice. In one way or another, we're all trying to do that but it's very difficult. My formula is designed to result in a tendency to buy lower and sell higher. It works for me, but is not recommended for anyone else. Musingsreaders may find it helpful in designing the investment plan that works for them. ----------------------------------------------------------------------------------------------------------------- Yesterday, I bought 700 shares of FSII at 3.10, continuing what may well prove to be an unhappy average down. But I don't question the formula at this point. It may need tweaking in the future, but for now, it works for me just as it is. After the miserable Tuesday we had, were you in the mood to buy an underperforming small stock on Wednesday's opening? That's what my formula directed me to do. FSII closed today at 3.16 so no damage done yet. |
Tuesday, July 10, 2007
Piping off Tony Blair; Investing part 1
| Before revealing more about my investing tactics, I wanted to note the final Prime Minister's Question time for Tony Blair, the week before last, and last week's first for Gordon Brown. By the way, you can see Prime Minister's Question Time at the crack of dawn on Wednesday mornings on C-SPAN, but it makes more sense to watch the rebroadcast Sunday night at 9 or 12 midnight. The sendoff for Mr. Blair was quite impressive as the members of all the parties rose above their political differences to honor him, culminating with a standing ovation. Mr. Blair moves on, as we had hoped, to take on the role representing the Group of Four to try to complete the unenviable task of negotiating peace between the Israeli's and Palestinians. As expected, Mr. Brown's first session was much less entertaining than Tony's typical 40 minutes, and one wonders whether Question Time can possibly maintain its popularity in the face of his droning monotonal responses. However, what he lacks in charisma, he might make up for in competence. We'll see. ------------------------------------------------------------------------------------------------------------- So the time has come to explain how it is I come to buy and sell decisions, and in the face of all logic, performed as well investing in individual stocks as many do in mutual funds. First, let's start with the mandatory disclaimer. My selections, tactics and strategies do not constitute investment advice as I am not an advisor, and they may not be suitable for anyone else (or even for me). Now with that out of the way, let's stipulate that if you are going to invest in financial assets, the first thing you have to consider is what mode of investing is going to make you comfortable. This is not a hobby you want to stress about. Quite the opposite, you are seeking financial security and peace of mind. That is why for most people, who have neither the time, inclination or temperament to do their own investing, professional money management through mutual funds is the right answer. However, those folks should understand they are going to pay for this service. The cheapest stock picking mutual funds will run up at least 1-2% of your assets as annual expenses. Index funds are a little cheaper, but you will not outperform the index. Variable annuities are even more expensive, since the mortality costs charged by the insurer represent an extra layer of expense. Personally, if I was a fund investor, I wouldn't be happy to buck a 2.5% or 3% annual expense nut. The grossest expense nut of all is in the hedge funds that charge 2% of assets PLUS 20% of profits. A lot of rich people have gravitated to hedge funds on the basis of out sized returns, but no one can buck that level of expenses for very long. Believe me, hedge fund investors have no chance in the long run. Think of what an expense formula like that motivates a hedge fund manager to do. Rather than actually hedge, it is in the manager's interest to follow the most aggressive strategy possible. If it works out, he's a hero, collects the extra 20% of profits, and tries (against all odds) to repeat next year. If he busts, he still has the 2%, and then he can close the fund and start all over again with a new strategy. As they say on the Street, the pigs get slaughtered, and that's what is going to happen to hedge fund investors. So I have never been a fan of fund investing. Besides the expenses, there are other downsides to fund investing. You can't be sure that the strategy that is advertised will actually be followed or that the fund manager will stay in place. Worse, you are going to be stuck with the tax effects of the transactions that the fund manager executes. He is not going to consult with you about taking gains, or whether you need tax losses. So funds are for those who are not really interested in investing and are willing to pay the price for someone to take that burden off them. What makes it possible in this day and age to pick your own stocks is discount brokers. There is no way you can pay 75 cents to a dollar per share per round trip to trade stocks with a full service broker. Unless you buy and hold forever, your expense nut will be similar to that of fund holders. But with a discount broker, you can hold your transaction costs to about $10 per transaction. That means you can properly diversify, which is important. Forget Jim Cramer's theory that you can be properly diversified with as few as 5 stocks. You need a minimum of twenty. I own about 60, effectively managing my own fund. That would not be practical if I didn't use a discount broker. And when I reveal my formula, you will see it would not be practical to execute the trades it requires except with a discount broker. But working with a discount broker means you will make your own decisions, as I do. That means time. The time consists of reading, reviewing your portfolio frequently, and making your trades. So you'd better be interested in this hobby. Again, Cramer says you need an hour per week per stock you own, so that's a minimum of five hours. I don't think you need to spend an hour per week per stock, but I guarantee that I spend more than 10 hours a week to maintain my portfolio of 60 or so stocks. Most of that time consists of reading. What do I read? The WSJ as you know, Forbes, Barrons (quickly) and that's pretty much enough. I also look at CNBC in the morning before the market opens, and I'll watch some of Cramer. What really saves time though is the Internet. I use Yahoo Finance, and it is fabulous in terms of keeping track of portfolios, researching and analyzing stocks, and picking up news updates on your stocks and the economy, all for free. I probably check Yahoo Finance at least three times per trading day (it only takes a few minutes to see what's moving if anything) and use it to help determine my trades. I also get great on line information from my discount broker, E-Trade. Though I am not a subscriber, I would also recommend WSJ.com. We'll go into trading strategies in the next post (sorry for the cliffhanger) but here's a word about what makes my buy list. Historically, most of the stocks I have owned have come from my Forbes reading. I want to feel good about a company's management and culture and get an inkling into their core values. You don't get that very often from any article, but when I do, I will investigate that company further on Yahoo. Then I'll decide whether to put it on my buy list. When I actually buy is determined by the formula that you'll get next time. If something happens, and I don't trust the company's management anymore, or if the company changes strategy and the reasons I put it on the buy list no longer exist, then I'll take it off the list and sell my whole position. I have done that with Tyco International, Saks, Torchmark, BP and others. By the way, the company or stock may still do very well after I sell it, but if I am no longer comfortable, it's gone. In fact, that's really my philosophy about investing - do what makes you comfortable. I know a bunch of people who have done very well in the market. Usually it's because they understand the industries they invest in, they understand their limitations, and they work from there. Each one has a different system that works for them, but would be foreign matter in my hands, just as my system probably would not work for them as well as their own. Why do I own the stocks I own? Pfizer, Schlumberger, Devon Energy, Barnes Group, Standex, Kaydon and many others came from Forbes. Newmont Gold came about because I think we might be beginning a secular bull market in gold, and I wanted to replace the stock I had, which was all hype and little production, with the best of breed. Conrad, Petroquest, Shaw, and a few others were on a recommended list from a Tulane Professor I heard, all companies from the Gulf area, and all companies he knew well. I took his list and invested in the companies with the best balance sheets. It has been a home run. In short, each stock I own has a rationale and a story. I like conglomerates so in addition to the ones I already mentioned from Forbes, I have GE (best of breed) and I had Alco Standard, which was my original winner that got me started. Today, Alco is Ikon Office, and it's no longer a conglomerate. So it's not on my buy list. Next time, more about maintaining the list and the criteria for buys and sells. -------------------------------------------------------------------------------------------------------------- |
Last Thursday, I sold 200 more shares of Conrad (CNRD) for 13.00 that I had purchased back on 11/2/04 for 1.95. On Friday, I sold 100 shares of Lindsay Manufacturing (LNN - thank you Forbes) for 44.75 that were purchased for 29.71 (split adjusted) on 4/24/98, a long time to wait for 50% by the way. Today I bought 200 shares of Avistar (AVSR) at 1.36 and 1300 more for 1.37, nice execution by E Trade since I only was charged one commission.
Wednesday, July 04, 2007
Independence Day Edition
| It may seem pretty pathetic to be reduced to blogging on July 4, but the rain has moved into the Northeast, cancelling most of the music/fireworks celebrations and even chasing me from my nice backyard patio stereo speakers, so here I am at my computer with WKCR's Louis Armstrong "birthday" celebration playing in the background. Louis always said (and apparently believed) that he was born July 4, 1900 but the records show that he was, in fact, born August 4, 1901. Rather than resolve the ambiguity, WKCR plays "Pops" for 24 hours both on July 4 and August 4. You can hear it and their other fine programming all over the world streaming on the internet on WWW.WKCR.ORG. ------------------------------------------------------------------------------------------------------------------------------ The more I watch the candidacy of Rudy Guiliani, the more convinced I am that he would be both the most capable GOP candidate and its strongest choice in terms of the general election. The question with him has always been how he would do in the primaries, and the liberal media has played that to the hilt (especially reporting his declining GOP poll results without considering that he still does the best of all GOP candidates in head-to-head matchups with the leading Dem contenders). He is the last person the Dems want to run against, believe me. They would much rather take on a social conservative that would drive the independent swing vote into the Dems' camp. Anyway, Rudy's interview in the last WSJ weekend edition was a very clear exposition of his campaign points and his foreign policy views, and pretty convincing in its clarity of vision. Earlier in Rudy's career, I was not a fan at all. I thought he overreached as a US attorney in his Wall Street cases, and virtually all of the convictions he achieved were overturned on appeal. As Mayor of New York City, Rudy's record was outstanding, but he was a bit heavy handed, polarizing the City along racial lines. Before 9/11, Rudy's tenure as Mayor had outlived his popularity and he never could have been re-elected, nor would he have beaten Hillary Clinton for the Senate had he stayed in that race. His leadership during and after 9/11 restored his reputation and his popularity, especially outside of New York. |
2008 will be a difficult election for any Republican candidate, unless things are an awful lot better in Iraq and Afghanistan, or unless the terrorists remind those who have become complacent that they can still be dangerous by means of a successful attack. Let's hope the latter does not happen. If the former occurs, Rudy and McCain will be the beneficiaries, and either one could serve this country quite well and honorably as President.
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The end of the Supreme Court session included a decision concerning school assignments that has the mainstream media in a hysterical uproar, some (for example Newsday) bemoaning the result that Brown v Board of Education has been overturned. Of course this belies their typical approach to Court cases, which is to look at the result instead of actually reading the opinions to see what the Justices actually ruled and why. In fact, Brown was not nearly overturned; I would say it was affirmed. What Brown said was that school assignment could not be determined solely by race, or by factors that de facto were equivalent, and that separate but equal was not an excuse for doing so. In the case of Brown, that disqualified an assignment approach that resulted in racial segregation. In the current case, the Court also said that race should not be the determining factor (though it could be a factor). So the ruling is consistent with Brown. The difference is that this time, the method invalidated was one aimed at an arbitrary quota system (based on whites vs non-whites) aimed at more integration. So the media's quibble is with the result, even though the process is consistent with the Brown ruling.
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As predicted here several posts ago, once Scooter Libby lost his appeal, the President came through with an action to avoid having him spend any time in jail. However, the President used his commutation power rather than the pardon procedure, although a pardon could also be forthcoming later. The difference is really not that great, since in either case, the case's result is left in place. The President could not change that; only a successful appeal could remove Mr. Libby's felony conviction.
Unfortunately, the President's message accompanying the commutation fell well short of the mark. He emphasized the damage that Mr. Libby's conviction has caused to his career and reputation, in effect saying that the jail term was extraneous. Instead, President Bush should have pointed out that the perjury charge should never have been brought since Mr. Libby's misstatements (or lies, if that was what they were) were insignificant and immaterial to the investigation. The investigation was about who leaked Valerie Plame's CIA status. By the time Mr. Libby was interviewed, everyone knew who had leaked the information (Richard Armitage of the State Department) and there was no need to even continue the investigation. The question remains, why didn't the Special prosecutor bring a case against the leaker, instead of the alleged perjurer?
The answer is obvious, though you won't find it in the NY Times. The Special Prosecutor was on a political witch hunt, the object of which was to tie the Plame leak to the Administration and particularly Dick Cheney's office. The State Department was not an object of this investigation since they were never on board with Administration policy. So the facts never fit the aims of the special prosecutor and his cheerleaders in Congress and the media.
So, I am OK with commuting Libby's sentence, though it hardly makes him whole. I am not OK with the President's lame explanation, nor with the VP's silence on the subject. Most of the general public, especially those who lean Democratic, now believe that Libby and Cheney's office have gotten away with the leak and avoided jail time unfairly. In fact, the person who got away with the leak has never been charged, and that is one I can't understand.
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It's in the can! The Bourne Ultimatum, third in the action series starring Matt Damon is set to open August 3rd, and that will mark my return to the movie theatre for the first time since Howard Stern's Private Parts, an eon ago. Previous to that, was Ghost so most of my movie watching has been cable/tape/DVD for an awful long time. The Bourne Supremacy was one of those rare sequels that was actually better than a very good original so I've just got to see part 3.
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We should have noted last month the passing of former Yankee, Athletic and Brave 3rd baseman Clete Boyer, who was one of the best fielders at his position of his or any era and a very dangerous #8 hitter on the great Yankee teams of the early 1960's. As one who always rooted against the Yankees, I had a great appreciation for arguably the best defensive infield ever (Pepitone, Richardson, Kubek and Boyer). Clete would have been a perennial Gold Glove if Brooks Robinson wasn't winning all of them. He was also overshadowed by his older brother Ken, also a good fielder, and a much better hitter on some very good Cardinal teams. Ken's promising managerial career was cut short by his untimely passing. Clete finished his playing career in Japan, then coached in the majors and managed in the minor leagues.
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On Monday, I bought 700 shares of the beaten down FSII for 3.16, hoping for some averaging down magic again. Believe me, it's a long shot in this case. There was some good news last week, when Andrew Corp (ANDW) received a better takeover offer. The market continues to treat us very well in the face of some really serious concerns, and we'll take it.
At least one musings reader has requested a full exposition of the stock picking and trading system that I obliquely refer to from time to time (actually, I don't trade, but that's another story). So I am considering doing so, of course with all the proper disclaimers. So with that teaser, you're just going to have to keep returning here and pushing the visit meter inexorably toward 1000.
