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Tuesday, May 27, 2008


Post Memorial Day Musings

Believe it or not, Memorial Day started as a day of remembrance honoring those who served in the military and sacrificed for the country, not as a day for a bar-be-cue. I wonder how many gave any thought yesterday to the young men and women serving in Iraq, Afghanistan, Korea and elsewhere, protecting our freedoms and advancing our nation's legitimate interests. The military today, of course, does more than fight wars and patrol areas under threat. They also provide aid when calamity strikes our friends around the world, and help rebuild communities as they are doing in Iraq (and have done since the main fighting ended). Today, the military released the information that violence in Iraq in the last month had reached its lowest ebb since the war began. Probably won't see that on the network news, PBS, or hear it on NPR though. The last thing the liberal media wants you to know is that the surge suggested by Senator McCain has been wildly successful, and that the end of the fighting might be within sight. Still there is much to do in Iraq and, of course in Afghanistan. And let's keep in mind that although Al Queda has suffered major reversals in a number of theatres, it is far from finished.

Of course, an Obama victory will likely reverse much of this success. Are we that stupid? Well, if Jimmy Carter could be elected, anything's possible.


Joe Lieberman's recent WSJ op ed about Democrats And Our Enemies got a lot of notice in these parts. One wonders how long the nominally Independent Lieberman and the Dems can co-exist. At some point, perhaps in January, it will make sense for him to cross the aisle and become a Republican officially. Musings will certainly welcome him to the fold when that happens.


The liberal media loves the idea that Libertarian candidate Rob Barr might siphon votes in key states from McCain, and look for them to provide him plenty of free coverage to help him out. But if the race is close as I expect, there will be very few Republicans defecting to Barr. Conservatives hate to waste their votes.

I did vote for Harry Browne when he ran as a Libertarian in 1996 when it was clear that Bob Dole had no chance in NY (or most other places) against Bill Clinton. There was no chance my vote would matter. This race figures to be quite different.


Why do the Mets keep losing? A lot of folks around here have been pointing the finger at Willie Randolph, and the manager is always part of it. He sets the tone, and like any manager, the right combination of discipline and inspiration drives better performance. But there are lots of other reasons. Here's a partial list: Carlos Delgado has about had it, although he seems to have finally figured out that he will do better hitting it the other way at this stage of his career. Castillo is also shot - bad knees. His bat has no pop of course, at a time when there are a lot of strong hitters playing second base. Schneider looks to be a very mediocre catcher at best, both offensively and defensively. Both Reyes and Wright are playing below par - especially defensively. One wonders whether they are being pushed hard enough by Willie. Among the pitchers, Santana is getting by with depleted stuff - he is wearing down, if you ask me. The young pitchers have been wildly inconsistent. Overall, the Mets are not playing smart, alert baseball.

You don't win the games on paper, you win them on the field. There is so far no clear evidence that the Mets are one of the league's better teams. They could be, but everyone could be. Baseball is a young man's game - most players prime years are before 30. That's why the Marlins and Rays can suddenly emerge as contenders.


Any stock or commodity will have short term reversals on their way up or down, but I really think oil may have put in an important top at around $135. People are going to drive and fly less and China will be reeling from this earthquake for quite a while. I think oil has to come down because something important is happening to the demand side, and the search for substitutes is intensifying.


Last Wednesday, I bought 1000 shares of CardioDynamics for the IRA at 1.82. They proudly announced today that they were in compliance with NASDAQ rules requiring the stock to trade at 1 or higher, thanks to the 1-7 reverse split. I still think they should have gone 1 for 20 to get the price up to 5 where funds and institutions can consider it. Then today, I bought 200 shares of Quanta Services (PWR), a new name recommended by my full service broker. I bought it there for 29.20. We'll be buying again tomorrow, but then it's off to San Fran for a long business meeting (five nights) so that will mean a short hiatus for trading and blogging.

Tuesday, May 20, 2008


Musings On a Cool May

The global warming crowd should be made to explain another raw and wet spring in NY. Somehow, I got two rounds of golf in over the weekend, including a rare and young 78 on Saturday, but we still haven't broken out the short pants. And forget about early evenings out on the patio with my jazz music and a martini. Presumably, the warm weather will come from out of nowhere, skipping spring weather entirely. But for now...yecch. We spent Mother's Day on my cousin's patio, shivering, and the same for last Saturday at my in-law's Communion party.


It's not baseball weather, but for those of us who are mainly TV fans, and Mets fans, we certainly enjoyed the Mets breezing to two wins at hallowed Yankee Stadium over the weekend. For all the flak Willie Randolph is taking (exacerbated by his own paranoia), I wonder how much patience Yankee fans will have with Joe Girardi, whose injury plagued team is performing miserably. Maybe my friends who are Yankee fans will finally admit that Joe Torre was not part of the problem over there, if they really had a problem. Remember, in baseball, the playoffs are a lottery - it's getting to the playoffs that determines a team's success over the long season, and Joe got them there last year despite a team with lots of deficiencies.


I haven't watched a pro basketball game in its entirety in a long time, but have to admit I could not take my eyes off Celtics - Cavaliers Sunday, basically because of the unbelievable performances of Paul Pierce and especially Lebron James who just did EVERYTHING. He is that rare superstar player who exceeds the hype. I don't know if the Celts will have much left for Detroit after that series.

Speaking of living up to the hype, if you saw Big Brown turn on the jets in the home stretch to demolish the Preakness field, you had to be impressed. This may be a mediocre group of three year olds he is slaughtering, but he is so much the best, not that much different from the way Secretariat manhandled the Triple Crown races. If he is sound for the Belmont, it may be a walkover.


I think it's interesting that Al Gore is withholding his endorsement for either Obama or Clinton, and my presumption continues to be that he wants to leave open the possibility that a deadlocked convention will turn to him. Though the Obama people think it's a lock for them, I can't see it. Since when does the presumptive candidate get so badly beaten as Obama has in West Virginia and now Kentucky? The fact is that the super delegates are not bound to support the "popular vote winner" (whatever that is) or the "committed delegate leader" and in fact, the nomination may be in their hands. If enough stay uncommitted right to the convention, neither candidate will have a first ballot majority. That leaves open the possibility for the McCain nightmare, a race against someone else (presumably Gore).

My belief is that the Hillary candidacy is hopelessly compromised by her gaffes and her husband's arrogance, etc., etc. As for Obama, when it's him alone against McCain, the public will quickly tire of his meaningless platitudes and simple-minded "solutions" that are really non-solutions. Smart professionals among the Dems know that the strong possibility exists that Obama will turn into another Dukakis in the general election, and they sure don't want to relive that. Given the slightest excuse, they will look for a third option.


So Ted Kennedy has a serious illness and now he will be the beneficiary of the health system he has tried so hard to upend all these years, another of the world's classic ironies. If any system can prolong his life and keep him in a productive state, it is the health professionals in the United States. Of course, Mr. Kennedy will have no problem paying since he enjoys Congressional insurance and is a multi-millionaire. But the fact is that our hospitals and doctors provide services for people who can't pay every day, and though they may have more limited choices than the Senator, the care they receive is generally at a very high level.

Of course, for that, we can in part thank the Senator who has done more to preserve Great Society health care programs than anyone else. It's interesting that while JFK was a President, (and one with a burgeoning reputation as viewed by historians), and RFK almost certainly would have been President, the brother who could not be President (because of various scandals) arguably accomplished more than either during a blessedly long Senatorial career. It is because of his record and legacy, not his personal popularity or "charisma," that Americans of all political stripes today are sad to learn of the medical challenges he now faces.


On 5/12, I tried to buy a thousand shares of CardioDynamics (CDICD) with a limit order, which made sense in a lightly traded stock with a wide bid/ask. In fact, I was only able to obtain 300 for my IRA with that day order, at 2.00. This is the down side of limit orders, but the upside is that if it were a market order, it would have been executed at something like 2.20 or more. On Wednesday, I sold 100 shares of AXYS out of my IRA at 57.40 (purchased 5/1/06 at 16.80). On Friday, an extra trade because we have reached the next level of portfolio value (a level we haven't been able to hold for very long before), I bought another 6 shares of Alleghany Corp. (Y) for my IRA. Finally, yesterday, I sold 100 shares of Devon (DVN) for 121.70 (purchased 11/19/01 at 16.725 - split adjusted). We still have 200 shares left, and of course the stock has gone even higher since yesterday.

Sunday, May 11, 2008


The Maneater at Bethpage

I played Bethpage Black for the first time since before it was "fixed" by Rees Jones (The Open Doctor) - in fact well over 10 years since the last time. The course is beautiful, and in magnificent condition despite almost constant play, with very good teeing grounds, refurbished, though still intimidating bunkers, and good greens (not great - but you never went to the Black for the greens). NY state residents play for $60 green fees, and enjoy a US Open caliber course - perhaps the greatest value in golf.

There is but one problem - the lengthening of the course and the steepening of the bunkers, the thickening of the rough (though shorter than I recall it) has made the course all but unplayable for the average weekend player. In the old days, I would say the Black was suitable for players at about a 14 handicap or better. Now, I would say 10 or better to play, and 8 or better to enjoy. On all but one of the par 4's, even a good drive was not enough to put me in position to get home in regulation. The four par 3's are all playable (though 17 is an awful handful at a 190 yard carry uphill over bunkers) and the three Par 5's are too (with difficulty). But that leaves 10 excruciatingly difficult Par 4's (actually, the short second is still a handful since the second shot is straight uphill and well bunkered).

In addition to the difficulty is the little matter of traversing the hills and dales without benefit of an electric cart. Since caddies were in short supply on Mother's Day weekend, we made the mistake of pulling hand carts, a physically demanding way to play there. Better would have been to put eight clubs in a carry bag. Anyway the idea is that though it was great to see the changes in the course I loved as a younger golfer, it's no fun playing there now at my dubious skill level and age.

If the pros thought this place was difficult the last time with the soft fairways and long carries, it doesn't figure to be any easier next year when they return for the Open.


A column in the Wall St. Journal this week posited that the securitization business had bottomed out and perhaps the Capital Markets were beginning their recovery. Forget it. Yes, there are securitizations being done, but only the ones that were standard before the mortgage boom. No one is going to buy into any of those non-transparent situations again; even investors reaching for yield now know better. The Capital Markets promoters, of course, want us to believe otherwise, but this is a sign of their desperation. They are finished.

Now the accounting gurus have to figure out how to make the rules work for investors again. Taking securitized assets off the balance sheets of financial services companies and banks was a disaster. Same for mark-to-market. Look at the difficulty the Street is having trying to figure out where AIG stands. By now, a lot of the shoes have dropped, but probably not all. And our prediction that a significant number of hedge funds would go belly up in 2008 has already come true.

So what is an investor to do? I wish I knew, but all I can say is the musings trading and investing strategy is still working (see the archives for the description) and as long as it does, I will continue to follow it. But that's not to say that it's not scary times out there.


We may have $4 per gallon gasoline, skyrocketing utility and food bills, and higher health insurance premiums, deductibles and co-pays, but at least the NY music scene continues to bring joy. At Dizzy's Club Coca-Cola alone in May, we had the Joe Lovano nonet (ending tonight) and the Bill Charlap Trio coming in for 12 days starting May 20. In June, it's the legendary Lee Konitz and then Dr. Lonnie Smith. Around town this month, you can see drummers Lew Nash and Jimmy Cobb, pianists Don Friedman and Hank Jones, another legend, sax player Eric Alexander, etc. etc. There's no place like NY for jazz, that's for sure.

Also coming in June, the JVC jazz festival with so many great shows. These include Sergio Mendez at Carnegie Hall (June 21), Poncho Sanchez at Le Poisson Rouge (June 23), Al Green and Dianne Reeves at Carnegie Hall (June 27) just to name a few.


On Wednesday, I sold 100 shares of Petroquest (PQ) out of my IRA for 23.64. These were shares I bought on 1/19/05 for 5.00 so that was OK. Meanwhile, another of my holdings suffered a long overdue reverse split when Cardiodynamics (now CDICD) went 1for 7. Since that did not even get the price to $2, I think the company should have gone 1 for 10 or even 20, but maybe that would not have left enough shares outstanding. Let's see if the higher price attracts any more interest in this beleagured stock and company.

Monday, May 05, 2008


Olympics Musings

The Olympic torch relay has been a tense and tortuous process as protests against China's human rights record has followed it all along its path. One can expect more political sideshows right through the games, as was easily predictable when the Games were awarded to them, not to mention the Chinese understandably exploiting the games for propaganda purposes as Hitler and other hosts have done historically. It seems that no matter which individuals are in charge of the Games, the interests of the athletes come way down their list of priorities.

Frankly, this was more troubling when more of the athletes were true amateurs. As it is, I don't care. In fact, I have little to no interest in the Games, and doubt I will watch much of them in preference to baseball or simply doing the things I love to do.

When it was our amateurs against their professionals, the Games were of at least passing interest, since David seemed to beat Goliath a lot more often then you would expect (think of the 1960 and 1980 U.S. hockey teams). However, as was pointed out by the ill-fated Steve Prefontaine, our athletes could not really train and prepare properly as true amateurs. So now, except for a few obscure sports, there are no truly amateur Olympians.

So every two years, whether Winter or Summer Olympics, I resolve to watch as little as possible, and though I usually end up seeing more than I intend, the networks would have pretty lousy ratings if my behavior was the rule. After all, the Summer Olympics is basically a track and field meet alongside a swim meet and a gymnastics meet. I don't follow any of those sports the other three years, so why would I suddenly develop an interest just because it's an Olympic year?

As far as the protests are concerned, I think they are a waste of time. China will change its behavior only when it matures as an economically oriented, hopefully non-Communist country, and not as a result of the actions of any protesters. The protests simply give the Games a sense of importance that is totally overblown. Frankly, I don't care what leaders attend or boycott the opening ceremony either. How did that become a command performance for national leaders anyway?


With the elimination of the Rangers by the Penguins on Sunday, NY's playing arenas have been abandoned to the baseball teams, as again our hockey and basketball teams have crapped out early. This means that the interminable playoffs in those two sports that will drag on until June will barely be observed hereabouts except by dedicated gamblers. Of course, Boston is still alive in B-Ball and Philadelphia in hockey, but you wonder if the people running these sports will ever understand that their seasons are too long to maintain interest. Hockey in June just does not compute.


The Fed acted as I expected, though their statement lacked sufficient conviction concerning the need to strengthen the dollar. One piece of good news is that the Street seems to have figured it out and now reacts more positively to tightening indications than to inflating ones. Since Chairman Bernanke has evidenced a disturbing propensity to act in accordance with whatever Wall Street wants, maybe he will finally begin to stumble into the correct decisions for a while.


Last Wednesday, I bought 200 shares of I-Two Technologies (ITWO), a high flyer during the dot com days, but a big loser ever since. I had a nice score with it back in the dot com era, but am now under water on this round by more than I made. This was a zero buy, of course, at 10.65. Today, I bought 400 more shares of Limco Piedmont (LIMC) for my IRA at 5.37.

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