Thursday, May 27, 2010
Prosecutorial Overreach
Item: U.S. drops criminal cases against AIG executives. Not exactly a shock to this blogger. Most business disasters are not the result of fraud and criminal malfeasance, though some are. Most are the result of misjudgements, incompetence, or the inability to adjust to a rapidly changing business environment. However, when politicians see the opportunity to leverage business failure for their own benefit, many take actions that criminalize ordinary behavior, or stupidity. Stupidity in business is a problem but it's not illegal. The current generation of prosecutors, whether state attorneys general in the mold of Spitzer, Blumenthal and Cuomo, or the young guns who inhabit the local offices of federal prosecutors, have become a particularly offensive group. Interestingly if you review the records of the above named, and review Giuliani's record as a federal prosecutor, you will see a poor conviction rate and that many of those convictions they did obtain were overturned on appeal. The more "successful" tactic for the Spitzers and Cuomos of the world has been to obtain plea bargains. We wonder how many of those copping to pleas were actually innocent victims who had simply reached the bottom of their legal war chests.
The result of the AIG mess is that there have been no convictions, and that nothing has been proven against Mr. Greenberg or any of his officers. What a shame that Spitzer's vendetta against Greenberg led directly to the company's implosion.
Given these facts, we wonder why Mr. Blumenthal still leads in polls to succeed the also ethically challenged Senator Dodd. You would think that the revelations about Blumenthal's non-service in Vietnam would have confirmed what Nutmeg State voters should already know about his character flaws. Well there's still time. Maybe the opportunity to dispatch him to D.C. is too tempting to pass up. But frankly, I hope he gets what's coming to him - a stern rebuke by voters this November.
As for Mr. Cuomo, if it wasn't so stomach turning, you'd have to laugh at his positioning himself as an outside reformer in the NY Governor's race. Of course, NY'ers are probably still grateful to him for his investigations that completely undermined first Spitzer and then Paterson, paving the way for his own run. The Cuomo name and organization is very powerful in NY, and no wonder - they have made thuggery respectable somehow. Still, things really begin after the convention - hopefully the GOP will find a viable candidate to rally around.
------------------------------------------------------------------------------
If our politics is down, dirty, and bare knuckled, British politics at least presents the veneer of sophistication. So now we have the spectacle, following a close election, of the laughable Liberal Democrats holding the balance of power, even though they actually lost a few seats in Parliament. Instead of making a deal with their natural allies in Labour, the Libs joined a coalition with the party on the opposite end of the spectrum, the Conservatives.
What is really interesting here is not that this coalition came together, but what it means for Mr. Cameron's attempt to keep a government in place. In the UK, there has to be an election at least once every five years, but the Prime Minister can dissolve Parliament at any time triggering a new election. This happens most frequently following loss of a key vote in Parliament, but it could also occur if the PM simply determines that now would be a good opportunity to gain some seats. Under the current setup, withdrawal by the Libs at any time could also cause the government to fall and a new election.
In short, I predict that one way or the other, we will see an early election in the UK, perhaps within the next two years or so. I don't think the Libs and Tories can co-exist in this coalition for very long. At some point a new election will be an irresistible opportunity for one party or the other.
-----------------------------------------------------------------------------
The health care battle is over, at least for now, but hardly forgotten. Did you notice that the mid eleven digit figure Medicare rate fix went through already, of course under a separate bill to keep it out of Obamacare scoring by the CBO. This is exactly what Republicans said would happen, and Dems never denied. But cynically, Dems claimed throughout that Obamacare would be revenue neutral or even save money, which was always impossible.
Here's a guest Business Wire dispatch on the Massachusetts version, which is a preview of the fiscal mess and health care rationing we face if Obamacare ever gets implemented.
Lessons Learned From Massachusetts’s $4 Billion Health Reform Disaster
CAMP HILL, Pa.--(BUSINESS WIRE)--The Massachusetts health insurance system under reform is already a financial disaster and sure to force higher taxes and insurance premiums in a preview of what is to come for all Americans under the recently passed reform laws, according to the cover story in InsuranceNewsNet Magazine’s May edition.
“Be Careful What You Wish For, America”
.“When we heard what was really happening in Massachusetts, we decided to devote our cover story to it,” says Rob Billingham, executive editor for InsuranceNewsNet Magazine. “It is alarming how the commonwealth is dismantling its health insurance industry and hurting the citizens’ access to affordable coverage. It’s also frightening that this is the model that national reform was based on.”
The article, “Be Careful What You Wish For, America,” was written by the leader of Massachusetts’s health insurance broker association, one of the people on the front lines who would have inside knowledge of the unnatural disaster hitting the state.
Mark S. Gaunya, president of the Massachusetts Association of Health Underwriters, explains how Massachusetts’s system is in danger of collapsing because it did little to control costs.
“Initially, MassCare was expected to cost $88 million a year — but today the Massachusetts health care budget exceeds $4 billion, and our fiscal budget for 2011 is underfunded by $294 million because of this law,” Gaunya says. “Simply put, Massachusetts can’t afford it.”
The system’s weak individual mandate is also forcing insurance companies to take the sickest and most expensive residents while healthy people go without insurance until they absolutely need it, driving up costs for all the other residents who buy health insurance.
“It is a calamity in the making and it is just a preview of what’s coming for the rest of the nation,” Billingham says.
---------------------------------------------------------------------------------
And in case you are not aggravated enough, here are some quotes to make you feel even worse about the higher taxes you will be paying next year (and probably long after):
"Albert Einstein - "The hardest thing in the world to understand is the income tax." Will Rogers - "It is a good thing that we do not get as much government as we pay for." James Madison - "I cannot undertake to lay my finger on that article of the Constitution which granted a right to Congress of expending, on objects of benevolence, the money of their constituents..." Will Rogers - "Alexander Hamilton started the U.S. Treasury with nothing and that was the closest our country has ever been to being even." Robert A. Heinlein - "There is no worse tyranny than to force a man to pay for what he does not want merely because you think it would be good for him." John S. Coleman - "The point to remember is that what the government gives it must first take away." Dr. Laurence J. Peter - "America is a land of taxation that was founded to avoid taxation." Milton Friedman - "Congress can raise taxes because it can persuade a sizable fraction of the populace that somebody else will pay." Plato - "When there is an income tax, the just man will pay more and the unjust less on the same amount of income." Benjamin Tucker - "To force a man to pay for the violation of his own liberty is indeed an addition of insult to injury." Winston Churchill - "We contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle." G. Gordon Liddy - "A liberal is someone who feels a great debt to his fellow man, which debt he proposes to pay off with your money." Dan Bennett - "There's nothing wrong with the younger generation that becoming taxpayers won't cure." Jean-Baptiste Colbert - "The art of taxation consists in so plucking the goose as to obtain the largest amount of feathers with the least amount of hissing." Benjamin Franklin - "It would be a hard government that should tax its people one-tenth part of their income."
---------------------------------------------------------------------------------
With the resurgence of jazz, there is now also a large cadre of excellent writers and reviewers on the subject, which is very helpful when it comes to sorting out the artists you want to go see and the CD's you might wish to buy. Still, there is no one better than Nat Hentoff, who has been writing about jazz (and many other topics) since it was the idiom of popular music in this country many decades ago. For the latest example of why his writing has been so important to the survival and renaissance of jazz music, see his column in today's WSJ (page D6) on young saxophonist Myron Walden.
-----------------------------------------------------------------------------------
Clearly, the Mets have adapted to their new ball park in its second season, and can even beat good teams there. Still want to see a good road trip or two before I get too excited. At least it looks like we will still be playing meaningful games in June.
-------------------------------------------------------------------------------
Wall Street, and indeed all of the world, is buffeting investors, who would do very well to keep their cool while maintaining a wary eye on the Euro, banks everywhere but particularly in Europe, and the threatening explosion of the bubble that is sovereign debt. Though the recent slump continues to bear the earmark of a correction rather than a new bear market, we are not discounting the possibility of a second dip to the recession either.
On Monday, we bought 400 shares of Great Lakes Dredging (GLDD) for the IRA at 5.24. This became a value buy when its debt/equity ratio dropped below 70%. For our "zero buy" on Wednesday, we bought 100 shares of Flir Systems (FLIR) at 27.87.
Most of our holdings' earnings reports have been OK - some reducing debt, some increasing equity, a few high performers doing both. We have also been rewarded with a number of dividend hikes of late. One action we did take was to formally remove Transocean (RIG) from the buy/hold list. We had previously sold all of our shares soon after the accident in the Gulf, and though we think both BP and Haliburton are more to blame than Transocean, my call is that deep water drilling is a business I prefer to have no exposure to. We've got plenty of oil service exposure (BRS, CNRD, GIFI and SLB of course) so RIG is not something we want to go back into, even if the lower price properly discounts the risks and costs of the accidents.
The result of the AIG mess is that there have been no convictions, and that nothing has been proven against Mr. Greenberg or any of his officers. What a shame that Spitzer's vendetta against Greenberg led directly to the company's implosion.
Given these facts, we wonder why Mr. Blumenthal still leads in polls to succeed the also ethically challenged Senator Dodd. You would think that the revelations about Blumenthal's non-service in Vietnam would have confirmed what Nutmeg State voters should already know about his character flaws. Well there's still time. Maybe the opportunity to dispatch him to D.C. is too tempting to pass up. But frankly, I hope he gets what's coming to him - a stern rebuke by voters this November.
As for Mr. Cuomo, if it wasn't so stomach turning, you'd have to laugh at his positioning himself as an outside reformer in the NY Governor's race. Of course, NY'ers are probably still grateful to him for his investigations that completely undermined first Spitzer and then Paterson, paving the way for his own run. The Cuomo name and organization is very powerful in NY, and no wonder - they have made thuggery respectable somehow. Still, things really begin after the convention - hopefully the GOP will find a viable candidate to rally around.
------------------------------------------------------------------------------
If our politics is down, dirty, and bare knuckled, British politics at least presents the veneer of sophistication. So now we have the spectacle, following a close election, of the laughable Liberal Democrats holding the balance of power, even though they actually lost a few seats in Parliament. Instead of making a deal with their natural allies in Labour, the Libs joined a coalition with the party on the opposite end of the spectrum, the Conservatives.
What is really interesting here is not that this coalition came together, but what it means for Mr. Cameron's attempt to keep a government in place. In the UK, there has to be an election at least once every five years, but the Prime Minister can dissolve Parliament at any time triggering a new election. This happens most frequently following loss of a key vote in Parliament, but it could also occur if the PM simply determines that now would be a good opportunity to gain some seats. Under the current setup, withdrawal by the Libs at any time could also cause the government to fall and a new election.
In short, I predict that one way or the other, we will see an early election in the UK, perhaps within the next two years or so. I don't think the Libs and Tories can co-exist in this coalition for very long. At some point a new election will be an irresistible opportunity for one party or the other.
-----------------------------------------------------------------------------
The health care battle is over, at least for now, but hardly forgotten. Did you notice that the mid eleven digit figure Medicare rate fix went through already, of course under a separate bill to keep it out of Obamacare scoring by the CBO. This is exactly what Republicans said would happen, and Dems never denied. But cynically, Dems claimed throughout that Obamacare would be revenue neutral or even save money, which was always impossible.
Here's a guest Business Wire dispatch on the Massachusetts version, which is a preview of the fiscal mess and health care rationing we face if Obamacare ever gets implemented.
Lessons Learned From Massachusetts’s $4 Billion Health Reform Disaster
CAMP HILL, Pa.--(BUSINESS WIRE)--The Massachusetts health insurance system under reform is already a financial disaster and sure to force higher taxes and insurance premiums in a preview of what is to come for all Americans under the recently passed reform laws, according to the cover story in InsuranceNewsNet Magazine’s May edition.
“Be Careful What You Wish For, America”
.“When we heard what was really happening in Massachusetts, we decided to devote our cover story to it,” says Rob Billingham, executive editor for InsuranceNewsNet Magazine. “It is alarming how the commonwealth is dismantling its health insurance industry and hurting the citizens’ access to affordable coverage. It’s also frightening that this is the model that national reform was based on.”
The article, “Be Careful What You Wish For, America,” was written by the leader of Massachusetts’s health insurance broker association, one of the people on the front lines who would have inside knowledge of the unnatural disaster hitting the state.
Mark S. Gaunya, president of the Massachusetts Association of Health Underwriters, explains how Massachusetts’s system is in danger of collapsing because it did little to control costs.
“Initially, MassCare was expected to cost $88 million a year — but today the Massachusetts health care budget exceeds $4 billion, and our fiscal budget for 2011 is underfunded by $294 million because of this law,” Gaunya says. “Simply put, Massachusetts can’t afford it.”
The system’s weak individual mandate is also forcing insurance companies to take the sickest and most expensive residents while healthy people go without insurance until they absolutely need it, driving up costs for all the other residents who buy health insurance.
“It is a calamity in the making and it is just a preview of what’s coming for the rest of the nation,” Billingham says.
---------------------------------------------------------------------------------
And in case you are not aggravated enough, here are some quotes to make you feel even worse about the higher taxes you will be paying next year (and probably long after):
"Albert Einstein - "The hardest thing in the world to understand is the income tax." Will Rogers - "It is a good thing that we do not get as much government as we pay for." James Madison - "I cannot undertake to lay my finger on that article of the Constitution which granted a right to Congress of expending, on objects of benevolence, the money of their constituents..." Will Rogers - "Alexander Hamilton started the U.S. Treasury with nothing and that was the closest our country has ever been to being even." Robert A. Heinlein - "There is no worse tyranny than to force a man to pay for what he does not want merely because you think it would be good for him." John S. Coleman - "The point to remember is that what the government gives it must first take away." Dr. Laurence J. Peter - "America is a land of taxation that was founded to avoid taxation." Milton Friedman - "Congress can raise taxes because it can persuade a sizable fraction of the populace that somebody else will pay." Plato - "When there is an income tax, the just man will pay more and the unjust less on the same amount of income." Benjamin Tucker - "To force a man to pay for the violation of his own liberty is indeed an addition of insult to injury." Winston Churchill - "We contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle." G. Gordon Liddy - "A liberal is someone who feels a great debt to his fellow man, which debt he proposes to pay off with your money." Dan Bennett - "There's nothing wrong with the younger generation that becoming taxpayers won't cure." Jean-Baptiste Colbert - "The art of taxation consists in so plucking the goose as to obtain the largest amount of feathers with the least amount of hissing." Benjamin Franklin - "It would be a hard government that should tax its people one-tenth part of their income."
---------------------------------------------------------------------------------
With the resurgence of jazz, there is now also a large cadre of excellent writers and reviewers on the subject, which is very helpful when it comes to sorting out the artists you want to go see and the CD's you might wish to buy. Still, there is no one better than Nat Hentoff, who has been writing about jazz (and many other topics) since it was the idiom of popular music in this country many decades ago. For the latest example of why his writing has been so important to the survival and renaissance of jazz music, see his column in today's WSJ (page D6) on young saxophonist Myron Walden.
-----------------------------------------------------------------------------------
Clearly, the Mets have adapted to their new ball park in its second season, and can even beat good teams there. Still want to see a good road trip or two before I get too excited. At least it looks like we will still be playing meaningful games in June.
-------------------------------------------------------------------------------
Wall Street, and indeed all of the world, is buffeting investors, who would do very well to keep their cool while maintaining a wary eye on the Euro, banks everywhere but particularly in Europe, and the threatening explosion of the bubble that is sovereign debt. Though the recent slump continues to bear the earmark of a correction rather than a new bear market, we are not discounting the possibility of a second dip to the recession either.
On Monday, we bought 400 shares of Great Lakes Dredging (GLDD) for the IRA at 5.24. This became a value buy when its debt/equity ratio dropped below 70%. For our "zero buy" on Wednesday, we bought 100 shares of Flir Systems (FLIR) at 27.87.
Most of our holdings' earnings reports have been OK - some reducing debt, some increasing equity, a few high performers doing both. We have also been rewarded with a number of dividend hikes of late. One action we did take was to formally remove Transocean (RIG) from the buy/hold list. We had previously sold all of our shares soon after the accident in the Gulf, and though we think both BP and Haliburton are more to blame than Transocean, my call is that deep water drilling is a business I prefer to have no exposure to. We've got plenty of oil service exposure (BRS, CNRD, GIFI and SLB of course) so RIG is not something we want to go back into, even if the lower price properly discounts the risks and costs of the accidents.
Thursday, May 20, 2010
Who Can Keep Up?
Blogging once a week is about all I have time for, but really I would like to put in two or three posts a week if I could, just to get a word in edgewise about all these amazing things that happen so quickly. I used to wonder why certain syndicated columnists could only produce one or two columns per week (and why they got paid so much for so little productivity) but after blogging these last five years or so, I understand. Of course if this was my job, and I didn't also do that other one, I think I could handle three columns a week.
Of course today's columnists also tend to double as TV pundits, authors of real books, maybe radio show hosts, etc. so they are just too busy also. So I am resigned to a weekly blog entry, which is how it's been for a while now, and that means that most posts are made up of brief observations of the items that I find at least semi-interesting.
Item: Tuesday primaries hard on party regulars. The Republican's party's pick to succeed Jim Bunning ran into a Tea Party juggernaut named Rand Paul, son of the libertarian Congressman, a somewhat loose cannon who really captured the mood of the moment. Despite an inclination to say the politically incorrect thing, or perhaps because of it, he is very likely to win the general election in November. Also, as predicted here when he switched parties last year, Arlen Spector was unable to win a primary in either party, losing badly in his adopted party to a liberal "real Democrat," Joe Sestac. Also Sen. Blanche Lincoln of Arkansas is headed for a runoff, a primary she could well lose, and even if she doesn't, she is a heavy underdog in the general election.
This may in fact be a year when incumbency is not the advantage it normally is, but we still believe the Democratic incumbents are much more vulnerable than Republicans.
-------------------------------------------------------------------------------
Item: Cloture motion passes Senate to end debate on Financial Reform...but debate goes on. Senate rules seem more inscrutable than ever. We had it wrong in a previous post - the Senate really did require 60 votes to BEGIN debate on this bill. I'm not sure why - perhaps they had an objection to a unanimous consent motion to begin debate. Whatever, they finally got that, and have had a robust and actually substantive debate over how to regulate financial services. This notwithstanding an absolute plethora of ridiculous ideas that will ultimately hurt the economy. Anyway, after one defeated motion to end debate, Senator Brown became the third Republican to vote for cloture, offsetting two sensible Democrats who wanted to continue ad nauseum. Showing rare intelligence and bipartisan consideration, Senator Reid, pocketed cloture but has elected to continue debate for as much as another week so that additional amendments can be considered.
In the end, we are going to get over-regulation that deals with everything EXCEPT what really caused the financial crisis in the first place - the fraudulent activities involving Fannie and Freddie and their Congressional enablers, and the "issuer pays" business model employed by the rating agencies. All of the other problems identified are merely effects springing from those causes. Not that some shouldn't also be dealt with. Reasonable incentives for companies to install proper governance and executive pay limits should be put in place, and either the Volcker rule or some form of Glass Stegall rules needs to be put resurrected to separate FDIC insured banking operations from investment banking. Let's see what comes out of conference committee. Many still say the House bill has more of what we need than the Senate bill.
---------------------------------------------------------------------------
Item: Passings included Robin Roberts and Hank Jones. Hall of Fame pitcher Robin Roberts was among the most popular of Cooperstown immortals, especially in Philadelphia where he was the young ace of the 1950 Whiz Kids and a perennial 20 game winner even on the terrible Philly teams of the remainder of the decade. A power pitcher, Roberts went out there every fourth day, more often if needed as down the stretch in 1950 when he started something like 3 of the last 5 games. Half of his starts were complete games, throwing mainly high hard ones, so in a typical season playing in cozy Connie Mack Stadium, Roberts would have at least 40 decisions and be among the league leaders in innings pitched, strikeouts, and homers allowed. After losing the edge on his fastball, Roberts moved on to Baltimore and reemerged for a couple of decent seasons as a finesse pitcher.
Hank Jones was one of three great jazz playing brothers. Playing piano as a leader, or accompanying the greats like Ella Fitzgerald, Jones worked into his 90's and had been scheduled to headline at Birdland next week. Befitting his longevity there are Jones records available in all of the dominant jazz styles of the last 60 years, many featuring his wonderful touch and rhythmic virtuosity. His brother Elvin Jones was the great drummer for the classic John Coltrane quartet.
------------------------------------------------------------------------------
I have little to say about the Mets and their stinking road trip, a 2-6 affair. With Ollie Perez banished to the bullpen and the mysteries surrounding Jon Maine continuing (he only threw 5 pitches tonight, none of major league caliber, before spitting the bit), one has to wonder more than ever if this team has any managerial leadership at all. They come home to face the Yankees, who likely will be in a surly mood after a couple of games against the tough Tampa Bay Rays. So it is not likely that Jerry will be removed until at least after the subway series is over. If the Mets get swept by the Bombers, that might be it for Jerry and this mainly inept coaching staff.
--------------------------------------------------------------------------------
Stock market corrections can be pretty nasty, and the trouble is that you really don't know whether you are in a correction or a bear market until it's over. What you do know is that your year - to - date gains are melting away. Like golf, investing has its humbling moments. We've been gradually de-risking for months now but still own plenty of stocks that are taking a pretty bad licking. The upshot is that our formula will have us buying, albeit a little less frequently, and that means more money siphoned off into preferred's, gold, and TIPS. Though the last inflation report was good, this is in keeping with Bob Prechter's analysis that says we should have some deflation before hyperinflation sets in. Since it is hyperinflation that concerns me more, we want inflation hedges.
In any event, we are happy we raised all that cash selling stocks into the March - April rally.
Last Friday, we bought 100 shares of Bunge (BG) at what seemed to be the bargain price of 51.50. As frequently happens in corrections, the cheap stock got even cheaper. On Monday, our risky zero buy was again Bank of Granite (GRAN), which I now hope will be taken over by another bank before it is commandeered by the FDIC. We bought 1400 shares at 1.45. Today, we bought 100 shares of Met Life Preferred
(MET.PR.B) at 22.89.
Of course today's columnists also tend to double as TV pundits, authors of real books, maybe radio show hosts, etc. so they are just too busy also. So I am resigned to a weekly blog entry, which is how it's been for a while now, and that means that most posts are made up of brief observations of the items that I find at least semi-interesting.
Item: Tuesday primaries hard on party regulars. The Republican's party's pick to succeed Jim Bunning ran into a Tea Party juggernaut named Rand Paul, son of the libertarian Congressman, a somewhat loose cannon who really captured the mood of the moment. Despite an inclination to say the politically incorrect thing, or perhaps because of it, he is very likely to win the general election in November. Also, as predicted here when he switched parties last year, Arlen Spector was unable to win a primary in either party, losing badly in his adopted party to a liberal "real Democrat," Joe Sestac. Also Sen. Blanche Lincoln of Arkansas is headed for a runoff, a primary she could well lose, and even if she doesn't, she is a heavy underdog in the general election.
This may in fact be a year when incumbency is not the advantage it normally is, but we still believe the Democratic incumbents are much more vulnerable than Republicans.
-------------------------------------------------------------------------------
Item: Cloture motion passes Senate to end debate on Financial Reform...but debate goes on. Senate rules seem more inscrutable than ever. We had it wrong in a previous post - the Senate really did require 60 votes to BEGIN debate on this bill. I'm not sure why - perhaps they had an objection to a unanimous consent motion to begin debate. Whatever, they finally got that, and have had a robust and actually substantive debate over how to regulate financial services. This notwithstanding an absolute plethora of ridiculous ideas that will ultimately hurt the economy. Anyway, after one defeated motion to end debate, Senator Brown became the third Republican to vote for cloture, offsetting two sensible Democrats who wanted to continue ad nauseum. Showing rare intelligence and bipartisan consideration, Senator Reid, pocketed cloture but has elected to continue debate for as much as another week so that additional amendments can be considered.
In the end, we are going to get over-regulation that deals with everything EXCEPT what really caused the financial crisis in the first place - the fraudulent activities involving Fannie and Freddie and their Congressional enablers, and the "issuer pays" business model employed by the rating agencies. All of the other problems identified are merely effects springing from those causes. Not that some shouldn't also be dealt with. Reasonable incentives for companies to install proper governance and executive pay limits should be put in place, and either the Volcker rule or some form of Glass Stegall rules needs to be put resurrected to separate FDIC insured banking operations from investment banking. Let's see what comes out of conference committee. Many still say the House bill has more of what we need than the Senate bill.
---------------------------------------------------------------------------
Item: Passings included Robin Roberts and Hank Jones. Hall of Fame pitcher Robin Roberts was among the most popular of Cooperstown immortals, especially in Philadelphia where he was the young ace of the 1950 Whiz Kids and a perennial 20 game winner even on the terrible Philly teams of the remainder of the decade. A power pitcher, Roberts went out there every fourth day, more often if needed as down the stretch in 1950 when he started something like 3 of the last 5 games. Half of his starts were complete games, throwing mainly high hard ones, so in a typical season playing in cozy Connie Mack Stadium, Roberts would have at least 40 decisions and be among the league leaders in innings pitched, strikeouts, and homers allowed. After losing the edge on his fastball, Roberts moved on to Baltimore and reemerged for a couple of decent seasons as a finesse pitcher.
Hank Jones was one of three great jazz playing brothers. Playing piano as a leader, or accompanying the greats like Ella Fitzgerald, Jones worked into his 90's and had been scheduled to headline at Birdland next week. Befitting his longevity there are Jones records available in all of the dominant jazz styles of the last 60 years, many featuring his wonderful touch and rhythmic virtuosity. His brother Elvin Jones was the great drummer for the classic John Coltrane quartet.
------------------------------------------------------------------------------
I have little to say about the Mets and their stinking road trip, a 2-6 affair. With Ollie Perez banished to the bullpen and the mysteries surrounding Jon Maine continuing (he only threw 5 pitches tonight, none of major league caliber, before spitting the bit), one has to wonder more than ever if this team has any managerial leadership at all. They come home to face the Yankees, who likely will be in a surly mood after a couple of games against the tough Tampa Bay Rays. So it is not likely that Jerry will be removed until at least after the subway series is over. If the Mets get swept by the Bombers, that might be it for Jerry and this mainly inept coaching staff.
--------------------------------------------------------------------------------
Stock market corrections can be pretty nasty, and the trouble is that you really don't know whether you are in a correction or a bear market until it's over. What you do know is that your year - to - date gains are melting away. Like golf, investing has its humbling moments. We've been gradually de-risking for months now but still own plenty of stocks that are taking a pretty bad licking. The upshot is that our formula will have us buying, albeit a little less frequently, and that means more money siphoned off into preferred's, gold, and TIPS. Though the last inflation report was good, this is in keeping with Bob Prechter's analysis that says we should have some deflation before hyperinflation sets in. Since it is hyperinflation that concerns me more, we want inflation hedges.
In any event, we are happy we raised all that cash selling stocks into the March - April rally.
Last Friday, we bought 100 shares of Bunge (BG) at what seemed to be the bargain price of 51.50. As frequently happens in corrections, the cheap stock got even cheaper. On Monday, our risky zero buy was again Bank of Granite (GRAN), which I now hope will be taken over by another bank before it is commandeered by the FDIC. We bought 1400 shares at 1.45. Today, we bought 100 shares of Met Life Preferred
(MET.PR.B) at 22.89.
Thursday, May 13, 2010
Thursday Antics
It was a week ago today that we had one of the strangest sessions ever in the markets. About 2:30 or so, I adjourned to the men's room for a necessary bio break. Passing a TV by the reception desk on the way in, I noted the market down a disturbing 400 Dow points, with pictures of the riots in Greece overlaying the market stats (our screen is always tuned into Bloomberg). I emerged a few minutes later, took a fast glance at the screen as I passed, and stopped cold in my tracks to make sure I had seen what I thought it saw. There it was, no possible mistake, the Dow down almost a thousand.
Once I digested this development, I returned to my office and put my Yahoo screen on automatic update. Within twenty minutes, the market had pretty much recovered to where it was when I started my ill-fated bio break.
Needless to say, concentration on the mundane work of the day was all but impossible as we watched the market slosh through an hour of reflexive recovery from the earlier chaos and hapless commentators speculated about what had happened. Despite the early "evidence" about fat fingered keystroke errors or other speculation about blameworthy rapid automated trading mechanisms, it now appears that the explanation is just a function of 21st century trading custom.
First of all, we all know that futures trading is the tail wagging the stock dog. When you arise in the morning, what you want to know is not what happened overnight in Japan or Europe but where the S&P futures are versus fair value. That tells you how the market will open. Sure enough, it appears that a large futures sale Thursday afternoon caused those on the buy side of the trade to execute their hedging strategies by selling stocks in the cash market. When sales of that magnitude hit, (remember the market was already under water because of Greece) dormant stop loss orders become market sell orders as prices retreat and cause the market to go down further. If the bids dry up and/or get withdrawn, prices can really cascade, particularly since we no longer have an NYSE specialist these days charged with maintaining an orderly market for the stock. Instead, the machines are in control, and individual stocks can be available in multiple markets. In some cases, like Proctor and Gamble, there were no bids left to field the market stop loss orders, and the stock went down to one cent!
In its infinite wisdom, the market's powers that be have determined that based on certain arbitrary criteria, some of these trades at silly prices will be cancelled. However, the reality is that a lot of money changed hands anyway. The country's regulatory mindset being what it is, people are hard at work thinking about how to prevent a recurrence. They have floated solutions such as banning market orders (requiring all sale orders to be limit orders), enforcing commodity like "limit moves" on individual stocks, and calling trading halts after certain percentage moves in individual stocks. None of these are really solutions. After all, stop loss orders are limit orders (that become market orders when the limit is reached).
Rather than worry about how to solve the systemic problem, I choose to think about how to protect one's own trading portfolio during meltdowns. I do use market orders since they are cheaper at my discount broker, but also because most of my transactions are executed at the opening, and if I use a limit order, it may not execute if the stock runs the other way. Jim Cramer says to only use limit orders, and that is OK advice if you don't mind missing an execution here and there. I think you can use market orders, but you have to make sure that the bid ask spread is not too great, that trading is not crazy volatile, and that the stock you are trading is not one where you are selling or buying a lot of shares at a low price. Then you need more control over the execution price and it's got to be a limit order. If I want to buy or sell 2000 shares of a stock trading around a dollar or two, I can't take a chance on a market order when a ten cent price differential costs $200, much more than the commission.
If your pending orders are all limit orders, you don't have to worry about selling something for one cent when we have a day like last Thursday. When you put in a market order to sell something, you have to first know where the bid is and that that price is acceptable. For a market order to sell, the operative concern is the ask price. This is all trading 101, but it is amazing how many experienced, even professional traders, muff executions. Just like in an auto race, a reckless trader puts all the other players at risk. That's what happened last week.
One last consideration - when the markets move explosively, it's human nature to want to play. Certainly when I saw things down 1000 points, my first instinct was to call my broker and buy some OEX calls, suspecting something funny going on that would be reversed. I know 25 years ago I would have done just that. Many other folks might have had the idea that they should just sell everything and get out.
Whether your instincts are ultimately proven right or proven wrong, my current philosophy is that when the market is in short term turmoil, we amateur traders and investors should simply stand aside and do nothing. Let the pros battle it out until things get resorted. It's easier for me to do that now that I have established a transaction formula that I trust and do not abandon under stress.
--------------------------------------------------------------------------------
The Mets had a 3-3 home stand, and that's just no good. So after the hot streak that saved Jerry's job for the time being, things are back to (sub)normal. Meanwhile, the underperformances just continue. Hitters are simply not thriving under Howard Johnson - Wright and Francour over swing constantly and don't recognize pitches - so the strikeouts are just appalling. Warthen's pitchers just walk too many hitters - too much nibbling, and Jerry just mangles the bullpen. But since nothing has really changed with this inept manager and coaching staff (except we now seem to have a competent 3rd base coach, unlike last year) why should the results be any different?
-------------------------------------------------------------------------
At least while the market was being buffeted, I could look forward to an evening's entertainment since I had a ticket to see Mark Knopfler, my favorite rock guitarist, at the United Palace Theater on 175th St. in Manhattan. This is an interesting place to see a show. The neighborhood is a bit dicey, as you can imagine. Standing literally across the street from the theater, I didn't know I had arrived since there was no sign indicating Knopfler's appearance, just a banner hawking the Reverend Ike for Tuesday night. As Dave Barry would say, I am not making this up!
Once inside, there was the agony of getting seated which took forever, since the "ushers" appeared to have been recruited off the local playground basketball court and had no idea of how to find your seats. Once the brief warm-up act finished, it was a bit less complicated, with the lights on, to reseat all the people in their proper places and get everyone in place for the main event. Knopfler did not disappoint. Despite a pinched nerve that restricted him to a stool for the evening, his playing was as brilliant as ever, and most of the songs were arranged to allow him to improvise above the band for a couple of minutes after the last chorus. The band really cooked too, just as good as in the Dire Straits days. Highlights included Sailing to Philadelphia, the ever popular Sultans of Swing and Romeo and Juliet, and the best moments, Telegraph Road, with an unforgettable improvised section to close the main body of the show.
--------------------------------------------------------------------------------
We have been buying. On 5/5 we bought 400 shares of our Australian Aluminum issue, AWC, at 5.40. Monday, we bought 400 shares of Great Lakes Dredging for the IRA at 5.65. This originally was a recommendation by our full service broker, and we still have the faith. Yesterday, we bought the SPDR Gold EFT, 20 shares (two ounces) of GLD at 121.29. This is a high price, but simple economics tell me gold could go much higher.
In the late 1990's, we had the phenomenon where a company could issue a simple press release about a new web site and juice the stock. We had an amazing run in BAMM back then where it went from single digits to 44 and back in less than a week. When this happens, it makes me uneasy - do you sell, or do you let it run. Back then, we got some shares of BAMM off in the teens, but obviously didn't max out, (nor did most others since the stock was in the 40's for only minutes).
Today, our HAUP issue announced via press release a new interface with Apple I-phones and I-Pads, causing the stock to triple between 3:30 and the close. Of course this is a silly move, and it's fun to see the reactions on the message boards. The bear case is that a ten dollar item can't really make a financial difference to any company. The bull case is that it isn't the ten dollar item, it's the demand it will create for the company's more expensive base equipment that means something.
My reaction will be to watch with great interest - and follow our formula. If we realize some profits, that will be just fine.
Once I digested this development, I returned to my office and put my Yahoo screen on automatic update. Within twenty minutes, the market had pretty much recovered to where it was when I started my ill-fated bio break.
Needless to say, concentration on the mundane work of the day was all but impossible as we watched the market slosh through an hour of reflexive recovery from the earlier chaos and hapless commentators speculated about what had happened. Despite the early "evidence" about fat fingered keystroke errors or other speculation about blameworthy rapid automated trading mechanisms, it now appears that the explanation is just a function of 21st century trading custom.
First of all, we all know that futures trading is the tail wagging the stock dog. When you arise in the morning, what you want to know is not what happened overnight in Japan or Europe but where the S&P futures are versus fair value. That tells you how the market will open. Sure enough, it appears that a large futures sale Thursday afternoon caused those on the buy side of the trade to execute their hedging strategies by selling stocks in the cash market. When sales of that magnitude hit, (remember the market was already under water because of Greece) dormant stop loss orders become market sell orders as prices retreat and cause the market to go down further. If the bids dry up and/or get withdrawn, prices can really cascade, particularly since we no longer have an NYSE specialist these days charged with maintaining an orderly market for the stock. Instead, the machines are in control, and individual stocks can be available in multiple markets. In some cases, like Proctor and Gamble, there were no bids left to field the market stop loss orders, and the stock went down to one cent!
In its infinite wisdom, the market's powers that be have determined that based on certain arbitrary criteria, some of these trades at silly prices will be cancelled. However, the reality is that a lot of money changed hands anyway. The country's regulatory mindset being what it is, people are hard at work thinking about how to prevent a recurrence. They have floated solutions such as banning market orders (requiring all sale orders to be limit orders), enforcing commodity like "limit moves" on individual stocks, and calling trading halts after certain percentage moves in individual stocks. None of these are really solutions. After all, stop loss orders are limit orders (that become market orders when the limit is reached).
Rather than worry about how to solve the systemic problem, I choose to think about how to protect one's own trading portfolio during meltdowns. I do use market orders since they are cheaper at my discount broker, but also because most of my transactions are executed at the opening, and if I use a limit order, it may not execute if the stock runs the other way. Jim Cramer says to only use limit orders, and that is OK advice if you don't mind missing an execution here and there. I think you can use market orders, but you have to make sure that the bid ask spread is not too great, that trading is not crazy volatile, and that the stock you are trading is not one where you are selling or buying a lot of shares at a low price. Then you need more control over the execution price and it's got to be a limit order. If I want to buy or sell 2000 shares of a stock trading around a dollar or two, I can't take a chance on a market order when a ten cent price differential costs $200, much more than the commission.
If your pending orders are all limit orders, you don't have to worry about selling something for one cent when we have a day like last Thursday. When you put in a market order to sell something, you have to first know where the bid is and that that price is acceptable. For a market order to sell, the operative concern is the ask price. This is all trading 101, but it is amazing how many experienced, even professional traders, muff executions. Just like in an auto race, a reckless trader puts all the other players at risk. That's what happened last week.
One last consideration - when the markets move explosively, it's human nature to want to play. Certainly when I saw things down 1000 points, my first instinct was to call my broker and buy some OEX calls, suspecting something funny going on that would be reversed. I know 25 years ago I would have done just that. Many other folks might have had the idea that they should just sell everything and get out.
Whether your instincts are ultimately proven right or proven wrong, my current philosophy is that when the market is in short term turmoil, we amateur traders and investors should simply stand aside and do nothing. Let the pros battle it out until things get resorted. It's easier for me to do that now that I have established a transaction formula that I trust and do not abandon under stress.
--------------------------------------------------------------------------------
The Mets had a 3-3 home stand, and that's just no good. So after the hot streak that saved Jerry's job for the time being, things are back to (sub)normal. Meanwhile, the underperformances just continue. Hitters are simply not thriving under Howard Johnson - Wright and Francour over swing constantly and don't recognize pitches - so the strikeouts are just appalling. Warthen's pitchers just walk too many hitters - too much nibbling, and Jerry just mangles the bullpen. But since nothing has really changed with this inept manager and coaching staff (except we now seem to have a competent 3rd base coach, unlike last year) why should the results be any different?
-------------------------------------------------------------------------
At least while the market was being buffeted, I could look forward to an evening's entertainment since I had a ticket to see Mark Knopfler, my favorite rock guitarist, at the United Palace Theater on 175th St. in Manhattan. This is an interesting place to see a show. The neighborhood is a bit dicey, as you can imagine. Standing literally across the street from the theater, I didn't know I had arrived since there was no sign indicating Knopfler's appearance, just a banner hawking the Reverend Ike for Tuesday night. As Dave Barry would say, I am not making this up!
Once inside, there was the agony of getting seated which took forever, since the "ushers" appeared to have been recruited off the local playground basketball court and had no idea of how to find your seats. Once the brief warm-up act finished, it was a bit less complicated, with the lights on, to reseat all the people in their proper places and get everyone in place for the main event. Knopfler did not disappoint. Despite a pinched nerve that restricted him to a stool for the evening, his playing was as brilliant as ever, and most of the songs were arranged to allow him to improvise above the band for a couple of minutes after the last chorus. The band really cooked too, just as good as in the Dire Straits days. Highlights included Sailing to Philadelphia, the ever popular Sultans of Swing and Romeo and Juliet, and the best moments, Telegraph Road, with an unforgettable improvised section to close the main body of the show.
--------------------------------------------------------------------------------
We have been buying. On 5/5 we bought 400 shares of our Australian Aluminum issue, AWC, at 5.40. Monday, we bought 400 shares of Great Lakes Dredging for the IRA at 5.65. This originally was a recommendation by our full service broker, and we still have the faith. Yesterday, we bought the SPDR Gold EFT, 20 shares (two ounces) of GLD at 121.29. This is a high price, but simple economics tell me gold could go much higher.
In the late 1990's, we had the phenomenon where a company could issue a simple press release about a new web site and juice the stock. We had an amazing run in BAMM back then where it went from single digits to 44 and back in less than a week. When this happens, it makes me uneasy - do you sell, or do you let it run. Back then, we got some shares of BAMM off in the teens, but obviously didn't max out, (nor did most others since the stock was in the 40's for only minutes).
Today, our HAUP issue announced via press release a new interface with Apple I-phones and I-Pads, causing the stock to triple between 3:30 and the close. Of course this is a silly move, and it's fun to see the reactions on the message boards. The bear case is that a ten dollar item can't really make a financial difference to any company. The bull case is that it isn't the ten dollar item, it's the demand it will create for the company's more expensive base equipment that means something.
My reaction will be to watch with great interest - and follow our formula. If we realize some profits, that will be just fine.
Tuesday, May 04, 2010
Plenty of Blame to go Around
With sovereign debt crises seemingly indicating that the EU's Social Democracies are coming apart at their fiscal seams, we needn't get too smug in the good old US of A, where not only do we have a federal government budget that has lost its moorings, we are also looking at a lot of states and municipalities that will be unable to fund services and service debts. In fact, I am seriously considering whether the triple tax exemption in my in-state municipal bond fund is worth the risk of defaults on the underlying assets. This at a time when the Obama and Paterson administrations are doing all they can to raise the value of the tax exemptions by raising all the tax rates they can think of.
Of course, the Obama administration's answer to everything, and their major election talking point, will be to say that this is a deficit they merely inherited from the preceding administration of the other incompetent party. This overlooks two inconvenient truths. First, with much of the TARP bailout now paid back, the gigantic increase in government debt nearly all belongs to the current administration, courtesy of their silly, ineffectual stimulus giveaway and their inability to provide the actual incentives to work and produce that would really end this recession. But second, and more to the point of this post, they forget that while George Bush led his administration through a moribund second term, and failed to exercise his veto pen nearly enough, it was Congress that passed all those spending bills. And in 2006, the Dems took over Congress. So it was Reid and Pelosi who were Bush 43's partners in deficit crime, and the Dem's should share the blame for those disasters of 2007-2009. If you don't believe that, just ask any congressional Republican who spent those two years trying to rein in Fannie and Freddie while they were being safeguarded by Dem's, who were banking all that campaign cash contributed by the GSE's. By the way, Mr. Obama was one of the leading beneficiaries.
This has led some thinking Republicans to wonder if the best result for November 2010 would be to win enough seats to hamstring the Dem's without actually taking over the majority and sharing the blame for what will inevitably go wrong in 2011-2013. This thinking is just too cute by half. When you have the chance for a majority, you take it, as Newt Gingrich did in 1994. It is necessary to stop the government grab that is going on now. As government takes on more and more functions and performs them all so ineptly, it becomes clear we need politicians who will recognize that what we need is for government at all levels to do less but do it much more effectively.
There was a time, to be confirmed by those of us old enough to remember, when government recruited very bright people and performed at an extremely high level. So when President Kennedy committed the nation to winning the race to the moon even after the Soviets got a huge head start, he could be confident that NASA would have the highest quality scientists and engineers to get the job done. In those days, people went into government service to accomplish great things, not to secure a cozy early retirement and then double dip into social security.
Today, we have government performing high minded functions but adding little value. So in a day when taxpayers spend huge sums to fund OSHA, when companies spend huge sums to comply with OSHA regulations (and pay fines for meaningless violations), we still have the same fatal accidents and environmental disasters in our mining and drilling industries we always had. So we have the regulatory function, but no value added for our money.
And then, to defend our outlandish union pay scales and benefits, we insist in our trade agreements that foreign nations adopt the same ineffective practices we have to "protect" their workers. It would be laughable if it weren't so disfunctional. With it all, we can't compete in the manufacture of commodity products or other basic industries so we now have a growing structural unemployment problem, after years of enlightened tax policy that drove nearly full employment. When the Bush tax cuts expire, my expectation is that we will have a very serious economic double dip recession. Perhaps the stock market is starting to discount that in pricing equities.
The question we should be pondering is, if the GOP wins big, as I expect it to in November and gains enough leverage to impact decision making in Washington, will the party have the courage and intellectual chops to take on our economic problems as Governor Christie is in New Jersey, or will they just drift along as in the Bush years? The party has the leaders who know the right way and seem to have the goods to get it done - people like Paul Ryan, John Kasich, and yes, Newt Gingrich. We'll see.
--------------------------------------------------------------------------
We make a lot of predictions at redwavemusings and try to resist the temptation to trumpet how many we get right, but I have to say that we were both perceptive and objective regarding the Mets road trip so far. No sooner did they get to the Confines of Brotherly Love than balls started flying out of the ballpark, unlike City Field where you practically have to hit it into orbit to clear the fence. And yes, the formerly light hitting Metso's hit their share of them, though the pitchers Pelfry and Santana, all but unhittable at home, also got lit up pretty well. Only Roy Halladay seemed immune to the gopher ball, but I think he could keep it in the park in Williamsport or maybe even on a paddle ball court.
Homers have continued on the Mets next stop in Cincinatti, but our goal of a 500 road trip is still (barely) within reach. So we got that goin' for us, which is nice.
---------------------------------------------------------------------------------
We have had three swoon dives out of the last six sessions on Wall Street and as per the formula, that has us back to the buy side. On Friday, we went out on the risk limb buying 1700 shares of the resurgent Sirius XM Radio (SIRI) at 1.20, a zero buy if ever there was one. Though the Company has actually reported a quarterly profit, and has (barely) positive shareholder equity, its market value is still way out of proportion to any concept of the company's actual value. Still, we kinda believe. Yesterday, we bought 100 shares of a MetLife preferred issue (MET.PR.B), eschewing risk in this case, in favor of a 6.5% yield. We put it in the IRA at a cost of 24.16 per share.
We also patted ourselves on the back for our prompt sale of RIG last week at 89 and change after watching the stock trade at 72 and change today. We haven't owned BP since removing it from our buy/hold list after its long ago Texas accident.
Of course, the Obama administration's answer to everything, and their major election talking point, will be to say that this is a deficit they merely inherited from the preceding administration of the other incompetent party. This overlooks two inconvenient truths. First, with much of the TARP bailout now paid back, the gigantic increase in government debt nearly all belongs to the current administration, courtesy of their silly, ineffectual stimulus giveaway and their inability to provide the actual incentives to work and produce that would really end this recession. But second, and more to the point of this post, they forget that while George Bush led his administration through a moribund second term, and failed to exercise his veto pen nearly enough, it was Congress that passed all those spending bills. And in 2006, the Dems took over Congress. So it was Reid and Pelosi who were Bush 43's partners in deficit crime, and the Dem's should share the blame for those disasters of 2007-2009. If you don't believe that, just ask any congressional Republican who spent those two years trying to rein in Fannie and Freddie while they were being safeguarded by Dem's, who were banking all that campaign cash contributed by the GSE's. By the way, Mr. Obama was one of the leading beneficiaries.
This has led some thinking Republicans to wonder if the best result for November 2010 would be to win enough seats to hamstring the Dem's without actually taking over the majority and sharing the blame for what will inevitably go wrong in 2011-2013. This thinking is just too cute by half. When you have the chance for a majority, you take it, as Newt Gingrich did in 1994. It is necessary to stop the government grab that is going on now. As government takes on more and more functions and performs them all so ineptly, it becomes clear we need politicians who will recognize that what we need is for government at all levels to do less but do it much more effectively.
There was a time, to be confirmed by those of us old enough to remember, when government recruited very bright people and performed at an extremely high level. So when President Kennedy committed the nation to winning the race to the moon even after the Soviets got a huge head start, he could be confident that NASA would have the highest quality scientists and engineers to get the job done. In those days, people went into government service to accomplish great things, not to secure a cozy early retirement and then double dip into social security.
Today, we have government performing high minded functions but adding little value. So in a day when taxpayers spend huge sums to fund OSHA, when companies spend huge sums to comply with OSHA regulations (and pay fines for meaningless violations), we still have the same fatal accidents and environmental disasters in our mining and drilling industries we always had. So we have the regulatory function, but no value added for our money.
And then, to defend our outlandish union pay scales and benefits, we insist in our trade agreements that foreign nations adopt the same ineffective practices we have to "protect" their workers. It would be laughable if it weren't so disfunctional. With it all, we can't compete in the manufacture of commodity products or other basic industries so we now have a growing structural unemployment problem, after years of enlightened tax policy that drove nearly full employment. When the Bush tax cuts expire, my expectation is that we will have a very serious economic double dip recession. Perhaps the stock market is starting to discount that in pricing equities.
The question we should be pondering is, if the GOP wins big, as I expect it to in November and gains enough leverage to impact decision making in Washington, will the party have the courage and intellectual chops to take on our economic problems as Governor Christie is in New Jersey, or will they just drift along as in the Bush years? The party has the leaders who know the right way and seem to have the goods to get it done - people like Paul Ryan, John Kasich, and yes, Newt Gingrich. We'll see.
--------------------------------------------------------------------------
We make a lot of predictions at redwavemusings and try to resist the temptation to trumpet how many we get right, but I have to say that we were both perceptive and objective regarding the Mets road trip so far. No sooner did they get to the Confines of Brotherly Love than balls started flying out of the ballpark, unlike City Field where you practically have to hit it into orbit to clear the fence. And yes, the formerly light hitting Metso's hit their share of them, though the pitchers Pelfry and Santana, all but unhittable at home, also got lit up pretty well. Only Roy Halladay seemed immune to the gopher ball, but I think he could keep it in the park in Williamsport or maybe even on a paddle ball court.
Homers have continued on the Mets next stop in Cincinatti, but our goal of a 500 road trip is still (barely) within reach. So we got that goin' for us, which is nice.
---------------------------------------------------------------------------------
We have had three swoon dives out of the last six sessions on Wall Street and as per the formula, that has us back to the buy side. On Friday, we went out on the risk limb buying 1700 shares of the resurgent Sirius XM Radio (SIRI) at 1.20, a zero buy if ever there was one. Though the Company has actually reported a quarterly profit, and has (barely) positive shareholder equity, its market value is still way out of proportion to any concept of the company's actual value. Still, we kinda believe. Yesterday, we bought 100 shares of a MetLife preferred issue (MET.PR.B), eschewing risk in this case, in favor of a 6.5% yield. We put it in the IRA at a cost of 24.16 per share.
We also patted ourselves on the back for our prompt sale of RIG last week at 89 and change after watching the stock trade at 72 and change today. We haven't owned BP since removing it from our buy/hold list after its long ago Texas accident.
