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Tuesday, May 31, 2011


Alumni Weekend

Following a panel appearance at a day and a half conference in Washington, Amtrak and SEPTA took me to Haverford Station on Friday afternoon for alumni weekend. I hadn't been back in about nine years and was anxious to see the campus again, as well as my friends from the Class of 1971. This being an off-year for me, I had no real obligations and could look forward to a return trip for my own reunion next year. So I kind of enjoyed my walk up College Lane and past the Duck Pond to the new Student Center (at least new to me - it was built some 25 years after my graduation) despite my heavy travel bag and the warm humid day. No matter. The campus was just breathtaking, a conclusion I came to at every beautiful corner I would see all weekend. It is truly a privilege to have the ability to go back now and then.

A warm greeting from the host current students and the happy news that I would be staying in 6th entry Lloyd at the north end of campus, and it was up the hill across the quad to the familiar rectangle where the Haverford extras who played the fictional college students in the first Eddie and the Cruisers movie had cavorted for the Rites of Spring. That was an odd scene to see for those of us who had gone to Haverford, since there have never been Greek Houses on the actual campus. Outside 6th entry, a group of 1971 grads were already lounging in a circle of chairs and tables. One called out that it looked like I could use a beer. I congratulated him on his visual acuity (considering our advanced ages) and said I would be right out after dumping my bags. He offered a critique of my chosen order of priority. but promised beer would still be available when I returned. Thank goodness it was, and I soon joined them. The weekend was off to a great start, and I texted the wife, "arrived at H-Ford, already beering."

After dinner in the dining center, there was a tent set up near the library and I saw a number of friends, including college staff, and even a stray classmate (whose wife was BMC "71). Most of the Class of 71 adjourned to a local classmate's house for a party I did not really plan to crash, so I did what I really wanted to do - walk over past the Quaker Meeting House to Lancaster Avenue and my favorite neighborhood watering hole from those long lost days, The Roache and O'Brien's. It was populated with alumni, mostly younger (who isn't these days?), but somehow quite a bit of conversation ensued. One change I didn't much like - there was no Guinness on tap, only in cans, which made Black and Tans impractical.

Day two was really fun. Somehow I caught the end of breakfast at the dining center in time to see my three roommates from the 71 class emerging. One of the three, Bob Schwartz, had received an honorary degree only the week before for his pioneering work as the founder and ED of the Juvenile Defense Center of Philadelphia, a remarkable non-profit which has become the model for similar centers around the country and even the world. We went to a panel of alumni media experts discussing the future of printed media, and the panel moderator was my old friend Dave Espo, now of the Associated Press (this blog spotlighted his coverage of the ObamaCare passage) who had been managing editor of the Haverford News when I was Sports Editor. We attended the awards ceremony in front of Roberts Hall (where Eddie and the Cruisers had their "concert") and then it was time for lunch in the tent. Sitting with Bob, he told me that after the panel, he and Espo adjourned to the library and reviewed some of the old editions of The News from our era. I decided to do the same later that afternoon. But first it was time for a panel on Quaker Values.

This turned out to be flagrantly false advertising, though the three panelists were all at least members of the Society of Friends. The leader of the panel was Joe Volk, Class of 1961, who for the last 21 years, has been leading something called the Friends Committee on National Legislation. They passed out literature from that group, and a quick perusal made it clear that the only true Quaker value we were going to hear about was pacifism. Otherwise, it was the straight Progressive agenda, tax the rich, environmentalism, debt reduction by starving defense, but no cuts at all for entitlements and preserve all other federal programs. Ugh. There were a lot of questions, but at Haverford, no one really challenges the politically correct line. Anxious to get to the library, I resisted the urge to rain on the parade, and decided to just let it go. Smart move, I think. Life's too short.

Next was the library, and a very happy hour re-reading articles from over 40 years ago, including some of my own and some from Pulitzer prize winner - to - be humorist Dave Barry, "69. I'm afraid Barry's work had me laughing audibly - good thing school was not in session and the library quiet rules went unenforced. Frankly, I could have spent days in there.

But I wanted to walk through the "Doug" and time was all too short. The new Douglas Gardner Center is Haverford's spectacular athletic facility, and it lived up to everything I had heard. I was green with envy as I walked around the basketball court, looked in on the huge exercise room with all its new equipment, saw the new squash courts, and all the different hallways honoring Haverford legends. I had taken a peak at the old field house, with its newly resurfaced track where Tom Donnelly's teams dominate Division 3 all winter as the cross country and track teams do outdoors in the fall and spring. The old basketball court has been resurfaced for indoor tennis. Not bad.

Doug Gardner was one of three Haverford alumni who perished in the World Trade Center on 9/11. Why so many from a school that has only about 10,000 living alumni at any given time, if that? Because Howard Lutnick, CEO of Cantor Fitzgerald is an alumnus, and the campus networking system had placed people in his employ. By pure luck, Lutnick was on a family errand when the catastrophe happened and he survived. His money largely funded the Doug, and it was his idea to name it for Gardner. Fittingly, there are remembrances of all three who perished in the building.

After my tour, I went to the bookstore, which is in the student center next door and bought a couple of tee shirts. Next was a walk to Bryn Mawr for the pre-dinner cocktail hour at Goodhart's music room with the Class of 71. Instead, we were treated to a recital by 1971 grads from both schools - cello and piano that took up the whole hour, leaving precious little (i.e. no) time for cocktails. I got a ride back to campus with Espo and we all made our way back to the Doug for dinner, where in addition to very good food, there was ample wine and beer. Highlight of the dinner was a short speech by Jack Coleman, President of the College during our era, now 90 and barely audible, but still a fountain of simple wisdom. He advised that it was not too late for us to do new and great things, a good pep talk for folks seeing retirement just over the horizon. He has certainly provided a great example. Since leaving the College, Coleman has run a bed - and - breakfast and a local newspaper. He allowed that he had not been necessarily the best economics teacher - I was in his class and would agree - but that he was proud of bringing coeducation to Haverford and loved the place like no other. On that, he had company in that room.

I spent some after dinner time with my former roommates and then it was time to go to the old Ryan Gymnasium, scene of many an intramural basketball game, to hear Dingo, the band from our era made up of classmates from 1971 and 1972. They were pretty rusty in the early sets, but hit their stride later on, and had everyone dancing to those good old songs by Steve Miller, the Stones and Spirit. From there it was back to the Roache for a very pleasant few hours of wind - down, ultimately closing the place.

Sunday morning, I somehow got up early enough to make it to the Meeting House for some real Quaker values. The hour went by quickly, mostly in silence as I prefer. There was a large house fly buzzing about, and I remember thinking that no fly in the world was safer than he; no Quaker would ever lift a hand to one of God's creatures, especially during their time of silent devotion.

Returning to the Dining Center for a farewell brunch, I said goodbye to Espo and promised to contact him when in D.C. He wound up driving me and my bags to the train station and I was on my way home, already looking forward to my next visit. As students, we always agreed that the place would be so great if it weren't for the classes, exams and papers. And now, that's how it is!


On May 20, we bought 400 shares of Great Lakes Dock and Dredging (GLDD) for the IRA at 6.34. The same day, we sold 100 shares of TMO for 65.55 that we bought on 1/10/02for 23.29. On 5/23, we bought 100 shares of IDT for 26.35 as we continued to build a position in that stock. On 5/25, we bought 20 shares of TIP, our inflation protected Treasury ETF for the IRA at 110.85. On 5/26, we bought 300 shares of Marine Max (HZO), a value buy at 7.99. Then on 5/31, we sold 300 more shares of Newpark Resources (NR) at 9.47. The purchase price for these had been 5.40 on 12/29/04. Yesterday, we sold 100 shares of Worthington (WOR) on the opening, a good time to sell as it turned out. We got 21.73 compared to a purchase price of 14.27 on
5/19/03. A tribute to patience as much as anything ewlse.

As we get new readers, I must repeat our disclaimer a bit more often. Redwavemusings and its author are not investment advisors, and none of the securities or strategies discussed here should be considered recommendations. Investment ideas here are likely to be unsuitable for other individuals. In fact, they may well be unsuitable for me.

Thursday, May 19, 2011


Two heads - better than one

So, I sat in front of my computer last Thursday with time blocked out for a blog posting and enough material for the week. For maybe the first time in all the years of my blogging career, blogger was down! The window of opportunity passed, and with it the blog entry for last week. Since our last post, we've been to Harrisburg and Richmond, CitiField and to Cipriani's for a charitable gala and of course Birdland. All this has left precious little time for blogging. This weekend it's off to Cortland for graduation and next week alumni weekend at Haverford, with a trip to D.C. in between. The action is non-stop and we'll take blogging opportunities as they come.


The politicians have been doing their level best to provide material. Tha French head of the IMF is accused of a sexually predatory attack on a hotel maid while staying at the fashionable Sofitel in NYC (right across from my beloved Penn Club and the fabulous 44 Bar). The IMF has come in for constant and deserved criticism by Steve Forbes for about as long as I can remember so I can't feel bad for those folks, but to put this in perspective, Mr. Strauss - Kahn was a leading opposition contender for the French Presidency, so this is tantamount to seeing someone of Mitt Romney's stature in the French equivalent of Riker's Island.

Not to be outdone, the ex bodybuilder/actor/governor of California outed himself for fathering a child with his domestic help some many years ago, which precipitated Arnie's separation from Maria Shriver. It's just a hunch, but I think there might have been some underlying problem in that marriage anyhow. And to think, my wife never would hire a cleaning service.

In more standard hi-jinx, Newt Gingrich trashed the Ryan Medicare plan before claiming he was maneuvered into the statement by those awful left-wing anchors on the Sunday morning news programs. Time to give it up Newt. In the least surprising political announcement of all time, The Donald bowed out of the Presidential race before getting in. We knew there was no way Donald would ever put himself in a position where he would have to reveal his net worthlessness. Apparently he can't tear himself away from the really vital work he's doing on the Celebrity Apprentice. Also wisely giving up the ghost in favor of the big broadcasting bucks was former Governor Huckabee, another candidate we won't miss very much.

So we are gradually getting down to the serious candidates. The frontrunner may still be Mitt Romney, despite his lame defense and rationalization of the Massachusetts version of Obamacare, passed on his watch. However, we've always thought Pawlenty would make a serious run and he and the less formidable Rick Santorum don't yet seem fazed by the Romney fundraising edge. Then there is Governor Daniels of Indiana, still lurking while his wife decides whether to permit him to run. If she signs the permission slip, we will at last have a GOP candidate with a chance to win. The agitated cries for Governor Christie are four years too soon. He thinks 2016 will be the Republican year and has the convenient inexperience excuse for this cycle. Almost forgotten in all of this is Jon Huntsman, who has studiously avoided taking a position on any issue, and of course Sarah Palin, much to the consternation of Dems who rejoice in her foolishness.

Then there is Michelle Bachman. Is she a serious candidate? I just find it hard to believe. But there she is. We've also got businessman Herman Cain and libertarian Ron Paul making their common sense appeals. The problem for these candidates is that the GOP historically nominates frontrunners who have paid their dues in previous campaigns. If they follow that tradition, the ultimate candidate will be either Romney or Pawlenty and that's that. The only outside shot I could see coming in really is Mitch Daniels. Actually, I think both he and Pawlenty have a better shot than Romney at beating Obama. Romney is a smart guy but I can't see the party getting that energized about him. We'll see.


It is always so difficult to defeat an incumbent President, though it happened to Carter and Bush 41. LBJ was ousted by elements of his own party. So it's not unprecedented, and once the reflected glory of the bin Laden execution wears off, we'll still have Obama with all his warts - lousy handling of the economy, lousy foreign policy, high gasoline prices, Middle East policy no one can really fathom, including today's strange speech emphasizing Israel's return to the 1967 borders (he must have calculated that he can win NY and lose Florida just as easily without the Jewish vote as with it).

In recent days, the academic left has been beating its chest about the anticipated GOP filibuster of Goodwin Liu's nomination to the ninth circuit. Read today's WSJ editorial for the scoop about why this man should not be confirmed for a Family Court position, let alone the already radical 9th circuit. The Left Wingnuts want Obama to make a recess appointment to put him on the 9th circuit. To my knowledge, recess appointments for judicial posts are unusual to say the least. I took the opportunity (a rare posting these days) to warn my Communist friends that they had better be prepared for the next GOP President to also make judicial recess appointments if Obama makes this one.

I also took the liberty to assure them that as long as there are 41 or more GOP Senators, the only way, Mr. Liu will get into the Supreme Court is with a guest pass.

Last night, I went to the gala at Cipriani's in support of the Caron Foundation's New York work, a little $500 a plate soiree that raised about $1 million for a great cause - support and cure of addiction (drug and/or alcohol) afflicting so many of all ages in our city. A good friend of mine from our industry, Tom Moran, was presented with a well deserved award for his work, not only in support of Caron but his great efforts in Haiti, Ireland, etc., etc. He is truly a humanitarian, successful in business and at the same time, extremely generous with his time, energy, and dollars. Tom and I share certain political leanings which got me to thinking through some ideas that i began to consider last weekend when my former college roommate received an honorary degree from my alma mater for his work in founding and spreading the concept of a legal firm to represent youth, funded entirely from foundations, donors and government grants. He and another of the degree recipients took the opportunity to expound on the ideals they believe in - the importance of work such as theirs that benefits the community, the environment, etc.

I wondered if I was a graduate in that audience whether I would think that only selfless, social contributions were the work college had prepared me for and the only work worth doing. Upon reflection, I have little doubt that the younger generation will, as we did, keep such ideas in perspective. In fact, the same motivations that have always existed in our society will continue to motivate most of us - security for our families, personal success and gratification, and yes, the marshalling of resources we can use to help those less fortunate.

Luckily, there will always be a few like my roommate who never were interested in material things other than what they need to keep their socially oriented enterprise going. The fact is, we can't succeed without each other. People who staff these organizations like Caron, who dedicate their lives to serving others are so important, but they don't exist without the Tom Moran's of the world, and without the rest of us who contribute what we believe we can to the causes we admire. I think they realize that too, and it's nice when they recognize their benefactors.

On the other hand, I'm not sure what it is that the academic left recognizes. I'm afraid I consider them society's true drones.

By the way, also receiving awards last night were the ageless Patti Labelle and Dr. John. Dr. John capped the evening with a 40 minute performance in the grand tradition of New Orleans blues. It was a terrific evening.

The great 1986 Mets team had a two headed centerfielder - a platoon really that one sportswriter called Mookie Dykstra. Manager Davy Johnson found a way to get tremendous production from two dynamic players sharing one position. It was a big factor in the Mets' Championship season.

This year, the Mets after a false start, have developed a two headed second baseman. Daniel Murphy and Justin Turner took over as a second base platoon and turned the Mets most obvious weakness into a pretty decent situation. Now both are playing every day, Murphy at first base and Turner at third, filling in for injured stars. Meanwhile, the Mets understudy shortstop, Ruben Tejada has returned to play second where he continues his late season 2010 trend of improving offense to go with his outstanding defense. So things are looking up in Flushing by the Bay. It's still early enough for the Mets to ovecome their bad start and climb safely over the 500 mark. We are forever hopeful.

Blogger may have been down but stock transactions continue. On May 6, we bought 100 shares of my full service broker, Stifel Nicolaus (SF), at 43.80. The stock had recently split 3 for 2. On May 9, we ponied up 26.80 for 100 shares of IDT for the IRA, a zero buy. On May 12, we sold 400 shares of FSI International (FSII) at
5.23. We had purchased them on 11/12/07 for 1.90. On May 13, we sold 900 shares of Sirius XM (SIRI) for 2.28, taking a loss in the IRA (where losses are no help) since we paid 4.09 for 600 on 4/7/04 and 4.30 for 300 on 7/12/06. This happens when you use the first in, first out method for allocating shares, even though we are ahead on the stock overall. Later shares were purchased for much lower prices. On May
16, we bought 100 shares of Goldman Sachs Preferred (GS.PR.D) for the IRA for 22.42.

We have splits coming for FAST and AAON. May is normally not such a good month for stocks so we'll take all the good news we can get. Today, TMO announced a $3.5billion acquisition that fits strategically, but we have to wonder about a price tag that amounts to about 7 times sales. Even if earnings rise immediately, it just seems like the level of growth needed to support that kind of price is unrealistic. Nevertheless, TMO had a nice pop today. It's the kind of action that makes me want to lighten up a bit.

Thursday, May 05, 2011


Obama Dispatches Osama

My plane home from Florida had just landed two hours late Sunday night at beautiful MacArthur Airport near downtown West Islip when the buzz in the cabin reached unusual levels of excitement. Passengers upon landing these days immediately turn on their cell phones, and ours were greeted with the "official" news that Al Queda's inspirational satanic leader, Osama bin Laden was dead. As we were soon to learn, he was among the victims of a raid by Navy Seals on Pakistani soil, a mission ordered by the President, planned by the CIA, and executed to near perfection. We were also to hear quite a bit of erroneous information in the first 24 hours. It is well known that in war, truth is the first and recurring casualty. There are reasons for this. In the heat of battle, it is human to misperceive, and under extreme stress, equally human to want to believe that events occurred in such a way as to put the teller in a favorable light when, in fact, people are acting out of desperation. Still, you might have thought Administration spokespeople might be more careful to get their facts right.

In addition, the Obama people are learning that even when you do things well, the political jackals will be nipping at your heels. There were many decisions to be made during the course of the mission and its aftermath, and it shouldn't be surprising to hear many critical voices from the left and the right, and the inevitable second guessers. Welcome to George W. Bush's world.

So for better or worse, here's the redwavemusings view, in the form of a handy Q and A.

Q. The raid took place on Pakistani soil, without their knowledge until it was over. Wasn't this a violation of Pakistani sovereignty?
A. Of course.
Q. So shouldn't the administration have informed the Pakistanis, even obtained their permission?
A. Surely you jest.
Q. It now appears that there were limited, if any, defenses in the compound and that Osama himself was unarmed. Shouldn't he have been taken alive and brought to Guantanamo or the States for trial?
A. Osama had repeatedly incriminated himself on tape and celebrated his organization's various terrorist events and murders. A trial was unnecessary and would have been turned into a circus. The cost of securing Osama in a prison a la the Nazi war criminals would have been huge. Instead, the Seals executed him and that was revenge we had coming and justice he had coming. I have no problem with that.
Q. Was it right to bury Osama at sea according to Islamic rites?
A. Following Islamic custom was an interesting touch but probably more than he had coming. Frankly, I agree with Alan Dershowitz that he should have been autopsied as U.S. homicide victims would be. That would have provided any evidence needed to discredit future revisionists (like the people who think the moon landings were staged). I do think the burial at sea was a good idea. Why provide a memorial spot for his followers?
Q. Should the pictures be released?
A. I don't really care that much, and have no prurient interest in seeing them. My assumption is that eventually, they will be leaked, whether the Administration wants that or not.
Q. Does this mean that the CIA is back to the standards of effectiveness we took for granted during the Cold War?
A. Woulds't that were true!

A few other thoughts. There is no way to absolve the Pakistanis in this. They either knew where Osama was and protected him for a long time, or they are just plain stupid. Either way, their lack of curiosity about the compound speaks volumes about their reliability as an ally.

The Dems will never admit it, but the ultimate success of this mission owes a lot to the aggressive questioning of KSM by the Bush Administration. Frankly, it never bothered me whether waterboarding might be torture or not. it made sense to use whatever methods were necessary to extract from people who knew the information we needed. Since Al Queda fighters were not uniformed soldiers and did not subscribe to the Geneva Conventions, the protection afforded other POW's did not apply to them.

So, while this result inures to the credit of the Obama Administration (it's time something did), it also reflects well on the Bush Administration. And the President was both gracious and wise to call GWB and keep him in the loop because of his ongoing stake in the mission.


On 4/29, we bought 100 shares of IDT, a zero buy at 28.70. On 5/3, we sold 300 shares of Newpark Resources (NR) for 9.40, some more profit taking (and we'll report how much in the next post). On 5/4, we bought 200 shares of RBS preferred (RBS.PR.E) at 15.90. It appears that the Brits are going to keep this bank propped up indefinitely, so we'll keep accepting the dividend payments.

The last few days have seen the market correct pretty drastically, reversing almost all of the recent trends. The dollar has been stronger, metals, oil and stocks down. Folks have made a lot of George Soros reversing his view on gold and silver. He's another crackpot as far as I'm concerned. I think this is just a correction and that the trends will reassert themselves. That is, inflation hedges up, dollar down. I will think that until I see real change in monetary and/or fiscal policy, not just speculation.

When these corrections occur, no matter how much profit taking you've done, it never feels like it was enough. However, thanks to our formula, we did a fair amount the last few weeks and never got euphoric about the long rally, just satisfied. We're in good shape to do some buying here, having piled up ample cash, especially if the correction continues for a while.

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