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Friday, April 27, 2012


On the Lighter Side

The Wall Street Journal reported this week that all time great Al Green has resumed touring, though he regrets time away from his tabernacle where he is Reverend Al Green. The article went through his colorful past, starting out as the soul singing sex symbol, the scalding incident, the end of his partnership with Willie Mitchell, and the gospel period. In fact, Green's shows blend his soul pop with his gospel songs these days, and his fans (especially this one) delight in his still superior singing chops regardless of the idiom. One of my favorite and most cherished CD's is Al's Greatest Gospel Hits CD, favorite because it includes 17 amazing cuts, especially "Ocean Blue (I'll Rise Again)," "Straighten Out Your Life," "Your Heart's In Good Hands," and an amazing version of Curtis Mayfield's "People Get Ready." Cherished because this record is almost impossible to find, and generally is not included even on the internet juke boxes where you seem to be able to find just about anything you might want to hear. So if you run across this one, just buy it, whatever the price. And if Al's tour comes to your area, get your tickets early. Also on tour, and with a new record called Underwater Sunshine, is Counting Crows. This is a little surprising since front man and lyricist Adam Duritz felt he was creatively burnt out after the wonderful Saturday Night, Sunday Morning album. Yet, here he was back again, introducing the record (as is group custom) at New York's Roseland Ballroom on April 24. The show was an immediate sellout, and though I returned several times to StubHub hoping to score a ticket, what few tickets offered were not close to a reasonable price. The tour goes to Mashantucket, CT tomorrow night and Atlantic City Saturday before heading South. So I will be hoping for a Central Park show this summer, having fond memories of the one two years ago. ------------------------------------------------------------------------------ Spent the last couple of days lobbying in Albany, NY, nothing especially interesting about that, but I did hear a couple of good stories. Here's one: Three candidates for a CIA position are told that they will be given an assignment which they need to carry out to the letter to secure the position. Two of the candidates are males and one is a woman. The first man is given a gun, told to open a door and go into a room where he will find a person whom he must shoot. He takes the gun, goes into the room and finds his wife tied to a chair. Shocked, he quickly determines this is not for him, leaves the room, hands back the gun and gives up the job. The second man is also sent into a room with a gun, finds his wife and has the same reaction. Unable to carry out the assignment, he leaves. Finally the woman is given the same instructions. She enters the room sees her husband tied to the chair and closes the door behind her. Shots ring out, then the sounds of struggle, furniture hitting the walls, etc. She emerges disheveled, hands the gun to the interviewer and reports, "there were blanks in that gun, no bullets. I had to untie him and beat the son of a bitch to death with the chair." -------------------------------------------------------------------------- Our last post moved a reader to comment on our generally negative view of the environmmental movement, wondering where we got the idea that many in the movement are motivated by a generally anti-corporate, anti - growth and anti- industrial philosophy as opposed to (or, at best, in addition to) genuine concerns about the health of the planet. I guess my answer would be from talking with them and reading their articles, letters, blogs, position papers, etc. Most seem to have very little knowledge about environmental subjects beyond the slogans and talking points they are provided with by the movement's "leaders." I pointed out that nuclear energy, which does not output carbon dioxide, methane, or mercury is still frustrated and opposed by so-called environmentalists, with the result that we are only now planning the building of the first plants in 30 years. I would also stipulate that it is dangerous to generalize about such things, since I am sure there are many sincere environmental scientists, just as there are many sincere skeptics. The reader also pointed out that the statistics we printed indicated that green energy solutions were yielding a few trillions in BTU's per year. But the point of the statistics was to show that this was a meaningless percentage of our total power output, and that even after all the subsidation of these power sources, they were nowhere in terms of replacing carbon based energy sources, and would not be anywhere for decades. So all in all, while I appreciate the comment, I am not tempted to moderate my position at all. Environmentalism is basically a religion for too many of its adherents, and they have faith in it to the extent that they too often ignore facts, statistics and the scientific method. And this was my most important point. Environmental concerns are and should be in the forefront of our thinking. Putting aside whether global warming is man made or not, our planet is in a warming trend. I choose to believe this is neither good nor bad, it just is, and we need to understand and deal with the implications of that. Environmentalists hurt their own movement and therefore all of us when they ignore the scientific method, belittle those who disagree with them (rather than discussing the merits and evidence of the arguments), and emphasize the politics instead of the science. Unfortunately, there is a lot of money riding on which studies get funded, which articles get published and so on. The whole controversy goes to credibility. That's why the e-mails that related to the academic interest in subverting global warming skeptics were so damaging to those who conspired to keep the skeptics' articles out of print and to discredit them. --------------------------------------------------------------------------- Since we've been buying, the stock rally has lifted some of our new shares and that's a good thing. On 4/16, we bought 300 shares of Newpark Resources (NR), one of our Tulane portfolio stocks, for 7.39, a value buy. On 4/19, we added 100 shares of Harsco (HSC) to our IRA at 21.80, a zero buy. On 4/20, we bought 100 shares of SunTrust preferred (STI.PR.A) at 20.45. Monday, we were back at it, buying 100 shares of Flir Systems (FLIR) for 23.26. Wednesday, we added 50 more shares of Dupont (DD) at 53.27.

Sunday, April 15, 2012


Obama v Romney = It Begins

With the decision by Rick Santorum to "suspend" his campaign, Mitt Romney is the de facto, if as yet unofficial winner of the GOP sweepstakes. We predicted this result ages ago, though we thought it would end sooner. So why did Rick pull out now? It was necessary to save his future viability as a candidate for much of anything to avoid the embarrassment of losing in Pennsylvania again, his former home state, which appeared increasingly likely to happen. And all the candidates who give up suspend, rather than curtail, their campaigns so they can continue to collect donations to pay off their campaign debts.

So now, Mr. Romney gets to do the traditional GOP candidate "move toward the center" and to focus on defeating Mr. Obama. No one should underestimate how difficult that will be, but there are good reasons for optimism. For one thing, the Rasmussen poll out yesterday (by far the most accurate polling service in recent years) showed Mr. Romney with a 48-44 lead. If it stays that way, or anything close to it, that's a disaster for the Dems, who win populous states like California and New York by miles and therefore have more wasted popular votes than Republicans. Also, the undecided voters tend to break away from incumbents as you get closer to election day. After all, they've lived with the incumbent for four years and if he hasn't sold them yet, he ain't closing. That's why pollsters look for incumbents to get to the magic 50% mark. Obama has a long way to go to get there.

There are trouble signs economically again too, bad news for everyone, but good election dynamics for Romney. Not only are the jobs numbers softening again, but inflation is in the air, and not just at the gas pump. This should surprise no one since we have had full bore inflationary monetary and fiscal policy for this entire administration. It's why we have been accumulating gold ETF shares and common stocks.

Last week, there was much in the liberal press (in fact the whole media) concerning Romney's alleged "gender gap," that is his much lower poll numbers among women than among men. Let's acknowledge that Barack has a double digit lead among women, for whatever reasons. Since the various polls have the race about even, doesn't that say that Romney has a double digit lead among men? Why don't we hear about the Obama gender gap with respect to men?

On this subject, Meet The Press had a segment featuring debate between NY Senator Gillibrand and Minnesota representative Bachmann. It was pretty hilarious. You could just see Gillibrand going through her memorized talking points and once that was done, we didn't hear from her again. Her job at that point was to smile and show why she has been given the title of "hottest U.S. Senator." Meanwhile, Bachmann scored all the actual debating points.

The Sunday morning news shows are a great opportunity to test the conservative thesis concerning the liberal dominated media, and yesterday was no exception. While good old David was tossing softball questions to Tim Gaitner on Meet the Press (instead of grilling him about the lousy economic numbers that came out last week), Chris Wallace was challenging Republican operative Ed Gillespie on every response with solid follow up questions on "fair and balanced" Fox. No wonder Fox leads the other three networks easily in news ratings.

Meanwhile, our hapless President O'Blama goes about his business with startling ineptitude. Only days after trumpeting his "negotiated agreement" with the North Koreans to provide them with emergency food aid, the Koreans launched a rocket in violation of the agreement and various UN resolutions. So the Admininistration cancelled the food agreement. The episode managed to embarrass all parties involved when the three stage rocket's alleged payload landed harmlessly and laughingly in the ocean less than two minutes into the flight. I guess no one here can play this game.

And in the environmental wars, the hysterical concerns raised by the "anti-frackers" turned out to be bogus when it was shown that any water contamination was a result of faulty construction of the water wells, and was not caused by fracking, as was obvious since the frackers were nowhere near the water supplies they allegedly contaminated. The worst part of all this is that, like the global warming crowd, the premature charges (without evidence) only undermine the environmental movement's credibility, when in fact there are real problems to address. As someone wise said, just because it turns out that climate change is not man made doesn't mean we shouldn't be working to improve the viability of electric cars.

Unfortunately, the greens are not only hysterical, they are totally unrealistic. Here are the stats in terms of trillions of BTU's by energy source consumed in the U.S. in 2010 (published in WSJ last week).

Natural gas 24,701
Coal 22,077
Crude oil 11,669
Nuclear 8,441
Biomass 4,310
Hydroelectric 2,509
Wind 924
Geothermal 212
Solar 109

And this is with all kinds of subsidization for the green sources (not to mention tax credits for their users). So carbon based fuels are going to be our main source of power for a long time to come.

In fact, the environmental movement was long ago taken over by people whose real agenda has nothing to do with the environment. They are strictly anti-industrial, anti - growth, anti-business, and anti-globalization. If they were really interested in the environment, it wouldn't have been thirty years since we last commissioned a nuclear power plant.

In the end, it's not really about carbon or carbon dioxide. It's about really bad stuff like methane and mercury. Of course, flatulent cows give off more methane than industrial plants. Whether cows are to be blamed for global warming (and we all acknowledge we are in a slight warming trend, which has often happened before in earth's history), I don't know, but I do know that the weather in the northeast is improving as a result.

We have been busy on the buy side trying to deploy our cash in excess of the 20% allocation we aim for. Cash swelled because of the Con Ed preferred sale and the Kaydon dividend.

On 3/30, we bought 100 shares of Kaydon (KDN), putting some of that dividend money back in the stock from whence it came. This was a value buy at 25.92. On 4/2, we bought 50 shares of Dupont (DD) at 52.71. On 4/3, we paid 21.73 for the Hartford preferred (HIG.PR.A) we've been accumulating. You would have thought there would be more buying interest after the company announced it was spinning off the life and annuity division. On 4/4, we paid 70.19 to buy 100 shares of Devon (DVN) for the IRA. Then on 4/5, we bought 100 more shares of Harsco (HSC), this time for the IRA, at 22.93, a "zero" buy. On 4/9, we bought 20 Tips (TIP) for the IRA at 118.28. On 4/10, we bought 400 shares of good old Petroquest (PQ), a value buy at 5.80. That caught us up for all the transactions missed during confinement. On 4/11, we were back in there buying 50 more shares of Dupont for the IRA at 51.72. It's very much the norm for new names to go down a bit more after we make the initial purchase. A la Cramer, we tend to buy on the way down, and don't expect to catch the bottom. Friday, we bought 100 shares of Protective Life preferred (PLP) at 23.33.

Here's our periodic disclaimer: Neither Redwavemusings nor its author are investment advisors. The securities mentioned here are not recommendations, only transaction recordings. No reader should think that any of the securities mentioned here are suitable as investments for their own portfolio.

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