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Sunday, October 28, 2012


Countdown to Election

The debates are over and it has been pretty comical to hear the media spin concerning who won.  According to the mainstream press, Romney scored a knockout in the first debate, and Obama won close decisions in the other two.  But that's baloney.  It's the general impressions that matter.  High school debate scoring is inapplicable.  And on general impressions, the debates were huge for Romney and diminished Obama.  Mitt came off as Presidential, a man with a real plan, and enough understanding of foreign policy to get by (Presidents really learn foreign policy on the job).  He showed he was secure enough to acknowledge the areas where he is in agreement with the President, but enough backbone to fire back when his positions were mischaracterized, a routine Dem tactic.

On the other hand, Obama came off as childish and tiresome, repeating ad nauseum the talking points we're all tired of.  When there was a factual disagreement, for instance about whether Romney's tax simplification plan is a $5 trillion tax cut (it's not a cut at all) or what his Times op ed said about auto industry bankruptcies, inevitably Obama was found to have it wrong. 

This is not to say the Governor's performance was perfect.  I would have liked to see him make the point (as the WSJ did last week) that eliminating the Bush tax cuts for the top two per cent will raise only $50-80 billion in annual revenues, a rounding error given today's deficits.  In fact it will be even less as we've pointed out before, due to the ATM mechanism.  Also, I still think the Governor should propose ending the tax break for carried interest that hedge fund managers enjoy.  He is likely to do this after he is elected. 

Still, the Progressives and their media friends are in full scale panic mode and with good reason.  The polls are showing that Romney has the momentum.  It looks to me like he will carry Ohio, Florida, and Virginia.  If so, he may not need Wisconsin, but it is in play.  When you see states like Michigan and Pennsylvania only leaning or in play, you know the President is in trouble.  Still, I am laying in a couple of bottles of bordeaux for election night.  It could be a long one.
I wonder if Israeli Prime Minister Netanyahu would call a vote for Romney a "Mittsvah?"
Luckily, no matter who wins, we will still have great music in New York.  The week before last, I played bridge in Manhattan, and got the last of the silver points I needed for Life Master.  To celebrate, I stopped at Birdland for the 11 PM show and saw a fine quartet led by Nicholas Peyton, perhaps the world's greatest living trumpet player.  However, he has also taken to playing piano and electric keyboards, and even doing some singing.  Often he played trumpet with one hand and keyboard with the other simultaneously.  It was a remarkable show and the late night Birdland audience demanded and received a rare (for jazz clubs) encore.

Last Wednesday, I was back in Birdland for David Ostwald's delightful weekly tribute to Louis Armstrong, made even better by the presence of jazz writer and teacher Dan Morgenstern, celebrating his 83rd birthday.  The 8 time Grammy winner (for liner notes) was even persuaded to sing one on the bandstand.  After that was done, I walked down to Small's in the West Village to hear a terrific quintet, led by the excellent young saxman Seamus Blake.  It also included a favorite pianist, Dave Kikofski.  It was my first time at Small's, which is ...small.  Intimate might be more descriptive, in a rustic sense, but they have a very good cabernet by the glass.

Then Thursday, I had a ticket to see Counting Crows at the Roseland Ballroom on the West Side of Midtown.There were two entertaining warm-up bands.  First, Tender Mercies whose Four White Stallions the Crows covered on Underwater Sunshine.  TM is a San Francisco band that, like CC, plays a mix of country tinged rock, real rock, and staggeringly pleasant ballads.  They were followed by Mean Creek, four young kids from Boston who play modern hard rock with incredibly high energy.  The lead guitar is a little gal who bounces all over the stage and also sings the harmonies.  The songs were fun, not especially melodic, but definitely hot.  

CC front man Adam Duritz introduced these bands and clearly enjoyed watching and listening to them from stage right.  It was good to see Adam apparently at peace with himself.  That carried over  to the Crows' actual performance, by far the best of the three times I have seen them.  Running through a set list of 17 songs and three encores, CC hit on all of their albums with the live performance embellishments their fans have come to expect.  Adam has taken to occasionally quoting other songs as jazz players do, for example, inserting Gershwin's "Someone to Watch Over Me" in the midst of "Rain King" and quoting "Crimson and Clover" at the end of "St. Robinson in his Cadillac Dream."

Throughout, the vast majority of the Roseland crowd stood in the floor area, and they seemed to have more fun, albeit at close quarters, than the folks sitting in the side balconies.  In any event, the audience was singing along with Adam all night and it's hard to describe the emotion of sharing with all these strangers a common love of those 80 or so Counting Crows songs.

One other thing.  We love all these albums and songs, but there is just something special about the songs from August and Everything After.  That album belongs in the rock pantheon with Abbey Road, John Barleycorn, Let it Bleed, Everybody Knows This is Nowhere, Blonde on Blonde, the Doors' first two albums, Mixed Bag, and a handful of others.
One transaction we omitted from the last post was a purchase of 15 more SPDR Gold shares (GLD) for the IRA on September 26 at 169.45.  On 10/8 we sold 100 shares of Ceradyne (CRDN), another stock pending takeover.  We got 35.05 for shares we bought in January of 2008 for an average price of 45.94.  That loss will be offset by gains on other shares we'll tender.  Also on 10/8, we had a chance to unload 600 shares of Presidential Life (PLFE) we had with the discount broker at 13.98, close enough to the pending takeover price of 14.  We paid 9.27 for 300 on 12/31/09 and 10.02 for 300 on 12/29/10.  On 10/15, we bought 100 shares of Teleflex  (TFX) for 68.63 a value buy.  On 10/16, we collected the cash through full service broker for the tendered shares of FSI International (FSII) at the takeover price of 6.20.  We paid 15.75 for 300 in Feb., 2000, 10.125 for 400 on 10/16/00, 9.125 for 500 on 1/16/01, and 3.03 for 1500 on 11/14/02.  Tallying all purchases and sales in all accounts for this stock over the years, we paid 48,805 including commissions, and netted 69,930 in proceeds, a gain of just over 21,000.  This is the result of a formula that when it works, tends to have us buying low and selling high.  It certainly worked in this stock, which has been a roller coaster ride.  I'll bet most holders cashed out at the bottom of one of its swoons for an overall loss.  What the discipline of a formula does is take those self defeating emotions out of play.

On 10/17, we bought 600 more shares of USA Trucking (USAK), a very high risk stock these days, at 3.43.  Will this one come back too?  I guess most people would not be bullish on small independent truckers.  We'll see.  On 10/19, we paid 46.69 out of the IRA for 50 shares of Cincinnati Bell preferred (CBB.PR.B).  Finally, on 10/22 we bought 200 shares of Flir Systems (FLIR) for 19.31, another value buy at that price.  Remember, none of these are recommendations and they may be unsuitable for other investors.  

Tuesday, October 09, 2012


D.C. Musings (again)

So, I am here in Washington D.C. for a "fun-filled" 6 days of meetings with the international insurance regulatory community.  Just imagine the possibilities.  Thank goodness there are baseball playoffs, football games, and political shenanigans to provide sufficient distractions.
Televised debates at the Presidential level are rarely game changers, though they have had significant impact in some elections.  Many people no longer watch debates since often, the level of discourse is not far above what might occur in a high school student council election. 
They weren't televised of course, but the Lincoln - Douglas debates rightfully command the reputation as the most literate and significant debate series in our history.  Interestingly, the debates were not held in conjunction with the 1860 Presidential election (in which Douglas was one of three losing candidates), but rather were part of an earlier campaign for US Senator from Illinois.  Most believe today that Lincoln "won" the debates, but actually Douglas won the election.
In the 1960 Presidential election, the first televised debates occurred between Vice President Nixon and Senator John F. Kennedy.  Going in, Kennedy was still not well known to many, so the contrast in style and appearance had a real impact on those watching.  Though the discourse was largely fact free, most polled who watched the first debate thought Kennedy won.  Of those who listened to it on radio, most thought Nixon won.  The debate "performance" gave Kennedy the recognition, credibility and momentum needed to achieve a narrow victory, so close that many feel to this day the the election was stolen, compliments of Chicago Mayor Dailey.
In 1984, Dems nominated a very competent candidate in former Senator and Vice President Walter Mondale to take on President Reagan.  The first Reagan Administration had started inauspiciously with a severe recession in 1981-82, but with help from Fed Chairman Volcker, Reagan broke the back of the inflation and high interest rates inherited from the Carter years.  By 1984, the financial markets and the economy were back in gear.  Reagan's debate summation put the question simply and concisely: "Are you better off today than you were four years ago," and cemented his landslide victory.
In 2000, VP Al Gore's inane and arrogant performance in debates turned what should have been an easy election win for Dems into a virtual tie, that was ultimately resolved in favor of his opponent, Bush 43.
So here we are in 2012 and 60 million watched an inexplicably listless performance in debate by President Obama.  In contrast, Governor Romney was prepared, aggressive, and battle tested, having gone through so many debates in the GOP primaries.  The debate has reinvigorated his faltering campaign at the same time it took the air out of the Obama campaign balloon, which seemed to be flying high.  The Obama campaign and his media friends are frantically trying to spin this result, pointing to real and imagined factual errors in what, it must be said, was a typically fact free debate.  That effort will play largely as sour grapes.  They promise a better performance next time, but the biggest debate audience has already occurred and early voting in swing states is well under way.
Though it is unlikely to be decisive, the VP debate Thursday night pitting the blustery Joe Biden vs the wonkish Paul Ryan promises to be an interesting exercise.  The prediction here is that we are headed for another dead heat election, similar to 2000 and 2004.  Enthusiasm and turnout will matter a lot.  Down ballot, I expect the GOP to keep control in the House, with the Senate just about evenly split.

I am enjoying the baseball playoffs and typical of the post-season, we are seeing exciting, if not always well played games.  Best of 5 is a coin flip in baseball, but if it has to be thus, I love the new format with only one travel day and the team with the better record starting with two games on the road.  When those two games are split, the home advantage for the higher seed becomes huge, as it should be.
The wild card play- in games were exciting, and I was thrilled to see the O's win on the road.  The Braves Cards game was marred by a late call by the left field umpire invoking the infield fly rule in short left field.  The Cards' SS was camped under the ball, but hearing the ump unclearly, probably believed he was being called off it by the LF, so the ball dropped untouched.  The runners moved up, but the batter was out as soon as the infield fly rule was invoked.  This led to a spirited argument, but the umps got it right, and the fact is that if the IFR had not been invoked, the SS would have simply caught the ball and nobody would have thought twice about the play.  The late call was just unfortunate.

There was a time when women in jazz meant singers, like Billy Holiday, Ella Fitzgerald, and the Divine One, Sarah Vaughn, among others.  There are still great female singers around (my current fave would be Jane Monheit), but the girls are certainly not restricted to that role.  New York's great distaff instrumentalists include pianists Renee Rosnes and Helen Sung, reed star Anat Cohen, and the twenty-something trumpeter (and singer) Bria Skonberg.  Last week, I went to Ms. Skonberg's CD release "party" at Birdland, and an entertaining hour it was, as Bria led a quintet that included young stars Ehud Asherie on piano and Jason Brown on drums.  Naturally, I left with a CD.
If you are in New York on a Friday and are thinking of stopping in to see the Big Band for the early show, please be advised that they are on tour for the month of October, and will be stopping at various points in the Midwest to show off their chops.  They will have Tommy Igoe leading, by the way.  Ably filling in this month is the David Berger Jazz Orchestra.
Here are some October gigs to consider if you're in the area.  The Blue Note (Oct.16-21) has Paquito D'Rivera and Cyrus Chestnut playing in tribute to Dizzy Gillespie.  Oct. 16-20, Nicholas Payton leads a trio at Birdland.  Oct. 26-27, Joshua Redman is the guest star at Lincoln Center's Tribute to John Coltrane.  The New Jersey Performaing Arts Center Jazz Festival (Newark) features pianist Geri Allen in Quartet mode on October 21.  The Bill Charlap Trio takes residence at Village Vanguard October 9-21.  The Bob Sheppard Quartet includes pianist Dave Kikoski at Kitano October 18. In Guilford, CT., Oct 13-14, go to Jeff and Joel's House Party and you will hear Vince Giordano and trombonist Jim Freyer, among others.  Vince and his Nighthawks are also scheduled in Wilton, CT. at St. Matthews Episcopal Church the afternoon of October 21.  Jane Monheit will headline at the 92nd St. Y on November 3.  She also appears as a guest star in Birdland's early gig this Monday, Oct. 15 at 7 PM.  Donald Harrison,  a great tenor player, leads at Dizzy's October 16-17.  Following him in, Oct.18-21 is the Charles McPherson/ Tom Harrell Quintet.  The Thursday night of that gig should be a live feed via internet.  Finally, the George Coleman Organ Quintet, with Mike LaDonne on the keys, headlines at Jazz Standard Oct. 25-28.     

On 9/27, we bought 600 shares of TATT at 3.74, a value buy, but one not for amateurs.  On the same day, we sold the remaining 1000 shares of FSI International (FSII) from our discount broker at 6.19.  The takeover at 6.20 should close soon, but in our E accounts, we have to pay for tender transactions, so it usually saves money to sell once the price gets close enough to the takeover price.  We paid 2.98 for these shares in June and July of 2011.  We still have shares at the full service broker and those will close soon.  On 10/1, we bought 100 shares of Harsco (HSC) at 20.62, a zero buy.  On 10/4, we added 100 shares of SunTrust Preferred (STI.PR.A) to the IRA account at 23.74.  On 10/5, we sold 100 shares of Lowes (LOW) for 31.26.  We bought these on 12/19/07 for 22.78.

Disclaimer time:  The transactions reported here are merely for the record.  Neither redwavemusings, nor its author are investment advisors.  The securities mentioned here should not be considered  recommendations and may not be suitable for readers (or even authors).  

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