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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.  

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