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Thursday, February 13, 2014


Oh, Snow. No Relief In Sight

Having battled my way into the office for three plus hours last week, the idea of another trip featuring trains that don't come, parking lots not plowed, and slick sidewalks and stairways did not appeal this morning, so instead, we did the technology thing and worked from home today.  The uncannily accurate weather forecasters were right about when this storm would come and when the snow would change to rain, so I assume they will be right that it will change back to snow tonight, with more snow coming Saturday.  Ugh. 

Back in the "real world," Janet Yellen has moved in as Fed Chair and promptly told Congress that nothing would change.  This pleased the stock market which always favors higher prices today and we'll worry about next year when it comes.  I call this the "Wimpy Syndrome" (I'll gladly pay you Tuesday for a hamburger today).  The good news is that she is continuing the reduction in bond buying, but the bad news is bond buying continues, and the Fed's accomodative stance that punishes savers by keeping interest rates artificially low has the ironic effect of starving the economy.  I guess the Fed's dominant Keynesians will never figure this out.  Luckily, our stock trading formula seems to thrive under these suboptimal conditions.

Congress did its part by abandoning any attempts to use the debt limit law to achieve budgetary discipline.  I guess no one gives a hoot anymore.  At least we have the Sochi Games to distract those who care about that.  Even I haven't been able to ignore a few of the nice moments from there, mainly the Opening Ceremony   (unfairly criticized because one of the Olympic Rings didn't illuminate, but really, who cares?) and the Russian Pairs figure skaters.  The best story I heard reported from the games was, as usual, from curling fans, noting the absence of alcoholic beverages at many of the locales (the Russians are appropriately paranoid about their extra mortality caused by alcoholism).  "Really," said one young fan, "how can you watch curling without some beers?" which strikes me as an eminently reasonable question.
As interminably awful as the Grammy's award show was, Grammy's tribute to the Beatles was very entertaining.  If you saw it, you saw many of today's artists performing excellent covers of very good Beatle
songs.  As for the performance by Paul and Ringo, it was also fun to watch if not exactly an artistic triumph.  Fittingly, the Journal's excellent rock critic Jim Fusilli authored a retrospective last week called "Invading Powers" recollecting Beatlemania 50 years ago.  Here is an edited version:

"Sociologists who study the 1960's attribute much to the Beatles' arrival in America 50 years ago...Some credit the cheeky, high-energy quartet with being just the boost the U.S. needed after having endured the assassination of its president.  Others cite the band's seemingly instantaneous popularity as a sign of an emerging teenage consumer culture.  Such claims obscure a more fundamental question: In February 1964, were the Beatles any good?"
Fusilli points out that the Beatles were veteran performers by the time they performed on Ed Sullivan, at Carnegie Hall and the Washington Coliseum. They had performed almost daily since summer, 1960, and at the Royal Albert Hall twice in 1963.  They had also done two sets a day at the Olympia Theatre in Paris in the weeks before coming to America.
"By 1964, the Beatles were a tight quartet who could play pop, rock 'n' roll, rockabilly, and R&B with equal force and efficiency.  They had studied (and covered) their predecessors-but had developed their own sound: Lennon and McCartney gave the group two versatile, easily differentiated vocalists; and Harrison...was a lead guitarist with a feel for several styles.  McCartney wasn't yet the exceptional bass player he would become; Lennon provided color and support as a rhythm guitarist.  But with the savvy, rock-solid Ringo on drums, they were built on a platform of driving rhythm.  What distinguished the group, though, was its songwriting."  Here Fusilli recounts the early hits they wrote, McCartney's "Love Me Do," Lennon's "Please, Please Me," influenced by Buddy Holly and their first UK #1, the first two US albums, including "I Want To Hold Your Hand," #1 in the U.S. by the Feb. 9 Sullivan gig.
"They opened the Sullivan performance with McCartney's "All My Loving," which displayed the group's many talents in well under three minutes.  The meticulous, syncopated arrangement found Lennon playing triplets on rhythm guitar while McCartney, who sang lead, offered a walking bass line and Starr altered his accents on his snare drum as his cymbals sizzled.  After adding tidy country licks on the turnarounds, Harrison played an eight-bar interlude at the bridge with nods to rockabilly.  A cleverly crafted pop gem, "All My Loving" was delivered with confidence and an infectious elan born of experience."
"After performing "Till There Was You" from the Broadway musical "The Music Man" - perhaps as a bone thrown to Sullivan's traditional viewership - they played another compact gem: the Lennon-McCartney composition "She Loves You."  As on the recording, the live reading was driven by Mr. Starr.  Two and three part harmonies delivered the lead vocal, which built to the twin hooks: "woos" and "yeah, yeah, yeah!" Lennon played folk chords on electric guitar, thus enriching the mid-section and freeing Harrison to add colorful filigrees.  In front of more than 70 million viewers, the quartet knew they were on their game.  At the midway point, Lennon, who had been relatively static in contrast to McCartney's bubbly exuberance, exchanged a smile with Harrison.  High on his platform, Mr. Starr continued to bob behind the cymbals.  His fills and the rumble of his kick drum and toms made the performance."
"The Beatles returned in the second half of the show with the Chuck Berry-influenced "I Saw Her Standing There and "I Want to Hold Your Hand," but by then notice had been served.  ...The Sullivan audience saw that the band could deliver the hits with authority and charm.   Two years after Mr. Starr joined them, the Beatles were...a self contained group capable of writing, arranging and performing increasingly challenging and ever-engaging rock and pop of the highest caliber.  Were they any good?  Oh yes.  And they were going to get better."

My view - The Beatles in 1964 were a competent rock band.  Harrison and McCartney were learning to play their instruments and eventually would be very good.  Starr was an underrated drummer, largely because his technique was unconventional.  As vocalists, they were exceptional, particularly McCartney.  And they had three great song writers.  McCartney and Harrison wrote outstanding melodies, and Lennon's lyrics were the strength of his songs.  And they were outstanding arrangers too, an ability not recognized enough.  If you want to know how to end a record, listen to the Beatles.  Only rarely do their songs fade out.
It is interesting that "I Saw Her Standing There" is still so fondly remembered.  That was the "B" side of the "I Want To Hold Your Hand" 45 RPM single (remember those?).
Those were fun days and the music world was really on fire.  As Beatle songs became more sophisticated and broke new ground, it was common to downplay the early hits, but  they have survived anyway.
You can read Jim Fusilli's reviews in the WSJ every week, as if you needed yet another reason to read America's greatest newspaper.

 By the way, one other thing little remembered.  Several months before Sullivan, Jack Paar ran a film of the Beatles playing in a European concert, which for many of us, was the first time we had heard of or seen them.  They were shown singing "She Loves You" and it was that rare song you love the first time you hear it.  After that, those of us who had seen it were primed and when DJ's like Murray the K and Cousin Bruce Morrow started promoting the group, Beatlemania was lifting off.

For those who heard the State of the Union and are anxious to start their MIRA, my advice is forget it, and buy a lotto ticket.  Obama's brainchild has little or no appeal for anyone I can think of.  Investments will be limited to low interest Federal debt, and the accounts themselves must be rolled into Roth IRA's as soon as there is any appreciable money in them.  In short, anyone who thinks this will be a retirement solution is dreaming.
 WSJ's Dorothy Rabinowiz has long been a voice in the wilderness defending  those railroaded into court and even prison by out-of-control DA's and AG's and other accusers in the wave of trumped up child abuse cases from the 1980's and early 1990's.  Most of these cases were built on the "testimony" of young children, who were persuaded that their teachers, schoolmasters and even parents had abused them.  They were extensively coached  by these accusers, often making the most ludicrous charges and describing impossibly absurd abusive acts.  The most infamous of these trials was that of the Amirault family,which owned Fells Acres nursery school in Massachusetts.  Ms. Rabinowitz kept after this case until finally the family was exonerated and released from prison, though the DA's, led by the current Massachusetts AG, Martha Coakley, have never acknowledged their innocence.  Violet Amirault and her daughter Violet served 8 years in prison before their convictions were overturned.  Her son Gerald was finally paroled after 19 years  The child accusers were almost as much victims as they, never actually being able to separate what was true from what they had been programmed to believe.

Ms Rabinowiz resumed her crusade last week, this time in defense of Woody Allen, who was recklessly accused by his ex Mia Farrow, and her adopted daughter Dylan who became convinced that Allen had abused her when she was 7.  Dylan recently renewed those charges.  Rabinowitz' take is illuminating.  "It's impossible to read Woody Allen's reply to charges that in 1992 he molested his and Mia Farrow's 7 year old adopted daughter, Dylan, without being struck by its haunting echoes of the words of countless people accused of such crimes.  He had thought that the charges were so ludicrous he didn't think of hiring a lawyer, he reported in an op ed for the New York Times on Sunday.  He had believed that "common sense would prevail."  He had "naively thought the accusation would be dismissed out of hand."  It was the kind of naivete evident in virtually every person known to me who had been falsely charged...convicted and sentenced to long prison terms on the basis of testimony from children coaxed into making accusations.  Accusations made, at ages 5,6,or 7, that many of them would continue to believe fervently were true, into adulthood."

Allen said in the op ed, wrote Rabinowitz, that "After Mia Farrow accused Mr. Allen of molesting Dylan, Connecticut police called on the Child Sex Abuse Clinic at Yale-New Haven Hospital to investigate.  The investigators' conclusion was indisputably clear.  :Dylan had not been sexually abused by Woody Allen.  She had made the accusation, the investigators said, either as a response to stress or because her mother had coached her to do so, or a combination of both.

So how are we to know the falsely accused from the true sex offenders every community fears?  That's a hard question, but for starters, there should be corroborating reliable evidence to convict.  The Penn State cases are an example where the evidence meets that reliability test.  But Woody Allen?  Are you kidding?

One might also consider his primary accuser, Mia Farrow.  Farrow's good works on behalf of world youth notwithstanding, her life's record is largely one of rank opportunism starting with her goofy marriage to Frank Sinatra.  Her relationship with Allen secured her standing in his ensemble movie casts.  Allen's own life choices represent some odd twists and turns, but his talent has been undeniable, and if anything, his desire to be a private person speaks for itself.  Self promotion is not what Woody's about.  His longstanding friendships and the desire of his cast members to work with him again and again put the lie to the monster characterization Farrow would assign him.

I think Rabinowitz again has this right.  It's a shame that Woody's reputation has been so unfairly tarnished.

Here are the transactions since the last post:
Date          Stock symbol       Shares           Price      Comment
1/17              ONCS               4200       0.4725        Our lotto ticket paying off?  Bought a few more shares
1/21              WFC.PR.P          100      21.31
1/21              SJM                      25       97.80          Still a value buy even at this price
1/27              GWR                    25       90.03           Zero buy, Small RR performing big
1/28               IAU                     200      12.20          The "other" Gold ETF
1/29              GIFI                     100      20.97           Value in the "Tulane Portfolio"
1/31              AGCO                   50       53.89           New name meets the value criteria
2/3                SBRAP                 100      24.75           Another good looking reco from full service broker
2/5                NEM                    100       21.30           Maybe it finally bottomed
2/7                FNFG                   300       8.45             Zero buy, trying to consolidate its aquisitions
2/10              PLP                       100      21.25            Best preferred stocks are in the insurance sector
2/11              AGCO                   100      51.27            Value Buy, building the position

1/15               B                            100      39.31            We paid 8.3125 on 3/22/99
1/21             DBD                         700      34.90            Took Diebold off the hold list; took a small loss
1/21             BEAM                      150      83.40            paid 62.75 in 2006, 52.88 in 2008
1/21             BEAM                      150      83.40            paid 76.62 in 05, 21.52 in 09

We sold BEAM to the arbitragers; the company is being sold to Suntory.  On Diebold, we just don't think its products have much growth potential in the US, and management doesn't seem to be able to achieve its international potential.  We found AGCO in the WSJ daily list of dividend increases, and noted price to book of less than 2 and debt to equity less than 0.7.

Neither redwavemusings nor its author are investment advisors and the securities mentioned here are not to be considered recommendations since they may not be suitable for readers.   

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