Wednesday, January 10, 2007
There is no one else who is saying anything about it, so naturally I will. How about those Gators? Florida whipped the ever-loving bejezus out of Ohio State last night to become the BCS college football champions. I love it when the underdog not only wins, but it also does so convincingly. Having been an underdog most of my life, I love to see a team that is told that they simply can't do something, and actually go out and do it well … Well guess what? Just as high school drop outs aren't supposed to be able to achieve a level of success in the financial industry or have several articles and a book published, Florida wasn't thought to be worthy of even being on the field with the brutes from Ohio State. Crown them champions.
There are lots of trading, market and life lessons here.
1. As always, you should have an edge. Florida found the passing seam in OSU's zone defense and exploited it.
2. When it's clear that your edge is working, exploit it ruthlessly. Once Florida knew where the seam was, it pushed the point and went back to it over and over again.
3. Respond to adversity by attacking. When OSU's phenomenal player, James Ginn Jr., ran back the opening kick for a touchdown, Florida could have been demoralized by falling behind such a heavily favored team. Instead they got a runback of their own and calmly drove in for the score.
4. Play great defense. Florida's defense refused to make mistakes last night. The Heisman trophy winner was 4 of 14 passing for 35 yards and they could never get going. Protect your bankroll at all times. Don't be afraid to push it when you have the edge (the continual blitzing last night kept Smith running for his life), but not until you know you have the edge. There have been a lot of times in the past few years where playing good defense, such as having cash on hand and selling as the market went higher, allowed me to jump on opportunities that led to profits.
5. Loyalty counts. Florida's kicker, after being all SEC last year, has had a difficult year. They stuck with him. He booted two from over 40 yards. OSU's head coach, Jim Tressel, refused to allow Troy Smith take the blame for the loss, and instead took it all for himself. People remember things like that and think better of you for it.
6. If you do lose, be gracious about it. Learn from it. Nobody likes to lose but it will happen. Jim Tressel's post game interview was a lesson in the behavior of a gentleman. There is no doubt in my mind that he will review, learn from this and be back with a top ten program again next year despite the humbling nature of being beaten so badly.
7. Know when the risk is too great. When asked about Boise State, Urban Meyer stated that he loved those guys, but he wasn't going to play them. Boise, by whipping Oklahoma, proved that they are indeed a top flight school. Florida is relieved they don't have to do a one playoff game with that tricky high octane offense.
8. When the odds are against you, study, prepare and believe in yourself. Nobody thought Florida had a chance, and that could have demoralized the gators. Instead they were there to prove a point. They practiced, and they studied film (no one else found the seam in the zone all year, so they studied hard). They believed, they studied, and they worked. Call them a champion.
Monday, January 08, 2007
I usually sit down and review the year gone by in the last week of the year. This year however I was in South Florida with old friends eating drinking heavily and trying to win the heart of a certain young lady with the cutest damn Kentucky drawl and brightest eyes I ever saw. Me being me, of course this failed in typical tim like spectacular fashion( I am now completely convinced that my sole serious purpose in life is to serve as a warning for married guys about being single in your 40’s) but the weather drinking and eating was spectacular. To sail in 80 degree weather on New years day makes one wonder why I ever stayed up here in the cold during the holidays.
On just about all fronts its been a spectacular year. The markets have been fantastic to me. Its been a great year for my speciality weird twisted unusual securities(talk about matching style to type!)Lets face it, Biloxi Land and Marsh is not exactly a household name.It has however been a great stock along with such well know names as bexil, Optimal,Nashua and Ipas. Book value and high cash on the balance sheet continues to work very well. There was a lot of success early in the year selling options around activist stock and I continue took for situations to do that but with the vix at 10 theres not many trades around at the moment. It remains in the arsenal however. The SPAC rade. What can I possibly say about that? Aldabra,now Great lakes dredging. Up 400%. AQR up 30 % with wozniak and amelias completing a tech acquisition. ESA, up almost 50%. The truly scary thing is these warrants are so cheap ESA and AQR remain attractive ad I ll buy them on every down tick.I ll be reviewing all outstanding SPACS for new trades and will report back on any new opportunties as soon as Im done.On any pullback I thin shares of NSHA, FRN and FINL are worth picking up as there is strong activist pressure and the real values of these stocks seems much higher to me.With the Canadian government effectively shooting them in the ass with tax arrows, you amost have to own shares in some of the Cnadian Energy trusts. I like pDS, 5 times earnings and a 15% dividend yield and Peak energy. Rally har not to like a stock at 60% of book, 6 times earnings and..get this..a 23% dividend yield covered by cash flow.
Having said that, and knowing that my genral market calls have been spotty at best, I don’t see how we can go much longer without a pullback in the overall market. There are too many reasons for it to go down here. Housing,economic confusion and lack of direction (inflation,deflation,stagflation,its all on the menu. Just order the one you like and take your chances), increasing troop strength in Iraq and still the possibility of very real conflicts with North Korea and Iran I think we need to see volatility rise and prices pullback here to give us more a normal operating environment. Now all due respect from my good friends in Chicago, I don’t think the world will end, I just think some good healthy selling is in order. My official prediction. We will see some volatility come back, we will get one good strong sell off that will create an enormous opportunity along the lines of 2001-2002 in select sectors. The Dems being in control in Congress guarantes gridlock and the 90s proved that the inability of all those good folks and blundering idiots in Washington to get anything done is good for the markets.The interesting developments out of Argentina today with Chavez moving to nationalize companies heavily owned by foreign investors make bring some sense of risk back to the Emerging markets. It bears watching.
In Sports its been an incredible year. Maryland women winning the national title. The ravens in the playoffs with a great shot at the superbowl. The Orioles we will leave in the same category as women from Kentucky. I don’t want to talk about it.The tigers improbable run into the series was inspiring to everyone except televsion executives. T he kid Howard from Philadelphia was impressive at the plate and looks like a blak mickey mantle at the plate and in the field Boise Stae-Oklahoma. Nothing else needs to said there. Navy, 9-3 barely losing to Boston college. Maryland football revived under Ralph da fridge friedgen back to winning ways including a spanking of purdue in the trojancondomlatexunderwear bowl ( I have no idea which corporation bowl it was. Does anyone else miss when it was the orange Bowl, the sugar bowl etc?)Oscar de la hoya fought again and looked sharp setting up the mayweather fight later this year which promises to one of the best ever. Looking ahead we have the NFL playoofs with some dream matchups. Eagles SaintsThe Chargers patriots(you don’t watch this you re not a fan period. The Mayflower Bowl with the Colts coming back to Baltimore to be massacred by the Ravens. My prediction? This ones not even close. The Ravens keep manning running for his life instead of passing and crush the colts.Acc play starts this week with Maryland at 14-2 and looking like perhaps they will avoid the NIT this year.Maryland Women still ranked number one. 4 to 6 weeks when I can have hope the Orioles got better over the winter before they break my heart yet again.it been a good year to be a sports fan and I think 07 will be as good or better. Tonights game..Heart says florida but my god Ohio state is just so strong across the board.
Been a good year for books as well. Anew darker doc ford from Randy wayne white ( ate at this place in sanibel over years. Best Cuban sandwich I have had in years). Two romrm rober parker, one in the spenser series and one in the jesse stone. Solid new offerings from WEB griffin. Red the best book on insider buying and selling I hve ever read,Investment Intelligence by Nejat Seyhun, Christopher Moore had a new book that was predictably hysterical, The jokes over by Ralph Steadman was a sentimental journey for fans of the hunter Thompson lifestyle and body of literature.Strong suggestion one reads doctorows the march as well.07 looks as strong on the book front. New Parker this month. Christopher Moores follow up to bloodsucking firnds out this wee and a new randy Wayne White due in March.Mohnish Pabrau has one coming out as well and given his aggressive deep-deep value style is probably going to be a worthy read Bogles little book of value investing fue as well would should be a fune read since many of earn our living proving that indexing is for bonehead academics too damn lazy to do the work,.
06 was a good year for travel as well. Three trips to Kentucky, one for the annual booze fueled degenerate gambling trip ( where fred insisted .rounding up that damn female vet from Britain to arm wrestle me and baby faced mike Ott taking bets like a drug crazed bookmaker at a Tyson fight .Goddamn broad had shoulders like cannonballs but O perservered) and twice on my quixotic romantic quest(yeah I know I should no better but I just cant stop myself man those eyes!) Two to chicago, the mandatory deep winter Crossman melvin drinking and stock market binge and the air show with what I hope is annual tradition the party at pams. Great times with great friends every time I stray to the windy city. 3 to florida including the beemer adventure you may recall from earlier writings, an old friends wedding,made more special as it was the one friend everyone has who swore he would never marry. I always knew we would be together at a wedding someday but I thought it would be another one of mine. The Kentucky-Tennessee football game(see quixote,tim,oops),more time to new york than I can count. Again 07 looks even better. I ll be in Chicago soon for the annual mid winter deed, keeneland looms on the horizon, Mike has made plans for the Iowa football game for some of us(sorry Mike you may look like a choirboy but even I never left a chick in a Mexican jail),looks like I ll have more trips to Florida and possibly reno soon.I ll never log as many miles as Mcnabb but I ll be out and about in 07. If I cant get that freaking cheese head hillman to come east I may actually have to go to (shudder) Wisconsin.Marriage does not exempt one from his spec after dark duties.
All in all, 2006 was a great year. Not everything went the way I hoped but hell it never does.Thanks to Pam I finally got a chance to write a book. Granted it was a ghostwrite job but it was a thrill to see my work on the shelves of the bookstores.For such an irascible irrepressible little prick I have been blessed with friends like no other but from the spec and trading world and here on their island. It was a year of fast boats, long nights with loud music and louder friends, potters patch, as well as intriguing and rewarding markets. Managed to get tossed from the jetty(an impressive feat given the jettys clientele) twice for which I would like to express my appreciation to matt and darryl. Assholes. There were great books, some women of grace and beauty who moved through my life and I ll always be glad they did. There were a few who maybe weren’t that beautiful and damn sure weren’t graceful but hell, they were fun.
Whast next. Who the hell knows. I have another book in the works that is proving to be a lot of fun to write. Theres new books by some of my favorite authors. I am sure there will a couple of opportunities to allow some wonderful woman to kick my testes back up into my left ventricle and my dumb ass will be right there, there will be great games, incredible moments, sparkling sunsets and as always the group of friends who mean so much to me. There will be setbacks of course. But life is far too short to dwell on those so I prefer to look at the good things I see for the year ahead. The markets will be tricky but I think there will some incredible opportunities to make money this year as volatility picks up I cpntinue to be a boat bitch as willis calls me hopping rides at every chance ( I would buy one but really..do you really want to see some with my lack of dexterity and coordination and willingness to do stupid shit just because it sounds fun driving something with 1000 horsepower?To say noting of the two kids in college who might resent seeing daddy cruise around the bay in their tuition).I ll just buy the beer and kick in for fuel. Safer for everybody. So reach up and pull the belts tight boys and girls. New year, new goals, same mission. Prosperity, growth and two and a half shitloads of pure old fashioned fun and good time for everybody