Deep Value Letter - Banner Ad / Email Capture

Tuesday, February 13, 2007

its time

As snow and ice pound through the mid atlantic region I try to keep in mind that winter will end. It always does. Just as the stock market seemingly always rallies and night turns to day, soon this blight of crappy cold weather will go away and bring sunshine and warmth. I am aided in this effort by the simple glorious fact that today and tomorrow are two of the most magical days on the calendar. That’s right. Pitchers and catchers report and spring training begins. See- even the word is there to help chase away the chill SPRING. Hope springs eternal.

Unless of course you are an Orioles fan. Its bad enough that we have to be in the same division as the Yanks and the DAMN red sox, now our most veteran pitcher is out for the year with a rotator cuff tear. Not what you want to hear the day before camp opens. We quickly signed Steve traschel as a replacement but he was an unsigned free agent nobody wanted.Meanwhile the red Sox continue to feature an unbelievable starting line up and have added pitching. The Yankees of course are the Yankees so again we seem to be playing for third at best before a pitch is thrown. One can hope one of the two giants has a disastrous season allowing us to slip in a wild card but I sure wouldn’t bet it that way.

This should be an interesting season. Will Big head barry break the record or go tojail? Could this be the last year for Joe torre if he doesn’t win World Series number 27 for the pin stripers? There’s four guys with a chance to hit number 500.. Frank Thomas (487), Jim Thome (472), Manny Ramirez (470) and Alex Rodriguez (464).Is matsuzaka worth 101 million dollars? Can Slamming Sammy actually make a big league roster this year? What month and where will Roger Clemens come back? Is Glavine up to the workload without Pedro in the rotation? Is Detroit for real and can they possibly repeat? Who is this years Cinderella team? Have the cubs spent enough money to finally field a winner? Will anyone jack 70 or more this year? Smart money says that a healthy Pujols, Ryan Howard have a chance and with Soriano hitting into the short porch a Wrigley you cant rule him out. It should be a great year. My prediction? Te Yankees. I think Clemens joins them in June, A-Rod earns his paycheck with a monster year and Boston falls to the wayside in September. The Orioles? Probably out of it by June First. Love the team but it’s the worst ownership in the game.In the national league I think the cubs did spend enough. They are this years Detroit

Another sure sign of spring. Just booked my tickets for the annual spring spec list after dark outing to the hallowed grounds of Keeneland raceways. It’s the Ashland stakes this year instead of the bluegrass but it will still be bourbon, gambling and all around fun.Maybe I can find once more the chain smoking, foul mouth hard drinking coed of my dreams that Crossman scared away a few years.Or at least have a hell of a good time looking.

Spring. Baseball. Ponies. Its almost here

Thursday, February 01, 2007

Mcgee and markets

This is the time of year when things begin to slow to a crawl on the island. Summer, of course has been over with the hectic pace that comes from living in a place that runs at a frenetic pace to get as much pure fun into the warm months as can possible be done. Summers with the roar of engines, the swirling of bbq smoke drifting through afternoon skies resonating with music and laughter, the late nights with good friends checking out good music under the stars an amazing mix of cold beer, gin cocktails, good music, steamed crabs and great friends that are the hallmarks of an island summer. Then of course we have football season with mandatory Sunday barroom appearances to watch the ravens, along with Monday Night Football, college football Saturday afternoons. This brings us, of course into the Holidays and all the sorted get togethers, parties and shopping expeditions. Now, however for a brief period of time life around here slows down a bit. College ball ended a few weeks ago with Florida Stunning the corn fed boyos from OSU, The ravens are out of it entirely after losing to the Colts in the first round of the playoffs. There is this week’s super bowl and there will be a party for the game. I ll make some chili, have some drinks and watch the last game of the season. But it wont be the quite the same party it would have had the ravens made the game. After Sunday, nothingness, a black hole containing only Valentines Day and college hoops. I ll watch some college games but wont really care until the Acc tournament starts. Besides the Terps look to be sliding back into NIT hell again this year so what’s the point? So, life slows down now quite a bit. There will be some happy hours, and dinners but we will all catch our breath and settle down for a few months.

What to do with the time? Its winter now and the good weather has departed. Cold and snow in the forecast is the order of the day. Let me go on record here. I freaking hate the winter. There is nothing nice about it. It is cold. It is wet. People who profess to like winter and find the colder temps invigorating should be locked up for the own protection. Invigorating is a tropical breeze swirling through a tiki bar on a 90 degree day while I watch beads of condensation form on my ice-cold gin and tonic. I could sit around aided by a good glass of grouse and think deep thoughts about life, the world and the markets and some nights I shall do exactly that. If I want to depress myself I can always consider the ongoing search for the next incarnation of the one true love of my life and the comedy of errors that has become. It has been so weird and ridiculous that the WB turned it down when I pitched it to them as a comedy adventure series as too unbelievable. So, mostly reading for me during the long winter nights. I will read some non-fiction market and history relayed books but mostly it will be fiction.

Why fiction when there is all that great nonfiction to read. You can learn stuff, expand your mind and horizons perhaps but a lot of nonfiction is really just someone else’s opinion. It is a pretty good bet that I will eventually get around to Ken Fishers book and a writer and musician by the name of Gary marks has an interesting looking book on the way from Wiley called rocking Wall Street. So some non-fiction will make the list. For the most part I avoid a lot of the new market and finance related books because there is not that much new in them The basic readings of graham, Niederhoffer, brandes , Klarman, greenblatt and the like have given me a great base of knowledge from which to operate and extended knowledge lies at then of the phone line since through participating in the spec list all these years I have a great extended network of friends who trade pretty much everything under the sun.

Not only is fiction relaxing and much more entertaining than the garbage that spills from the television on an unending basis, there is in fact much to be learned from good fiction. Think pf previous discussions of lessons from Don Quixote, Moby Dick and the O’Brien series of Aubrey books. Real meaty stuff on living dying, loving and trading that stay with you long after the book is finished. There is a just released collection of Louis L ‘amour stories out that can teach you far more about self reliance and achievement than a stack of psychobabble tomes on the same subjects. Think of the lessons of robert parkers Spenser series and the code of honor and determination to always do the right thing based on your personal belief system, no matter what it takes. To say nothing of taking time to enjoy the good things of life, the love of a woman, cold beer, baseball and good food. Fyi, I f you pay attention there is always at least two very good recipes in every Spenser novel. I have tried a few of them and they are as good as parker makes them sound.

This time of year, with the skies gray and overcast and that damn artic wind finding its way southward I will no doubt revisit a few of the timeless John D. MacDonald Travis McGee series. McGee, the square jawed, deep water tanned sometime beach bum and part time r recover of lost items is one of the greatest characters in all of fiction. This is the series that created the genre now referred to as “Florida fiction”. McGee, happily ensconced in slip F18 of the bahi mar marina in Lauderdale has a unique approach to life, enjoying his retirement now while he can enjoy it and working only when the stash in the special hitting place in the hole of his beloved houseboat, the Busted Flush gets low. He finds things thought lost for half the value and along the way he usually helps some poor soul redeem themselves and put their life back on track. Along the away there are long conversations with Meyer the hairy economist, his best friend in the next slip over aboard the John Maynard Keynes. Consider some of these quotes for the series and see if you can find the lesson that lies in these superb books

The early bird who catches the worm works for someone who comes in late and owns the worm farm.

How true, how true. I have never been one to be able to work for someone else in the true sense of the word. Yes, I have a job but I work when I want, how I want and for the clients I choose to work for. I simply could not do it any other way. The mindset that allows a human being to have the terms of their life, their paycheck and so many other critical choices dictated to them by another person escapes me.

Education is something which should be apart from the necessities of earning a living, not a tool therefore. It needs contemplation, fallow periods, the measured and guided study of the history of man's reiteration of the most agonizing question of all: Why? Today the good ones, the ones who want to ask why, find no one around with any interest in answering the question, so they drop out, because theirs is the type of mind which becomes monstrously bored at the trade-school concept.

This kind of goes along with Victor’s assertion to only read hundred-year-old books. It also goes to why I like to read fiction. Only in fiction can we begin to understand the base motivations of humans and individuals. We can pick lessons and gleaning about the right way to live, to think in order to achieve out goals. So much of today’s nonfiction is the hey look at me, ain't I smart and wonderful and if you don’t agree with me then you are an idiot. Compare some to the best-selling life lessons claptrap books on the shelves today with the wisdom of just one sentence form Ishmael in Mob Dick

Nothing exists in itself. If you flatter yourself that you are all over comfortable, and have been so a long time, then you cannot be said to be comfortable any more.

More from McGee

Piss and vinegar can't be summoned on command. The muted colors of a muted life will not suddenly brighten because you think it a good idea they should.

You cannot expect to live a risk free life, content with your 9 to 5 job, the Simpson’s and a six pack every night, maybe a little bowling and poker and expect to rise up to a true crisis or event. The mindset and mental skills wont be there. By staying sharp, taking risks and seeing life, as it is each and every day is the only way to actually live it, enjoy it and overcome the obstacles. To give into mediocrity in life and attitude is to accept that you will pretty much just have to take whatever life gives you, as you will not have the juice to fight back.

One last one, from Meyer

In all emotional conflicts, the thing you find the most difficult to do is the thing that you should do

Doesn’t sound too heavy does it. Now run back in your mind all the serious emotional conflicts you have ever experienced and realize just how powerful the statement is. Hell, apply it to your trading and see how powerful it is. Breaking out the canes for example when prices are falling all around you and the doom and gloom guys are all over CNBC and the Journal. It is damn hard to do but it is almost always the right thing to do. Resisting the urge o jump in the pool when prices are racing higher is hard as well however jumping into the late phase of an up move when all seems happy and prosperous is a great way to make a generous donation to the mistress of the markets.

So, its winter. Time to hibernate a little bit, stock on some good scotch, some great books and let the calendar works its way to back to more acceptable temperature levels. Theres new books by my favorite writers due out, I have a bookstore across from my office, and I have good old Amazon ready to wade through the sleet and snow when I don’t feel like it. There are some classics to reread for the new lessons contained within their pages. I hate winter and cannot wait to see it leave. Until then I have books, I have scotch and I have an incredible set of friends in whose company I can wait out the long gray afternoons. Now, if only we had some contender for the next incarnation.

Oh well. Spring will be here soon enough.