Saturday, December 31, 2011
Okay let’s get it out of the way. A lot of bad shit happened this year. The IRS came calling with a vengeance, the reorg at my biggest contract cut compensation, the Orioles sucked, Gary Williams was forced out Willie Don died, Kentucky lost in the final four, the Fed continued its horses ass economic policies, the troops are still in Afghanistan since nobody in the defense department has actually ever bothered to read a history book or Kipling novel, Navy football had a losing season (even though Corban and Mr. Earle you will note that we did beat Army AGAIN), I didn’t make it to Chicago or Lexington all year, the drink tax passed in Maryland, Arab Spring became a Muslin extremist nightmare, Obama is still President, people still care about Lohan and the Khardashians, Christopher Hitchens, Joe Frazier and Al Davis died, there are no more Harry Potter movies and there is a Justine Bieber singing toothbrush going off in my house every morning. You could add all that up and say that 2011 was a less than wonderful freaking year.
Except it really wasn’t. Any year that ends with most of us still here is a good one. Truth be told viewed through the lenses of experience it was a pretty good year. For reasons unbeknownst to me my wife still loves me and has been a rock as I dealt with some of the weirder things that fell down on us this past year. My kids are all doing well and moving forward with their lives and occasionally grace us with an appearance on weekends. Both are working hard towards what they want out of life and for the most part succeeding. There was wine, there were books to enjoy throughout the year. There has been music and food to savor. There is love, family and friendship, magic moments and contented days of doing nothing. There have been setbacks and disappointments but that’s just life. It happens. You can whine or you can live.
Had enough of the syrupy stuff? Me too. Let’s now move on to some of the important stuff like sports markets, books and maybe even politics as we roll into years end. I ll start with sports and Maryland basketball . Forcing out Gary Williams was criminally stupid. The guy is justifiably a legend and belongs on the bench calling the X’s and O’s. They should have gone out and hired two or three great recruiters to offset Gary’s weakness in that area but as usual the powers that be neglected to seek my advice in the matter. What we have now is a lot of raw undisciplined talent (the kind Williams excelled into making into winners) that is struggling to beat the small schools and stands a significant chance of getting their boy parts kicked through their earlobes when ACC play starts next month. It is hard to watch so I have not so far. Thank god I picked up a liking for Kentucky basketball. I will add that to the list of favors owed to Colonel Depew. Omid and I tried to offset our sports pain by becoming Knicks fans but the early season has me questioning that decision. Go Big Blue is my motto.
The Orioles have done it again. They raised my hopes and then exceeded even the lowest expectations you could have possibly had for the team. The change in general managers does not make me much more hopeful looking forward to 2012. Our position players are not bad at all and JJ Hardy is a diamond in the rough as far as I am concerned. A decent shortstop with power is a blessing in baseball and the guy plays with heart. Weiters is the best defensive catcher in all of baseball and the bat is getting better. When his rookie contract is up the guy will become a legend in pinstripes. Jones and Markakis get the job done day after day. I love Reynolds all or nothing approach to hitting and it works for him. The team is one more big bat away from being a real team. That is if you don’t have to have pitchers. The mantra every year is that the young arms will get better. Every year the young arms sink to depths that would make Jacques Cousteau blush with envy. I will still root for them since that blood does indeed run deep but damn it can’t anybody around here throw a fucking strike that stays in the ballpark?
We will find out what we need to know about the Ravens tomorrow. They have been great at times and at times looked like they forgot what game they were playing. Much like me without a few cocktails this team just does not travel well. If they go on the road and beat a desperate Bengals team they have a real shot at the Super Bowl. If they don’t then figure they will get an ass whipping on the West Coast in the first round and head off to practice their golf game. Either way it’s an 11 win season at least and a lot of fans in other cities would kill for that.
This is of course the time of year for stock market and economic predictions. I love it when the pundits and other assorted idiots make such confident predictions about the next 12 months. These shit heads are never right but they are loathe to let a little thing like inaccuracy stop them. No one knows for certain what the market will do next year. This year is probably worse than others for making predictions. You have some serious wildcards out there in the form of Europe and the Mideast that could change the game in a blink of any eye or detonation of a really big bomb. The political and fiscal situation here at home is muddled to say the least and none of the real negatives are fixed.
The two things to focus on are jobs and real estate and both are still weak. I love those who cite the reduction in the unemployment rate as a sign it’s getting better. Unemployment has improved by about 10% or so this year. Surprisingly that’s just about the number of folks who said screw it and quit looking. Reducing your work force is not really an effective job creation tool in my opinion. Reading over the releases and the Beige book this year it looks to me like job creation is anemic with a few signs that it may get better next year providing nothing else happens to derail the economy. You can cite all the stats you want all day but the fact of the matter is that demand for food banks and other relief agencies is rising and that’s not happening because of robust job creation. Call it anecdotal if you like but I see a lot of people out there who cannot find jobs that do not involve smiley face name badges and an inquiry as to your preference for fries or not.
Real estate has pockets of strength in areas like Washington DC, Boston and New York. The financial services industry in the form of big banks and bigger government is cranking along on all cylinders and that has propped up real estate in those areas. However the most recent Case Schiller report shows that housing prices are still falling across the nation. As the robo signing and other legal issues are settled we will see a wave of previously stalled foreclosures take place early in the New Year and that is going to increase pressure on prices as well cause a spike in the supply of distressed properties. The good news is that this could finally put a bottom in place for housing prices once this new wave of properties finds a market clearing price level. On the commercial side the Moodys REAL CRE Index is bouncing along the lows as well as firmer pricing in apartments has helped commercial values. Hotel, retail and industrial property pricing is still very weak and is not going to improve much until the jobs market and economy begin to improve markedly.
The good news here is that this is great news for us vulture investors. I have ben suggesting many real estate securities over the past year and I think that these can still be bought. 10 years from now the real estate that you buy today in the form of publicly traded securities can change your life when the economy improves. I have been buying shopping center REITs like Kite Realty Group (KRG) and Cedar Real Estate (CDR). We are paying a fraction of book value of these two operators of grocery store anchored shopping plazas and enjoying decent dividend payouts while we wait for the world to improve. I like hotel REITs as well and think names like Sunstone Hotels, (SHO) , Chattem Lodging (CLDT) and Chesapeake Lodging (CHSP) are worth owning as a long term play on a recovery in the hotel industry. For office and industrial properties I am a fan of Commonwealth (CWH) as they move from suburban of urban properties in their portfolio mix and Prolodgis (PLD), a global owner and operator of industrial properties. Be smart and patient with buying real estate through the exchanges. Buy when the news is bad and the market is down to gain a long term edge.
In mortgage REITs I like the idea of owning best in class Annaly Capital (MLY) along with research driven non agency mortgage buyers like the Wilbur Ross advised Invesco realty and the hedge fund like Ellington Financial (EFC). Be double smart buying these REITs. They are seeing pressure on their spreads as fiscal policy keeps long rates artificially depressed and the headlines and short term results could pressure prices. When everyone hates em, you buy em.
Let’s move onto international banks. Either the world ends or they recover. I have no intention of buying the problem children of Italy Spain or Greece but I do like Royal Bank of Scotland (RBS) and Bank of Ireland (IRE) among European banks. I am also a fan of Aegon (AEG) the Dutch insurer. I like and own two Japanese banks that sank in the aftermath of the nuclear disaster in that country .Fears of a total write-off of Tokyo Electric bonds and a weaker economy pressures shares of Mitsubishi UFJ (MTU) and Mizohu Financial (MFG) to a point where I consider them too cheap not to own. Please keep in mind that unlike some who claim to be, I really am a long term investor in these situations. I hope to own them for a decade and only sell them at many times the current quote to fund my semi-retirement.it will be a bumpy ride and if you care about the day to day or quarter to quarter quote you may not have the stomach for these.
This bring us to US banks. The smaller regional and community banks are as cheap as I think you will ever see them If you are not friends with your local bankers and getting the low down on who survives and who doesn’t you are making a he mistake. Many of these trade at less than 75% of tangible book value and new regulations and expenses will force them to put themselves up for sale in the next few years. This will occur at a multiple of book value, not a discount as they trade at the current time. I don’t give my names away in this space (although I will happily sell them) but if you were to assemble a portfolio of banks less than $100 million in market cap trading at less than 80% of tangible book value and tangible equity to asset ratios above 10 along with Non performing loans less than 3% of total loans you will be a very, very happy camper in 5 years. Do your own work or send me a check.
Speaking of cheap I also like some net net and net cash stocks as we head into the New Year. These bunny hop stocks tend to be very boring little companies until they get taken over, reorg or management decides to unlock the value of the balance sheet as a result of family needs or activist pressure. It’s a diverse little group of companies. Envirostar (EVI) is in the laundry business. Air T is in the air delivery game with a long term contract with Fed Ex. GTSI (GTSI sells IT products to the Feds. Gencor (GENC) is in the asphalt and highway construction game. TSR (TSRI) is a computer programming outsourcing company. Lakeland Industries (LAKE) sells safety garments. These stocks will bore the hell out of you until the day they do not. They are not really long term holds either. When they pop up 50% or so its usually best to sell them and move on to the next. There are, of course exceptions to that rule but for the most part these are just okay businesses selling at really great prices.
There is going to be some other stuff to do next year as well. Microcap risk arbitrage especially in the small bank sector looks like it is going to be fun again. Eventually we will see a selloff in junk and bank loans that makes that a worthwhile activity once again. Tracking private equity moves into the banking sector should also be a profitable activity. We should see activist begin to clamor after all that lovely cash on corporate books in 2012 as well. We will talk about those when the time is right, For right now I am a cynical optimist going into the new year and only want to own the stuff that is really, really, not really cheap.
I am just going to do a drive by on politics for now. There will be lots to talk about in 2012 as the election will be hard to escape. As it looks now the republicans have blown the opportunity to unseat the current President. Rather than forming ranks behind a young(er) candidate without a long history in the inside the beltway like Huntsman, Santorum, Johnson or Jindeau they have turned into an 8 way circus. Rather than going after the president they have turned on each other and attacked like a pack of wolves in a room full of fat chicks wearing Gagaesque meat suits. Note that I am not dissecting the merits of any of these gentleman, just noting that was the way to win. They should have put Obama on his heels and kept him there. As it is now they are merely giving some very street smart Chicago Pols around the President ammunition to stuff down their throats in the fall.
In Congress I expect the partisan bullshit and bickering will get worse not better The only upside of the current mess is that it moves us ever closer to that time when Americans set don’t the Bud Can, turn off the Simpsons and recognize that we truly are going to hell in a hand basket at almost every level of American politics. I have no idea how many more gas tax increases, per drink liquor taxes, eat the rich wealth destroying measures, or dead American men and women lying in the sands of some god forsaken hell hole but it comes ever closer. Until then we can only wait and endure the foolishness that is modern American politics.
So, tomorrow marks a new year. You don’t know what will happen in the next 266 days and neither do I. There will be disappointments, there will be tears. Shit will go wrong. There will be disasters and losses. The Orioles will suck. Some trades will be losers. But there will be good times too. There will be family and friends gathered around the proverbial table with wine and laughter in equal parts. There will be romantic nights and lazy afternoons. There will be new books that entertain and educate (yes I know I didn’t cover books or music here. There was so much good stuff and new discoveries this year I will do a separate piece in the next few weeks). There will be afternoons at the ballpark with cold beer. Some of your portfolio companies will get taken over at a stunning premium.
This year , like any other year, will be what you decide it will be. You can enjoy the amazing things life has to offer and enjoy all the really great shit about being alive or spend all year bemoaning the little things you don’t like and bitching about the people you do not like. You can, as Baudelaire advised, be drunk in life, on wine, on beauty or you can be just another dumbass teetotaler shuffling towards the grave. I made my choice a long time ago deciding that I would stumble into deaths waiting room proclaiming the joy of the ride rather than bemoaning the misery of it all. You choice is up to you.
Good trading, smooth seas and Happy New Year to All.
Thursday, December 15, 2011
What do we regret as we lie on the proverbial bed awaiting the last gasp that marks our passing from this realm? It is a great question and one I have spent some time thinking and reading about over the years. How do we live our lives to minimize the regrets as we anticipate the end of our earthly experience? Is there some magic formula we can all use to make sure that we pass this live with as few regrets as possible?
A few years back I read an interview with a hospice worker on this very subject. In her many discussions with those about to pass through the door of life she found that most people regret the things they did not do far more than the things they may have done. Regardless of their crimes and misdeeds throughout their life their regrets were about not taking that trip, not kissing the girl, not chasing their dreams and not being who they wanted to be as they took their journey.
It is quite correct to point out that the whole wishing you spent more time with family and friends and other greeting card sentiments is probably a cliché of sorts. While there are not many headstones that say I wish I spent more time at work it is also true that very few of us actually pick our own epitaph. I am quite sure that many do pass those last hours wishing they had been better husbands, wife’s and parents. I am also sure many spend their last hours wishing they had done more with their careers, their business and professional life. We are all different and as much as we live different lives we will have different regrets as we approach our individual deaths.
The real regrets come from the fact that far too many of us do indeed live lives of quiet desperation. We are born, go to school, get married, have a family, get divorced, work at jobs we hate, raise kids we don’t understand, settle for less than we dreamed and do what we think we are supposed to do along the way. Our lives get shaped by television and pop culture and we drift along on a sea of conformity and apathy. I see it every day and I am sure the rest of you do as well. We all start out with dreams, hopes and desires and somewhere along the way let go of them to get along as best we can. I have yet to talk to a recent college or high school grad who told me they were going to get a job they hated, have a couple of kids who would stop talking to them in twenty years, spend thirty years drinking bud and watching Survivor reruns before dropping dead mowing the lawn in a house they hate while their ex-wife spends their hard earned retirement funds on a cruise to Cancun. I have however talked to a lot of folks my age whose life has played out exactly that way.
How the hell does this happen to us? We start out full of fire and hope. I never met a lawyer who planned to spend his years getting his soul crushed as a mid-level associate or a doctor who planned to spend a few decades doing colonoscopies at the VA clinic. We all want to change the world, to get rich, to create great art and chase big dreams as we start of the path of adulthood. None of us start out to become what so many of us do.
Little boys dream of being the star center fielder and or the hot gloved third baseman with the big bat not the backup utility infielder. Little girls want to be the prima ballerina or the singing star with the big hair and bigger voice, not the back up chorus singer. We all have the big dreams and hopes as life begins. That of course is much of the problem. We cannot all be the star we hope to be. If that was true I would currently be managing the Orioles after a long career as the much loved replacement for Brooksie on third base. I am not. I love baseball but I am about as athletic as a door stop. Never mind a curve ball I couldn’t hit a little league non fastball. Cant sing, cant dance and the only thing I can do with a paint brush is make a mess. I was never going to be a star ballplayer or artist no matter how much I dreamed.
This can be crushing. We get into the world and find out bills need to be paid, food costs money, bosses will work you into a nub of yourself without so much as a thank you or a fuck you. The world does not care about you or your dreams and no one was sitting around anxiously awaiting your arrival on the scene. You take a job to get by and next thing you know you are sitting in La-z- Boy bud in hand noticing that the only thing more absent than your hairline is your happiness. It is too easy to let live dictate you instead of you dictating life. You have to be vigilant to protect your passion and your dreams.
I can dream with regret of not being the hot handed third baseman and the world’s greatest baseball manager or I can love the fact that I can be a fan and sit in the stands on a summer day with a cold beer and a scorecard. I can bitch and moan about not going to college and maybe going to work for Goldman Sachs or even better the New York Times or I can love the fact that I am a pretty good writer and decent manager of investments and have managed to build a life around those two facts. I can spend my days wishing this or that or I can love what my life is and the fact that I have chased my dreams and made pretty good headway towards achieving parts of them.
Often life is just not going to go the way we want and wish. This does not mean that life cannot still be magical and absent of regrets for the most part. Even if life has forced you into circumstances you never wanted and instead of being the accountant that saved the world you are an IRS auditor does not mean that all the things you love and desire about life are gone. IRS auditors can still listen to Beethoven, watch sunsets, fall in love (just not with my daughter please) and appreciate the beauty of life. Just because you are selling Fords instead of driving one to victory at Daytona does not mean that life is not capable of being a beautiful and wonderful experience. There are still books, knowledge, music, art, and other parts of life that can produce great passion and meaning.
Life is precious and as far as we know we can only have one of them. We have to protect our passions and no matter what life deals out stay focused on what we love about living. We will all screw up along the way and it is probably not going to work exactly as hoped as we crossed the stage to pick out diploma. That does not mean we need to just lay down and accept what comes along the way and miss out on the adventure. So having kids kept you from going to Tibet and contemplating the navel of a Yak in search of the world’s great answers. You can let that beat you back into the chair and take in Snookies latest adventures or appreciate and love the fact that you have the chance to mold the spirit of adventure, love of beauty and learning in your kids and share the adventures with them as they grow. So you are not Clarence Darrow and the superstar of the legal world but to those you help on a day to day basis you just might be.
The problem with many of us is letting fear dictate our actions, or more accurately our inactions. Just because we got divorced or had a bad relationship does not mean we should harden our hearts against the possibility of love in the future. Just because our Fried Liver Chips franchise idea failed does not mean we should never explore another opportunity. If your first novel is rejected you have joined than ranks of just about every author who ever lived and it’s not a reason to set down the pen and turn on the TV. If you are not the star learn to appreciate and live the fact that most people never even make it to the chorus. Chase you dreams, your passion and enjoy where it takes you.Life will give you a lot of choices and paths along the way. I promise you life will give lots of chances to just quit. You will not be able to hit the curve ball. You voice will sound like amplified sandpaper scrubbed on cement. You will not promoted to department head. Someone you love will not love you back. It is not all going to go your way. It will be easy to quit. If you do you will spend those last days and hours thinking of all the things you did not do and struggling to remember who was the last one voted off the island.
I think the key to no regrets is to embrace the romance and beauty of life and to chase your dreams and your passions. You may not get all you want but there is a good chance you will get the life you want. Read the book, turn up the music, kiss the girl, take the chance. You will win some, you will lose some. But the dream come true really is the journey and adventure of it all. Don’t, as they say, sweat the small stuff because its all small stuff. If you want to spend more time with your family then do that. If you want to spend more time building your company, then that’s how you should spend your time and energy. It is your life. Live it. Then perhaps you can be able to die without regretting the choices you made along the way
Tuesday, November 22, 2011
Ah yes it is upon us once again. That magic marvelous time of the year. Over the turnpike and through the six mile long security line to grandmother’s house we go. Today and tomorrow are the two biggest travel days of the year and highways, airports and choo-choo trains will be packed to the absolute gills with happy travelers heading home for Thanksgiving. Nothing says the holidays like being stuck on the New Jersey Turnpike or DC Beltway with a car full of kids and their twerping, beeping electronic devices and loud arguments over battery chargers and seat space. Nothing, and I mean nothing, invokes the Holiday spirit like inhaling the delicious seasonal odor of exhaust fumes tempered with McDonalds and full diaper from the nether reaches of the back of the minivan. A body scan and a strip search get the holidays started off the right way. It’s the most wonderful time of the year.
But it is worth to gather with loved ones and make memories that last a lifetime. Remember last year when Aunt Ethel got shit canned on Gin gimlets and wondered constantly throughout dinner why Cousin Mary, a Lesbian rights activist, had not found some nice boy and settled down? Or the year Uncle Frank, reeking of burnt hemp and stopping only to shovel in the Fritos, insisted on telling the little ones all about his ear collecting adventures in The Republic of Viet God-damned Nam? Maybe your younger brother can show up in an Armani Suit and new 5 series Mercedes again this year and the whole family can go batshit crazy comparing all his great achievements to your piddling efforts. If you are real lucky he will also once again pull you aside later and ask to borrow a few grand until his next deal settles. No big deal, just needs to get the credit card companies off his back for a bit. Perhaps you will once again wonder how in the hell your Mom can cook such an incredible dinner when she starts drinking white wine about five minutes after the first guests show up and stays in the kitchen in order to avoid the madness as long as possible?
We here at Chez Melvin decided long ago that we were not traveling ANYHWERE over the Thanksgiving Holiday and we have a tightly controlled guest list. All are welcome until you screw up. This policy makes for the type of fun, loud, laughter filled Holidays we prefer. Thanksgiving is my slam dunk, winner by a wide margin, favorite Holiday. There is plenty of food, lots of booze, great wines and of course pie. Lots of Pie. There is football to watch, stories to tell and I do not have to buy one single damn gift for a soul. No bow, no ribbons, no bells. Just food, drink and good times. I get to spend a couple of days cooking and prepping and no one will complain too much about the mess I make in the kitchen. Did I mention Pie?
In the midst of all this we really should stop and take time to give thanks. Even if you have had a shitty year and are a victim of the non-recession we are experiencing, there is a lot to be thankful for. Look around the table . If you are surrounded by friends and loved ones enjoying the day you still have a lot of good things in your life. If you are at a Dennys by yourself with the Turkey Platter (and yes I have done exactly that) special, you are still alive and at least they were open. Even when it sucks, life can be like a poker tournament. As long as you have a chip and a chair you still have a shot. If you have the basics it is time to be grateful. Most of us have far, far more than that and should be extremely grateful for all we have. This year has not gone as planned but when I look around the table at my wife on our second Thanksgiving together and all the kids, family and friends gathered there I will be blinking away silent tears of gratitude for just how spectacular life can really be.
Every year at this time I give thanks for the country in which we live. Most of the time we have a sort of semi democratic capitalist society, that in spite of the best attempts of those with good intentions, can still offer us the opportunity to chase and reach our dreams. They will tax you, regulate and discourage you every step of the way but they have not yet figure out how to take away the chance or dim, much less extinguish, the brightness with which a dream can burn. The United States is not perfect and may appear to be less so every day but it is still the land opportunity and if you squint and peer deeply into the fabric of America you can still see the outline of the bright shining city on the hill that we are still capable of becoming.
On cannot be grateful for the land in which we dwell without expressing our thanks for those who have defended her and kept her free to stumble towards that which was intended by the founding father. Every man and woman who has put on the uniform of the United States of America from Valley Forge to Fallujah deserves our gratitude. Our peaceful dinner gathering is won for us by hard men and women willing to commit extreme violence on our behalf. I do not always agree with the reasoning the half brained self-proclaimed genius fuckwads inside the beltway use to send our best and brightest into harm’s way but I am grateful that they are there and willing to defend the hard earned freedoms we enjoy in this country.
I am grateful for books. They teach, inspire, educate, entertain, inform, relax, inform, inflame. My love of reading has been responsible for any measure of success I have enjoyed in this life. I love great books, bad books, technical books, funny books, sad books, whimsical books and lyrical books. Every book you read from the thickest text book to the basest novel contains some kernel of information and knowledge. Books make my life better. I learned to invest, to write, to cook, to drink, to be a better father, to not kill the puppy, to value a company, to laugh at my own humanity, all from books. To everyone who ever stuck a pen to paper or finger to keyboard and bled their thoughts, knowledge laughter and tears onto a page, I am grateful.
There is so much in today’s world for which to be grateful. Car Seats that warm your ass cheeks on a January morning. Cable TV Channels with 24-7 baseball coverage even in the offseason. The world of information available at your fingertips. Wireless technology that allows me…oops I mean You, to pretend to be at work when you are really on the beach. Cell Phones that allow you to be in touch around the clock. The off button on cell phones. Libraries. A world of music on a little box that fits in your shirt pocket. Microwave ovens. Wine. Pennant races. Flat screen TV’s for less than a decent radio used to cost. E Readers. Look around you and this amazing world we live in and you have to take a second or two to be grateful for it all.
Most to fall of course I am grateful for my family. My daughter who has through sheer determination and will overcome the difficulties of health problems and constant setbacks to fight her way towards her dreams. One semester left and she will joined the ranks of the chronically over worked and underpaid and become a teacher. She tells me she wants to keep going and eventually be a professor of literature. I know she will achieve it, talking too loud and laughing too much all the way. My son the businessman and well on his way to executive son. He has a drive and determination to succeed that never fails to impress me. The little shit refuses to read but he soaks up knowledge like a sponge. He has turned into such a great young man I am glad I didn’t beat him to death all those times in his teens when I was sorely tempted. My hyper intelligent stepdaughter with her runaway imagination and creative spirit absent mindedly stepping along the path out of childhood and into, dear god and sweet Jesus protect us all, the next stage of girlhood. She is 8 going on 19 and has an extraordinary future ahead of her. My wife, my partner, my best friend. I never expected to find a partner especially one like Erin who is just the perfect fit for my life. She is my other half and makes me believe in things I never did before. I never knew how much I missed having someone who makes my life whole until I found her.
I am not an idiot. There is a lot about life that sucks right now. Bailing out dishonest bankers . Now it looks like we will use the IMF to bail out Europes dishonest bankers in an act of sheer stupendous stupidity. Taxing away productivity. Shitty little misguided wars in stupid little countries we should just bomb into fucking oblivion and forget about or ignore. Democrats. Republicans. Hangovers. The Boston Red Sox and Pittsburgh Steelers. Traffic jams. BCS Rankings. Foreign aid when we are technically broke. High frequency trading. Hybrid cars with bigger carbon footprints than conventional cars. A reliance on political dogma instead of common sense. Peter Angelos still owns the Orioles.
Heres the truth of it all. There has always been a lot wrong in the world at any given point in time. However there is usually far more right than there is wrong. No matter what time period in which one lives the thing to be most grateful for is life itself. Be it a divine plan or accidental biological collision of groins that produced you, you are alive. You are here for however long to taste the tears, feel the kisses, breathe the air, read the books, hear the music. No matter what else you are hear and alive with a chance to succeed, to fail, to make love, to get your heart broken, to fall in love to walk in the rain and sit in the shade. We are alive and there are people who love us, people who like us and we get to share this with them, this being alive. Sometimes it is glorious and sometimes it hurts like hell but we are alive. For that and that alone we should be grateful. The rest is a huge bonus.
On Thursday I will lift my glass and give thanks for being alive, being with the ones I love and who love me , or at least tolerate me most of the time, for all the adventures, for the laughter, the kisses, the books, the music and the opportunity to be . And for Pie.
Happy Thanksgiving my friends.
Wednesday, November 09, 2011
It has not been a lot of fun but it is really not all that bad. We moved off the island and now live in the close in Baltimore burbs so it’s more of a return to my roots than anything else. At least that’s how I am selling it. I hated leaving the Island but it may have been past due. I have contemplated leaving several times in the past but I had more palm trees and less late night sirens involved but thems the breaks. The memories and friendships developed over the past 15 years will be with me always. I am sorry for all the bartenders who will now have to struggle to pay for their kids college education and Cadillac payments but we all have our difficulties in life. I swear I heard my liver sigh in relief when I crossed the bridge for the last time.
To its dismay there are plenty of bars and liquor stores here as Baltimorons are the drunkest prayingest people in the world according to my late father. Every few blocks has a bar, a liquor store and a church. I am not much on church but the other two may come in handy. I have already talked one understanding liquor store operator close by into stocking my brands of wine and cigarettes so all in all the move is survivable. I hate taking the hit in this manner but I still have my books, my wine and people who love me. My wife has been a rock through it all and made the circumstances far less diminished than they would have been otherwise. My kids have been understanding, albeit sick of helping dad move shit between the house and storage facilities we have spread out all over Northern Anne Arundel County.
I am not going to sit here and blame the evil government or satanic bastards at the IRS for my DC (diminished Circumstance) issues. The government in its current form is evil and the IRS is indeed the devils tool but the truth is all fault lies in the mirror. If you are aggressive enough that the IRS calls you to task, you made a bet and you lost. Even if you do not want to pay them or think that you do not really owe the money they have the laws and the guns to take it. To avoid them entirely means allowing the government to take far too much of your money over your lifetime. I made what I thought was the right decision. They humbly and with all the legal tools at their disposal disagreed. I picked a fight I couldn’t win. My bad.
I should have had a more diversified revenue base and built up the money management operations sooner to avoid reliance on one contract. I should have developed my own web presence and newsletter service some time ago. The money was coming in, waiting until manana was the easiest path. Godot may not ever show, but tomorrow always does. I can regret that but the truth is I had a grand life for years. I am paying for all the boat rides, ball games , late nights, stiff drinks and long trips at the moment but I am not sure I would not do it exactly the same again. I view it as living like Travis McGee and taking my retirement in chunks while I am young enough to enjoy it.
I do not want to down play it all. I took some good hard shots and have to do some serious rebuilding. My family has been through a tough month of downsizing our dwelling and lifestyle. As with anytime you experience DC I have lost some friends. There is probably some bitterness among some acquaintances for deals that collapsed when I could no longer afford to play the game for now. I regret it that but I sure as hell can’t change it. I have been left holding the short end when others had bumps along the road and chalked it up to the business of life. That’s the case here.
In the grand scheme of things I do not feel like my circumstances are really all that diminished. I go to sleep each night and wake up each morning next to my best friend and partner. My wife has been a rock and a joy during this past month. All the things that make life wonderful , the books, the friends, the wine, the music, my incredible children, are all still here. I will be able to regroup and rebuild rather quickly and as I do the reduced expense load will allow us to stockpile cash to take advantages of the opportunities offered by the current economy and stock market. Not one ounce of the knowledge or wisdom I have gained over the years has been lost. I have merely added to my list of stories for when I am a grouchy curmudgeon telling stories at my combination bar and book store on a southern beach.
Let’s move along. Not much to see here anyway. Looking at the stock market I see some incredible long term opportunities. Right now I am trying to focus on those areas where if they do not make me rich the world will have totally absolutely once and for all collapsed and it won’t matter very much. Banks and real estate certainly would seem to fit that definition. They trade at valuations that are fractions of what they are worth in better times. If we ever see boom times again in the next decade (and history tells us we will) many of these stocks will be minimum ten baggers. If they do not improve to more normal times at some point over the next ten years, our money would be far better off in bullets and canned food and I am still more optimistic about the future that that .
When I look at real estate I see that some of the premier operators once again fetch premium valuations. However when I look at smaller operators I see bargains. Hotel operators like Sunstone (SHO),Felcor Lodging (FCH) and Red Lion (RLH) trade are ridiculously low valuations. Quality shopping center operators like Cedar Shopping Centers (CDR) and Kite Realty (KRG) not only pay fat dividends the share price is far less than any reasonable estimate of their real value. Suburban consumers are wounded but unless the Walking Dead (GREAT TV SERIES!) becomes a true story and zombies eat up the entire customer base these REITs will see much better performance and much higher share prices over the next five to ten years. Commonwealth (CWH) has some management conflict issues and has issued too much stock in the past two years but the shift from suburban office properties to urban center high grade offices should pay off brilliantly. If the stock just trades to book value you double your money and the 10% dividend yield pays you for your time waiting. Real estate, especially among lower tier REITS and real property in your local marketplace is just cheap if you have a long term perspective and can handle some volatility.
Banks are in the same boat for all the same reasons. In reality the weakness in real estate is responsible for the weakness in smaller community and regional banks. I am starting work on a new project ot produce a book outlining all the ideas for the trade of the decade so I won’t name nay new bank names as I expect you all to pay for them when I am done. However I still like the private equity infused banks like Central Pacific (CPF) United Communities (UCBI), Sun Bancorp (SBNC), and even Hampton Roads (HMPR) . Hudson City (HCBK) is still a quality high yielding bank name that I like quite a bit. Among larger regionals Key Corp (KEY), Fifth Third (FITB) and even Huntington Bancorp (HBNK) are worth buying on declines. First Interstate (FIBK) and Renasant (RNST) are worth consideration. If you are not looking into smaller banks in your region and talking ot the community bank executives in your town you are making a huge mistake and leaving huge dollars on the table. The book will be out shortly and I will disclose all the names and possible strategies for the Trade of the Decade.
The other either works or we are all good and truly fucked investment area is infrastructure. We have delayed spending the money as municipal finances are strained and federal money disappears into bureaucratic black holes but we better figure out how to raise it and spend it soon. The electrical grid is a mess especially in the northeast. It seems a vigorous wind is all it takes to knock out power for days at a time. Water systems all over the country are years behind in repairs and updates. Roads and bridge repairs have been delayed to the point of being dangerous in many areas of the country. I favor turning most of this over to private hands and let them raise and spend the money but I am not naive enough to think any government official in the nation is that smart so we may have to wait for the economy and tax revenues to improve but if we wish to avoid slipping further towards third world infrastructure this has to be done soon.
Infrastructure stocks should be in your portfolio and on your watch list. I think you can but stocks like Muller Water (MWA), Gencor (GENC) and Pike Electric (PIKE) right now. Others like LB Foster (FSTR), Flour (FLR), Foster Wheeler (FWLT) Granite Construction (GVA) and Sterling Construction (STRL) should be on your list of stocks to buy in a broad based decline that makes valuations more attractive. This is if not when money. I think that at some point in the next decade these stocks will be a boom sector of the market and I want to own them before this happens rather than chase them.
Moving along the Orioles have hired a new GM. Peter Angelos’ deal with the devil is firmly in place as the only one who would take his offer has been out of the game for almost a decade. Still, I am an optimistic idiot when it comes to baseball and the guy did build a winner in Boston falling just short of the World Series before the trend Follower fired him and replaced him with a certified fucking genius in Theo Epstein. Epstein has moved onto the Cubs and after he finds the appropriate sacrifice (Soriano burnt at a stake at home plate?) to appease the goat I think the Cubs will head for the series sooner rather than later under the new GM. Can Dan Duquette and Buck Showalter combine to work the same sort of magic for the Orioles? We shall see but just in case I am keeping a Cubs jersey in the back of the closet if they fail and I need to find a less desperate team to call my own next year.
I keep saying I will write here more frequently and almost never follow through on the threat. I am going to have a book to promote endlessly and am keeping an eye open for new money management clients and writing opportunities so perhaps this time I will follow through. I might, although I find that I have many books to read and write, many moments to spend enjoying the company of my wife, large blocks of time scheduled to annoy my kids as well as to talk baseball, college hoops, markets and swap tall tales with friends all over the country. I shall do my best.
Thursday, September 15, 2011
The major question today is which fetid stinking pile of crap I want to examine first. The markets are confusing, Europe is on the constant verge of collapse, the political situation in the US would be laughable if I could just stop crying, unemployment is high and real estate just refuses to get better. But I have put it off long enough. I have to begin this time with a review of the Baltimore Orioles and the season that sucked worse than last. I had high hopes coming this year. I say that every year but with a new manager and some new bats I thought, I hoped and prayed that a .500 season was in the cards. Once again the Gods of baseball laughed at my pretensions and answered my prayers with a sound and resounding “fuck off little man.”
Painful as it is let’s take a look at the team. I cannot lay any of this on Buck Showalter. The guy is a proven winner if you give him some talent to work with. That makes Andy McPhail a fail, much as it pains me to say. We never made the moves or got the players we need to have a chance to win. Rumor has it he will move on at years end and the next victim of the Angelos curse will move into the warehouse as GM. I think you could put Bill Beane and Brain Cashman’s love child in that office and they will fail. We are cursed. Angelos traded not his soul but the Orioles hopes to satanic forces in return for the riches of asbestos and tobacco settlements. There is no other rational expectation.
On the field one of the biggest problems is that Brian Roberts again spent most of the year off the field. Robert Andino did a more than adequate job of filling in for him but he is not the driving force and team leader that Roberts has been over his years. I have doubts that Roberts can ever again be the straw that stirs the drink in Baltimore but no replacement for him has stood up this year. We need that sparkplug leader on this team and right now we just do not have it.
Offensively the Orioles are not that bad. We were 6th in the AL in terms of team batting average. We have four players with more than 20 home runs, a claim only premier teams like the Yankees and a few others can also make this year. We average about 4 runs a game which should be enough to win more than 59 games we have through last night. The problem once again is pitching. Its horrible. It’s not even a good triple AAA staff. It is the worst pitching staff in all of the major leagues. You have to have pitching to be competitive. We do not.
The worst part is that one of the most reliable pitchers we have had here in the past few years is poor damn Jeremy Guthrie. The guys has good enough stuff he would be a third of fourth starter and win 10 to 15 games a year anywhere else in the majors. Instead he is on track to lose 20 games. When trade rumors were swirling at the deadline he had to be secretly hoping they traded him anywhere for anything to get the hell out of Baltimore. He will give 200 innings again this year but he is snakebite in this town. It would be an act of mercy to trade him at this point. The rest of the staff has been a circus of flash in the pans and almost theres. Some of these young guys have to live up to their potential if we are ever going to have a chance to win.
On the field it was nice to have Vlad Guerrero here. He did okay hitting .286 but that’s not why we got him. 12 home runs and 54 RBI is not why you sign a one and done guy. I love Derrick Lee but was glad to see him go. Signing old guys in hopes of a year of resurrection has never worked for Baltimore. Stop doing it. It is a waste of money. This is Baltimore. There are no miracles in Camden Yards. Find and sign younger talent that can be here a few years and make a difference
It can be done. One of McPhails greatest achievements is going to be the long term signing of JJ Hardy. Give me 9 players like him and I’ll make the playoffs every year. He is gritty no nonsense ball player who shows up to work every day. 26 home runs and reliable defense from the shortstop position does not suck. I like this guy and am glad we signed him to a contract extension.
Nick Markakis had another decent year hitting in the .280+ area. He is an outstanding right fielder and has one of the best arms in the game. When he first gam up I thought he would be a genuine super star but he has never developed the power I anticipated. Still he is a solid reliable everyday player an if he ever had real lineup support we might see that power and RBI potential show up one season.
Adam Jones has also had another good year and is on the verge of being a great ball player. Right now he is very, very good and it is a short leap to the next level. He can easily be a steady .300 and 30 guy in my opinion.
Matt Weiters is the best defensive catcher in baseball. Once again this year he has started to show power in September. We need that to make an appearance in July sometime. He can hit better than .260 and needs to settle in and hit to his potential and he will be one of the greatest catchers in the game. My guess is that will happen when his contract expires and he goes to New York or Chicago in a few years.
Move Mark Reynolds to first base or DH and keep him. If he hits 30 or more home runs every year he is a keeper no matter how often he strikes out. The man has 108 hits this year and 68 of them are two bases or more. If we could runners on ahead of him he would have a 100 RBI’s. Whatever you do get him off third base.
We need power on the corners and we need pitching. Pitching than can go out day in, day out throw at least seven innings and keep the team in the game. Of course we have needed that for 14 years now and have been unable to get it. The bright side is that once again we get decent draft picks again this year. High draft order has not worked as a strategy yet but I am always hopeful. For Now it’s back to rooting for ABB (anybody but Boston).
Now let’s address the markets for a moment. We are in some seriously uncharted waters. We have zero interest rates and ZIRP will be a reality for some time to come it appears. Europe is just a train wreck and that’s not helping any sort of global economic recovery. China is gleefully buying up the world’s debt at pennies on the dollar and I just cannot think that’s good for anyone but China in the long run. Job creation is non-existent in real terms and real estate just keeps getting worse, albeit not as fast as before. Given all the uncertainty if anyone tells you they know where the market is going and give you a high confidence prediction of stock market movement the rest of the year you can pretty well figure they are idiots and move on. One can have hopes for the market and a scenario they think may play out but there is no certainty in this market at all.
Stocks, especially financials, appear cheap but now we have to see what happens as the FED moves to push down the long end of the bond market. The steep yield curve was allowing banks to arb their way back into decent shape by borrowing short and lending long in a risk free transaction. Now the decline in long yields is supposed to force them to lend. The problem is that collateral values are still declining and most bankers are very reluctant to take on risk here. I can’t blame them given the state of the economy and the ass whipping they took in 2008 and 2009.
John Templeton got his own island by having the courage to buy at the point of maximum pessimism. I think that applies to European financials right now. I like Royal Bank of Scotland (RBS) and Aegon (AEG) here as the European financial stocks most likely to survive and thrive at some point. I can make you a hell of a case for owning Bank of Ireland (IRE) as an undated call option in Europe as well. Buy it here around buck and forget about if for the next decade. You will either lose the money or make a ton. Ireland will be the first to get it together among the troubled PIIG nations and I think making a ton is a good bet. I still think Japanese banks are a buy as well for similar reasons and reaming long Mitsubishi UFJ (MTU) and Mizhou Financial (MGF)._
The trade of the decade keeps shaping up here as well. It may take banks awhile to dig through all this but owning names like Key Corp (KEY), Fifth Third (FITB) and Capital Federal Financial (CFFN) among the larger regionals will be incredibly rewarding over the next 10 years. I also have high hopes for my little portfolio of private equity infused banks. Hampton Roads (HMPR), United Community Bank, Flagstar (FBC) and Sun Bancorp (SNBC) all have issues and at least one of them will probably go bust. Anyone that actually executes a successful turnaround with the assistance of private equity and distressed investors will make me enough money to more than offset the losers in the long run.
Be smart whatever you are doing in the market. There is no need to go all in or over leverage here. That’s a great way to leave the arena on your shield. Financial stocks are so cheap that you can take your time and scale into positions. When volatility spikes it makes sense to sell puts and back into some of these stocks as well. Time and uncertainty are on our side. Be patient and be smart.
I am not going to touch politics this time around. Why should I? I am in a good mood right now. I will address my views on the current clusterfuck of politics the next time I have a shit eating beard burning stomach churning hangover to talk about it. That’s about the right mood for what I see happening right now. Moving on.
It’s a great time to be alive. There is football, both college and pros. The Ravens crushed the Steelers and this is always a happy event. Navy looks good and Maryland is off to a good start going into the big test game against West Virginia this weekend. There are some interesting pennant races going on and playoffs are right around the corner. A lot of good books have come out and the fall release season is almost upon us. My wife and I just celebrated out first anniversary and as proof that she loves me she has not killed me in my sleep yet. I am married to one incredible woman and our family is doing well. Hell, I even have a damn puppy. We have wine, we have music, we have books and incredible friends and family to share them. It’s a good life.
Monday, August 08, 2011
All weekend I keep hearing how this is the Tea Party Default. Those vile wicked tea partiers forced S&P to downgrade the US debt by digging in their heels on the idea of new taxes in the budget and debt ceiling argument. I am pretty sure they did exactly what their constituents asked them to do and dug in their heels on taxes and spending. I have no problem with what the tea party did in the negotiations. In fact I wish they had dug in harder,. The compromise bill is joke and the spending cuts will never happen. I love that “spending cuts” in DC speak means increase by less than we originally planned. There will be no cuts forthcoming from the magic compromise committee. Next year is an election year and both sides will bluster and posture for political purposes.
The fact is we need a viable third party. The ultimate solution would be no parties and perhaps people would once again think for themselves instead of just pulling a level.Absent that the national discussion has to be broadened beyond partisan lines. A third party of sufficient size would help accomplish that. The two party system is a disaster. We are falling behind in education, science, culture, life span, children’s health and just about every other social measurementyou can imagine. Thanks to the two party system we are engaged in two wars and one military action. We have troops scattered all over the globe at enormous cost to the taxpayer. We have entitlement programs that have swelled far beyond what even their creators could have ever imagined and under no scenario are viable on the long run. We see corporations exert far more influence that they should be in our day to day life and they seem to just be able to elect who they wish to direct the proper benefits in their direction. Our tax code is ridiculously complex and has more to do with controlling the behavior of the population than balancing the budget. The simple truth is that a 20% income tax on individuals and corporations as well as 15% VAT would balance the budget. There is no power in such a structure so we don’t have one.
I do not care if you are a liberal or conservative, if you step back and are objective both parties have lost their way. We spend more time worrying about who is doing what with whose groin and who gets what based on skin color and gender than we do on the very serious questions that face our aging republic. The great head fake of misdirection by throwing out boogey men and benefits while they plunder our rights and pocket books has been in play for some time now. People laughed at Eisenhower when he warned of the military industrial complex consuming the nation but it has happened almost exactly as predicted.
“Crises there will continue to be. In meeting them, whether foreign or domestic, great or small, there is a recurring temptation to feel that some spectacular and costly action could become the miraculous solution to all current difficulties. A huge increase in newer elements of our defense; development of unrealistic programs to cure every ill in agriculture; a dramatic expansion in basic and applied research -- these and many other possibilities, each possibly promising in itself, may be suggested as the only way to the road we wish to travel.
But each proposal must be weighed in the light of a broader consideration: the need to maintain balance in and among national programs -- balance between the private and the public economy, balance between cost and hoped for advantage -- balance between the clearly necessary and the comfortably desirable; balance between our essential requirements as a nation and the duties imposed by the nation upon the individual; balance between actions of the moment and the national welfare of the future. Good judgment seeks balance and progress; lack of it eventually finds imbalance and frustration.”
We were warned. In the name of saving the globe and providing benefits we could not afford in order to secure votes by the two parties we have arrived in the very place we were told we must avoid. We need a viable third party to help us reassess our goals and purpose as a nation. The “tea party downgrade” needs to become a starting point for open discussion of solutions to the problems we face as a nation and what are role in the world should be. My fear is that is just becomes an excuse to dig the heels deeper into the sands of partisan politics.
My own thoughts on what it takes to return to being the land of the free and home of the brave are pretty well known. We need to stop being the worlds policeman, bring troops home and let the world know we will act with fierceness and totality to protect our interests. No more politically correct wars, police actions or interventions. We want peace and trade but if you harm us we will DESTROY you. We cannot protect the children of Somalia or the women of Afghanistan and from the reaction of the world they do not really want us to try. So just stop. The goals are seemingly noble but notattainable and ,of greatest importance, the problems are not ours to solve.
We need an immigration policy that makes a lot more sense than what we have now. We refuse the poorer immigrants so they sneak in. Then we give them drivers licenses and social benefits while they pay no taxes. Give us your hungry , your tired and your huddled masses indeed. Let’s find a way to let them come here, pay taxes and be productive members of society. Then any that are here illegally right now should be given a choice. Serve in the military or social services for two years and you can stay. Otherwise go the fuck home and thank you for playing. Your ability to breed inside our borders does not grant you or your offspring citizenship. Your benefits end here unless you are willing to become a useful, productive, legal member of our society.
Stop punishing the successful. The idea that doing well means you should pay a higher percentage is not only stupid it is evil. If I make more I pay more anyway. If we are all in this together then let’s all pay the same percentage. No more asinine deductions for certain behaviors, no more exemptions for being productive at giving birth, or incentives to buy cars or use certain energy sources. One rate across the board and we all have more in our pockets at the day.
Capital creates jobs. Quit taxing it. That’s idiotic. Make capital gains on asset held more than five years nontaxable and less that that ordinary income, and not only do you create businesses and jobs galore, you stabilize your capital market by encouraging long term investment. Do you think we would have had a real estate crisis if you had to pay full tax on housing gains on properties held less than five years? Would investors cash out their mutual funds every time Bernanke farts if long term investments escaped taxation? Don’t tax long term capital investment.
Quit teaching ot the lowest common denominator in the classroom and teach to the highest. To help the lower level kids catch up fire half the administrators and replace them with teachers to reduce class size. We do to need the level of administration to reach our education goals, We need teaches who give a shit about the kids and have a passion for teaching, smaller class sizes and parents with the balls to turn the television off.
Now let’s move onto other subjects. The current turmoil in the markets is creating some opportunities. Any type of corporate disappointments is leading to a steep and drastic sell off. Right now foreign banks are god-awful, point of maximum pessimism cheap. I like two of the larger Japanese banks, Mitsubishi UFJ (MTU) and Mizhou (MFG). Both sell at a fraction of tangible book value and for an investor with a time horizon of five years or more should be very profitable. The same is true for Royal Bank Of Scotland (RBS). The stock is at 40% of tangible book and management has a solid plan to de-risk the balance sheet and return to profitability. As a final foreign excursion the shares of Dutch insurer Aegon (AEG) are also very, very cheap. They have repaid the Dutch government for the emergency funding and should pay a dividend again starting next year.
Here at Home Hudson City Bancshares (HCBK) have sold off sharply. After the reorganization of the balance sheet the bank should do very well going forward and at a discount from tangible book and yield of 4.40% it’s an attractive long term investment. First Bancorp (FBNC) is also cheap and replacing the TARP funding with Treasury Small Business program funding will be an enormous boost to the bottom line. Locally Shore Bancshares(SHBI) has been a severe disappointment as loan losses have continued to mount. I am going to hold that name and add Severn Savings (SVBI) at this price. I have a lot of faith in the Hyatt families’ strong desire not to lose the millions they have invested in the bank. Insiders have been buying so it’s worth a shot at one third of book value.
Force Protection (FRPT) missed earnings and is now trading at very cheap prices. This company should have sold out last year and now I think it is just a matter of time. They have a decent business but will function better as a division of a larger defense contractor. LB Foster has decent earnings but there is a product liability claim with Union Pacific involving 1.6 million rail road ties. The question becomes is that worth the 50% of market cap the stock shed? They will be a huge winner when we finally get all this crap behind us and pour economy is once again growing to the point that infrastructure spending resumes. Demand for computers and other tech products may be slow but it will come back when the economy does. That makes Micron Technology (MU) a screaming long term buy at 75% of book value in my opinion.
I like the idea of buying a small package of mortgage REITS here.
I would buy a little Anally (NLY) and a little Invesco Mortgage (IVR) here with the idea of building the position over an extended period of time. You are likely to get a chance to buy lower based on conditions and volatility in the bond markets going forward. However they are cheap and the yields of 15 and 20% respectively make them worth a shot here.
It is confusing challenging time. We are seeing inventory created for value investors but as we have seen recently it always pays to keep some powder dry. Cash may not earn much right now but it aint losing anything either. I would move slow and stay small but start to build potions in very cheap stocks.
I thought about including a season to date update in the Oriole here but it is just too early to start drinking.
Friday, July 01, 2011
So once again that grandest and greatest of American Holidays is upon us, The Fourth of July beckons, complete with a three day weekend thanks to a fortuitous calendar this year. I am traveling out of town this Fourth but already the locals are planning the boat trips and dock bar excursions over the course of what looks to be a glorious sun soaked Independence weekend here in the Mid Atlantic. When I ran errands this morning I could see that the good folks at Red Eyes were up and about stocking the bar with all the necessities for a great time in the sunshine, and boat traffic was heading out the narrows already. With my usual exquisite sense of timing I am off to South Texas to enjoy the holiday with relatives. I understand there has been a cool wave down there and we are going to actually enjoy sub triple digit temperatures for a day to two while we are there.
It is one of the grandest of American traditions. In a letter to his wife shortly after the Declaration of Independence was signed John Adams said “It ought to be commemorated as the day of deliverance, by solemn acts of devotion to God Almighty. It ought to be solemnized with pomp and parade, with shows, games, sports, guns, bells, bonfires, and illuminations, from one end of this continent to the other, from this time forward forevermore.” In this we have not failed Mr. Adams.
There will be parades all over America and veterans will struggle to see if that somewhat expanded waistline can still fit into the old uniform. Squads of Vietnam veterans in small towns and cities will march proudly as, finally, the old divisions have healed and they finally receive the long overdue welcome and thank you for their friends and neighbors. Small town bands will pay out of tune and march out of step as parents proudly snap fuzzy photos. Politicians and beauty queens will float down Main Street in vintage convertibles that appear only on this day for this specific purpose. Flags will fly from every house and store, as well as sprout from the clenched fist of small children as the parade of independence passes by.
We will barbecue and the grill smoke of PETA (people eating tasty animals) will waft in an unbroken cloud of charcoals goodness from sea to shining sea. The bays and rivers will be covered in flag draped boats. There will be swimmers, tubers and skiers as far as the eye can see. From Seattle to Miami the sound of freedom will ring as countless beer cans are popped open and raised in a toast to our freedom, our nation, our home. It will indeed be a grand holiday, this celebration of independence.
As night draws nye, we will begin to really act like Americans. We are going to blow some shit up! From the breathtaking spectacles that light New York harbor and the Grand Dame of liberty herself to the smallest of boys with a brick of purloined black cats the fireworks will boom and light up the night skies, as well as fill our nation’s emergency rooms. Nothing says freedom like a man with a 30 back of Bud and a mortar tube! There will be bells bonfires, guns and illuminations that would make Mr. Adams swell with pride form the depths of his most patriotic chest.
As we celebrate the day, pop our beers, light the night sky, march down Main Street praying the buttons hold for just two more blocks, grill up the best nature has to offer, dance on the dock or however we celebrate this day, please take time to remember something. Today, this day of celebrating the birth of our nation and realization of our founder’s dreams of liberty ,was paid for by all the generations before you. Many men and women have toiled in the service of liberty, of commerce, of the United States of America and all that means and holds, so that you could have this three day weekend of patriotism and fun. They paid with their blood, their work, their dreams, their very being so this nation could exist at this moment in time.
There were soldiers. My god, there were soldiers. Citizen soldiers with hopes of liberty and weary of oppression sitting behind the trenches of Bunker Hill. Frozen, dejected soldiers in the little handmade huts of Valley Forge. They were frozen, they were despondent but they held firm to one desperate dream. A free nation of free men and women, a land where your opportunities came not from your lineage or place of birth but form your hands, you back, your brains, your efforts, your dreams. They held on to that desperate desire and gave us that nation.
There were soldiers in the great tragedy of our Civil War. They fought against cousins, against neighbors and yes even against brothers each side struggling for their concept of freedom. They fought to right great wrongs and other fought to preserve their flawed way of life. The changing tide of history overwhelmed the South’s distorted view of the world but not before many brave men on both sides burned to death in the wilderness, or lay in the field of battle, thirsty alone and dying of brutal wounds. They died by the hundreds, nay, by the thousands in places like the bloody fields of Antietam and Gettysburg. In the end freedom was preserved for most, obtained for others, and the great Union was preserved.
In two great world wars there were American Soldiers. They died in the trenches of France in 1918. In 1945 they charged out of landing craft onto the beaches of Normandy. Those that fell lie buried from the majestic cemetery in France to unmarked, never to be found graves on shitty little islands all over the pacific. They lie from under the monument in Pearl Harbor to the bottom of the pacific in ships sunk decades ago that have never been, nor will be found. Freedom was threatened and soldiers answered the call.
They have continued to answer the call and soldiers have responded from the frozen reaches of Korea to the sweat soaked jungles of Vietnam. They still do from the sands of Iraq to the treacherous bloody mountains of Afghanistan. They fight for our freedom and often for the freedom of those they do not know and whose language they do not speak. Their nation calls and bravely fighting off the rising gorge of fear and vomit, soldiers have answered the call. My god, there have been and still are soldiers. We owe them a toast, frosty glass raised to the sky and voices raised still higher to thank and praise the American soldier. The made us free, the keep us free and they have paid in sacrifice, in their very youth and innocence and in their blood for our celebration this Fourth of July.
What about the great leaders who have helped to build and sustain this nation, this “shining city on the hill.” Not so much the shit bags that occupy DC today but those true leaders who like John Adam studied the science of politics and war so there sons and daughter could study mathematics and literature. The names and resonate and echo down the halls of history. Jefferson, Madison, Roosevelt, Lincoln, Reagan, Kennedy, Jackson, Truman, and yes, Adams. They made the decisions, the choices and sacrifices that have paid for today’s beer soaked joyous rituals.
There have been the builders, the creators, innovators whose dreams and achievements have powered our economy and our nation forward. Henry Ford, Albert Einstein, Thomas Edison, The Rockefellers, Bill Gates, Andrew Carnegie, Ted Turner, Walt Disney, the DuPonts, ray Kroc, Steve Jobs. This list could run on for pages of men and women who built industries, create jobs, improved our lives and built the fabric of our nation’s economic might. Their dreams, their creativity and their hard work also paid for today s holiday festivities.
Thank the poets, singers, dreamers and writers have made our culture so unique and wonderful raise that sweaty martini glass to Sinatra, Billie Holiday, Satchmo and the Duke (Ellington and Wayne). Give a tip of that bourbon glass to Twain, Faulkner, Fitzgerald and Hemingway. Raise your beer glass to Mencken, Brando, Newman and Mitchum. Raise your frosty cocktail to Frost, Whitman and Warhol. Give a tip of the bong to Hendrix, Joplin, Kerouac and the Allman Brothers. We have this crazy weird mixed up mish mash of people who have created some words, music and dreams that has produced art of the highest order.
Yes be sure to thank them all, Thank all the men and women who got up, went to work, paid the bills, raised the kids and made our nation work. Thank the teachers who have sat up all night grading papers and planning lessons. Thank the bankers who have made the loans that build our home, our factories and out nation. Above all thank those underpaid folks we have dubbed first responders. Thank the generations of Police officers who have put their life on the line every day to keep our nations safe and free. Thank the fire fighters who have rushed into hundreds of years of burning buildings to rescue those in danger and preserve our property. Thank them all, each and every America who made today, this moment with family, friends, music, friendship, love and frosty beverages ,possible.
Now wait my friend, now that you have toasted all those who made today possible, wait just a minute Don’t put that dog on the grill, turn the engine off, put the beer down and listen up. Your forefathers accept your thanks. Those Americans, those immigrants and Indians, sinners and saints, leaders and laborers, warriors and poets have a message for you. They are grateful for your thanks and they would do it all again. Pay the same price, conquer the same obstacles and face the same fears as they did it in the name of liberty and the cause of freedom. They lived, toiled dreamed and lived to better their own lives, their children’s and the lives of all those who have followed them. They have a charge for you, yes you, and for all of us. It is our turn.
They issue their charge to you in the words of Thomas Paine.” Those who expect to reap the blessings of freedom, must, like men, undergo the fatigue of supporting it.” Supporting freedom means practicing freedom and preserving liberty .It is our turn and frankly we are doing a shitty job of it. In the name of security and maximizing our personal benefits form the trough of government we risk the freedom that was given to us. We did not earn it; we did nothing but be born to enjoy it. We must preserve it for those who follow us as did those who came before us.
Practicing freedom is not always easy. It takes the courage to say I am going to follow my dreams and struggle each day to make the world better for me and mine. I will ask nothing of any man but his friendship and his trust. It means not turning to the government or society for your subsidence or for your luxuries. Freedom means you accept the responsibilities that come with it and are willing to shoulder your load, and even to help those around you with theirs. Not by the insistence of the authorities but out of the kindness of spirit and greatness that are the hallmark of your humanity.
Freedom means acceptance. Again Paine says it best.” He that would make his own liberty secure, must guard even his enemy from opposition; for if he violates this duty he establishes a precedent that will reach him.” Freedom has to mean the same to the family with 2.5 kids and a picket fence as it does to the gay couple who are willing to adopt, love and raise a child. Freedom has to be the same for the new (legal) immigrant with nothing but dreams and a willingness to work hard as it does to the man born here. The same freedoms extended to the folks at a posh uptown cocktail party must be extended ot the downtown folks who prefer to toke up. For your freedoms to exist you have to be willing to share it with those who do not look like you, think like you, love like you or live like you. Life, Liberty and the pursuit of happiness must apply however we chose to live that life or seek that happiness.
Freedom has been gifted to you. Preserve it, fight for it, practice it. You owe it those who gave it to you and to those who follow.
Now, fire up that grill. Open the bar, crank up the tunes and let’s get in going American style. Let’s get loud. Let’s get rowdy and blow the doors off this joint. Kiss the ones you love and do something to piss off the neighbors. Buy a soldier a drink..ah hell get him drunk .Take a coke to the cop on the corner, Drop some ribs by the firehouse.Toast the past as well as the future of our nation and the greatness of our people.
It is the Fourth of July. Let us go forth and blow some shit up. Mr. Adams demands it.
Thursday, June 02, 2011
Its summer on Kent Island at long last. We have had a couple of 90 degree plus days and I can feel summer creeping into my veins. It is a more subdued roar these days as my life situation has changed in the past year. It is not so much the firing of growling engines and popping of many beers as it is the firing of the grill and the sipping of cocktails by the pool this year. Truth be told I am getting to old for those 48 hour blasts of depravity that marked summers past so this is all a good thing. Coupled with the fact that the slowdown is accompanies by the perfect combination of lover friend and wife and it’s all good. Summers here and the good times will roll. I ll probably slip in a few wild nights along the way but this time I ll have a partner in crime.
Moving on I find that I took some shit about my last posting here. At least one old friend appears to have stopped talking to me. Let’s review. Earlier this year I said:
My second piece of advice that I can share at this point in my life is do not go into the financial business, especially investing. It’s too fucking hard for most and the plain simple truth is that those of us who do this for a living do not really add much to the world. We may help a few clients do better with their money over the years but for the most part the more honest among us will admit we do not add shit to the world we live in.
I really did not mean that as a criticism of the brokers I have worked alongside for decades. It was really meant more at those who journey to Wall Street to be rocket scientists finding new ways to slice and dice securities. Use your degree for something more useful that creating reverse convertibles or auction rate preferred stocks. The world does not need a new way to slice and dice a damn mortgage. I really had in mind the math major who wants to open the worlds next stat arb fund or be the king of the world at Goldman Sachs. It’s a lot fucking harder than you think it is and it really doesn’t add much to the world.
My friend and a few others took it as a slap at brokers. He also pointed out the business had been good to me and it was not right for me to cast aspersions on the profession. I wasn’t but as long as the subject has come up lets talk about it. I entered the brokerage business back in the 1980s. We sold stocks and bonds, maybe a few mutual funds to investors. A few of the braver souls traded options and futures. I loved it. If you worked real hard and learned how to make some money for your clients you got more clients and built a business. You could specialize in municipal bonds and cold call your way into a six figure income. Many of the firms were still partnerships and there was a lot more caution when it came to risk taking and product invention. It was the best job in the whole damn world as far as I was concerned.
When I left I was a dinosaur. The firms were all public companies and the emphasis was on asset gathering and fee generation. Brokers were taught not to be stock pickers but to gather money for “professionals” to manage. Product wholesalers would wander though the office and with a straight face look you in the eye and tell you a variable annuity with a 7% commission was a good deal for a customer’s IRA. After all it had benefits. They forgot to mention that the client paid for the benefits and had to fucking die to collect them. They would tell you it was far too risky to sell puts for your clients but then push a reverse convertible note. Hey guys, read the term sheet..its the same thing! Brokers were urged to “allocate clients assets” according to some model without ever mentioning that everything in the portfolio was highly correlated, The only time the idea of non-correlated assets comes up these days is when someone wants to sell a futures fund with ongoing fees streams and commissions that have rarely delivered solid returns. It is not the business I entered all those years ago and I am less than convinced the changes have been for the better.
There are a lot of great folks in the financial services business. The fact is there just too many of them. There are almost 8000 mutual funds in the US. There are 9400 hedge funds. There are over half a million registered representatives. Close to 6 million people are employed in financial services including brokerages asset managers and other investment related professions. Goldman Sachs alone has more than 38,000 employees.
Of course some people will go into the business. If you have a passion for it you should. I don’t mean just a passion for making a shit ton of money but a deep and lasting passion for the markets and all that entails. Are you willing to do the homework to really learn the markets? It’s a steep learning curve. Don’t tell me you passed the exam and took your CE classes so you’re qualified. That’s a lot like your doctor telling you he passed the entrance exam to Med School and remembered to wipe his ass this morning so he’s ready to do your surgery. You have some self study ahead of you and it aint gonna be easy.
First this is a sales business at the end of the day. You have to convince people to do business with you. With that in mind you need to read Nick Murray, Leroy gross and Tom Dorsey on how to manage and grow your practice. You need to learn how to make a presentation and tell your story. If you can’t do that it is going to be a very tough road. Once you know how to tell the story let’s make sure you have a good one to tell.
A good portion of your life and your business will be in and around the stock market. You need a deep in depth knowledge of markets whether you are selling individual stock, managed accounts or mutual funds. You have to read them all I am afraid. It does not matter if you favor growth value or a technical approach to the markets. The other schools of thought are active participants in the market and will have an impact on prices. You need to read Ben Graham, Joel Greenblatt and Marty Whitman’s value investing books. You also have to read and learn the great growth stock pickers like Navellier, Phil Fischer, Mitch Zacks and William O’Neil. You also need to read Steve Nisson, Larry Williams and John Murphy on the basics of technical trading of stocks. Trend traders have a huge effect on stock prices at times so Michael Covel s books on the subjects are on your reading list as well. Counter trend traders play a part in this mix so add Victor Niederhoffer to the list as well.
That’s a good start. Now let’s add Damodoran on valuation and investment fables. Probably better read all the editions of Jack Schwagers market wizards as well to gather different viewpoints. You really need to understand as many different market viewpoints as possible Guy Wyser Prattes Risk Arbitrage is also necessary homework.
You need to understand the workings of fixed income and interest rates as well. Start with James Grant for the history of interest rate markets. When you are done that move on to Frank Fabozzis fixed income handbook. You also need to read Calamos on convertibles in my opinion to really get a grip on taxable fixed income. Back to Fabozzi again now for the handbook of municipal bonds as they will most likely be an important part of your business if you deal with individual clients. Jim Lebenthal on munis also makes a lot of sense if they will be a big part of your repertoire.
Now we have to put all this together. You should read Peter Bernstein on capital markets and Risk. David Darst on asset allocation is absolutely mandatory . You need to learn how to diversify and allocate portfolios and not just use an out of the box software package provided by your firm. To take it ot the next level read Phil McDonnell on optimizing portfolios.
You also better read Van Tharp and Steenbarger on the psychology of being a trader and investor. This is as much to help you as your clients. Some nights you will be euphoric and other as a friend of mine once put it you will want to” stop in the middle of the fucking bridge and just jump.”
If you plan to trade options and have not studied McMillan, Euan Sinclair, Taleb or the like on options pricing I think you are criminally negligent. Every time you enter an options trade keep in mind that in all likelihood the firm buying or selling that option from you has had to install special air conditioning units to cool the supercomputers they are using to make prices.
That is a bare minimum fucking start in my opinion. Not only should you read them I think you should have a passion for this stuff deep enough that you want to read them. A lot of this can now be gained though the excellent little books of investing put out by Wiley and Sons but some of it you just have to work your way through. If you decide to adopt a specific style of investing you have to go still deeper into the subject. Most of all you have to keep reading and educating yourself all the time. On top of that you have to measure your success by your client’s success and not your paycheck If you do that the paycheck will always be there.
If we cut the number of brokers in half and only kept those who have the attitude and desire to be the best and what they do and learn all they need to know to master the markets somewhat, brokersand clients alike would happier and richer.
Just one mans opinion of course.
I wonder who will stop talking to me this time?
Monday, May 02, 2011
So it seems I am turning fifty tomorrow. How the fresh hell that happened I have no idea. I never thought I d make it this far for one thing and for another I do not feel 50. Somewhere in my mind I’m still 30 years old and ready for anything. I have had grey in my hair since my twenties so it’s not like that was a warning sign. I am successfully able to ignore the various creaks and cracks my bones may put on during the course of the day as a unique and committed form of denial of the aging process. I can recall turning 18 and thinking that I might be lucky to see the turn of the century as I calculated I would be the old age of 39 when that happened. That has come and gone and much to my surprise as well as that of many others I am still here. It has been one hell of a journey and I have picked a few lessons and observations along the way. Naturally being somewhat verbose in nature I find it necessary to share them here.
First and foremost my over riding thought on life is that it is simply too short to be miserable or unhappy. I am no Pollyanna I am fully aware that from time to time shitty stuff will happen to all of us. We will lose people we love. We will lose money, jobs, friends and many other things and people along the journey. Sometimes the world will just simply take a huge shit right on your head. Some of it will be of our own making and fault. Some of it will not. No matter of whose making it is just going to happen. If you play hard and live right you are gonna get some boo-boos. I guarantee it. When it does happen, deal with it and move on. Or as we used to say get drunk, get over it and get on with your life.
There is also a lot of nasty shit in the world. Wars, famine, genocide, poverty, taxes, The Boston Red Sox and the Pittsburgh Steelers come readily to mind. Some of these you may be able to help change. Most of them you simply cannot. If you fixate on all that is wrong with the world and with life you will miss all that is right. And mark my words the vast majority of life has much that is right
There are so many moments of life that can offer varying degrees of rightness. To sit with someone you love and watch the sunset can be one of life’s more pleasant moments. You can listen to the majestic symphonies of a Beethoven, Bach or Handel and have your soul inspired to new heights. You can throw on George Thorogood and just celebrate the growling good time that is life and rock and roll. Throw Coltrane or Miles on and get lost in the complexity and twists of sound and thoughts. Delve deeply into the poetry of ee cummings, Yeats, Whitman and Frost to rediscover your sense of romance and thepossibilities that life can offer you. Read the works of the great writers and thinkers to learn the story and rhythms of life. Read the great storytellers to be entertained and escape and sometimes even be educated.
Who can list all that is right about life? Think about it all and it is overwhelming. Books, music , family friends. Shakespeare, Plato, Darwin, Galton, Vivaldi, The Beatles, Sunsets, sunrises, thunderstorms, babies laughter, three run homers ,deep long kisses, Robert Parker, Randy Wayne White, long nights with good friends, good wine, dock bars, rainy Sunday mornings, The Grateful Dead, Broadway Plays, road trips, holding hands, squeeze bunts, Oscar Peterson, Harry Potter, beaches , average wine, Waylon Jennings, Hemingway, clean sheets, kickoff returns, Graham, Clancy novels, adult children, a loving spouse, Louie Armstrong, fast boats, slow boats (but no blow boats) Bogart and Bacall, WEB Griffin, Mozart, Mark Twain, Slow dancing, wild sex, making love, Disney movies, weeping willow trees, dandelions, hard rock, soft jazz, rockfish, thick steaks, tears laughter love. And I have just scratched the surface. Yes life will have it bumps but there is so much more that is good and right about the world we live in and the possibilities that life grants us.
My second piece of advice that I can share at this point in my life is do not go into the financial business, especially investing. It’s too fucking hard for most and the plain simple truth is that those of us who do this for a living do not really add much to the world. We may help a few clients do better with their money over the years but for the most part the more honest among us will admit we do not add shit to the world we live in. If you are going to take on this type of risk and commitment of capital and time open a business. One of the best pieces of advice I have ever received and not taken came from legendary trader Larry Williams. He said to own businesses that provided cash flow if you wanted to trade. Investing should be a companion to your real business activities for most people. If I was young today after reviewing different options I think the best choices for a career would be to own a liquor store, an auto repair shop or owning school buses. I know or am related to at least half a dozen people in these businesses and they have all done very well. If you don’t want to do that find a business you do love be it building houses, making widgets or programming computers to do useful stuff. You will have success and add a lot more to the world than those of us chasing red and green digits across a fucking screen. Use the cash flow from your business endeavors to trade and invest and I think you will have a more productive life. We are at a point in the world where I thing that learning a trade and having some business sense will take you a lot further than an MBA in Finance. But never under any circumstances do what so many have done in the past two years and open a damn cupcake store. That’s just stupid.
Be kind. A lot of people you run across in the world are going to be grumpy, surly and downright assholes. Try not to be one of them. Show some compassion as you go through life when you can. Yu are going to have ups and downs along the way and so does everyone else. You have no idea why the store clerk is in a bad mood. Don’t take their mood on your shoulders or add to their load if you can help it. That brusque waitress may be at the end of a second shift at her second job of the day to support two kids and a sick mother. You don’t know so be kind when you can. Which brings me to another thing. Don’t just tip, over tip. The extra buck or two means very little to you but could mean a lot to the server. Every once in a blue moon when you are a little flush give a bum twenty bucks. Of course he’s going to spend it on booze or drugs! What the fuck do you care? Your life is good at the moment and you ll never notice the cost but to him it’s another escape from what has to be a pretty shitty life. Be kind as often as you can.
Sometimes you will meet someone that is such an asshole kindness and compassion is just impossible. A hearty fuck you and move on is the best advice I have. Some people just can’t be in your life for whatever reason. Fuck em. Life really is too short.
Don’t be afraid. You are going to make mistakes and sometimes in spite of your best efforts you will lose. Guess what? Sometimes you are going win and winning makes up for losing by some very asymmetrical factor. Take risks in your life. In things like business, reaching your dreams and love you only need to win one time for it be permanent Don’t be afraid. Write the book, start the company, take the job, and sing the song. You might fail and that would suck for a little while. You might succeed and that will last a lifetime. Especially don’t be afraid of love. Being afraid of love is the saddest thing that can happen to a person. If you are even close to my age you will have had lumps, bumps and bruises from relationships. There are relationships that didn’t go where you thought they would, relationships where you knew it would end badly but took the ride anyway and relationships that died before they could be born. We all have them. I have had a few fuckups and scotch soaked nights wondering what the hell just happened in my life. If I had been afraid of love I would not be so happily married to so wonderful a woman right now. You only have to win once. At 49 I finally did and it was worth every loss that came before.
Know math. I don’t give a shit who you are math is going to dictate and control much of your life. From making change at the drive up to calculating the probability of success in a venture you need to have some clue about numbers and how they work. I am not saying you have to be a math geek although in hindsight I wish I had been. But know math. Probability, reversion to the mean, compounding, physics and the rule of 72 will all play a role in your life. A lot of equations will be important to know for each of us. So far mine have included some really cool ones like (.50xtb),B to the third power and the all important 1+1=1. Yours will be different than mine but equations of all sorts will be a part of your life.
Measure your success in life not by what you have and what you doubt by who loves you. This is far more important at the end of the day. Don’t tell me how great you are. I don’t give a shit what you have done if your achievements did not lead to having a circle of family and friends who love you. The greatest monument in the world to anyone one of us is not monuments or estates. It is those who love us as family, children, lover, and friends. You may think differently. You are wrong.
To have friends be a friend. Don’t expect a whole bunch of people to show up to help you move if you never toted a buddy’s couch up three flights of stairs. Don’t expect anyone to listen to your drunken ass whining about your life if you never took their midnight phone call. Don’t expect anyone to share their achievements and success with you if you never celebrated yours with them. Put others first sometimes and there is a good chance they will do the same for you when you need them.
It has been a long and interesting journey so far. Perhaps I ll write the whole story some day but I have seen jail cells, penthouses in the city and most stops in between in my time. I have been way up and way down and many stops in between. There’s lot of of stories involving cars, ditches, snowstorms, pissed off dogs, long walks in the desert in a three piece suit, filled straights, busted flushes and all kinds of other interesting happenings. I made some stupid mistakes, some silly mistakes and a few hilarious mistakes. Along the way I occasionally got a few things right.I look forward to more as I enter what will be the second half of the story. I have happy children who are doing well in life. I have friends all over the country with whom I have shared much laughter, a few tears and great knowledge has been exchanged. I have a wife I am head over heels in love with as I enter the next fifty years.
It’s a good place to be.