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Tuesday, July 31, 2012

It's How You Play The Game That matters

No wonder individual investors have been avoiding the stock market. In addition to the two huge losses incurred in the past decade they have to deal with news flow and noise that is bewildering right now. A look at the popular financial media form just this past weekend is insightful. There are warnings about substantial pension shortfalls causing a bubble in junk bond prices. To offset that at one fund manager told Bloomberg reporters that all the economic risks were priced into the market and stocks were cheap. Some commentators worried about the fiscal cliff faced by the United States next year while others are highly confident we will muddle through and the markets will go higher. Some expect QE3 to push markets higher while other put the chances of QE3 as similar to the Minnesota Twins pennant chance.

One market guru thinks that a wave of merger activity will push the markets higher. In ordinary times I might agree as there is a lot of cash on corporate books and the easiest way to grown in a slow economy is to acquire new earnings. However political and tax uncertainty will keep a damper on a corporate activity in my opinion. Many commentators pointed to the companies beating earnings estimates while other focused on slower sales growth and lower guidance. The news and advice being thrown around in the media is confusing at best.

The individual investors I know are not just scared of losing their money again. They are confused and have no faith in the stock market or Wall Street. All the things they thought they knew have turned out to be wrong. Stocks do not really return 10% a year on average all the time for everybody. Buying and holding an index fund may be cheaper than active management but that has not worked so well over the past decade either. Diversification has really just spread the losses around as markets went to nearly perfect correlations for much of the past 10 years. Pretty much everything they learned in those college econ and finance classes turned out to be wrong as well. They correctly suspect that much of the Wall Street corruption they see on the news has been at their expense and they are done playing the game. They feel like they do not trust or understand the markets and are no longer active participants.

I am pretty sure this is the wrong thing for most of us. Stocks and real estate are still the best way to build wealth over long periods of time. The key for investors is to change their mindset and forget what they thought they knew. Prices of even the best stocks or houses in the best neighborhoods do not go up forever. The time to buy is not just any old day you happen to have cash but when markets have declined and people are scared. The time to sell is when everyone else is buying and more importantly bragging about their quick gains in the markets or flipping properties. Making money is far more important than being popular or exciting.

John Templeton once said” If you want to have a better performance than the crowd, you must do things differently from the crowd.” If everyone is buying dividend stocks and junk bonds you should probably think about avoiding them. If everyone else loves Google (GOOG) and Amazon (AMZN) you should consider they are over owned and overvalued. If energy stocks are trading near five year lows you should think about buying them. If short term traders are distorting the larger company stocks think small. Think opposite the crowd, avoid the noise and the hype coming out of New York and DC and focus on the sectors and assets no one else loves at a given moment in time.

Investors should not give up on the markets. They just need to educate themselves and think differently than the crowd.

Tuesday, July 17, 2012

Educate, Employ or Perish

John F. Kennedy once warned us that we dare not forget that we are the heirs of the revolution. When I look at the world in which we live it is clear to me that we have failed to heed his warning. We have become a nation dependent on government for the most minor of decisions and think the idea that we do not need a passport to cross state lines implies we are free. The government can tell us what to wear, what to eat, how to enjoy our free time, what to do with our bodies, who to love and even forcibly take a large percentage of our income and we cling to this illusion of liberty.  We as a society argue about how much to take form the half who pay taxes to support the half of the citizenry who do not. We vote along partisan lines for people who do not bother to take take the time to read the legislation they are passing. It is a sad state of affairs.
As a nation we are no longer a land of individual thoughts and efforts. 

We are a collection of groups. We vote as Democrats or as republicans selecting governing officials not on the quality of a man’s ideas but his party affiliation. One group thanks it is perfectly okay to take my money and give it away against my will. This makes all equal. Economic redistribution is not the activity of a free society or market but these folks will tell you it is fair. It is fair to have the more successful pay a larger percentage to support the government than those who make less.  The other will tell you that they and they alone can define morality and know who you should love, who you should fuck and how you should treat your reproductive organs. Neither of these positions make one whit of sense and neither are an example of liberty or a free land governed by free people. They are a prime example of a bunch of fucking idiots telling stories to gain votes so they can ascend to office and enrich themselves at your expense.

Both sides seem to believe it is okay to go to war without the constitutionally required declaration by Congress. It is clearly illegal but we have been in a constant state of War since 1950 and no declaration has ever been passed. Both sides believe that violating the privacy if its citizens are okay to protect us from the plots of others. Both sides believe in detaining without cause or charges in the interest of national security. Both sides believe that large financial institutions are too big to fail and should be able to gamble with a backstop of taxpayer money. Interestingly our current President makes political accusations against big banks but takes their money and a goodly percentage of his advisors have a Wall Street background. Indeed our” populist” President has closer ties to the Street and big banks that any of his predecessors.

I am often accused of being some rapid right wing conservative. The truth is I hate both parties but I confess a more vocal hatred of those who so freely take and waste my money. I hate the Democrats for the immoral idea that wealth redistribution or progressive taxes is fair. I despise a President who has the gall to say “Somebody helped to create this unbelievable American system that we have that allowed you to thrive. Somebody invested in roads and bridges. If you've got a business, you didn't build that. Somebody else made that happen.” Does he not know that the ones who built that infrastructure were the taxpayers and business people who come before me. There was no beneficial group of citizens who said lets build a road so other can succeed. Nor does he address why the road was built in the first damn place. The road would not exist unless it was needed for the transportation of good and services produced by business people.

The average citizen would happily tell you that the USA is number 1. Except we are not. We do not lead the world in literacy math or science. We do lead in life span or infant mortality. We do lead the world in defense spending outspending our allies and enemies alike by more than 20 times. We lead the world in incarcerated citizens per capita thanks to asinine drug laws and thoroughly ridiculous anti-poverty programs.

We can blame all of this on the government. After all the government has grown into this self-sustaining monolith that lives to feed and grow itself at the citizens expense.  However the truth is that it is our fault. In this country we really do hold the power to change things with our votes. But you mark my words that in spite of the all time low approval ratings of congress most incumbents will be returned to office. They will get elected not because of any accomplishments or positions. It will simply be because of the D or R next to their name on the ballot. We are too apathetic and too sound bite trained to actually take the time or effort to elect those who might actually make a difference. John Adams once said “There is nothing which I dread so much as a division of the republic into two great parties, each arranged under its leader, and concerting measures in opposition to each other. This, in my humble apprehension, is to be dreaded as the greatest political evil under our Constitution.” It seems his fears have come to pass.

The only way to change our country is for we the people to get pissed off and demand the foolishness end. We have to stop letting legislators pork barrel legislation. They need to stop hiding bills to tax roll your own tobacco shops in transportation bills and outlawing internet poker as part of the ports security bill. We need to insist that congress vote on bills and funding straight up without unrelated amendments and hidden laws within laws. We need to keep track of how out legislators vote and hold them responsible.

The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;

To borrow Money on the credit of the United States;

 To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;
 To establish an uniform Rule of Naturalization, and uniform Laws on the subject of Bankruptcies throughout the United States;

 To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;

 To provide for the Punishment of counterfeiting the Securities and current Coin of the United States;
 To establish Post Offices and post Roads;

 To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries;

 To constitute Tribunals inferior to the supreme Court;

 To define and punish Piracies and Felonies committed on the high Seas, and Offences against the Law of Nations;

 To declare War, grant Letters of Marque and Reprisal, and make Rules concerning Captures on Land and Water;

 To raise and support Armies, but no Appropriation of Money to that Use shall be for a longer Term than two Years;

 To provide and maintain a Navy;

 To make Rules for the Government and Regulation of the land and naval Forces;

 To provide for calling forth the Militia to execute the Laws of the Union, suppress Insurrections and repel Invasions;

 To provide for organizing, arming, and disciplining, the Militia, and for governing such Part of them as may be employed in the Service of the United States, reserving to the States respectively, the Appointment of the Officers, and the Authority of training the Militia according to the discipline prescribed by Congress;

 To exercise exclusive Legislation in all Cases whatsoever, over such District (not exceeding ten Miles square) as may, by Cession of particular States, and the Acceptance of Congress, become the Seat of the Government of the United States, and to exercise like Authority over all Places purchased by the Consent of the Legislature of the State in which the Same shall be, for  the Erection of Forts, Magazines, Arsenals, dock-Yards, and other needful Buildings;

 To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof.

Article IV, Section 3
 New States may be admitted by the Congress into this Union; but no new State shall be formed or erected within the Jurisdiction of any other State; nor any State be formed by the Junction of two or more States, or Parts of States, without the Consent of the Legislatures of the States concerned as well as of the Congress.
 The Congress shall have Power to dispose of and make all needful Rules and Regulations respecting the Territory or other Property belonging to the United States; and nothing in this Constitution shall be so construed as to Prejudice any Claims of the United States, or of any particular State.

Amendment XVI
(Ratified February 3, 1913.)
The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.
In short the business of the federal government is common defense and commerce. As citizens we should insist that the Congress limit themselves to those activities and powers granted them and not stray beyond.
At every level of government we have laws defining criminal acts and outlawing theft, assault, murder, rape, fraud, robbery and most other acts against one another. We have more than enough traffic regulations and restrictions. Tell legislators that they need to stop controlling our lives with taxes and penalties for smoking, drinking soda pop and eating hamburgers. Our personal habits are none of their damn business.

The key to a happy population is prosperity and peace. If we focus on education and jobs we will have prosperity. If we stop acting like the world’s policeman and trying to win hearts and minds we will have peace. If we followed Teddy Roosevelt’s advice to never hit softly our enemies would be too scared of our might to even think of a serious attack upon our nation. It is best to never hit but when you must hit hard. Education, jobs and protecting peace by being prepared to wage total war. If we can get legislators at every level to focus on these three tasks we will once again be the shining light on the hill and beacon of liberty and prosperity.

 We need for freedom to mean free for all of us. If the government can focus on the task at hand instead of redistribution of wealth, controlling our sex lives, dictating our personal habits and feeding its own need to grow we can take our country back in the direction intended by our founders and our forefathers. When political parties give us choices like the two bozos they have every four years for the past several elections we need to pick our own candidates and draft an independent or (gasp) start a real third party. On a local level we need to elect people who understand government is there to serve not control the population. We need to get our fat collective asses off the couch and ACT. Our biggest enemy is not the Muslims terrorists or the politicians, it is our own apathy.

Jobs and education are the answer to every problem we have. Elect leaders who get this and will act accordingly.

Tuesday, July 03, 2012

The Truck Caper and random Observations

The time to move south was finally upon us. We had talked for some time about moving to either Texas or Florida. Opportunity and desire combined, we found a perfect situation in Orlando and it was time to go. I am a bit of cheapskate at times so as moving day loomed I evaluated all the options, talked to several moving companies, consulted with others who had made similar moves recently and came to what I thought was a brilliant decision. Paying movers to load and unload on either end of the trip and then driving the truck myself was cheaper by far than other options. In fact it was about 50% cheaper given the recent decline in gas prices. I love to drive and if you give me coffee and cigarettes aplenty I will bounce down the road for days at a time perfectly content. My wife could drive the Honda along with the cat and my stepdaughter and my daughter could drive the 16 year old Jag. We save a few grand, the move got done and everyone’s is happy was my conclusion. As we shall see, dear reader, I am a fucking idiot.

We will eventually get to the point of the story but I shall take the license to wander near and far along the way. As with everything I write here this will be part commentary and part story with healthy doses of economics, politics, sports and occasional stupidity dumped in the mix. One of my favorite activities on road trips is to observe the nation through the windshield in an attempt to gain some deeper understanding of current conditions.

Our journey begins just as a massive heat wave hits most of the country. This becomes more critical as time goes by as the air conditioning in the Jag does not work and tight ass here never bothered to fix it. As long as there is air moving in the car I don’t care. I had high tech 2-60 AC as far as I was concerned. Roll down 2 windows and drive 60 miles per hour and I am good to go. However I was not driving that car. My daughter was along with the somewhat spoiled climate control inclined dog. However we got on the road around 1:00 on the 28th and all was good initially. The truck was professionally loaded, it was not brutally hot and our caravan headed south. The plan was to get south of the clusterfuck known as DC well before rush hour hit in full fury.

As Mike Tyson once said “ We all have a plan until we get punched in the face.” Washington DC traffic is horrendous pretty much anytime of the day. As bad a president as Woodrow Wilson was his namesake bridge is worse. They just rebuilt the damn thing a few years ago and yet there were construction and repair related delays getting across the damn thing. The Empire State Building was put up in 18 months and  has been fine for decades. The Woodrow Wilson can’t even stay repair free for a fucking year without needing some type of traffic snarling, commuter soul crushing event. Once we cleared that abomination I began to breathe easier as the traffic radio was informing of normal conditions on 95 south.

I have avoided DC for years and in my solo days would fly though DC late at night on my southern journeys. I had completely forgotten that normal conditions on 95 south means completely, entirely and resoundingly fucked up beyond belief. Our little vehicular parade was on the brakes all the way down below Fredericksburg. Grant moved the entire goddamn Union Army to Richmond in less time than it took us. It took almost two hours to clear traffic and get back up to speed. My daughter was dying as to have 2-60AC you need 60. We were not moving at 10 for much of the stretch and temps were hovering around 100.  She and the dog were going through water by the gallon.

No matter how bad it gets for the rest of the country the DC area thrives and has a reasonable economy and the attendant traffic jams. The huge complex that is government sprawls out in every direction and employs hundreds of thousands of bureaucratic minions. The companies that feed off the massive cash tit that is the federal government bring millions more people each dedicating a minimum of 8 hours a day to consuming taxpayer dollars. It is a giant parade of legislators, lobbyists, freeloaders, taxers and spenders circling the beltway fucking up traffic and burning through YOUR money.  I fail to see how any rational human could spend time in the traffic snarl that is Washington DC and not realize the giant criminal fraud and corrupt self-feeding institution our government has become. No intelligent person can circle the beltway and not be an anarchist of libertarian by the end of the trip.

Once we moved inside the Richmond beltway traffic broke free. Now my little 26 foot U-Haul and I could only move along at between 65 and 70 MPH. The truck would go faster but it got right damn hinkey at higher speeds. The bounce factor increased to the point it was a like being in a water bed with a fat person dong the jitterbug. The steering got right damn jiggy as well at anything over 70. As traffic south of Richmond moves at 80 or above most of the time, I called my wife and my daughter and told them to stay together but just go on without me. The Jag was bringing up the rear during the first leg so I told Lisa to just pass me and stay on Erin’s bumper the rest of the day. I would poke along and get to our destination hotel in Fayetteville North Carolina whenever I got there.  My daughter was very concerned about going on without me and was really talking up the whole “Are you sure dad, I don’t want to just drive ahead and leave you behind?” It would have been convincing as hell as a show of concern if she wasn’t already three car lengths ahead and accelerating while the dog sat in the front seat waving bye-bye.

Everything went fine. They sped up and the car cooled off just fine.  I bounced along down the road thinking deep thoughts. I caught up with them for a quick dinner and dog poop stop and they took on off ahead of me again. They got to our hotel about a half hour ahead of me and had the animals and required essentials all organized in the hotel by the time I arrived. The hotel was jammed so after circling a few times I parked on the street next to the hotel behind two tractor trailers. I grabbed my bag, circled the truck to make sure all was well, checked all the locks and headed inside.

My wife informed me that I was expected to take the daughter to the hotel bar for a drink. She and the dog had not enjoyed the trip as much as the rest of us and this was my fatherly duty. You would think she would know better by now. My daughter and I have a blast in the bar. We are both talkers and will strike up conversations with anyone about anything. We got to the bar just as an event in the hotel was ending and many of the participants were wondering in for a nightcap. One of the special ops divisions had a dining in with the commanding General and soon the bar was full of special ops officers from Fort Bragg. We spent more time than we should have talking to them about history, literature, the middle east, Iraq, Afghanistan and other matters of the day. It was fascinating but there was a real consensus view that the Afghanis will never be able to govern themselves and we need to either take it over and stay forever or blow it the fuck up and walk way. The latter conclusion seems to have more supporters. All of the folks we spoke with had been there including many as first boots on the ground and all expected to be going back. Most expect to see action in other parts of the Mid East as Arab spring becomes Arab Shitstorm with specific concerns arising about Egypt and Syria. Fascinating evening all the way around and I bought more drinks for our nation’s warriors than was prudent.  We stumbled back to the rooms and fell asleep looking forward to another long day on the Road to Orlando.

Now the story takes a turn for the worse. In the morning I grabbed a quick shower, loaded my bag and went out to throw it in the truck. Except the truck was not there. One of the tractor trailers I parked behind was still there but my truck was just gone. Gone. The whole fucking truck. I was stunned to the point of speechless. I staggered back to the room and just looked at my wife. I had to tell her the truck with EVERY FUCKING THING WE OWNED was gone. I ran to the front office and asked if they had towed the truck for some reason. No such luck. I had them call the police.

The Fayetteville police came out and took the report. They told me what I already knew and there was probably little hope of recovery for our stuff. We called UHaul and reported the theft. They talked to the cop and got all the needed information. I was a little surprised they do not have GPS devices on their trucks but they don’t.  There was nothing left to do and no point staying in Fayetteville.  Stunned the wife and I loaded the stepdaughter and the cat into the Honda with Lisa bringing up the rear with her faithful but thoroughly confused canine companion.

To say my wife was devastated is understating the matter. It was not the big stuff that hurt. We had already called the insurance company and knew we had full replacement cost on everything. It was going to be a massive pain in the ass we would replace the furniture, appliances and electronics. It was the little things, the sentimental irreplaceable things that just hurt all the way down inside. Her mother’s china. Her aunt’s heirloom ring. The finger paintings from first grade. Baby shoes. The first sonogram. Love letters. Decades of photo albums. Every mile bought new memory and a fresh round of tears. This was devastating to me as there was almost nothing I could do to ease this pain, this loss that some heartless fucking petty criminals had inflicted on the woman I love. There was nothing I could do to ease the pain or stop the tears. It was brutal.
I am something of an emotional hard ass about stuff but there were things on that truck that had traveled with me for decades and the loss hurt. I fought back the tears as I drove because I needed to look strong for the wife.  I had to force myself not to think about the baseball bat my Dad gave me when I was sick, the three of four surviving pictures of him. The pictures of my kids as babies. Our wedding albums. You can take most of my stuff and I won’t care that much. These things hurt me way down inside in places I don’t usually like to travel.

In the meantime the sun is waging harsh warfare with the highway. It is over 100 degrees and my daughter is just dying in the JAG. After the lunch stop in the middle of South Carolina I knew I had to take over. If I have moving air and smokes I can handle it. I spent far too many years on the road as a salesman in a wide variety of broke ass vehicles to let a little heat bother me. We loaded up with sodas and water and continued on our sad journey south to rebuild and replace our stolen lives.

We had the hammer down. For the better part of five hours we flew down 95. The switch was probably a good idea as my wife and daughter are best friends and decided that they needed to take action. They began building inventory lists of stuff in the house by room, crying little tears at some of the stuff that was lost.  It was a small distraction at the magnitude of the loss. As her brother put it it was if our hosue had burned down and we all escaped. We had to focus on the fact we were all okay and would be fine. The insurance claim was going to be a major pain in the ass but it would all get done and we would not be homeless or sleeping on floors. However if you want some idea of the pain look around your house at all the little things that make up your life. The pictures. The refrigerator magnets from the trip to Niagara falls with Uncle Fred and Aunt Edna. The lamp you bought together in that funky little shop at the shore. The lopsided  sculpture your daughter made you in preschool. The martini glasses from “That Night.” Gone. For good. Can’t be replaced. Gone. On the floor of some fucking warehouse somewhere or in a dumpster because they have no value to anyone but you.

Then the call came. The North Carolina State Police had found the truck and what appeared to be most of our stuff was still on it. We pulled off the highway and plotted our next move. We had to turnaround and head back but it made no sense for all of us to trek back the five hours to reclaim out belongings. We loaded our daughters in the Honda, sedated both animals with Dramamine and sent them on to the resort hotel we had reserved in Orlando for the night. The wife and I climbed into the Jag and began to backtrack the five hours to North Carolina to get the truck.

As we headed north it became apparent form our conversations with the police that the truck had been found about forty minutes away from the hotel just sitting on the side of the road. It also became apparent the  State Police in North Carolina and Officer Leviner of the Fayetteville Police were just great people. These folks were calling constantly to let us know what the situation was and where the truck would be. It was supposed to be towed into the impound lot for us to pick up. The troopers apparently decided we had been through enough for one day. The got together and drove the truck to the State Police repair yard, had the mechanics check it out, consulted with the local U-Haul guy to see if he had another truck in case ours could not be driven. As it turned out the mechanic gave it a full clean bill of health and they decided to just leave the gates to the repair shop so we could pick it up after hours. The U-Haul dealer called and gave us his home number in case we needed to help starting it since the ignition had been stripped. It was all some faith in humanity restoring stuff.

We arrived about 7:30 in the little burg of Elizabeth Town NC around 7:30 and there was our truck in the repair yard. It was apparent that some stuff off the very back was gone but the majority of our stuff was still there. My theory is that given the number of U-Haul’s and trucks in our hotel the previous night the thieves had prior knowledge of a U-Haul full of contraband or highly valuable cargo at that location and simply stole the wrong damn truck. When we unloaded Saturday it was obvious that this was the case. All the loose shit was thrown off, cabinets open and dumped. My briefcases were dumped all over the cab but they left the cigarettes, electronics and checkbooks with everything else. When it became apparent that this was not the droids they were looking for, they left it running on the side of the road and walked away.
We were now 9 hours of backtracking to Orlando.  My wife was overheated but happy again.  We made the not so smart decision to just stick it through and get all the way to our destination. I asked if she wanted the truck or the car and my poor over heated sweat soaked wife tells me she would feel guilty taking the air conditioned truck.  I just gave her a kiss and the keys.  I could drive the Jag with the heater on just then as I was so relieved that she didn’t have to deal with the loss of all her belongings and keepsakes. It was a long night on the road but we pulled into Orland about 5 in the morning with our stuff.

After an hour cat nap it was time to head over and meet the realtor to get the house keys and sign the lease. We are in Windermere right outside Orlando and this place is gorgeous. I have big honking ass palm trees in yard. We have met more neighbors in two days than I spoke to in years living up north. There are a dozen or so little lakes and ponds throughout the community and we have been just walking around taking it all in.
Being me there are some general observations form our expedition. First traffic on (%, both car and truck, is not up to pre-crisis levels by any stretch of the imagination. We were on the road on a Friday before the fourth of July and the volume was just not there. It is not the ghost road it was when I drove down in December of 2008 but Lisa went into rush hour in both Jacksonville and Orlando and reported that while traffic was heavy she never had to hit the brakes. This would seem to confirm my opinion that the economy is better but not good once you get away from the sewer that is our nation’s capital. The added cost of high taxes becomes readily apparent as you go south as well. Gas prices dropped steadily along the way and one station in South Carolina broke the $3 barrier for regular. Speaking of South Carolina if you ever have the chance to drive through the state three times in one day, take a pass. It is three hours of sunbaked gateway to hell. 95 in the state is in shitty shape and you bounce your brains out in a truck. I have some great memories of the state and know some great people there but the highway is flat boring and bouncy. I also note that the ratio of church to strip club billboards form North Carolina’s northern border to Georgia’s Southern line remains a constant 1 to 1.

We are here and so far I love it. I have wanted to live in Florida for years and now I do. It was an interesting journey down but we and the majority of our stuff is here. I’m looking at Dads baseball bat and Victors cane, the pictures re going up and everyone is safe and thrilled to be here.

Next time I just pay the damn movers.