Deep Value Letter - Banner Ad / Email Capture

Sunday, April 21, 2013

Baseball, Books and Guns

Our last few free form forays here have been thought and writing exercises based on famous quotations. They have been fun to do and I will be revisiting them in the near future. They are entertaining and put some much needed grease on the old brain gears at times. However much has happened in the world since I last updated my thoughts, ruminations and ramblings on the world, markets, life books and baseball so I shall devote some time today to catching up.

I will start with the events of the past week or so and get the madness out of the way as quickly as possible. The events in Boston have been covered at great length so I shall just share some random thoughts on this. First, the reaction of “I hope its an angry white guy” response we saw from some media outlets was as puzzling as it is disgusting. The politically based divide and hatred in this country is reaching dangerous extremes.  I am further amazed that a population of roughly a million people in the immediate Boston area shut down in an unprecedented act of sheepish civil obedience. I get that there may have been some risk to going out until they were captured but can you imagine NYC or say, Tel Aviv shutting down because some armed nutballs were on the loose? Keep in mind that it was an eagle eyed citizen who found the guy once the lock down was lifted.  In addition civil liberties were just trampled during the search. Before you chastise me about how necessary it was keep in mind the words of the esteemed Mr. Franklin. They that can give up essential liberty to obtain a little temporary safety, deserve neither liberty nor safety.

Moving onto a related measure I keep asking any of my friends form either side of the aisle to tell me just what was in the recently failed gun control bill that would have done one darn thing about illegal gun ownership and use. There was nothing. It just made it more difficult to legally buy a gun. It was political grandstanding to show the world that they were in fact doing something about this awful gun problem. They were by god acting to protect the people from all these bad people with guns. They really weren't doing one damn thing except passing another law restricting the right of the citizenry.

Here something to chew over while you are calling a right wing fascist SOB who doesn't care about the children of America. We have lots of gun laws. It’s illegal to carry a gun without a permit. In most states you need a background check to buy a gun. In many you have to register your gun with the proper authorities. It is illegal to discharge a gun inside most city limits in the United States. It is illegal to threaten someone with a gun. It is illegal to smuggle guns or distribute them without a license. It is most certainly illegal to possess a firearm while committing a crime. It is illegal to shoot someone, or even just in the general direction of someone. I could go on but you get the general point. We have lots of gun laws. We do not need more gun laws. If more gun laws were the answer than strict gun control cities like Chicago and Baltimore would not have such high violent crime rates. Boston never would have happened but those kids could have never got their hands on the arsenal they obtained.

Here is my plan for gun control. Let’s end the war on drugs and use the money and manpower to go after ILLEGAL guns. We have over 500,000 people in prison in the US for violating a drug law. Let them out to make room for gun smugglers, illegal dealers and those who possess firearms illegally. Use all these alphabet agencies to get killers and violent criminals with guns off the streets and leave the potheads alone for a change. Let’s enforce the gun laws we have to the maximum extent possible and leave legal gun owners alone as well. Stop the political posturing about gun control and actually do something for a change.

It’s not just gun control. Common sense has been removed from the political process by the presence of the two parties. People take black and white stances based on the R or D on their voting registration card. If you have a D you are pro-choice so you do not even want to consider that what the guy in Pittsburgh was doing is murder. If you have an R you are pro-business so it’s impossible to admit that what we have done with the big banks is immoral crony capitalism. If you have a D you want to help the poor even if it means taking someone else’s money at the point of a gun in the name of “fairness.” If you have an R you are pro family so you insist it is okay to tell others who they can love and marry. Nobody thinks, they just vote.

George Washington nailed it when he said “However political parties may now and then answer popular ends, they are likely in the course of time and things, to become potent engines, by which cunning, ambitious, and unprincipled men will be enabled to subvert the power of the people and to usurp for themselves the reins of government, destroying afterwards the very engines which have lifted them to unjust dominion.”

John Adams foresaw the problem as well saying “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.”

We should join our founding fathers in the distrust of political parties. Doing away with political parties would force candidates to say who they are and what they believe and not just regurgitate the platform. Voters would actually have to take the measure of the man or woman in front of them instead of just pulling a lever passed on the initial next to the name. It is of the people, by the people for the people not for the party. Removing or at least ignoring political parties would go a long way to putting some common sense back into the political discussion and just maybe the practice of governing.

Now onto to something more interesting like baseball. There been some early season surprises most notably the New York Yankees. The Bronx geriatric squad is making an impressive early showing for themselves and winning games no one thought they would. They are 9th in the majors in total hits, 4th in batting average and 7thin runs scored. With so many bats on the DL this is unexpected. The pitching staff has been luckier than they should be as they are holding onto a sub 4 ERA with a WHIP that is 20th in MLB.  They are 9th in hits allowed but 22nd in runs allowed so they are catching some breaks in the early part of the season. I’m not sure the offense  can bail them out forever but they have a much better than expected start.

The other surprise is Los Angeles. There must be some anti baseball stuff in the water supply because both LA teams are goo to terrible starts. The Angels lead the league in batting average and are 5th in total hits but they runners are not scoring early on they are just 15th in runs scored. They have to get better at driving runners across because the pitching staff with a WHIP of 1.50 and a staff ERA of 4.81 is not helping the cause. The Dodgers are just middle of the pack in hitting and pitching and seem to have a bad case of overpaid locker room disease.

Then Orioles are about where I expected them to be but I have to admit they are a much better ball club with Brian Roberts than without him at 2nd base. Still they have more total hits than anyone in the division and trial only they lucky boys in the Bronx in total runs. The pitching needs to get better as a WHIP of 1.26 and ERA of 3.96 will make it a battle to win the division. With the exception of Pedro Strop the bullpen is doing very well but they need to replace Strop and get more quality starts to stay in the thick of things all year.

I replace fantasy baseball this year with fantasy baseball betting at Its more fun for me than playing manager as I am much more of a degenerate gambler type than manager type. I have always said that the two greatest jobs in the world would be a baseball writer or a bookie and this has elements of both. My official record right now is 43-41 although in my defense there are 4 games where form lack of coffee, inattention, stupidity or some combination of the three resulted in hitting the wrong button. Naturally all 4 went my way so I am a little better than that at actually picking but I am unaware of a bookie that lets you cancel a mistaken bet after the fact so the record stands. Given the nature of the money line I estimate you need to pick about 65% winners to be a winning baseball bettor so I have a long way to go to perfect the art.

I find it interesting from a psychological point of view that all the bad habits I have drilled out of myself in picking stocks show up in my early betting patterns. I am using pitching stats and hit run totals to make my picks allegedly but I have let expectations get in my way. I have taken a beating on the aforementioned LA teams because I expected them to be good and bet accordingly no matter what the line said. Favoritism gets in the way as well. I find it impossible to bet against the Orioles or Nationals. If Samardzjia is pitching I take the Cubs. Same with the kid Fernandez in Miami. I find it very easy to bet against Boston no matter what the stats say and the line looks like. I bet too many games and try to force an edge where none exists. It will be an interesting exercise to see if I can bring my market discipline over to betting and if that improves results as the year goes on.

As for market this weekend reading has scared the living crap out of me. In Barrons the number of bullish money managers leapt up to 74% the highest reading in some time. In fact it’s a record level . That much optimism should scare the living crap out of you. Then we have Mark Hulbert’s Piece on the Value Line Median Appreciation Potential reading. This is simply the services estimate of the average 3 to five year appreciation potential on average in the universe. It is at just 50%, very near the 5 year lows. Combine that with what is a weak revenue showing in earnings reports so far and there are red flags all over the place.

I am not a market timer but this does look like a time for increased caution to me. There are not many cheap stocks showing up when I run my screens outside of energy and materials. I have long said that either these names have to rally or the broader market has to come back to reflect the economic reality reflected in miners and materials. There are some cheap stocks around which I discuss both on Real Money and in other posts on this blog but the list is thinning.  Forget discount double check, it is a good time for portfolio triple check.

There have been some decent things to read of late as well. My first suggestion is that is worth your time to read Glen Duncan’s The Last Werewolf and the follow up Tallulah. I know the werewolf vampire thing has been down to death of late but these books stand out. I stumbled on them when the first one was named a top 100 of 2012 by the NYT and it is a great read. The book has all the werewolf stuff you expect nut it weaves in history, literature, philosophy and a host of other subjects in way that is entertaining and even somewhat thought provoking. The second does as well but not to the degree or quality of the first. However any book that contains the quote “The modern adult has really only one thing to say to its inner child : I am sorry . I am so (bleeping) sorry." is automatically a worthwhile read.

I picked up the Mickey Rawlings baseball mysteries again recently and they are a smuch fun as I recall. I never read them all but they are now available on Kindle so I am going to fill in the holes in the series. The adventures of the journey man baseball player as he travels around the league in the early part of the 20th century make for fun easy reading.

If you like adventure, the civil war and naval yarns in any combination you will probably become as addicted to the Honor Series of books by Robert MaComber as I am. They follow the career of one Peter Wake form his start in the navy during the civil war up through the turn of the century. I am halfway through and highly recommend the books.

The writers carrying on Robert Parkers characters are doing as well for him as he did for Chandler. Ace Atkins is doing a bag up job with Spenser and Robert Knott has the western characters of Virgil Cole and Everett Hitch nailed. No one can ever be as good as the master but they are still great reading. Atkins novels are solid material on their own by the way and good reading for hard boiled mystery lovers looking to escape into a good book.

Of course there is baseball related material to consume as well. Clay Snellgroves The Ballplayer is an excellent novel  that is as much a love story as a baseball yarn. It does both well and is a good read.
Joe Peta’s Trading places is a must read for fans of baseball, math and/or gambling and markets. Just a fantastic book.

Randy Wayne Whites Night Moves is the best offering in the Doc Ford series in some time. Gone, his book introducing a new character Hannah Storm, is also a solid read.

Paul Varnes is a retired professor with a fascination for Florida history and it results in tow read worthy novels for history buffs. Black Creek and Confederate Money are not a threat to Shakespeare but they are great yarns about the days of the Seminole and Civil War in Florida.

You will note that there are no finance books on the list. I have reproduced a recent column on market books in the past immediately prior to this one for that subject. Of the newer tomes only Quantitative Value by Wesley Grey and Tobias Carlisle has been of merit and worth your (or my) time.

And so life goes on and the world gets weirder. Bad stuff happens and will continue to do so. Politics will continue to be an immoral abyss and the apathy of the average American will allow it to do so. We shall quantitatively ease our way into eternity or oblivion and no has a clue which it shall be.Markets will do what they will do and those who insist they know what will happen will continue to lose money.

However there will be new books out this week and everyone thereafter.  My West Coast and French friends inform me that the vineyards are still making and shipping wine. My wife still says she loves me and proves it every day by not killing me in my sleep. I still have a wide circle of friends with whom to discuss, debate, curse, vent and fume. The kids are all doing great and on their way to a solid happy life (although the daughter and boyfriend are apartment hunting and that gives one a kind of “oh crap” mental tingle). They are playing baseball today and everyday though the end of September .If you learn to embrace life and all it offers there will usually be more good stuff than bad.

You may note that the complete absence of a certain grouping of words and phrases. A certain stock picking mountain climber form the land of grunge and coffee challenged me to done of these with the usual profanity laced tirades that tend to slip in my ramblings.. Now that this is accomplished I am sure we be back to our regular (bleeping) program in no (bleeping) time.

No comments: