The wanderings of an amorous and avaricious mind

Another Year Gone By

2011-12-31T14:35:00.002-05:00

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.

Regrets? Too few to mention.

2011-12-15T13:11:00.001-05:00

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

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That Time of Year

2011-11-22T13:58:00.001-05:00

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.

Diminished Circumstances

2011-11-09T13:42:00.001-05:00

Diminished circumstances. A fine turn of a phrase that means I fucked up big. Just once I would like to get carried out of the building covered in piss and blood while long 137 car loads of S&Ps while the market crashes; or stuffed up to my ears with a short bond position on POMO day collapsing in a beaten battered heap screaming Viva la Revolucion! Something dramatic and gritty that will make the autobiography more interesting. This is not my lot in life. The markets have been good to me and I expect them to continue to be for some time to come. This type of financial market weirdness is in my wheelhouse and I am not leveraged so I get no grand and glorious ending worthy of a late night CNBC special. A huge cut in compensation from my largest free lance deal and a few nasty grams from the scum sucking bottom feeding government tit sucking bastards at the IRS and here we are. Diminished circumstances.

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.

Birds and Markets

2011-09-15T18:13:00.001-04:00

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.

Tea Parties and Stock Markets

2011-08-08T12:06:00.003-04:00

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.

Independence, Liberty and Justice For All

2011-07-01T15:55:00.005-04:00

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.

High Finance and a Low Down Dirty Shame

2011-06-02T19:31:00.004-04:00

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?

Ruminations on turning fifty

2011-05-02T16:03:00.004-04:00

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.

Where we are now

2011-04-18T14:49:00.002-04:00

As usual I have taken entirely too long to come back and update this space. I always seem to have the best of intentions but after doing the daily writing and various investing and household activities I just do not seem to get as much time as I think I have. We are moving into spring here in the Mid Atlantic and the warmer weather beckons on the occasional teaser day we have experienced so far this year. Baseball season has started with the usual high expectations and low delivery for the Orioles but we will touch on that later in this epistle.

I will start with the markets. The most powerful lesson learned is that o interest rates trump everything. Never fight the fed when your opponent pulls out a bazooka. Low interest rates mean more than troubled real estate markets, stagnant economies, high unemployment, geopolitical turmoil and natural disaster. There have been literally dozens of valid reasons to worry about the stock market. There has only been one to be bullish. The bulls have won a resounding victory so far. Money has been literally, and by the Feds admission, forced into stock the stock market. Much smarter traders than I have recognized this and used valuation neutral ETFs and black box trading to lift offers in the market and create a self feeding frenzy pushing prices still higher.

The other thing that the last two years have proven true is my philosophy of always buying stocks that are too cheap not to own regardless of my macro views. I was literally forced to be a buyer of cheap stocks back in 2008 and 2009 and it has paid off with some big winners. The Forest City debentures (FCY) have gone up six fold over that time. Hardinge has doubled as has West Marine. Capital Source and Tech Data has doubled in value as have a whole host of hotel REITS that were picked up at the height of the panic. Had I relied on my world view instead of valuation I might have hid in a closet sucking on a bottle of scotch but the “too cheap not to won” concept carried the day. A usual my stock picking is a hell of a lot better than my macro thinking.

With that thought in mind I am pretty much going to ignore the current macro environment. If you own a TV or read my RealMoney column (please subscribe btw) you know what’s going on out there. I have no idea when the zero rate policy stops forcing the mass asset allocation trade. Some say it will be when QE2 ends in June. It’s a pretty safe bet that so many expect that result that it is almost impossible for it to be the case. Perhaps today’s downgrade of US government debt to negative status will be the straw. I do not know and I suspect on one else really does either. I do know there a few cheap stocks around worthy of our attention.

Hilltop Holdings (HTH) has been on the cheap stock list for some time now. I have no idea when Gerry Ford will make an investment or strategic move to unlock the value of this company. I see that he just did a deal for an ownership stake in SWS Securities at a favorable price so that may be the catalyst. I do know that the $50 million he invested does not even put a dent in the almost $650 million cash stockpile he has available. I also know the stock remains not only cheap but safe trading below net cash levels. TSR (TSRI) is still trading for less than cash and receivables. The business has struggled but it is still profitable and has been for 10 years. It is just an okay business in a crappy industry. But it is safe and cheap and management is a big owner and will have to monetize their interest in the company at some point. Heavy machinery and as[halt plant manufacturer Gencor (GENC) will someday see a huge surge in business from infrastructure spending. That day is not today and the company trades for less than cash on the balance sheet.

I have a toe or toe in the mortgage backed securities market as well. I think that aggressive investors can own some of the high yielding mortgage back REITS right now. I favor Invesco Mortgage(IVR) and Chimera CIM with 19% and 14% yields respectively. I also like the public partnership Ellington Financial with its hedged fund approach and 22% dividend yield. The caveat here is that there is a lot money getting ready to move into this market. A bunch of companies including giants like TCW and PIMCO are planning IPOs of mortgage backed funds. Several companies including Invesco are doing secondary offerings to take advantage of the messy pricing in this market. This could push prices higher between now and the end of the year and its going to be necessary to exit a pop in these things. Too much money in a sector is always bad news. The good news is that when they push it too high the weak ends will get flushed when the market cracks and we can do this all over again.

We continue to move into the small bank trade as well. Here I am playing a barbell approach. I like the higer quality banks like mutual conversions like Capital Financial (CFFFN ) and FoxChase Bancorp (FXCB). I still like Shore Bancshares here on the Eastern Shore of Maryland. I am also taking the long shot picks in the industry. I am trying to invest alongside the private equity money going into the industry. Hampton Roads Bancshares (HMPR)), Sun Bancorp of New Jersey (SNBC) and United Community Banks (UCBI) are among the names on this list. I am also mining the recent filings by noted bank activist like Lawrence Siedman and Joseph Stillwell for potential big return troubled bank stocks. There is a long list of stocks like Renasant (RNST) in the South and First Interstate (FIBK) in the Upper Midwest that I want to buy when the market finally does stage a decent pullback. They have great balance sheets and pay decent dividends. Now we just need an acceptable discount to tangible book value.

Now onto baseball at last. We added bats that are not hitting. Out team average and home run count can be generously said to suck like a hungry hoover. One would hope that changes soon. On the plus side the young arms seem to be doing about what they were expected to do. They are not great but they have great moments and don’t get blown out too early. They have however developed a disturbing tendency to give up the long ball and fall behind hitters. This has to improve or it will be another long losing year. Matt Wieters is starting to drive the ball with authority but not enough are falling in or clearing the fences yet. He is one of the best defensive catchers in the game. I just hope his bat gets as great as it can be before his contract is up and he is out of here. On the plus side the Red Sox look like crap and that is always a happy thought. It is a long season so here’s hoping they stay awful and we get better as the weather warms.

I have to stay away from the politics this time around. I am so sick of the twisted corrupt assholes on both sides of the aisle I want to puke. I don’t have time to spend an hour or tow vomiting away the sour taste of stolen dreams and leveraged futures. My wife will take it badly if I kick the cat in frustration at budgets, taxes, lies and empty statements. So this time around I ll skip discussing those twisted souls and thieving minds that have conspired to push our nation into a morass of political and monetary bullshit. Don’t worry. It wont be long before one of these $1000 suit wearing corrupted mentally frigid assholes pisses me into a rant of Thompsonesque proportions. But for today we will skip it

Summer is indeed just off the horizon. Every once in awhile you catch one of those gusts of heated air that smells of boat engines, barbecue pits and suntan oil. If you strain in the evening you can almost hear the crash of the surf and the band at the dock bar. It was not a bad winter around these parts just a long one. Now the days are just a little longer, the air is a little warmer and its almost time to get excited about all that summer has to offer on the island. Not yet, but almost. Life is good.Unlike years past I have someone to share the goodness with and that makes it even better than I had imagined it could be. And I have a good imagination!

Ramble On

2011-02-28T13:02:00.003-05:00

I meant to write a variation of this rambling for some time now but just have not had the time or inspiration necessary to sit down at the keyboard for what was sure to be a long ramble. Fueled with new thoughts and periods of demented musings it will now be an even longer one. Now that I am back from Key West and ahead of the day on Monday I will endeavor to get all this down in as coherent a fashion as I am capable of doing. As I have not written in this space in a bit I will eventually get to important stuff like baseball and markets but for now let’s tell the story that has been in the back of the brain for a few weeks now.

It all starts in the kitchen with a glass of wine. That’s where almost all my stories that don’t start at Red Eyes begin so that not unusual. I was cleaning up after one of our family dinner gatherings and talking with the sister in law while my wife put the little one to bed. I forget what the subject matter was but at one point I commented that I just did to worry about this kind of thing. She paused for a moment and said “I get the impression you do not worry about much.” I thought about that for a second and realized that I really do not. Worrying is a waste of time in my opinion. I am all too well aware that bad shit can happen but to sit awake at night or waste one minute of one day stressing over it is a waste of life and time.

To those who know me only as an investor that may seem to be a contradiction. I enter every investment by asking what can go wrong? Once I have the answer to that I begin to calculate the upside potential. If I like both answers only then do I enter into the proposition or security. This allows me to sleep at night and hopefully earn enough profit to keep chugging along. I approach a lot of life like that as well. What can go wrong? Can I handle that? What’s the upside? I think it is the second question that screws most people up. They badly underestimate what they can handle in my opinion.

I think fear keeps many of us from being who we could be and living the life we should. I know people who sit awake worrying about shit that may or may not happen and crap that probably will never happen. Bad shit can happen I know that. You could lose your job; your business could go under. If it does the sun will rise the next morning and it will be time to start over. It might not be the most fun you ever had but you can do it. I know far too many of trader friends who went bust, drank it off and went back to raising a stake or rebuilding their bankroll. It has happened to me before in the aftermath of a divorce and a market collapse. I could barely afford my bar bill. It was not a hell of a lot of fun but I rebuilt, survived and thrived. It did not kill me, make me uglier or shorter and I moved on. Bring broke did not make music, books, sunsets friends or anything of the other things that make life so spectacular go away. They were still there.

There is all sorts of stuff to worry about if you choose to do so. The economy still sucks and job growth is so anemic it makes a snail look like Richard Petty in the backstretch at Daytona. The Middle East is in full revolt and we may get a democracy or two but that’s not the way to bet it. It started out that way but there’s a whole bunch of well-armed nuts over there so the outcome is very much in doubt. Gas prices are rising. We have mortgaged our future and it seems to me that we have done so for all the wrong reasons in all the wrong ways. Our two major political parties strike me as institutionalized insanity at this point. The tax code is absofuckinglutlely ridiculous and unfair to anyone with an ounce of ambition or thrift. The list goes on and on into an infinity of worries. You can work yourself into a right good frenzy of worry if you so choose just on geopolitical and big picture stuff if you want.

Then there’s the personal stuff. Things did not go so well at work today ,this week, this month this year. Business is slow and my customers are not buying what I sell. My son/daughter/cat/fish is not behaving the way I want. I owe too much money (um..this one’s easy. Quit fucking borrowing money). My parents/siblings are crazy .I need a new transmission. I hate my job. My pinky toe hurts. My 401k is down. I weigh too much. I weigh too little. I have a pimple. My kids might not get into the college I want them to attend. My house is worth less than I paid. All of these may be legitimate concerns but they are not worth worry or stress. Nothing that does not involve the imminent death of a loved one or yourself is worth worry in my opinion.

Stress kills. It kills faster than anything else on earth. Faster than drinking, smoking or any other of a host of bad habits. I think you can literally worry yourself to death. The very worst part is that you can worry yourself to death years before your body has the common sense to join you in death. Worry and stress can take every last millisecond of enjoyment out of life and that my friends is a tragedy. There is far too much beautiful and wonderful about life to ruin it with destructive worry and soul sapping stress.

Here is how to handle sorry and stress. Look at the situation that is a worry. What can you do to change it? Go do that. Is there any way to protect myself and the ones I love from this? Go do that. Can I profit from it in some way? If there is a way, Go do that. Once you have taken the steps that you can take relax. Go put some Coltrane on the stereo, pour a libation, read a book, play with your kids, kiss your wife. Live your life. What happens happens but you have done what needs to be done and you can handle the consequences.

The other best method for eliminating stress is to eliminate the ridiculous comparisons. Sam made more money than me. So what? Are your bills paid and do you have what you need? Jill has a nicer car. Who cares? She probably has a bigger car payment as well. I was not the best trader/salesman/mime this month or year. Again so what? Are your customers and clients happy? If not apply the questions above and make them happy. As any gunfighter or gambler can tell you there is always somebody better. Be as good as you can be and that’s more than enough.

None of this should be taken to mean that bad shit will not happen. You will stumble bumble and fall. You will make some mistakes that in hindsight will be stunningly stupid. You will lose money at some point. You will get your heart broken. All that and more will happen to us along the way. That danger of loss is more than offset by the good stuff that can happen. You can fall in love and find forever. You can find that dream job. The good stuff far outweighs the bad in this twisted little journey of life. Keep in mind that no one gets out of here alive. This is a one way trip to the best of our knowledge. Experience it all, live it all, love it all. Quit worrying, buy the ticket and take the ride.

My friend James Altucher recently wrote a nice piece on stress and reduction that I enjoyed (by the way if you are not reading his blog, Altucher Confidential, you should be. Entertaining useful and funny.) In one area we disagree. He suggested no alcohol to reduce stress. I disgagree.100% of all experts named Tim Melvin agree than wine reduces stress. Orange crushes at sunset reduce stress. Fruity rum drinks on the beach reduce stress. Cold beers with a two run lead in the seventh reduce stress. You can look it up.

I find myself in agreement with Baudelaire on this one. Be drunk. Be drunk on wine, virtue, poetry, love, sunshine, laughter. Be drunk on anything and everything. Drink deeply and sloppily of life, deep thirsty draughts of your children, your partner your friends, music, books, starlight, thunderstorms, fast boats, slow kisses, rainy mornings and sun drenched afternoons. Quit worrying and start drinking of life.

Now on to recent travels and adventures. We recently took a delayed honeymoon voyage to the Keys. We flew into Miami ,rented a car and drove down the Overseas Highway. If you have never done it, book the trip now. It is one of the most breathtakingly beautiful drives in the country. You can feel the tropics seep into your soul with each passing of a mile marker. If you get a chance stay overnight in one of the little resorts (no hotels o motels in the Keys, just resorts) in the Upper Keys. We stayed at the Drop Anchor in Islamorada one night and loved the place. The door opened right onto the beach and the ocean. Just a spectacular little place to spend a night or a lifetime. Furthermore if you can stay stressed strolling down Front Street with a drink in your hand and the sun in your eyes you need an extended stay in the Maynard G. Krebs Reality Rehab and Finishing School.

My next observation is that Jimmy Buffett should be horsewhipped. Don’t get me wrong. I like his music and used to organize bus trips to his shows in my younger days. He has some great tunes and I love the lifestyle he espouses. But the corporatization of the whole things he has done is just distasteful. We were on Duvall Street watching the upper middle aged sunburned set standing in line to get into Margaritaville with overpriced cheeseburgers and other standard Mid America fare. Two doors away Jakes was almost empty and we dined on conch ceviche and shrimp that was wonderful at an almost empty bar (note to Key West and the rest of the south. Quit boiling the damn shrimp. Buy a steamer). The whole concept of Parrot head clubs who think they are pirates for drinking three coronas while wearing loud shirts at Harrys Caribbean bar in Milwaukee is silly. There is no such thing as an organized casual lifestyle. Hippies, pirates, roustabouts, layabouts, dreamers, outlaws and drinkers of rum do not have an elected board of directors or a federal tax ID number. While we are on the subject if you insist on having such a club quit giving money to Jimmy charities and spend a little money and effort in your own backyard. I am pretty sure there are hungry or illiterate people in your little town that need the money far more than whatever corporate cause Jimmy advocates these days. Jimmy has lots of money to give his causes. Find your own and give deeply and often. Also Listen to some different music. Buffett’s okay but check out some Solomon Burke, Jerry Jeff Walker, Lyle Lovett, the Drifters and such.

Of course books will make an appearance in these ramblings .I stumbled across a book call Life Lessons of a Legend by Brad Manard and Captain Tony Tarracino. First I will say I liked it and you should buy it. Furthermore you should buy it at Voltaire Books on the corner of Simonton and Eaton in Key West. It is a great little book store whose owners went out of their way to be helpful when my wife was looking for a particular book to bring home to the small blonde child. Having said that the author is a member of a Midwestern Parrotheads Club and also looks at Tony through glasses of a deep rose color totally ignoring what Tony himself called his inner bastard. It is understandable I suppose. The last Brad from the Midwest we run across in culture was last seen wrapped up in a sexual embrace with a transsexual transvestite in a fright wig and fishnets. Manard spent some time with Captain Tony in the last years of the legendary Key West icons life and he came away with some pretty good stuff that makes for a good read.

One thing that is mentioned frequently in the book is Captain Tonys advice to look for the jewel within. Translated this means to look for the good in all. This is great advice for reducing stress. I have a lot of friends many others think are asshats, assclowns or simply assholes of the highest nature. I myself am frequently told I am like whiskey, an acquired taste. A lot of people have wrappers that have nothing to do with who they really are. Insecurities fear, and a whole host of other entirely human factors lead them to put a shell that is not entirely pleasant. If you see through the bullshit there is usually a pretty good person within. While it is true that there some folks who fit in the WOS (waste of Sperm) classification most people I meet are actually pretty decent humans just trying to figure it all out. Look for the jewel within is pretty damn good advice and the concept is pretty well presented in the book.

The other lesson Brad from Iowa gets from the gambler, hustler and saloon keeper is that compassion is the most important word in the dictionary. This is something that those of us who call ourselves libertarians fuck up beyond belief. While I deeply believe that government redistribution of wealth, uneven taxation and handouts is wrong this does not mean that there should be no compassion. Believing in myself and taking responsibility does not excuse me from giving a shit about those with whom I share the planet. I should not have an obligation to give my money to anyone I do not want to. However I should want to help some of those who have struggled along the way. If life has smiled on you why not help those who feel frowned upon right now.

Why not give money to help spread literacy? We have far too many people in our own country who never learned to read. What contribution might they make to the world or their own life if we open that door for them? Is giving the mentally handicapped the chance for a job or the ability to take some measure of direction over their life a handout or a hand up? Do you know what horrible circumstances led that mother and child to be homeless? Are you so perfect you get to judge? The five bucks you give her might go to the crack pipe, that’s true. It might go to feed the child for a day. Since you tip more than that for an overcooked burger and a beer at the Parrothead meeting why do you give a shit? The chance she feeds the baby is worth taking the risk in my feeble mind. You are right. I do not owe it to anyone to help them. I owe it to myself.

I have one last observation from Key West. This is one of the more diverse little towns you will ever find. You will not hear the word diversity there very much. No one seems togives a shit if you are red, black white yellow or any other shade. No one asks which flavor of groin you favor or what religion you choose to practice. The real question is did you show up for your shift on time and do your job? You do what you want and be who you and be sure to tip your waiters and waitresses. I will do the same. I love that attitude. Let’s do away with societies and association to advance fill in the blank people. Let’s start to new one called the Society for the Advancement of People. As long as we still use the word diversity or request special treatment based on skin color, religion, groin preference or some other feature or habit racism and discrimination will survive. You be you, I’ll be me and none of the rest really matters all that much.

Cleary I lied. Baseball and markets will have to wait for another day

Safe Cheap and Skeptical

2011-01-22T12:45:00.003-05:00

I wrote a variation of this article on RealMoney recently but of course I am somewhat more constrained and correct in those pages than I am here. The upshot of it all is that I am done apologizing for my economic and market outlooks. I have often found myself apologetic for taking a stance that is contrary to folks that have Ivy League degrees, white shoe firm pedigrees and a shitload of initials behind their name. I have none of those. Far from having fancy degree I was actually a high school dropout. To be fair kick out is a far more accurate term. I was not a well behaved youth and had spent a fair amount of time behind bars lng before I was old enough to be in bars.

I do not apologize for that either. I eventually graduated at the age of 17 by going to night school while washing dishes, busing tables and cooking at a dive in downtown Baltimore. For a while there I cooked at the drug and alcohol rehab where my father was a counselor while polishing off my diploma. While it was not a perfect path, nor one I would recommend or allow my kids to follow, I have to say it was an education in and of itself. I know that at some point I should have gone back and gotten a degree but the truth is that there is just been too much life to live, too many adventures to have and far too mnay other interesting things to do than sit in a classroom.

I learned what I know through books. Of course I have read all the graham Books, Klarman’s book, Marty Whitman’s and every other significant piece of literature related to value oriented investing. I have read all the important technical books growth bools and just about everything I could get my hands on about markets over the years. In addition I found time to work in Adam Smith, Milton Freedman, Hayek, Keynes, Marx and Mises. I didn’t learn it all in a classroom but I think I have a pretty good handle on the subject.

I often find myself defending my current position. There is no doubt that forcing money into the market is good for stocks and fanfuckingtastic for Wall Street. With rates at zero there is no other place to put money. Of course that’s going to push stock prices higher. I do not think the market is particularly cheap as earnings achieved through cost cutting, inventory management and accounting measures are not growth. There is very little top line growth going on in the US right now. Let’s say the idiot, I mean analysts are right and we will indeed achieve Nirvana this year and hit $96 in earnings on the S&P 500. In real terms the growth rate of our economy is roughly zero. A zero growth rate according to everything I have ever learned deserves a multiple of 8.5. That gives us a fair value of about 816, a far cry from yesterday’s close of 1283. There will be some who tell me I am wrong about the zero growth rate and cite government stats and other horse crap about why we have this great recovery. To which I reply if we were growing we would be seeing JOBS created. We are not nor do we appear likely to do so. Repositioning is not growth.

I also take a little flack for my long term structural view of the economy and markets. While easing measures have bailed out bond traders and stock jockeys we have not done much to repair the country. In fact I think we have harmed it deeply. I fail to see how we grow enough to deal with the deficits we continue to pile up. These measures are not creating jobs; all the cash thrown in the markets have not healed the real estate markets. We have allowed those that created the problem to prosper at the expense of those who suffered. I am not talking about the idiots that borrowed too much money for too much house or used their house as an ATM. They are as much to blame as anyone. What about the poor ass that paid his bills, lived within his means and was unfortunate enough to buy the stocks as the best long term choice mantra and invested his kids college fund and his 401K accordingly. That poor bastard got hosed. Now he is going to be stuck with a higher tax bill to pay for this mess.

They told us that all kinds of bad things would happen if they did not bail out the banks.so what? Is my reply. Sometimes the piper has to get paid and this was one of them. Yes it would have been a mess and some of the big guys would have failed. Again, so what? I think banks like BB&T, M&T and even Wells that did not have the mess the giants had would have filled the void. There’s a good chance that JP Morgan would have made it through. is the world really a better place because we saved Goldman, B of A and Citi? I do not necessarily think so.

Here is where are now. State and municipal fiancés are mess and probably going to get worse. Real estate, income and sale taxes are the lion’s share of most state revenues. With real estate down, a 20% real unemployment rate of 20% and justifiably scared consumer I question how quickly these recover. The federal budget deficit is out of control and the debt is rising at an alarming rate. The stock market is higher but the bulk of the volume is form algorithmic traders and there is very little long term investing going on right now. ETFs and indexes are distorting valuations and the retail investor has left in disgust. Our capital markets look like casinos without the benefit of showgirl and free cocktails. This is a party that has to end at some point and there will be a hangover.

The upshot of all this is that I am even more cautious than usual. The emperor not only has no clothes he has a tiny wee-wee. When this becomes apparent I think the market will price a lot lower. It might not be in 2011 as the free lunch provided by liquidity and forced asset allocation holds sway. But it is going to happen and I do not want to be the guy paying the bill when the party ends. You cannot borrow your way to prosperity. Smart phones cannot be the basis of an economy as you cannot text your way to prosperity either.

Two things have given me a greater deal of confidence in my views of the markets and economy. First as I mentioned in my Real Money article I am finding that an awful lot of smart people with degrees and letter have almost exactly the same viewpoint I do. I am not some lone voice in the desert preaching doom and gloom. I am actually in well-educated experienced company in my views. The other factor is that historical record of my ramblings. I have been cautious about the markets and limited my buying to only the cheapest names for several years now. There are warnings on the foolishness in real estate as far back as 2006. Throughout I have remained cautious and openly skeptical of government involvement in the markets. It has worked and I have to my surprise been right far more than I have been wrong about the outcomes.

I shall openly and proudly confess that my biggest missed call was 2009. I badly underestimated the markets ability to recover. The impact of the printing presses surpassed anything I could have imagined. I failed to see how powerful the Fed could be in influencing the direction of the stock market. I will also say that following the discipline of buying what was too cheap also worked far better than I could have ever imagined.

I am not always right. Nor am I always wrong. I am however done apologizing for being cautious. The first question I always ask is what can go wrong with this? Right now I see a lot of things that can wrong with our fiscal policies. Unlike 2008 and 2009 I do not see a lot of cheap assets that I should buy no matter what I think the economy is going to do. That sends up a huge red flag for me. I think we have fiscal and structural issues that could be problematic for us and I think stock prices are too high given what’s going on in the rest of the world outside the beltway and the rivers.

Right now I am content to drift along buying the occasional super cheap stock and waiting for things to adjust to my perceptions. I think they will. Then there will be sufficient cheap assets to get more heavily invested. I’ ll continue to track and buy thrift conversions as that is one area of the market that I think has extraordinary potential If you have a mutual thrift in your town go now and deposit a few bucks to get at the head of the IPO line. I do not feel the need to chase the market or attempt to out trade the black boxes and ETF traders that currently control the landscape.

I am at heart an optimist about this country. I always have been and always will be. I have no idea what the catalyst will be to correct the current fiscal missteps I see. At some point we will figure it out of that I am sure the 70s lead to Reaganomics, Mike Milken and a sustained 25 year burst of prosperity. It won’t be the same path to a brighter fiscal future but a path will open and the right person will hopefully emerge to take us there. I have a suspicion that this time the path is a combination of reduced assistance to Wall Street and infrastructure spending that creates real jobs and expands payrolls and the tax base but the jury is still out on that. I would like to think it was a return to hands off economics that lead us out of the wilderness but we may have passed the point where that would work. But if we are going to spend money let’s spend it on rebuilding the nations electric and water systems as well as transportation infrastructure in a way that creates job and leaves open a return to Austrian methodologies down the road.

When it comes to governments and markets I will never again apologize for being cautious, critical and suspicious. It has served me well for a long time now and probably will for years to come. Safe chaep and skeptical shall remain my mantra.

2011-01-14T10:21:00.003-05:00

My country tis of thee, what the fuck have you done? I sit here day by day watching the news scroll across the screens and I often cannot believe what I see. Mr. Bernanke tells us he is not printing money but not to worry anyway because whatever you call it is working. His evidence of this is that the stock market is higher. Now I work around the edges of Wall Street and I love it when the market is higher. In spite of my cautious view of things I own quite a lot of stock and the market rising is very good for me. The merger activity created by the lack of real economic growth makes my inner arbitrageur want to sing sally sunshine songs. However when I look at the real world I see a problem. Unemployment is still bad and real estate is not getting better by any stretch. We had over 1 million foreclosures last year and more than 2 million folks got at least one foreclosure notice. Now the foreclosure process is bottlenecking in the courts and there is still a large shadow inventory of homes out there. Unemployment claims are consistently high and the terminally unemployed number is growing. When I talk to friends who own businesses I find that business is better but still a long way from great. All this means is they are no longer draining their bank account to stay afloat. It does not mean they are anywhere close to adding jobs.

On top of it the price of the stuff we use every day is going higher. All that lovely money we did not print but nonetheless put into circulation is driving the prices of the commodities higher. In a really jarring nte around Chez Melvin coffee is up over 60% and that’s just a hardship. If I still drank scotch the rise in grain prices would just be insulting. Crude oil is up 15% and gas is back over $3 a gallon. Cotton alone is up almost 100% in the last year and this is driving apparel costs higher. While all Americans may not own stocks we all do eat, use energy and with the exception of certain celebrities we like to go about fully dresses. The cost of all this is adding up at a time when many are still looking for jobs and trying to hang onto their house. The gap between those inside the beltway or between the rivers and the rest of the country is growing and that really is not good for the future. A large disparity between Main Street and Wall Street simply is not good for the country and may spark enough discontent that people put down their remote and take action.

Or not. Illinois just passed a whopping 70% tax increase without cutting any government expenses. Here in Maryland they are talking about raising the gas tax and adding a drink tax on alcoholic drinks. California is a just a hot mess and even peace and love space trooper Jerry Brown says that costs must be cut. The states are such a mess as sales and real estate tax revenues decline and across the board are suggesting cuts in service and higher taxes. Yet, nobody seems to give a shit. At both the state and federal level the mantra seems to be that those with more should pay more. Here’s a news flash dumbass, we already do. Someone told me yesterday that is was fair that I paid more since I made more than they did. Um NO! Fair is we both pay the same percentage. I ll still pay more but it will be fair. A-Rod hits better than most. Should we tie one arm behind his back to make it fair? Right now my total tax bills add to more than half what I make. How the fuck is that fair?

Enough of all this. It’s a 1970s style mess and I do not at this time see a Reagan rising to turn the tide. However at heart I am optimistic about the US and think we will muddle through and find our way out of the morass. It may just take a while longer than I like. In the meantime there is still stuff to do to make a few bucks. Cheap stocks are thin on the ground but there are some around and hopefully they will continue to keep me afloat until the world gets better.

Avatar Holdings (AVTR) is trading at half of a book value and as long as people prefer Sunshine over snow land value in Florida and Arizona will eventually recover. In the meantime management seems to be doing a great job of managing the balance sheet and adding properties at distressed values. The grocery business sucks with tight margins and gladiator like competition but Winn-Dixie’s (WINN) stock price more than reflects the state of the industry. At less than 60% of book and no debt they have to be on the takeover radar screen. I am in total agreement with Mike Milkens position on education. We have to focus on this area to remain great and this should provide favorable trends for LeapFrog (LF) eventually. Presidential Life (PLFE) and Kimball International (KBALB) are stupid cheap at less than half of book value. As a bonus they are profitable and are seeing insider buying.

The thrift conversion trade is going to be exciting. As mutual thrifts are forced to convert to stock ownership we will see some incredible bargain in solid smaller banks. I have already bought Fox Chase (FXCB) and Capital Financial (CFFND) and there will be more. It’s the closest thing to free money on Wall Street. I also still own Shore Bancshares (SHBI) here on the Eastern Shore and think I will be well rewarded for doing so over the next few years. The small bank trade could easily be a get rich investment over the next decade and I continue to track the sector for additional bargain issues.

With real estate so depressed I think you have to have some presence in that market. I like Commonwealth REIT at yields over 8%. They own high quality properties and you can buy them at half of tangible book value. I also continue to like the fractured mortgage back securities market. I like Invesco real estate since Wilbur Ross’s research team advises the REIT. At today’s price it yields 17.50%. You can also buy Chimera (CIM) yielding over 16%.Start small with these and add on sell offs.

I am staying short treasuries as well. In addition opt the commodity inflation I see the simple fact is that on the long end we are not a good enough credit risk to pay less than 5%. Our budget and balance sheet are a mess and getting worse. I own TLT puts and intend to for some time to come. I am also looking to buy puts on the various high yield ETFs. Junk spreads are stupid low and that market will implode sometime this year in my opinion. A small position in the puts could have a large pay off.

Okay enough business. Onto to things that really matter like baseball. The orioles have added some power on the corners and that has been desperately needed. Slowly but surely the lineup gets better. If mark Reynolds can strike out less than 200 times and take advantage of the short porches in the yard he could be a home run and RBI machine. Derek Lee is a steady presence at first and again the short fences could allow him to rebuild his power numbers. The youngsters on the pitching staff will hopefully get better. Kevin Gregg improves the bullpen one of our glaring weak spots. The club played a lot better under Buck Showalter late in the season they could be fun to watch next year.

It is January so I am an optimist. The realist in me looks at what the Red Sox added and my heart sinks. That is a very good baseball team right now. Speaking of the Red Sox I have been forced to deal with a dilemma regarding this team. I have long hated the Beantown Boys. I am not a fan of their trend following owner John Henry. He sucked enough money out of unsuspecting retail investors with fee laden commodity partnerships over the years that its impossible for me to cheer for his team (in addition to 49 years of other reason to hate the damn Red Sox). Now Seth Klarman has bought part of the team. Klarman is a man I admire and respect. He is one of the greatest value investors of this or any other generation. After some soul searching I came to the conclusion that I will always root for Seth in life and in the markets. In the American league East however we shall be enemies.

The Ravens so far are doing what the Ravens always do. They make it more interesting than they should but they win. If they play every game like the KC beat down last weekend they can get to the big one. However the Steelers are in the way this Saturday and that is a formidable obstacle. Any fan of old school football has to love a Ravens-Steelers game. They don’t track touchdowns as much as they do causalities when these teams meet. It should be a great game and with a little luck and blocking on the long haired freak we will hopefully win the game and move on. I find I have to root for the Jets this weekend as well so we can get a home playoff game and avenge 1969.

The world moves on and changes abound. If you felt the planet shift on its axis on September 10th 2010 the answer is simple. I got married. His time last year I had pretty much given up on the idea of finding love and any sort of marital bliss. Once I determined to move on in a flurry of books and scotch it found me. I knew by the second date that something special was happening and by the end of the third I knew Erin was the “One”. Describing the way I feel when we are together is impossible even for a wordy bastard like me. Suffice it to sat I am incredibly happy. A year ago I could not imagine not being by myself. Today I cannot imagine not having Erin at the center of my life.

This will of course mean less tales of alcohol fueled rampages on Second Avenue and Rush Street in this space. Darryl’s ditch is probably safe from future damage as well. Trust me dear reader this is a good thing. I am sure I will slip in one or two over the years but full throat stupidity will no longer be an every weekend addition to the story. Once the stiches came out and the ribs healed it was a lot of fun most of the time and some of the stories were hysterical. This is better. I am far happier (to say nothing of safer) on the couch with my wife with a glass of wine than I can remember being.

And so on we go. There is a lot wrong with the world but there is a lot right as well. If we have learned anything from history is that the forward march of man finds a way to work through problems and that the US has too many entrepreneurs, innovators and economic heroes to not overcome the current stupidity. In the meantime we have friends and loved one to keep us inspired and mentally healthy; we have laughter, music and book to keep us from drowning in insanity. There so many special moments that make up a life, rather they be quite nights with the one you love or nights of well-fed friends and family enjoying too much wine and each other’s company to ever take it all too seriously. After all not one of us gets out alive so we might as well enjoy the ride. Like quickly, love deeply and drink up my friends. The adventure as always continues.

The year ahead, markets version

2010-12-31T09:25:00.003-05:00

Ah the years end prediction exercise. It is of course a mostly useless exercise since not a one of us can predict what shocks, positive or negative, the world and the markets could see in 2011. I find it crack up laugh out loud funny that some pundits come out and offer up earnings estimates, GDP growth assumptions and interest rate guesses to give a precise level for the year end S&P 500 price. You might as well pick numbers out of a bag and rearrange them by lottery to come up with a year end number. In a world where we are fighting two wars, a hostile government holds the majority of our debt and several sovereign nations continually teeter on the edge of oblivion it’s pretty much ridiculous to assume what could happen in the year ahead. Having said that, as my son’s favorite WWE wrestler when he was a little guy used to say “It’s time to play the game!”

Ill start with bonds. I have owned puts on the long term treasury market for two years now. I gave some back in 2010 after a huge gain in 2009 but am still slightly ahead. Ill roll the position forward and buy January 2012 puts and stay short. When I look at bonds I hear some folks talking about rising basic commodity prices and worrying about inflation. They are of course correct. This is happening. I hear some other really smart folks talking of weak real estate, high jobless rates and the potential for falling back into recession. Naturally, they are also exactly correct. So I will predict the one thing no one else is. We are on the verge of good old fashioned 1970s style stagflation. Commodity and basic needs prices will accelerate as QE2 has at least stimulated demand from emerging markets by allowing these wonderful credits to borrow money cheaper than a school teacher with a 750 FICO score. Bonds go lower as rates spike. Our economy and balance sheet are a mess and we have governments run by men in tin hats lecturing us on fiscal responsibility. "How low will they go Tim?" How the hell do I know? I just think they go lower by enough for me to profit.

Nor can I tell you where the stock market will go this year. I suspect we have had it too good for too long for no reason so I think we get at least one spectacular gut wrenching, vomit inducing sell off during the year. Much as lower than expected profits exposed the silly valuations of the new paradigm stocks I think that the darling group, retail , will spark a selloff in the stock market this year. Sales will be up a little bit but except for Tiffany’s (TIF) and that luxurious ilk margins are horrific. Discounting started early this holiday season and grew from there. They will get steeper now that that Santa Claus has given back my credit card and returned to the great white north. The earnings season will see a lot of missed estimates and lowered forecasts and that could well pop the bubble. Once it starts the HFT boys and girls should make sure it goes lower than anyone expects.

Here’s the thing about my prediction. It is no better than anyone else’s. In other words I am talking my book and predicting what I hope will happen. Having learned this lesson over the years I have alos learned that when it comes to market timing and market direction I am probably the dumbest guy in the room. Because of that I have trained myself to always buy the stuff that’s too cheap not to own and hold it regardless. After the rally since September truly cheap stuff is a little scarce on the ground but I have found enough to be about 40% long going into the year. I have a watch list as long as a taller persons right arm but most of it hover above truly cheap.

Here is what I own going into the year and think is still cheap enough to buy. I like Winn Dixie (WINN). The grocery business sucks right now. Wal mart has crushed margins industry wide. That aside WINN trades at 60% of tangible book value and at some point their 514 stores in the Southeast will attract attention from investors. A takeover here would be less than shocking. I will add Presidential Life (PLFE) to the list. This stock is also at 60% of tangible book and I expect to see a lot of M&A activity in the insurance sector this year> this should raise valuations across the board. I like Miller Petroleum (MILL) with their drilling presence in Alaska and the shale field soft Tennessee. This one trades at 70% of tangible book. I'll add Imperial Sugar (IPSU), Syms (SYMS) and Micron Tech (MU) and Avatar Holdings (AVTR) to my list of cheapies and move on for now.

I am going to start building my small bank portfolio this year. Eventually this group becomes the "Fuck you walk away money" trade of the decade. As real estate losses work through the balance sheet and some measure of stability returns to the financial system, perhaps toward the end of the year, the small baileys savings and loan type banks should start to recover. We will also see a mind blowing M&A wave as larger banks look to gain not just market share but healthy assets to put on the books. Right now these names trade at a fraction of tangible book value. They will reach a multiple of that in a recovery or takeover scenario. Right now I own shares of Shore Bancshares (SHBI), a local bank trading at 80% of book value and a reasonably healthy loan portfolio. I have some other mini microcap banks as well that shall remain my little secret and not used to figure how my predictions work out. I mention them because if you have a mini micro bank in your community you should go meet the bankers, review the books and consider investing if it trades below the magical tangible book value and has excess capital. Flagstar Bancorp(FBC) is my super longshot undated call option on the economy and real estate markets.

I will also play the thrift conversion game heavily this year. With the elimination of the Office of Thrift Services under the new financial regulation many of the benefits of being a private or mutual thrift are going away. There are a ton of mutual savings banks that will now convert to publicly traded banks. A lot of these deals will be priced below the pro forma book value that is created by adding all that lovely IPO cash to the balance sheet without a corresponding increase in the shares outstanding. Right now I have Fox Chase Bancorp (FXCB) and Capital Federal Financial(CFFN). There will be more. Deals are happening every day right now and again I would keep an eye out for local deals that you can take advantage of in the next few months.

I also think that 2011 will be the year of the activist investor. These folks took a beating since 2007 but this should be their year. There is a ton of cash on corporate balance sheets but lots of underperformance in the current economic environment. We will see activist drive takeovers, restructures, and special dividends this year in my opinion. Recent filings of interest include strong activist positions in Surmodics(SRDX), SeaChange International (SEAC), and Energy Solutions. Tracking activist portfolios and 13D filings should be a very profitable activity in 2011.

I have been looking at some interesting new stuff with options as well I am not going to give most of it away just yet but I ll give you one stimulated by a recent list discussion. H and R Black is highly likely to go into a private equity portfolio next year. Management has made every mistake you can make and the loss of RALs is a big problem for the company. However the brand has real value. I do not want town the stock just yet but I like the idea of selling the January 2012 at $.70 to $.75. If you cash secure the put it’s a 10% or so return if the stock stays above the strike. If it falls below I’ ll be happy to own the stock with a 6 handle net.

Back in 2008 everyone anticipated a huge default wave to hit the high yield market. Thanks to federal stimulus money pumping programs it did not happen. However in the spirit of "sell the dog food the dog will eat at the given moment" the hedge fund world raised an enormous amount od distressed debt money. Thanks to this high yield spreads are far too low. CCC paper in particular is priced at absurd levels. These things trade like money good paper and much of it is not. Extend and pretend has helped but if the economy stays weak and interest rates rise rolling over the tsunami of paper due over the next few years becomes nigh onto impossible. I am going take small position in puts on the various high yield ETFs. If I am right they will explode when that market implodes. Continuing to talk my book I hope this happens. Among my nightly prayers is “Please God just one more two year period of asset rich companies with current payments having bonds trade below recovery value and I promise not to piss the money away this time. Amen. PS. If you add in risk arbitrage spreads of 30% annualized returns along with this I would not object. Love, Tim.”

I can’t tell you what the markets will do. I do know that I want to own some safe and cheap stocks, some well capitalized small banks trading below book and participate in activist situation. I will be underinvested in equities going into the year hoping my watch list becomes my buy list in market stumble. I will have put positions on long T-Bonds and high yield hoping for a large asymmetrical payoff.

Other than that I am clueless.

Christ in Christmas

2010-12-10T17:26:00.003-05:00

A well meaning perhaps, but closed minded, soul wrote this letter to a Maryland paper today.

Editor:

I am responding to the announcement I heard regarding Wachovia Banks decision not to place Christmas trees in any of their establishments because they may be offensive. Offensive to whom? I am suggesting that all Christians remove any and all accounts from Wachovia Bank, because if anything is offensive, it is their Christmas tree decision. It is time that Americans stand up for what they believe and not allow our traditions to become moot because they may offend someone in the minority. This country was founded on the belief of freedom of religion, not freedom from religion. The Christmas season is time for peace and acceptance of all faiths and beliefs - not the time to try and take Christ out of the season.

There was of course no way in hell I was not going to respond once this was bought ot my attention. I doubt they run by my reply was as follws

Editor:

In response to the recent letter by xxxxxxxx I can tell you as a Wachovia customer and stockholder in Wells Fargo, Wachovia’s parent company, her assumption is simply incorrect. It is the choice of each branch manager to display a Christmas Tree or not. I would also like to make the point that our country was founded on the principle of freedom of religion for all religions, not just yours or mine. Even if her assumption was true, to call for a boycott of a business based on their recognition or lack thereof of your particular religion is completely and totally un-American. Should we boycott the Jewish establishment because he does not put up a Christian symbol? Should we avoid doing business with atheists, Hindus, Buddhists or any other merchant or service provider who does not display artifacts of a particular faith?

We would do well to recall that religious freedom extends to all faiths, and even to a lack of faith. We may choose to do business with whom we wishes but to call for a boycott of any business based on their shared participation in your particular holiday runs against every single value upon which our nation was founded. Christmas is not a time of faith and belief for all religions. Celebrating the birth of Christ is uniquely Christian. Instead of asking for a boycott of a business we should practice some of the tolerance that is one of the hallmarks of Christ’s teachings.

I rather suspect in a world torn by war, poverty, hunger and disease God has more on his mind that where you keep your checking account. Perhaps those of us who call ourselves Christians should focus on those issues and let others bank where they wish without religious interference.

Before you ask, I have a great big honker tree in my house and celebrate the holiday with zeal. I also think that businesses and municipalities should be free to place symbols of the holiday wherever they so choose. They should also feel free not to without fear of boycott or discrimination from those of us who celebrate Christmas. That’s the American way I was taught and believe in to this day.

I am off to Wachovia to open accounts for my kids as an expression of the real meaning of freedom of religion. Merry Christmas!

Tim Melvin

Annual Thanksgving Malarkey

2010-11-23T18:36:00.001-05:00

So at long last the Holiday season is just about upon us .I know the malls and stores started playing Muzak versions of Rocking Around the Christmas Tree before we even sent the little ghosts and goblins out to extort candy from the neighbors but to me the Holidays start with Thanksgiving. It is one of the most perfect of holidays with excessive amounts of good fattening food, oceans of wine, lot of laughter and of course football in the extremis. I am not a fan of the retail rush to Christmas. In fact I hate it. There is no evidence it increases sales or profits and in fact it irritates me to the point I want to slap the crap out of fat guys with beards and short people wearing green on general principle. It’s just annoying. As my old partner in the door to door book business used to point out the rest of the year I’m just a grouchy a-hole but this time of year I become some sort of happy-happy ho-ho mother something or another.

I write this every year a day or two before the actual day occurs. Tomorrow is Thanksgiving Eve and generally I start cooking the night before. The stuffing gets made and there are onions to sauté, celery to chop and sausage of several varieties that need to be fried and mixed into my savory creation .There will be butternut squash to whip and sweet potatoes that cry out for roasting and smashing. Others will be getting their junk touched by aggressive TSA officials at the airport, or perhaps posing for suitable for framing portraits of their nether regions in one of the new scanners, as the travel back to hearth and home for the occasion. Many others will be enjoying the spectacle of lights a twinkling…brake lights that is as they endure the back up of turnpikes, beltways and interstates on their way back to the bosom of family and friends. Still others will be jammed into trains and buses as they head home for the company of those they could not wait to escape when they left home in the first place.

It can be a special time. It is a chance to renew acquaintance with the obnoxious cousin you have pretty much hated since birth. We share apple pie and the opportunity for Mom to suggest we need to lose weight and change our hairstyle or pester us about grandchildren we have no intention of bearing. Doubtless Aunt Juniper will pass out in the rocking chair again this year have consumed too much of her the fruit of her namesake berries and it’s a safe bet Uncle Herb will pinch your wife on the ass again this year in an annual ritual of shameless buttockal groping. Its a magical time to eat drink and remember exactly why you never liked your second cousins third husband and rediscover all the ways your particular family puts the fun un dysfunctional.

All joking aside it is a time for families and for gratitude. We have a bunch of family and friends coming to Chez Melvin this year and we would not have it any other way. There will be wine, there will be pie, a giant turkey bird and all the trimmings my warped little mind can think of to enjoy throughout the day. There will be football.Above all there will be gratitude for all we have and the life we are so lucky to live and share together. We find much to be grateful for this time of year and here is just some of my list.

How can we not be thankful for the magic that is life itself? We lose track of it all someday but life brings so much to love, to savor and to enjoy. It is critical that we do not let the day to day garbage makes us lose sight of all that makes life so simply wonderful. There are full moons, sunsets and as I have discovered thi year sunrises you can see without staying up all night (more on that later). We live in a world that has books full of knowledge, adventure dreams, hope, answers, questions, poems, relaxation and inspiration. We have music from the soul solacing sounds of Mozart and Beethoven to the gut crunching guitar licks of Stevie Ray and JJ Cale, We can enjoy the melodical pattern woven by John Coltrane and the lyrical twisting of a Lyle Lovett (how can you not love a line like “I’d ride my pony on my boat) song. There is food of every description from steaks on the grill done to a sizzling perfection to seafood fresh from the bay and everything in between for us to enjoy and fuel our journey through the days.

More than ever I am grateful for friends of all stripes. We live in a land of slow breezes, fast boats and quick laughter here on the island and I have been blessed with incredible friends. The mix of people I am fortunate to call friend ranges from the married up tire guy to the Mr Clean look alike firefighter, form the goat and the shacked up freeloader to the bread man, from tic tacs and meatballs to cupcakes and wedding planners ,crack babies to shaky electricians and just about everywhere and everyone in between.

Friends goes beyond the island as well. There is everyone from the irascible curmudgeonly options trader to the cheese head and they have all added much to my life. The world’s only Iranian Jew was just here for a visit just before he went into viral celebrity for a brief but good visit. The handicapper is in NYC running stock market cartoons and projecting some sort of lines on charts, the spread trader stops his fun filled journeys to war torn nations and famine stricken banana republics long enough to check in from time to time. The Wiz and the Professor are still doing exactly whatever it is they do to hammer on the markets and the chairman still does his best to deflate ballyhoo and avoid hoodoos of all stripes. The counter count, the chartists chart and the opinionated opine and I am happy to call them all friend. They have added much to my life and my world.

Of course I am grateful for my children even when I am contemplating locking them in a dank dungeon full of James Joyce novels and leaving them in there until they can rationally explain Ulysses to the average person. My son’s twisted sense of humor and sarcastic mannerisms hide a sharp mind and a kind heart. I probably do not tell him enough but I am proud of him and the success he has already begun to achieve in his short time here on the planet. His mind naturally grasps the concept of business and profits and he is wise far beyond in 22 years in the ways of commerce. My daughter still has her too loud infectious and a voice that climbs a decibel with every sip of wine. She is adamant about being a teacher and has shown a perseverance and determination to reach the goal she set for herself. She has vercome the five years of being sick, worked her way through the first few years of school and is now at 26 finally a full time student closing to reaching her goal of being broke and happy as an elementary school teacher. I am plotting to get Tim Hewson to immigrate and marry her so I don’t have to pay the extras for the rest of my life. I figure it we are going to have an Ayn Rand loving libertarian school teacher in the family we might as well add an Irish trader with good taste in booze and books. I love watching the two of them continue to grow and learn to love life. Now I f I could just get my son to read a book.

There is an addition to the list this year. There is now a seven year old step daughter in the mix and the madness here at Chez Melvin. This energetic young Mensa candidate is either going to keep me young or wear me out in short order. She is a blonde haired, earlier rising sweet heart of a girl named for an Irish cattle stealing Queen and she is a welcome addition to the family. As a sign of her extraordinary intelligence he adores Lisa already, is getting used to her step brother and is altogether unsure about myself. Told you she was smart! She is a reader, with a sharp mind and loving heart who adds much to our family mix.

With a stepdaughter of course comes the person for whom I am most grateful this year. After giving up on the concept of ever finding someone who could put up with me it actually happened this year. I met the one person I really think I was destined to be with for life and maybe even beyond. I will spare all..okay some..of the romantic sappy stuff but when I look into Erin’s eyes I am sure I have had my last first kiss. We met in May, married in September and I cannot imagine my life without her ever again. She is everything I never thought I would have in my life. I was not looking anymore but the universe put her in my life and she has become my world. Above all this year I am thankful for my wife and the love we share and the grand adventure of life we have before us.

Life has its bumps and bruises. Almost nothing is going to go as planned. Life is unpredictable. Quit bitching about it and enjoy the journey. No matter your circumstance of current situations there is much about life for which to be grateful. There are raucous nights and quiet Sunday mornings. We have grand symphonies and party time rock and roll. Here is knowledge to be gained and lessons to be learned. There are bright sunny days for play and majestic rolling thunderstorms to watch in awe. Life is here like or not. Learn to embrace it, to enjoy it and above all to be thankful for it as this holiday of gratitude comes upon us this week.

I will lift my glass to you my friends on Thursday. I wish for you to have laughter and love, a thirst for knowledge, a zest for life and above all a sense of gratitude for the many wonderful moments that make up our lives and I thank you all for being a part of my life.

I am off to pour a glass of wine and begin to slip into my happy happy ho-ho state of mind

Election Eve Thoughts

2010-11-01T13:43:00.006-04:00

So here we are the day before election. I am sitting here with the tube on a business channel and the internet running as on any other business day. Over the weekend I watched some football as well as a little bit of the World Series. The news is all about the election and the run of hate and demagoguery filled commercials have become quite taxing on the old brain. This election cycle appalls me. I hate what I am seeing. I love politics but hate what I am seeing develop around me. The overriding question in my mind is simple. What the fuck have we done to our nation?

Everyone is divided along party lines. The Dems adhere solidly to their platform and party leaders statements and beliefs. So do the Republicans. The Tea Partiers are pissed off but a lot them have no clue exactly why they are pissed. Everybody is repeating the party line and it does not appear that anyone is actually thinking.

Here is the problem as I see it. The GOP thinks that we should have more freedom for business and less taxes. I agree. However their definition of freedom applies only to those who think like they do. While deregulating commerce they want to control my personal life. I struggle with why you can support one freedom but not another? You want my business practices to be outside government control but think you should be free to regulate who consenting adults sleep with or with whom they choose to spend their life. The Democrats get a lot of the individual stuff right but think there should be a surcharge on success. The Democratic definition of fair means taking my money to pay for your lack thereof. Freedom means free folks. The logic of both sides has holes a five year old could drive a Tonka truck through with relative ease.

Which brings us to the Libertarians and some elements of the Tea Party. They have a lot to say with which I agree but I have a question. Why is that every time I listen to a libertarian candidate and talk to hard core party members I am left with the impression of a bunch of fucking goof balls who think freedom is best expressed by getting high on whatever is available and doing whatever you want regardless of the consequences. Look people I get legalizing pot. However legalizing crack is just fucking stupid okay? It should be obvious even to a stoner that free speech and free press does not apply to kiddie porn .No laws is not freedom ;its anarchy. Your freedoms end right where they hurt me and mine. Take your basic platform, add some common sense and we can talk.

Lets start with assumptions of what freedom means. First start with a basic. I do not owe you shit and you don’t owe me shit. What your daddy did to mine, or the color of our skin or religious practices do not incur a debt on either of our parts. If I fuck up, lose all my money and end up living under an underpass its not your fault or problem. If, out of the kindness of your heart, you choose to extend a helping hand I appreciate it. But you do not owe me anything. If your parents had more money than mine at the time of our birth it just means that I have to study harder, work harder and make my own way. All we are owed is a level playing field. If you have nicer uniforms and better equipment that’s life and I have to deal. That may not seem fair at first. However glance at the back of your birth certificate. There is no fairness guarantee. Freedom means you have a choice to do what you can with what you have to make your life what you wish. It does not mean fair in all things. Life is inherently unfair. Make the most of it anyway.

Lets now talk about business. My conservative friends think that business should be unrestrained. Basically I agree. However this does not mean that corporations should be able to do whatever they wish. Make a profit by all means. Invent, innovate, produce and add to the worth of the nation. However if you treat your employees like shit or make products that harm ,you should not be allowed to prosper. If you are dumping crap into stream and rivers that kill people I am kind of thinking you should be punished for this. If you lie to sell poor or unhealthy products this should not make you rich beyond your wildest dreams. If you want freedom and less regulation you have to accept the responsibility that goes along with this.

If you bet on red and it comes up black do not appeal to your personally purchased legislators to bail you out with money that came from my neighbors and I. You bet wrongly, thank for playing, you lose go, the fuck home. If you make a product that is not as good as a competitors or another country can produce it cheaper do not ask for my money to keep you in business. It’s not my problem. You are in business and have to accept the risks and responsibilities that come with business.

This responsibility extends to consumers as well. Use a little common sense and quit suing or seeking to punish corporations for your dumb ass mistakes. Coffee is hot okay? If you spill it in your lap its going to burn a bit. Giving a bite size toy to a toddler is just fucking stupid so act accordingly. Guns are dangerous, particularly if you leave them loaded where kids can find them. Fast food will indeed make you fat if you eat the crap every day. Booze and cigarettes are not good for you. I am an enthusiastic user of both and would haunt any family member who sued the cigarette companies of vineyards after my death. It’s a choice I made with an awareness of what I was doing and the risks I was taking.

This next is a big one. Lets take the handcuffs of apathy and dependence on government off the invisible hand of Adam Smith. A basic tenet of free markets is that bad companies with poor or obsolete products will be driven out of existence by the marketplace. Hey folks. WE are the market. You and I. Set aside the question of bank bailout for a second. All of us are pissed off by the banking crisis aren’t we? The why do any of us have checking accounts or other products at banks like Citi and B of A that were at the very heart of the mortgage mess? All of us profess to want to shop at local stores rather than Wal Mart but none of us are willing to pay higher prices to do so. We all bemoan the childhood obesity problem but most of us will hit the McDonalds drive through to get the kids six greasy nuggets and a bag of fried potato goodness along with a giant cup of flavored sugar water to wash it down when we do not feel like cooking. I have news for you. If we keep buying their products and using their services then the end result is not the fault of big evil corporations. It’s ours.

Listen people, corporations are not inherently evil . They make most of the stuff we use everyday. They create jobs, invent stuff that makes our lives better and in general do more good than harm. They are not a piggy bank to tax to pay for all your pet projects. Taxing capital and investment income is stupid and non productive. Now corporations keep in mind that along with the freedom to make money comes a responsibility to both consumers and the folks who work for you. Business works best when all three, capital, labor and consumer benefit. If you lose sight of this we reserve the right to quit buying your stuff and laugh as you go out of business. If you really lose sight of it we reserve the right to petition the courts and throw your ass in jail.

Now, politicians, listen up for a minute. The gross domestic production of the US economy is not you personal checkbook. It is our money. We need it to feed our kids, educate our families, build businesses and create jobs for our community. We need the money to invent new products, find new innovate ways to produce. We need it so we have a way and means to create art, write new books and play new music. We need it to do whatever the hell we want. It is our money NOT yours.

While we are at it lets get a few things clear. You have no right to tell me how to live my life. As long as it does not harm someone else leave me alone. I do not really give a shit what my friends and neighbors think about what I read, what I drink or who I sleep with. I do not want to hear that this insults some segment of the populace. I especially do not want to hear that this is not as God intended. GOD IS NOT RUNNING IN THIS ELECTION. I will settle my differences with God at the appropriate time but since I doubt your ability to interpret the wishes of an omnipotent and omniscient creator is any better than my own please quit telling me what he or she thinks of my life. That’s between God and I and doesn’t really involve you.

Next our tax code is an abomination. What the hell are you thinking? Our tax code only serves the purpose of keeping legions of lawyers and accountants in nice cars and good scotch. Lets just have a nice little flat tax and a national sales tax. Not only is that fair its transparent as hell. Nowhere for your eventual successors to hide new taxes the way you can now. Moving the national sales tax up a couple percentage points is something a second grader can understand. Now I realize that take a whole bunch of power away from you and gives it to the voters but if I may : THAT’S HOW IT IS SUPPOSED TO WORK! It is government of the people, by the people for the people not a bunch of politicians using the fucking tax code to get what they want and cover up their mistakes.

Speaking of mistakes lets talk about war for a second. No one likes war. I am however aware that people being the idiots they are it is occasionally necessary. Let’s review something for a second. War has to be declared by Congress. Lets stop sending troops in harms way without a declaration of absolute war. We keep sending our young men and women off with asinine rules of engagement and then are shocked when we get our asses whipped by enemies who do not care if they kill 100 as long as one of them is an American. War is neither limited nor politically correct. If you are not willing to fight total unlimited war with all our resources and total victory as the only objective let’s just stay home next time. Those are our sons and daughters you are killing. Please show as much concern for them as your do the cousins of our enemies or the inhabitants of a nation hostile to the United States. I know they are faceless names on a casualty list to you but they are our children, friends and loved ones. Declare and destroy or please just do not bother. After conferring with both liberal and conservative friends on how to destroy society instead of sending young people to bleed and die just send the offending nation the following and allow them to self destruct from within:
1. Rap records
2. Pornography
3. Video Games for their Kids
4. Jerry Springer DVD’s
5. Do it yourself Incorporation Kits
6. Ayn Rand Books
7. Michael Moore Movies

It is real simple. I want to live in the land of the free. More importantly I want my kids and their kids as well as so forth and so on to live in the land of the free. We, as individuals, corporations and legislators need to accept both the freedoms and responsibilities of freedom. We need to tolerate each others freedoms. If you are opposed to gay marriage, don’t marry a gay person. If you are opposed to right wing versions of Christianity do not bother attending Sunday Services at Liberty Baptist Church. Do not abuse your freedom by doing things that hurt other people. You should have a right in the privacy of your own home to guzzle all booze you want. You do not have the right to get behind the wheel afterwards. You have the right to believe what you want. You do not have the right to force me to believe the same. I will die for your right to think and believe as you wish. I will kick your ass if you try to get me to accept them as my own against my will.

When asked the result of the Constitutional Convention Ben Franklin famously answered that we have given you a republic if you can keep it. We can. Take a deep breath. Forget the rhetoric and political bullshit. Get your hand out of my pocket and your version of morality out of my home. I do not owe you and you do not owe me anything. Any assistance we choose to give each other is of our own choosing. Government does not have the answer to our problems. We do. To truly be the land of the free requires an acceptance of the responsibilities that accompanies that freedom. It requires that we tolerate others choice in life as long as they do not harm us. I don’t give a shit if they offend you but as long as they do not harm you to be free we have to be tolerant. It requires you accept responsibility for your actions. The success and achievements are yours to celebrate but so are mistakes and bad choices yours to endure.

You take care of you and yours and I will take care of me and mine. We will let business do business as long as they accept their responsibility to the consuming public and their workforce. A little responsibility and tolerance and a decreased dependence on those power hungry idiots dumb enough to run for federal office and the republic can be saved, and more importantly preserved for those who follow us. Quit indentifying with a particular party or group, take a good look around at what we have done in the last fifty years to our nation. Partisan politics on both sides have taken us to the brink of losing what our forefathers gave us so many years ago. Take it back before it’s too late.

Happy Fourth 2010

2010-07-02T15:27:00.003-04:00

Let Freedom Ring indeed. Let it resonate across the land and down the valleys of this great nation as once again celebrate the birth of our nation. Let the smell of freedom mingle with the wondrous odor of hot dogs and burgers and the grill and fill the skies across the United Sates this weekend. Let the sound of freedom ring out in the sound of boat engines firing, fireworks booming and rock and roll bands rocking the dock. Watch the celebration of freedom explode across the towns and cities of America and high school bands and politicians (yeah it’s an election year. The hacks will be out. Guard your babies , they may be contagious) along with American Flags and tasteless floats of all varieties shall block up the streets for a few hours.

America, that great shining city on the hill ,is 234 years old this year. What changes we have seen as we have grown! We have welcomed generations of immigrants who have helped remake our nation, usually for the better. Too many times we have seen our sons and even our daughter grab their rifles and head off to protect our life, liberty homes. We have gone to battle to preserve our ideals and to aid the world in retaining their freedoms as well. This nation has been the source of the industrial revolution, the technology revolution and been the driver of economic global growth for decades. We have risen from a small nation yearning to be free of taxes and religious restrictions to what I truly believe is the greatest nation in the history of the world in less than 300 years.

We have not always gotten it right. There have been missteps and errors along the way. Just in the last few years we managed to export enormous piles of toxic financial crap to send the words economy reeling. The Marx Brothers could not recreate our tumultuous and almost always incorrect steps in the Middle East. We have developed a nasty tendency to elect our politicians on sound bites and some kind of mythical ideology. Yeah, I admit it, we gave you the Shah of Iran, leading to the Ayatollahs, Jimmy Carter ,George Bush the Second and our current President Dum-Dum. Slavery was a horrendous stain on our national soul that took far too long to eradicate. We also gave you Ronald Reagan, FDR and Abe Lincoln as well as a free Europe and the exported economic wealth in unheard of degrees so I think we are still way ahead of the game. The good we have done far outweighs our historical contributions. I will always be proud to be an American and celebrate the Fourth with a vengeance and ice cold cocktails.

In this year’s misguided missive on the joys of freedom and liberty I want to examine some key thoughts expressed over the years. The first comes from HL Mencken a fellow Marylander and enthusiastic imbiber of a wide variety of distilled beverages. Mencken observed that most people want security in this world not freedom. Coupled with Benjamin’s Franklins observation that they that can give up essential liberty to obtain a little temporary safety deserve neither liberty nor safety and we find the most important threat to liberty we shall ever see. We were told for example that social security would give us safe and secure retirements. Instead it has turned into the largest Ponzi scheme in the history of the world and threatens the economic freedom of each of us.

Providing for the security of my family and myself is MY job not the governments. Get your hands out of my pocket and we will be just fine. I am not your responsibility and you are not mine. Leave me free from your ponderous taxes and my kids will eat well, go to college and achieve their dreams. I will retire or not as I so choose. That my friends if freedom. Do not I beg you allow freedom to vanish in the name of some mythical security the government can NEVER provide you, me or anyone else. Freedom comes from taking responsibility for your own life chasing your own dreams and controlling your own fiancés and destiny.

It was Supreme Court Justice Louis Brandeis who observed that “The greatest dangers to liberty lurk in insidious encroachment by men of zeal, well-meaning but without understanding. I get it. Feed the People! Save the Whales! Whip Inflation now! All that is well and good except that when you take money from me to fund your cause be it homes for the poor or a study of saving the microscopic weeping wood zit of Outer East South Cleveland it is theft at gunpoint. Think it’s not at gun point? Trying not paying taxes for a few years. I promise the agent that shows up too politely discuss the matter WILL be armed.

We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic tranquility, provide for the common defence, promote the general welfare, and secure the Blessings of Liberty to ourselves and our Posterity do order and establish this Constitution for the United States of America. That is the preamble to the constitution of the United States constitution and outlines rather clearly the job of the federal government. Note that it says promote the welfare of the people not provide. The job of the Federal Government is to provide for defense and promote commerce in the eyes of our founding fathers. It is in my eyes as well.

The rest of the stuff that make up our lives was supposed to be in the hands of states and local communities. We along with our friends and neighbors were supposed to set community standards for education (anyone want to argue that the establishment of the Department of Education as a cabinet position in 1980 led to a quantum leap in the quality of education on the United States?), living and working conditions and social rights and wrongs. The road to hell is indeed paved with good intentions. So too is the road to serfdom as Hayek pointed out years ago. With cumulative tax burdens on the most productive members of society well north of 50% can we say that were free?

I really do not want to come across as a ranting right winger. I am not one. In fact over the years I have been very generous with my time and my money to assist those less fortunate than I. In fact if you would stop taxing me and put down the gun I would do a lot more. So would most of us. In addition I believe in all freedoms. I really do not give two halves a shit who you sleep with, what substances you ingest or who you marry. As long as your actions do not infringe on me or mine I do not care what you do or who you are. The land of the free has to mean everyone is free to define the happiness they choose to pursue in my opinion.

Celebrate this weekend. At some point raise that frosted cocktail class to the skies and praise all those who defended that freedom and in some case died for her. Say a silent prayer of thanks for the men and women who built her with their labor and their genius. Be grateful for the steelworkers, the farmers and the business people who provided her literal and economic backbone. Scare the living shit out of neighborhood pets with the most over the top display of pyrotechnic devices your warped mind can conceive. Gather your loved ones close and light the grill. Skip over the waves at excessive speeds and dance your ass off at the dock bars. Splash in the pool and don your red white and blue. Celebrate this grand experiment 234 years in the making of freedom and individual rights. It should be celebrated with much noise, many imbibings and all the excess that earmarks being American.

Indeed celebrate the United States of America. However keep in mind the debt you owe to all those who came before you to protect and preserve the freedoms they worked, struggled and even fought to pass along to you.

God Bless the United States of America.

Memorial Day

2010-05-28T11:50:00.005-04:00

From an article originally posted in 2006

But at sometime this weekend I will raise my glass in a silent toast to the reason for the weekend, those who gave their lives in the service of their country. They fell on the green at Lexington, at Trenton on Christmas Eve and in the snow at Valley Forge. They gave up their very lives in the peach orchard at Gettysburg, the cornfield at Antietam, the wilderness outside Petersburg and at Shiloh and Chancellorsville. They left their future behind in the Beleau woods, at Château Thiery and at Ephey. They lie fallen on the beaches of Anzio, Normandy, Guadalcanal and Tarawa. They died at the frozen reaches of Korea at Chosin and Pusan. They paid the ultimate price in the jungles of Khe Sahn and Da Nang. They are buried in Arlington and veterans cemeteries all over the country..or in graves in France, Belgium or some obscure south pacific island.

They are the reason I have the right and ability to work hard and play hard. Because of them and the blood they shed, we all have the right and freedom to work for own destiny, to be that which we would aspire to become. Because of them we can trade for a living, write books, study numbers. It is their sacrifice that allows us to enjoy our lives and our loved ones. And Although I suppose this is more so for those of us in the United States, their sacrifice made it possible for many other nations to enjoy unprecedented levels of freedom and democracy. Memorial Day. Remember them as you celebrate the start of summer. Some enlisted willingly. Some were drafted kicking and screaming. But in the end they wore the uniform of their nation and died fighting under that flag that we may continue to be free and prosperous. I raise my glass to them in a salute of their honor and the sacrifices a grateful nation can never repay. To fallen comrades. We remember you.

The words may be a few years old but the sentiment remains as strong as ever. This weekend the haze of backyard BBQ grills smoking as an endless supply of burgers dogs, chicken and other tasty dead animals will dominate American skies in the ritual of the unofficial first day of summer. Here on Kent island the skies willl fill with the sound of music form the dock bars and the growl of high performance engines let losse for the first time of the year. The pack of fast boats will doubtless run to Tilghman island for the bash at Captain Buddy’s that has been a Memorial day ritual for many years (This year broken rib Tim will remain firmly terra firma). There will laughter, music, fiends, excessive aduly distilled beverages and a general damn good time. Enjoy the weekend but at some point recall why we are celebrating.

A bunch of us went out to see the blue Angels the other day as they put on the annual Naval Academy Graduation air show on Wednesday. I could not help but think about the graduates the air show honors every year. They all signed up in 2006, five years post 9-11. From the very first time they raised their hand on the first day of plebe summer they knew they were entering a war time military. Those who choose the marine option on commitment day last year were well aware they were probably going to face combat during the five year commitment. Those who similarly tossed their caps in the air early this week also knew that they would probably see duty in Afghanistan or Iraq in the next five years. Yet they joined anyway. Most of them could have gone to any school in the country. They chose to serve their country.

I think of the enlistees. Regardless of their individual reasons for joining they have volunteered to serve and if necessary fight for their country. They are all too aware what they are getting into. They are over worked, underpaid and they go to serve anyway. As you party and enjoy the comfort of family and friends this weekend, take a minute to honor them and think of those young men and women who have joined the ranks of those who gave all for our country over the centuries and decades.

The bravery and honor of all those who have ever put on the uniform of the United States of America deserves nothing less.

Almost

2010-05-17T22:02:00.000-04:00

It is almost here. Occasionally we have dreary rainy days with the death throes of winter on the edge of the air but summer is almost here. But there are days like this past weekend when the sun is overhead and the breeze carries a savory olfactory hint of the season to come. There is a hint of the mix of sub tan lotion, high octane gasoline and fermented and distilled adult beverages of a wide variety. Here is a far off rumble on high performance engines and outdoor rock and toll that comes in on the wind foreshadowing the good old days of summer. Wine drinkers are starting the annual switch from wine to perfectly chilled whites and scotch is retired for good old G&T’s and orange crushes. The smoke of a thousand grills and the poolside laughter of children will soon fill the air all over the island.Summer is almost here.

Unfortunately for us baseball fans, summer also means the Orioles have already dug so deep a hole that it is highly unlikely they have even an outside shot at the playoffs. From here they need to win almost 60% of their games to be a .500 club and with their current sparkling .300 win percentage the chance of that are about on par with a tax reduction this year. This cannot be blamed on the front office as in years past. Andy McPhail put a better team on the filed in terms of talent. Unfortunately that talent has been playing like bumbling idiots. Missing signs or the cut off man, getting caught in rundowns ad hanging a curve ball to the leagues best hitters is just stupid baseball. I still watch and root for the Birds but it can be physically painful.

The kids birthdays are next weekend and find it hard to believe they will be 22 and 26 this time around. I have been informed that I am cooking a spaghetti dinner on Sunday for however many show up as their celebration with an request, or perhaps demand there be lost of vino available. Ill bitch and mumble as usual but will actually be delighted to do it. The house will be filled with their friends and a few of mine with lots of laughter and food, and of course the aforementioned vino. I often wonder what happened to the little girl in the pom- pom get up and the little boy with bloody knees and dirty face but time stands still for no one. Still does the son of a bitch have to sprint? It is not all bad of course. They have turned into to amazing adults who are a pleasure to be around. Now if I could just get Tommy to stop going into the tire shop in his PJ’s.

The adventures of the island have been accelerated this winter at an unusually weird pace. I thought I had seen everything but we hit new lows this year. The breakups that some of our merry little band experienced hit new highs on the really fucking strange o meter. I saw things happen between various couples happen this year (including me of course just to get the season of what the fuck just happened off to a roaring start but at least mine was early enough I had drank it pretty much gone by Christmas) that would not even be believable as Monday night ABC sitcoms. Still we made it though and the summer is starting to show signs of better times ahead for all. The abnormalities of the past harsh bitch queen of the past winter is fading as temperatures rise for which I merely say thank god. Summer is almost here at long last and the perhaps the oddness will be behind us all now.

The markets have been even more volatile in recent weeks. The problems in Europe have made trades jittery and we are seeing downside action again. In spite of today’s snap back rally which smelled of serious short covering to me I think the market may have finally run out of some of the steam that pushed it up. I suspect some of the HFT guys have cut back after being blamed for the mini crash of last week and want to leave less of a footprint on the markets. The flight to quality rally is offering a great chance to re-enter or establish a short bond position as a long term trade. It looks and smells like agrat trade to me offering outsize returns without much risk to me. I saw today that Wilbur Ross commented on the other trade of the decade. He thinks banks will struggle for some time to come as a result of coming turmoil in bonds and commercial mortgages. As investors begin to realize this bank stocks are selling off. Eventually these stocks, especially smaller community bank stocks will reach levels that make them a must buy for long term investors.
All in all it’s a pretty good life. I am listening to Oscar Peterson and looking forward to tomorrow night and the weekend ahead. The kids are well, the friends are incredible and in spite of the fucked situation in the country today there is much that is right in my life. There are good books, good wine, great music in the future and best of summer is almost here.

Tea Parties, Baseball and Life It's Ownself

2010-04-15T14:52:00.005-04:00

I will be heading up to the tea party later this afternoon here on Kent Island. Like so many others I am disgusted with the current situation with pour government. The ever growing stream of taxes, fees and regulations flowing out of Washington is incredible. The government is bailout banks car companies and just about anyone else that represents a large chunk of cash or block of votes. As I read the constitution much of this is outright illegal and yet no one intervenes. The Supreme Court remains almost eerily quiet on the subject.

Want to get depressed? Sit down sometime and add up all the taxes you actually pay. Income tax, sales tax, liquor tax, cigarette tax, gas tax. You pay a tax on your electric bill, and both your phone bills. Then there is real estate tax, luxury taxes, car registration fees and taxes, alternative minimum tax, investment taxes and estate tax. If you have worked hard and done well you get to pay all kinds of extra taxes to help spread the wealth. Sounds socialist doesn't it? It should. It is. No wonder we drink.

My anger is not aimed at just barrack O dumb-dumb. Georgie W. spent money like a drunken hippie and entered into not one but two illegal wars. It doesn’t matter if you agree or disagree with the actions in the Middle East. I, for one, think militant Islam represents the greatest threat to global freedom since the insane fellow with the little mustache. However, the fact remains that we never declared war. We have not declared War since December 8, 1941. In spite of that we have had 4 wars and countless military actions and conflicts. We call then limited conflicts or police actions. The key affect of our limited action is of course rules of engagement that lead to more deaths amongst the brave men and women who wear our nation’s uniform.

The Federal Government grows stronger as the state and local governments weaken. This is exactly the opposite of what our founding father intended. The big joke is that there is almost no way in hell they can ever pay back all the money they have borrowed in our name and children’s name. Congress passes expensive bail out bills and healthcare reforms with not so much as one actually reading the legislation. The government is drunk on power and we are stuck with the bar tab.

Let me say that I am not without charity. I give often of time and money to certain causes. But they are of my own choosing, not the mandate of a vote seeking government. Lets get this straight. I do not owe you or anyone else one damn thing nor do you owe me. I will take care of me and mine and you do the same. If you won’t, do not ask me to pay for it.

The Tea Party has a chance to become a real political movement in this country. The biggest obstacle to the movement is similar to my problems with the Republican party. Many of those in the tea party forefront are conservatives. When I look at the speaker list for the Kent Island event I see some seriously hard core conservative politicians. The problem with conservatives in my opinion is that they want rights and freedoms that are beneficial to free trade and business. I am all for it. However the social values they represent are the exact opposite of the definition of freedom.

I have often said that I want the Democrats out of my wallet and the Republicans out of my bedroom. If we are going to push for a free country then let’s really push it. Why not gay marriage? Why should we hetros be the only miserable ones? I do not care if you screw goats as long as the goat consented and it’s not my goat. We cannot support economic freedoms and yet move to suppress individual freedoms. Relax the drug laws and tax the stuff for Christ sakes. People that want to will get high. We might as well tax it and balance the budget. Think of the reduction in law enforcement and prison expenses if we just legalized pot! Freedom should have the same meaning for a billionaire business man as it does for a 21 year old clerk who wants to toke up a little after work.

Now on to more entertaining speculations and musings. Lets start with the stock market. I confess to being dazzled by the continued rise. The near zero interest rate policy from the Fed has literally pushed money into the stock market. The liquidity and asset allocation fuled rally has been breathtaking. This ain’t going to end well. I have benefited from the action generously as the sheer number of cheap stocks last year forced me into the market. I was underinvested ,for sure, never getting more than about 50% invested by the number of stocks in my portfolio that have doubled and tripled is amazing. The only thing I would even consider buying right now are the net cash stocks like Actions Semiconductor, and Hilltop Holdings. I have two bank stocks right now as well, Shore Bank and Abington Bancorp as special situations. They may go lower if the market implodes. If they do I will buy more. Beyond that I am hesitant to add much money at these levels.

It goes without saying you should be short bonds. I own puts on the long bond ETF. Anyone who thinks the world at large will continue to lend money to the US at current rates for 20 and 30 years is smoking crack. They will eventually demand a higher rate. The Fed can control short rates but the market controls the long end of the curve. Eventually we will have inflation and that will also pressure bonds. The CPI report earlier this week was pointed to by many as a sign that inflation was subdued. Does anyone besides me actually read these reports? Equivalent rents are 40% of the CPI number. If real estate was not so deppressed that report would have shown inflation. God knows we are seeing it in food and energy prices. Bonds are the sell of a lifetime.

The Orioles. The 1 and 7 damn freaking Orioles. What can you say about a team hitting .156 with runners in scoring position? We have a team average of .237. On the bright side we have hit 9 home runs as a team. That’s tied for fourth in the AL. On the dark side our pitching staff has given up 10 to fall second in the league. We have a team ERA over four and are three from the bottom of the barrel. Can’t hit, can’t pitch. It’s going to be a long season.

I touched off a bit of a controversy the other day by posting a friends comments that he had a hard time finding a woman who wanted to be treated well. It is an interesting thought worth consideration. I see the seeds of a truth in there. All too often I have women tell me they want a guy with a sense of humor, who is intelligent and kind. The next night I inevitably see them out with Larry the Lounge lizard or Theodore the Thug. I spent a little time contemplating this remark and came to a conclusion. The majority of the time I am actually a nice guy. I think I have treated the women in my life fairly well. I cannot change this. I grew up with three sisters and I have a daughter.

I am well aware of my own faults. I smoke, I drink and I gamble to start. I make more than my share of my mistakes and have plenty of dummy moments. I am human and male. Once in awhile I will screw up and make an ass of myself. But on balance I think I am a nice guy and I will remain one. Even in the face of evidence that it works I will not become an asshole to land a girlfriend. Years ago I wrote the following. It was true then and it is now.

Being part of what is demographically called the middle aged divorce crowd,
I often see these failed models working out in the great American laboratory
known as the cocktail lounge, bar or pub. The young lady who professes to
value a sense of humor, kindness affection and romance will quite often
leave the bar with the lounge lizard who looks like Richard Gere, or the
overly muscled steroid biker freak with the long hair and will then spend
long hours lamenting these failed relationships over white wine and
cosmopolitans. Men are the worst here. In our desire for companionship, sex
and romance we are a sucker for the surgically enhanced temptress, long hair,
long legs and parts that do things the creator never meant parts to do…..We
forget so often that those who are appealing to the base desires, who dress
to look the part of the dream are most often looking to do exactly that…to
tempt us to do something we should not for reasons we usually would not and
its much more about their desires than ours…the muscle happy freak and larry
the lounge lizard are looking to get laid…the tight jeaned barroom queen of
our dreams, in my experience is looking for this month’s visa card payment
and a move up apartment. Those who initially profess interest in something
more meaningful fall into their traps and find all the attendant miseries.
Every time I have allowed a gin soaked brain to fall for a cosmetic package
that took my breath away…my wallet usually followed my breath. While all the
while their sits a decent respectable guy out with his buddies who would
like nothing more than to fall in love with the right girl and end up in a
Louisville airport in 30 or 40 years, arthritically shuffling for his
beloveds coffee, and an attractive women sits..without the surgical
improvement, dressed in clothes that actually fit but with more flashing
behind her eyes than even she realizes who only desires the right man and
dreams of wearing purple sundress and red tennis shoes on the beaches of her
future…..

Now I am off to get ready for the tea party. Afterwards perhaps I will drink and smoke too much and watch the Orioles find a new and exciting way to lose a baseball game.

Annual St Pats Instructions

2010-03-14T22:53:00.001-04:00

St. Patrick's Day: the one day of the year when the 2% of the world's population that's Irish gets the other 98% completely shitfaced. So i figured i'd help everybody prepare. Its closer than you think.

First of all, you got to start preparing your liver 3 or 4 days in advance. Warm up to the idea of whisky by drinking it all weekend so that your body gets used to the strong and powerful effects that it induces on your body and behaviour.You must excercise your liver and body into shape and raise your tolerance level so that you don't pussy out and pass out before the party even gets started.

Step1:

7a.m - 9 a.m. Rise and fuckin shine, its an early start to this day!!. Take a long, hot shower, and liberally use aftershave, perfume, cologne, deodorant and powders afterwards, because by 3p.m., you will be excreting raw alcohol and other poisons, and without proper preparations, you will smell like a three-day dead cat wrapped in a fraternity carpet. The bars open at 9, so use this time to prepare. Collect the following supplies and put them in a place where you will easily be able to find it in an impaired condition.

We recommend the bathroom floor, between the toilet and the baseboard heater, since that's where you'll probably end up: 1 quart spring water 1 bottle aspirin 5 pairs Depends undergarment 1 bottle Percocet 1 gram morphine sulfate 1 oz. human adrenaline extract 1 pre-charged electric defibrillator 4 Cardiac needles 1 trauma surgeon you MUST also be in the proper attire so gather your greens and get in the spirit.

Brew a strong pot of coffee. Add 9 oz. Jameson Irish whiskey, drink. Note that coffee should be drunk liberally throughout the day. There is a reason that the Irish invented Irish Coffee; unless you ingest a large volume of artificial stimulants throughout the course of St. Patrick's Day, you are going to die. Arrange to be picked up to be taken to the bar by 8:45 a.m. We cannot stress enough that you should not drink and drive. There is no reason to chance losing your license or killing someone in a drunken state when you have plenty of idiot friends willing to take that risk on your behalf.

Step 2:

9 a.m. to 11 a.m. Arrive at the bar right when it opens. Make sure this is an Irish bar if at all possible. Secure a barstool and do not leave it under any circumstances. The bar is liable to be packed by noon, and real Irish people do not wait in line for drinks, no matter what the consequences. While we do recommend the use of an adult undergarment to mask unpleasant smells, it really doesn't matter. By afternoon, you'll be sopping wet with spilled beer anyway, and your mild urine smell will be completely overpowered by the toxic stench of vomit.

We recommend starting out with a few more Irish Coffees to spike the stimulant level, however, you should not order an "Irish Coffee," as you will be given a fruity little glass mug topped with whipped cream and a cherry, and some guy named Seamus will call you a yuppie poseur while putting a cigarette out on your neck. Ask for coffee with whiskey and ask the bartender to leave the whipped cream can, as nothing will add spice to your day like the occasional whippet.

Step 3:

11 a.m. to 2 p.m. It's lunchtime! You may not be hungry, but it's important to eat something, because like Sheriff Bart said in Blazing Saddles: "Man drink like that and he don't eat, he is going to die." If you want to maintain your buzz and not get that hideous, bloated feeling that could slow down your drinking, there are only two options: popcorn or Pop Tarts. Both have the carbohydrates you'll need to give you energy, both will soak up excess bile in your stomach, and both have names that are hard to slur. If you start slurring your words too early, you'll hear the most frightening phrase in the English language on St. Patrick's Day besides "I'm pregnant": "You're cut off". By now, you should switch off of coffee drinks to beer. You have only one option here: Guinness Stout. You may be tempted to order green beer, but remember: beer doesn't always turn green because of food coloring.

Step 4:

2 p.m. to 7 p.m. By now, the bar is definitely crowded as people take long lunches and bail out of work early to tie one on. If you're doing your job correctly, the bar should look twice or three times as crowded as it really is. By now, you may be in conversation with some real Irish people, since the person you came with has likely been taken away by ambulance. Some conversational points to remember when talking to the Irish are: Football really means Soccer, and you should be more passionate about it than you are about your girlfriend or boyfriend, AND The English are all piss-assed, pig-fucking bastards who should be lined up and kicked into the Liffey. If you remember those two points, as well at least three derogatory names for Margaret Thatcher, you can talk to the Irish for hours.

You should continue to drink Guinness throughout this leg, although you may want to have another Irish Coffee if your heartbeat has become irregular. The Home Stretch: 7 p.m. to Closing Your goal, of course, is to be the last person to leave the bar at closing time. This will be impossible, since a blood alcohol content of .50 usually equals death, and you should be pushing a .35 or .40 by now. The only way for a true Irishman to leave a bar before closing time with honor is to be hauled away by the police.

Throw a punch. It doesn't matter who you hit or why; no one's made any sense since 3 o'clock, anyway. You will be beaten mercilessly, since your fine motor control has been gone since the late morning, but it doesn't matter since you can't feel anything. Depending on your community, the police should arrive within fifteen minutes to scrape you off the floor and clap you in irons. The final impression you leave is the most important: as you are being dragged from the bar, begin screaming that you want to take your drink with you. You will be a legend! Besides by now the friend who took you to the bar should have had his or her stomach pumped, and will be able to bail you out.

By following these simple guidelines, your St. Patrick's Day experience would be one you would never forget if it weren't physically and biologically impossible for you to remember any of it. And I am not to be blamed if you end up waking up naked In a Dumpster

Random Ruminations and Ponderous Ponderings

2010-03-09T20:09:00.002-05:00

A good whiskey and a good book are not a bad way to spend an evening and indeed that is how much of this one will pass. Of course a good whiskey and a good woman would be even better but at least I don’t have to make dinner for the book. As a bonus it is highly unlikely that my copy of The Young Lions will look at me in six months and want to talk about my smoking drinking and gambling. Of course that only the ones I have met we were drunk smoking outside the casino so perhaps there is hope for me yet on that front. But I digress. It is not my point this eve to ramble on about my many wonderful characteristics and fine character but to think a little about the world we live in.

I am sick of even thinking about this economy but I have to from time to time. I keep hearing all these proclamations from inside the beltway and between the rivers stating that everything is better and the crisis has passed. If this is the case how come no one I talk with out here in the real world thinks so? I make it a point to talk to a cross section of people as I go through the world and all of them are still concerned. Their friends and loved one are getting laid off and they are underwater on their mortgage. The revenues at their businesses are declining and they are worried about the ever rising tide of regulations, fees and taxes being proposed at every level of government. They are far less optimistic than the talking heads on the boob tube.

It seems to escape the attention of our elected officials that we cannot tax and regulate our way back to prosperity. Keep in mind that the entire stimulus is your money given to someone else to decide how to spend. Even worse the government is borrowing in your name to spend money. Instead of looking for ways to encourage innovation and entrepreneurship, the very engines that have grown our economy for centuries ,we are going to spend money on green energy projects that will actually raise the cost of living and going business. Instead of reducing taxes for the small business owners they buy bankrupt car companies and give a third of the equity to the Union that was much of the reason for the bankruptcy.

Part of the reason we got where we are has been our national apathy about our politics. I am convinced that if every American of voting age watched a few hours of C-Span a day the world would change very quickly. When you see the decisions being made and the process by which they are made you cannot help but be outraged. The deal making and pork barrel spending are outrageous and morally corrupt. We need for more folks to be mad, stand up and run against the professional politicians. I want a guy or gal in office who has sweated out a payroll. I want people in office who have gotten up at the crack of dawn to make peanut butter and jelly sandwiches for the kids lunches while simultaneously balancing the checkbook and making coffee. I want someone who has worked 16 hour days to build a business. Even better if they failed a time or two along the way.

Someone has suggested before that I run a time or two. What a great speech that would be! I not only inhaled, I snorted chugged and imbibed my fellow Americans. Citizens of this great state, you should be aware that yeah, chances are I DID sleep with that woman. Let me tell you why you should vote for me and make me the very first congressman who spent much of his teenage years in the city lock up for an incredibly wide range of activities. For some reason I do not see that playing well. Incredibly we seem to expect our politicians to be pure without a single trace of humanity or reality in their souls. It is one of the reason we are where we are in my opinion. I would much rather have a skirt chasing womanizer who knows how to balance the budget than some character who has never had a real job and lived his entire life behind closed doors.

I was talking with a friend of mine last night who runs a good size business that is struggling in the weak economy. He talked of some of the same fears I have, rising deficits, increased taxes and regulations. He said something to me that I think brings us to the heart of the matter. “Tim I am not worried about me. I am worried about my kids having the same chance I did.” BINGO. That what I worry about. I look at those two incredible young adults who I am privileged to have call me dad and I worry about the world I will be giving them. Will they be able to take the chances, experiences the thrills and the spills of life the way I have. Will they be free to take an idea or their creativity and drive and use it to make a life for themselves? Not if we do not change things and quickly.

If we continue to remove creativity, drive and determination from our society we will become a nation of bureaucrats, functionaries, lawyers, and fast food workers just waiting on each other. What kind of world are we leaving our kids if the Army is seeing increased enrollment because employment opportunities are so bad you are willing to take a risk of being shot on sand dune or frigid mountain just to get some kind of paycheck? It is happening. Look your kids the eyes and ask if this is theworld we want to leave them? If you don’t have kids and are extraordinarily brave come look at my two little capitalists in the eye and tell them the path we are moving down, mortgaging not just their future but their future kids is okay.

When a nation is not growing, it is indeed dying. I apply this statement not just to our economy but our culture. When I look at the best seller lists and realize that it is almost entirely composed of vampire books and instruction manuals on losing weight on the fast food diet I worry about the future. I worry even more when I realize that the vast majority of Americans are waiting for the movie about vampires and cheeseburger diets to appear on pay per view. The music charts contain songs that have worse language than me with two snoots full of whiskey doing my best Hunter Thompson imitation and I worry. Do not get me wrong. I love good loud rock and roll and a trashy novel is like mind candy from time to time. I acknowledge my John D. McDonald, Robert Parker and Randy Wayne White addictions. At least those books have important lessons on mixing great cocktails, cooking good food and throwing the perfect punch. A nation of television drones drowning in booming bass beat is probably not learning to think and imagine the way previous generation were able to experience.

I want to leave my kids and potential grandkids a world that still has great music and great books. I want them to be able to take an idea and run with it. I want them to deal with life’s bumps and failures that occur by going back to work not looking for a government bail out. I want them toexperince the magic celebratory nights of victory, champagne and laughter. I want them to be prepared to deal with the cheap whiskey and cheaper tears when it doesn’t work out as intended and be able to get up the next morning and start over. I want them to savor their achievements and not watch an avaricious government come in and take more than half the fruits of their labor in the name of income equality and social justice. I want them to have a life of first kisses and broken hearts, of good friends and great times, of loud laughter and soft tears and most importantly to know that is all theirs on their own hook and effort.

We live in a great nation in an incredible world. I have been blessed with an incredible life. I have failed in my usual spectacular fashion along the way and their have been highs and lows of equal proportions along the way. I have had my share of first kisses and broken hearts. I have danced all night under the starry skies of the local dock bars. I am surrounded by friends and two incredible kids. I have read great books and trashy ones. We have a world with everything from Beethoven to the Rolling Stones and back again. While all of this will undoubtedly still exist if we keep going down the road we are going the kids will not appreciate it as much as I did. It is hard to notice the arrangement and tone of the many hues in a multicolored sunset when you are taxed to the breaking point to finance spiraling debts not of your own making. When the opportunities to build your life as you want it are gone because of an array of regulations and social claims John Coltrane and Miles just do not sound as sweetly complex.

It’s not just the current bunch in office that is to blame, although God knows they are not helping. It’s decades of poor partisan politics and above all it is our fault, each and every damn one of us. We cannot enjoy nor preserve the fruits of liberty from a position of apathy.

It is time to ask ourselves a question. What kind of world do I want and what am I willing to do to make that a reality for myself, my kids and the future?

2010-02-23T20:30:00.002-05:00

Okay, before I move on to the usual suspects and subjects, and I will get to them all sports, markets, life its own self and such, I have some thoughts rambling around in the brain that need to be purged by spilling them onto paper. I have used several Hunter Thomson quotes as my Facebook status of late and it was only a matter of time before somebody reminded me that he had killed himself with his wife and kid in the next room. All right now lets be honest. Filling yourself with the better portion of a bottle of Wild Turkey and taking a huge fucking 45 and blowing your head off with family in the house is a pretty shitty thing to do. It is simply not nice, I will agree.

Now lets look at it from a slightly different point of view. He was getting older. He had lived a long interesting life and mow his health and probably his brain were starting to fade. If you read his Hey Rube columns on ESPN you knew he still had something left but the end was near anyway. He went out on his own terms in his own way with his family in attendance. Now look, that’s going to leave a mark on the wife and especially his son. His wife seems to have dealt with it okay. She probably expected it. The son perhaps not so well. For both of them there will be emotional and mental scars. It was selfish on his part I will grant.

But is it any more fucked up and selfish than things we seem to do to each other every damn day? More selfish than cheating on a spouse or lover? Trust me that shit leaves a mark as well. More selfish than fucking over a business partner for a bigger percentage of the pie? More so than taxing the living fuck out of productive people to give away to those who accomplish exactly jack shit in this world? More selfish than giving the wife and kid a smack because they won’t shut the fuck up while the TV is on? More selfish or harmful than the things people do every damn day to each other with no one blinking an eye? I do not really think so.

HST will go down as one of the last of those who lived his life as he wanted. He avoided the tepid conformity that seems to entrap so many. I didn’t always agree with his view points but admired that he was pretty equal opportunity about spilling his vile onto to the leeches and demagogues that have taken over inside the beltway. He was one of the best sportswriters I have ever read when he was on top of his game. He was equllay good at political wirting. Fear and Loathing on The Campaign Trail was classic. How can I not like a guy who loved women, whiskey and college basketball?

Enough on that. We are now into the what the hell is going to happen phase of the sports year. The Olympics are on and while some of it moderately entertaining I am just not enough of a winter sports enthusiast to work up a good interest level. I am more concerned about Maryland locking in a couple of more conference wins and securing an NCAA berth. If it wasn’t for the miserable fucks down at Duke I would like the Terps to take the ACC tournament this year but Coach K’s pack of rabid quick footed bastards are in the way this year. I am interested in seeing Kentucky go deeper into the tourney that Villanova so I can get within a thousand bucks of having an even ledger with that lecherous little munchkin Coleman.

The Orioles are another what the hell is next equation. I think they are better and if the young pitching staff steps up a year better and stronger they may actually be good. New York slipped a little but a little is not enough. Funny that a guy like Johnny Damon can sell his Red Sox soul to go to New York and they let him go. Those goddamn soul sucking rat fucking bastards in Boston actually improved and are going to be tough this year. Tampa has a good young team again as well. In the pit bull pit that is the AL East good just is not enough. Memo: I looked at single game ticket prices for the orioles and I have a question. Are you out of your scrambled motherfucking mind? How about we actually have a winning season before trying to charging me $60 for club level box seats?

Now to the big bitch mother mistress of them all, the stock market. More people out of work? Great news, buy them up. Fighting two shitty little wars that aren’t going well? Take the offer across the board. People walking away form their home because they cant sell if for half what they paid? Buy em boys. Revenues down double digits? Fire a couple thousand people and watch out stock double on cost cutting moves. Sovereign nations in danger of default? Best fucking news I have heard all year so I am going to buy some stocks.

This is getting stupid. The economy sucks like a hooker with a hoover and the geopolitical situation is unstable at best. I am watching companies get back to pre bubble levels and just wondering what the hell these people are thinking. Paying up 30 and 40 times earnings for mediocre companies and 60 to 70 times for the really good ones is not a recipe for success. I am finding very little stuff that trades below book value and I am not adding to a lot of positions right now. I did buy two banks for the first time in years. I bought Shore Bancshares here on the eastern shore last month and this month I scooped up a little Abingdon Bancshares. ABBC has struggled a bit and has a much higher percentage of troubled loans that I usually accept but they have outrageous capital ratios.The equity to asset ratio is 17 so I am confident that at 70% of tangible book I am okay buying it. My net cash stocks are working well and my portfolio is up almost double digits in spite of being under invested on the year. I will take it but I am being pretty damn careful.

I find myself agreeing with Doctor Doom that every living American should be short treasury bonds, especially the long term issues. Since no crack addled hobo would lend money to a broke ass for 4% a year how can we expect the world to keep doing so for the US. Our deficits are out of control. We are printing money like Tom Clancy novels and the people in charge of this shit show appear ever more clueless. China has cut way back on purchases. I suppose the Japanese could keep buying them but how many more newly printed yen do we want? At some point this will have one bitch ugly ending and I am willing to tolerate time decay to hold my puts on the TLT until it does. I made 40% on this trade last year so I only have house money left in the game at this point anyway.

I am also looking at some ideas on the net cash front. Solitron Devices (SODI) is a tiny little company that makes solid state semiconductors primarily for the military and aerospace markets. The company is squeezing out a profit right now and the book to bill is still above 1. They have $2.57 a share in cash with no debt against a current price of $2.51. Peerless Systems is also still profitable and trading for less than cash and securities balances. The current market cap is $41 million and they have cash and securities of $49 million. They sold all their operating business and just have royalty stream form OEM licenses at this point.

As long as I can find little dinky crap like this to buy I can continue my long standing policy of ignoring the absolute fucking mess we have made of our markets. We have turned our capital markets into short term casinos filled with algorithmic betting systems dominating the scene. Thank god for microcap value or none of this shit would make sense to me at all.

It is winter here on the island and we have been hammered by snow and I hear there may be more on the way. We have already had an epic snow party here on at Chez Melvin and I suspect we will get the chance for more before it is all over. Just fucking great. I hate snow with a passion usually reserved for ex wives, the Boston Red Sox and the Pittsburgh Steelers. Eventually it will be spring they tell me. I sure as fuck hope so. I need some sunshine and open water. We have seen an outbreak of break up fever here on the island so at least there are a lot of depressed motherfuckers for me to drink with so far. Some one had to take Tic-tac and Tire Guys place since they became nannies and got married respectively.

On the personal front there are no changes to report. It figures that about the time I decide I really want to settle down there are no takers on the horizon that would match up well with my personality. I am at that point where I really would like to settle into a long term relationship. Now although I have slowed down a bit I am not ready to say my skirt chasing days are over forever. Until I find that one person there are still nights when a look of languorous sensuality in a woman’s eyes, a swirl of skirt, a flash of thigh, a twirl of flesh can raise those demons for a return visit. Hell I am a guy. But in all truth I would trade a million of those nights for ones of partnership, with a friend, a bonding of the emotional, mental and physical. I get glimpses from time to time. Hell I thought I found it forever less than a year ago. The again I though I had it with the little Southern Maryland firecracker and the Soft Kentucky Drawl in the last decade. There have been a couple more that I thought might be contenders but for some reason they just do not see how fucking wonderful I actually am! Truthfully hope may spring eternal but I can be a difficult motherfucker to put up with it so she will have to be a pretty damn special person. Until then I have good scotch, good books and incredible friends. I will get by.

So it goes on. I never thought I would have this life. Shit where I grew up staying out of jail was considered a major accomplishment and more weekends than not I failed miserably at that. Thank God for books and Ken Morrow. Ken died in the last month or so and it hurt to hear it. Although I have spent the last twenty years waiting for my old friend and mentor to step out of the shadows and shoot the shit out of me for past transgressions (okay so the friendship didn’t end well) that man taught me to grow up, he taught me business and how to be a man. I have not seen him in 20 years but he will be missed. I have friends, incredible children and memories that most will never have. It has been fun. With any luck someday in the next bar I ll run into Hunter and he will tip his hat at a life lived almost as well.

New ramblings

2010-01-16T16:13:00.004-05:00

So here we are a few week into the New Year. So far so good as the old adage puts it. I thought several times of doing a year in review piece similar to years past. Then one night as I sat sipping a delightful 18 year old bottle of the grouse it I had a (no doubt scotch induced) epiphany. Why the pure fuck would I want to that? For many 2009 was a nasty brutal year. Professionally it was a good year for me but otherwise not so much. Add a 98 loss season for the orioles and the decarnation of the last incarnation of the one true love of my life and it was not much of a year. So lets just wish 2009 a fond goodbye and fuck you then move on.

So here we sit in Mid January. The cold spell is over and the Ravens are still in the playoffs. In a few hours we will find out if the defense is up to the task of stopping Peyton from turning the game intoa track meet. Its almost impossible to confuse Manning so we are going to have to knock him around all day. Our guys got to Brady so they can get to Manning. We will know in a few hours. Whatever happens that was a pretty good late season push to get in the playoffs.

Island life is slowing down to the winter pace after the holidays. Ah, who the hell am I kidding? The only thing the season change means around here is that we do our drinking and gathering indoors instead of on the docks and boats. Instead of boat rides and outdoor bars we fill the time with poker games and bar trivia, to say nothing of football. This is a great place to live and is populated with some of the best people I have ever met in my life. It is an eclectic group with a wide range of ages and occupations, I also have to say that it is one of the few places I have ever lived where no one gives two and a half shits what you do or what you have. You either fit or you don’t. Hell, we even have Redskins fans in the group.

Looking at the economy I wish I could say something real positive and that it was going to get better soon. Sadly I just do not see it. If you live inside the beltway or between the rivers you might try to twist up some of the pure bullshit flowing out of the economists and politicians mouths into a green shoot. Out here in the real world I hear tales of layoffs, foreclosures and furloughs. Business is slow for most and I am not hearing much chatter about any up turn just yet.

The stock and bond markets are priced for stone cold perfection. With real unemployment nearing the 20% level and real estate prices still falling I do not see much on the level of perfect going on. I know cost cutting is holding margins up for many companies but it is not really possible to shrink your way into growth. Sales for many key industries are still dropping and my ever reliable mall Spies tell me not much new is changing with the advent of a new year. Add in carbon taxes and health care surcharges and the profit picture gets even dimmer in my opinion.

I am quite confident in the ability of those shitheads on both sides of aisle in the mental cesspool of the Potomac to blow up the markets. None of these goddamn idiots should be entrusted with a fucking popsicle stand much less a nation. Our children grandchildren will be paying for this mess. We can’t have the type of bullshit bailouts and handouts we have been doing. If you and I fuck up and make bad decisions and stupid bets we go broke. The sheriff takes our shit and they auction it to pay what we owe. When Wall Street and Congress do it we just print more and send them away with a pat on the ass and a promise to do better.

We have a government that starts wars and doesn’t finish them. What a dishonor to the men and women who serve to send them in harms way with ridiculous restrictions. Further how we can continually do it with such blatant disregard for the constitution. This nation has not declared war since December 1941 yet every day we have casualties from armed conflict. We send them out with ridiculous rules of engagement. Collateral casualties cannot be a consideration if we are going to fight a war. Train them, arm the, then turn the m loose to fucking WIN the damn thing. Where the hell is Georgie Patton when you need him?

An economy in disarray and a unstable geopolitical situation is not perfection. There is just so much that can go wrong on so many levels and none of this is reflected in the markets. We have seen a massive forced asset allocation trade put on by the government. Keeping rates low and flooding the economy with cash has literally forced money into stocks bonds and commodities. This will end badly. It has to. There is not some super fucking genius kept in a closet in DC that knows how to unwind this trade. The same dipshits that created the mess will be the ones at the helm. I am sure they will drive the ship right up on the goddamned rocks and am investing in anticipation of this. I am short bonds again this year and intend to remain so throughout 2010.

Thank God for cheap stocks. I don’t think I ever got over 40% invested last year and in spite of that had one of my best years ever in absolute percentage terms. I enter the year with positions in several of my near or below cash book value beauties and am quite content to limit my activities to these stocks. I also just bought the first bank stock I have owned in several years, adding shares of a local bank to my holdings. I just stuck my toe in the water picking up a few shares of Shore Bancshares but I expect to add to the position throughout the year. The local bank trades below book value and has a solid loan portfolio and balance sheet.

This is the type of trade I am hoping begins to develop in earnest in the first half of 2010. As commercial and real estate woes continue to fall I am looking for the market to wake up to the problems facing the small banks. When it starts the stock market, being the bastion of irrational insanity that it is ,the baby will go out with the bathwater. This type of activity created a situation back in the early 1990s that allowed many [people to literally get rich over the next decade. When the god get sold with the bad I am looking to buy up a portfolio of small banks below tangible book value that have low loan losses and adequate reserves. As real estate improves-and it will someday- we will start to see a wave of mergers and acquisitions in the banking community. These transactions will occur at multiples of book, not at a discount. Those solid bank stock bought in this next sell off will show tremendous gains for those bold enough to step up.

Sam Zell, the grave dancer of the real estate industry, recently said that hotels would be the first commercial real estate he will start buying in 2010. I think he is right and am watching the hotel REITs carefully. I am spending time digging though the numbers at looking at every piece of the capitalization structure to find opportunities in the common and preferred equity as well as debt securities of these companies. It is still early on the CRE game but I want to have a buy list and a deep understanding of the industry when the time to buy arrives. It may be closer than we all think for this segment of the market.

Back here in the real world life may not be perfect but its still so damn good I cannot stand it at times. Both kids are living with me now and although I should be encouraging them to move out and on I am selfish. I like having the little shits around. They are both smart hard working people with a great outlook on life and I like having them around. It is not uncommon for the two of them to be my first choice for dining and drinking companions. For some strange ass reason they like hanging around with my friends and me and I love every damn minute of it.

As always I am blessed with that wonderful excess of friends that has made life so interesting and just flat out fucking fun at times. Things shift around as people marry, get married, move in a different direction with their lives but at the core both on the island and in the after dark spec group a core remains. The cheesehead may be in Wisconsin freezing his ass off but we still drunk dial from time to time and catch up on the latest adventure. Tic-Tac may have found a new career as a nanny but we still find time to meet for drinks and an episode or two of pure stupidity. The Porsche driver has become a fast friend and is just hysterical to be around. He is one of the very few people that has as fucked up a personal life as I do. Add a sense of humor and sense of adventure and he becomes a dangerous companion of the finest kind. The tire guy still plays keno as a battle to the death and bleeds purple and black as always. His wife just opened a new hair salon so I may actually have to start getting a haircut on a regular basis. The curmudgeon is splitting time between Chicago, Tahoe and the state of contusion but we still talk markets, sports and life several times a week. A good friend os one who bails you at 2 am. A great friend is one sitting in the cell next year saying, “Holy shit that was fun.” I am blessed with many of both.

So what does the year ahead hold? Hell if I know. I know there will be laughter and there will probably be a tear or two along the way. If you live full out and head on as I try to do it is pretty much inevitable. I have always held that he who dies with the most scars, in or outside, wins. Life is a contact sport nad I will play until the game ends. I win some I lose some and so far I have been able to win the important ones. I love what I do, I have incredible children who I count among my best friends, and friends in evry walk and phase of life. Doesn’t sound too bad to me.

Yeah okay so finding someone to share I with is not a game we put into the winners category just yet. Doesn’t mean I will quit playing. Yeah I have take a few good sharp shots over the years of the relationship variety but there have been more than enough moments of great romance and deep passion to make any tears or heartbreaks worth the price paid. Either that or I am just too stupid to quit. Whatever the reason the search continues. Hopefully this is my year. Probably won’t be because apparently I am a difficult man! But as with Mr. Edison and the light bulb I can fail in my endeavors to find a permanent incarnation of the one true love of my life many times and get right just once to win.

So let life roll on. Pour the wine, deal the cards, start the engines. To the best of my knowledge we get one shot at this thing sol endeavor to make it a good one. There are books to read, music to hear and adventures to be had.It is not always going to be perfect, nor it will always be fun. But there will be many moments that are both.I doubt that any of us will lie on our deathbed recalling the times when we struggled to pay the bills or drowned a broken relationship in cheap gin and tears. We will instead be recalling those wild nights with great friends or as I once heard it put nights we will never remember with friends we will never forget. We will think of the first cry of a child. We will recall a first kiss on a frozen winter’s night or perhaps dancing into the early hours on a dock with a new love. Perhaps it will be a little boy at his first big league game or a cherished friends wedding. It will be those memories we embrace at the end and they will bring a smile to our weary faces. It is those memories that make life worth living. It’s a new year. lets go make some.

Thanksgiving 2009

2009-11-25T19:23:00.002-05:00

It has been a tough year all the way around. The economy has been difficult for most of us. The markets have been confusing at best and dangerous at worst. The Orioles suck and the Ravens are going to need a miracle to make the playoffs. My personal life remains God’s personal comedy channel or at least a warning to others. In spite of that at this time of year it is appropriate to count my blessings and they are many.

Lets start with the fact that I am basically living my dream. I work from home, write every day and invest in stocks and bonds for myself and friends. It does not get any better than this. I moved into a larger nicer place and both kids are here with me now. While that is at times a mixed blessing I truthfully like it MOST of the time. I have dodged the worst of the markets and the economy and life is actually pretty damn good for me.

Yes times are tough right now for many in this country. Truth be told they may well get far worse before they get better. That cheerful breed of cutthroats, thugs thieves and outright fucking idiots that ascended to power are clueless. At times it seems like they are trying to screw up the world. It is amazing to me that the focus on politics and appeasing vote and money blocks allows them to totally ignore the long term implications of what they are doing. If they are considering that aspect of their actions than they are criminals and traitors and should be drug by their carefully coiffed hairdo to the gallows and swiftly and brutally executed. I find myself hoping they are just the vote whores and power sniffers I think they are. The alternative is ugly.

But the truth is that this is the US. I cannot believe that we have become so lethargic and sheep like that we will not see through this at some point. I already see the tea parties and feel the rage of many people in this country. People are confused and scared and they are beginning to realize what a buffoon they elected to lead us. This is change you can believe in all right just not for the better. The 1970s decade of clueless leadership and idiotic fiscal policies gave rise to Ronald Reagan ad 20 year boom and I think it will happen again. If it does not then it is our own damn fault for allowing it to happen.

I think we will again become an America where innovation and industry will be rewarded. Hopefully we get back to a point where a house is a home and not a speculation. Whats wrong with saving your money and making a downpayment and having equity in your home. The American Dream is the freedom to live the life you want not owning a fucking ATM machine with indoor plumbing. We need to change the tax code to encourage savings and investment once again, instead of encouraging debt and insatiable spending.

I do not who John Galt is but I think he is out there. The outcome of the incredible fucking mess we are in and are still facing is hopefully a return to a world where small business thrives and grows. If we do realize our mistakes of the past decade and get our country back on track then its worth it. If we do not take the country that way then we deserve whatever we get from the pocket picking assholes on either side of the aisle.

Those who are aware of my market and economic positions wil be surprised to hear me describe myself as an optimist. True I am bearish on the intermediate direction of financial things but on life itself I remain an absolute cock eyed fucking optimist. There is simply too much that is good and true and right about this life not to be. If life is so awful how can we have summer nights and winter mornings? Look at a smiling child and tell me again how horrid life is. Watch an elderly couple strolling hand in hand down the avenue oblivious of the traffic and crowds swirling around me and tell me that this journey is not worth it. It is.

There is so much to be grateful even in a tough year. There are books of course. Books have made my life what it is so far. They are my biggest source of education but of entertainment. Television is for sport and news. I do not see how people can sit in front of the box having someone else life fed to them in thirty minutes slices of idiocy when so much great literature and incredible stories are at hand. Hell, even if you are broke a library card is free. The lessons of the universe and of history are in their pages, as are the stories and epics of the ages. How someone can note read is just a mystery to me. Maybe not a Parker or Christie quality mystery but a mystery none the less.

There is music. Here’s an idea. Instead of taking anti fucking depressants fill your life with Handel, Mozart and Beethoven. Throw out the goddamn pills and turn on Miles and Coltrane to out out the fires raging in your head. Let Oscar Peterson take you off to dreamland and maybe a little rock and roll to get the blood flowing in the morning. Let me see you be a grouch ass in the morning with John Hiaat slamming through slow turning . Can’t be done. Music is the heart of life and the soul of creation in my opinion.

The next area is one I approach warily. There are women. While it is true that I am coming off a breakup of breath taking proportions even by my somewhat spectacular standards I will always be grateful for the women that I have been fortunate enough to have in my life. Yes, they have made me crazy at times and the source of more than one tear (if I cried of course.Everyone knows I am a tough guy and tough guys do not cry). But there have been so many spectacular moments that any pain has been worth the passion and even love. A first kiss, a lovers touch, the moment you know you are falling in love, these and so many others are the reason I will never give up on women. As with Edison and the light bulb I am aware that I can fail many times with explosions and even burns along the ay but I only have to get it right once for the light to work. I remain hopeful that at some point it does and I can be half of that couple walking down the avenue hand in hand oblivious to the crowds and the traffic swirling around them.

To not be grateful for my friends would be to mock at the face of God. I have been blessed with friends that are in my opinion the single greatest group of people I have known. Here on the island people like The Tire guy and his bride The Salon Chick, Tic tac and The Peruvian princess, Crackbaby an his girl the wine pusher are the glue of life. People like GQ and Lamie, The Fishermans Guy and the shacked up freeloader along with baldy and so many others are the ones I laugh with, play with and make life so much more enjoyable. When I think I have set a new standard for a whacked out personal life I need merely hang out with the Porsche driver for a bit and my troubles are greatly reduced in scope!We share the laughs, we share the tears and we love our lives.

Then there are the Spec Friends accumulated over the years. How much have I learned from The irascible curmudgeonly options trader and the rest of the disreputable Chicago crowd over the years? How many late nights and last calls have we all shared over the years? Too much and too many to ever properly count. There are the late night calls with the gin swilling Cheesehead who has become one of my favorite people on the planet over the years. The voodoo prof, the VT fan, the Iranian, the Kentucky colonel,all of these and more have added so much to my life over the years that I could never repay it . My fondest hope is that I have added some measure to theirs.

So yeah, it has been a tough year. But we have and will survive; Life will swirl around us with all the attendant highs and lows. There will be laughs and music to soothe out journey and enhance our path along the way. There will be sunsets of unspeakable beauty and storm of unfathomable strength and we shall pass through them all. There is much to love about life and so much to be thankful for even when times are tough.

So raise a glass my friends in toast to all we have to be grateful and all that makes life so wonderful. Happy Thanksgiving!

Life Rolls On

2009-10-02T21:58:00.002-04:00

So the time is upon us and the end is nigh. As we all do pass to where we do not know and dare not ask, the regular season is coming to its end. The orioles have been god awful bad this season and again we end on a weak note. There are signs of promise but we need one arm and two bats to actually compete I shall watch the off season closely. Now I turn my eyes north with the fond hope the Yankees kick the shit out of Boston and take it all. Who else would I pull for? The Phillies? LA? Not much chance of that. Give me the legacy of Ruth Gehrig mantle and DiMaggio as we move to the playoffs.

We have play off baseball and football this month. As a sports fan it is hard not to love October. The Ravens are good, Navy is average and Maryland sucks but we shall enjoy it all. Flacco looks like Unitas out there and has the same proud humility. It will be fun watching the season. I have MD season tickets but have only watched one quarter. They are truly terrible. Love the fridge but he may have to go. Navy took one to much if a schedule this year but I think we get six wins and beat Army so that is a good year.

The market? Are you fucking kidding me? I have been wrong since March but right since 2007. The real estate and employment situation are still horrible and they are the keys to everything. How can you be bullish in an economy that is 70% consumer driven and the real unemployment rate approaches 20%? Achieving earnings targets by firing people is not a healthy solution. I catch a lot of shit for being bearish but fuck em. I am up over 60% with my too cheap not to own stocks and I never got over 40% invested. The bulls can buy the ticket and take the ride but do not bitch to me or ask for a loan when it all goes to shit. You have to be a fucking idiot to believe we are okay right not. We are not.

Stick with the cheap shit. You wont lose money with stuff like FLY,CRE and SGI. Cash on the books is comfortable. You can sleep at night and not lose money. Given Marty Whitman’s approach to distressed debt and track record you have t be an idiot not to put money in his new credit fund. But buy the market? Why not just hit yourself in the crotch with a hammer? Might hurt less in the long run.

Enough of those topics. Life rolls on and it is good. The poets rhyme and the singers sing. The books keep being written and the sun sets with a colorful display of life and its possibilities every night. There are smiles and the greetings of friends. Each day there is a daughters laugh and a sons smile to reinforce the feeling of a job done well and right. I do not claim to be a great parent bit I did not fuck up too badly as the lives and determination of those two attest. Soon they won’t need me any longer. Although that has been the goal I may still shed an imaginary tear or two when that day arrives.

I am living a dream I never thought I would have, I write. I trade and life is good. I have friends that most people never will. I have lived my dream the past two years. If it ends tomorrow at least I had it for awhile. I do not think it will as it turns out I am pretty good at this. I will ride it as far as it goes and try to expand it further. We have on going talks about a fund or newsletter or a combination therein, by years end I will figure it out.

So on it goes. Life is incredible right now. There is a woman who makes me smile every time I think about her. She is very private so I cannot talk about her much. Suffice it to say that the last time I was this happy and thrilled with someone gray hair was nowhere near the issue it is now. No names or details , just smiles.
Life goes on. Sometimes it sucks, sometimes it dances. Markets go up, markets go down. The sun rises (so I am told I like sleep too much to ever see it) and it sets. Even when it hurts life it is glorious.

In honor of My sons 21st birthday, a guide to imbibing like a gentleman

2009-05-22T16:12:00.001-04:00

1. If heading out for an evening of imbibing, have cab far in cash in your pocket even id using a credit or debit card for the tab.
2. Learn your bartender’s name. No one likes to be called “hey you.”
3. Unless they piss in your drink, tip at least 20%
4. Run a tab rather than pay as you go so they know you tipped fairly, especially if you intend to be a regular.
5. If you can afford it, a little extra tip at the holidays markets you as one of the good guys and will pay off in spades over the years
6. Bartending can be a tough job. They put up with enough drunken assholes. Do not be one.
7. Fighting in bars is stupid beyond belief. Do not do it for any reason.
8. Most bar fights are over women. If someone hits and your date and she ignores it, you do the same. She is with you and he has to live with the burden of being a dick.
9. If she does respond, congratulate him on his skill in identifying a weak willed shameless slut. Tell HER to pay her own god damned bar tab.
10. A wedding ring on a woman not just no. It is not no fucking was not even if she offers blatantly. It will happen at least once in your drinking career and NOTHING good will come from it.
11. Drinking shots until you puke/pass out/become overtly obnoxious does not make you cool. It makes you one more drunken ass hole that only other drunken assholes will want to be around
12. Drunken assholes make poor friends
13. If you have a friend who likes to get into fights. Leave him home. His reputation will hurt yours.
14. If someone asks for your keys, surrender them. If another drunk thinks you are too drunk to drive, you are. Use the cab fare in your pocket.
15. If for some unfortunate or idiotic reason you are asked to leave an establishment, just leave. You are not going to talk your way back in.
16. Go back in the morning and apologize to the owner manager if this happens, especially if you are a regular.
17. If you could not dance or sing when you came in, you cannot dance or song later either.
18. Before leaving with a cougar or chubby always run the idea by your friends. You need a two thirds majority before proceeding. Alcohol often distorts perception.
19. Do not get suckered into buying drinks for groups of girls. Cutting one out of the flock is difficult at best and those $8 cosmos add up quick.
20. There is a difference between funny and obnoxious. Learn the difference. I t may save you from a horrendous ass beating one night.
21. Never clock block.
22. If someone does it to you, do not drink with them anymore. They will do it again.
23. Never fruit whiskey. It is inelegant and unmanly.
24. Sport fucking women you meet in bars without a condom is like paying Russian roulette with 5 bullets in the gun. I mean really, do you think you are the only one she has ever done this with? Wrap to ride.
25. If someone you do not know wants to play pool for money, you are probably going to lose.
26. Should you bet on anything, pay your losses immediately.
27. Never give someone a second chance if they do not do the same.
28. There is reason the state runs Keno in bars. That reason is not to give your drunk ass money to pay the tab.
29. If you offer to buy a girl a drink and she switches from draft beer to some shit with an umbrella in it, walk away after paying. You cannot afford the kind of leeching this chick will do to you.
30. If a friend buys a round, it is incumbent upon you to return the favor.
31. Should a find not reciprocate more than once, quit buying him drinks. Introduce him to the girl in #29
32. If you no longer recognize the language you are speaking, it is time to call that cab.
33. Wearing Ravens gear into a bar in Pittsburgh is probably not conducive to your health and well being.
34. If you and your biddies insist on referring to women as cunts, ho’s or bitches, rest assured that the one woman you set your sights on will over hear you. Dead Man Walking.
35. Be polite to friend’s wives, girlfriends and dates even if you think they are unattractive and bitchy.
36. Odds are the bar stool is not wobbly. You are drunk. Think cab.
37. If drinking at a Dock bar determine what number of drinks requires you to stay away form the edge.
38. If you bump into someone, apologize. If you spill their drink, buy them another one.
39. If you spill your own more than once, it is time to go.
40. Unless you can actually sing (see #17) or are Tom Cruise singing karaoke love songs to random hot chicks is not going to work.
41. Talking on 3rd down or a 3 and 2 count in the ninth inning is just fucking rude.
42. Before using a pick up line, ask your sister how she would respond to it.
43. By the time a woman is 25, chances are she really has heard them all.
44. It is true; some women are hopelessly attracted to assholes.
45. Those women are nor worth the high price of becoming an asshole no matter how hot they are.
46. Men will swarm around the tens. Somewhere in that bar is an 8 with a better personality who is would love some attention.
47. Do not bet basketball with Travis Coleman no matter what odds he gives you. Little fucker is lucky although he does owe me $20 from the Boston game.
48. More than one martini will probably have an unfortunate ending.
49. The bar maid is probably not going to fall in love with you.
50. Above all do not be THAT guy. If more than one person mutters “oh shit” or the bartender frowns when you walk in, you are on the way to being THAT guy and need to adjust accordingly

Market Thoughts 3-14

2009-03-14T14:09:00.003-04:00

Now that last nights ruminating and bloviating is out of my system (temporarily I assure you) let’s turn our attention and focus to more important matters. We finally got a rally in the stock market this week with 4 actual honest to god up days in a row. Hats off to Doug Kass for a brilliant bottom call. Frankly I am amazed it took so long to develop. Every indicator I have ever used was oversold, in most cases ridiculously so. I starting saying a few weeks ago we were probably due for a good little rally in the market. Day after day I watched the market fail to get a bid and just drop lower. There was a global buyers strike in equities. Now, we finally have a little bounce here, up about 10% in just the last four days. Let the rejoicing begin, the Bear is dead!

Umm.not so fast. In my mind to believe the stock market has pout in a bottom you have to believe that two things tha just do not hold up to examination. First, you have to believe that real estate has stopped going down. Plunging real estate prices and soaring foreclosure rates are the major problem in the economy. According to RealtyTrac foreclosures jumped 30% last month on a year over year basi., More than 10% of homes with a mortgage are at least one payment behind. A little basic supply and demand math tells you that all these homes being dumped on the market are going to push prices lower still in the months ahead. We still have a wave of ALT-A and Option Arm loans to reset this year. A very high percentage of these 2006-2007 loans are going to default. The buyers could not afford the reset payment rate if their life depended on it. Design all the government mortgage bail out plans you want. Short of giving these folks the house or charging 0 %interest for the life of the loan, as well extending the loan to 50 years in term, they are going to default.
Much was made of the fact that housing inventories declined a little in January and February. Except, not really. There is an estimated 700,000 homes in some stage of the foreclosure process, including other real estate owned on bank balance sheets that are not officially listed for sale yet. ZI have seen estimates as high as 3 million total foreclosures this year. That would be about a 60% increase in inventory levels if it comes to pass. The only buying we see in housing is on the courthouse steps these days. So far, there is not enough vulture activity to soak up the supply and allow prices to stabilize.

The second belief you must hold if you think the rally is an actual bottom is that earnings will get better in the second quarter. To those of you who hold such a belief I shall simply ask, “ Are you high?” Where will such earnings growth come form. Retail? Not a chance. Any sales truncations consummated these days are done to levels designed to clear inventories with little or no margin. Financials? Didn’t you just love the Citigroup memo the other day that they were profitable on an operating basis nit including speciall items. Special items like credit losses and asset write-down’s. I have to check this but I am sure that Citi was profitable without considering the gargantuan losses in every quarter since the crisis began. It’s the losses that have sucked up the $100 billion or so of private and public capital the bank has used to keep the doors open. Financials still have a lot of real estate related problems ahead of them in my opinion. Energy? Sure with falling demand and lower commodity prices their earnings should just explode this quarter. Tech? Last time I looked technology companies sold products and services to other companies and consumers, both of whom are scared to death, over levered and not spending money. We justput in the first quarterly loss ever for the companies that make up the S&P 500 and I just do not think the second quarter will be a hell of a lot better. Everyone thought I was drunk or insane when I said last year we would put a 6 handle on the S%P 500. I was right. I think I am right this time as well. We have not seen a real bottom in this market.

I would love to be proven wrong about this because I am tired of wrestling with the daily dichotomy of a poor stock market and the unbelievably cheap asset values I am seeing on a daily basis. My good friend Corban Bates, a budding value investor and recent grad of Hudson High, sent me a spreadsheet last with week with over 100 companies that trade for less then net current asset value. The last time we were anywhere close to that was the net cash bargains created in the internet blow up and the majority of those paid off handsomely over the next couple of years. You can buy stocks like ADPT, TECD, and ESIO for less than the value of the company’s liquid assets. You can literally build a portfolio of 40-50 of these that have a good credit scores, viable businesses and excellent recovery prospects. That’s enough to make me salivate at the possibilities for gains over the next several years.

DIS trade for about two thirds of my appraisal value. That is provided we give no value at all to the film library or character rights and price the parks as raw land and put a 5 multiple on after tax earnings DELL trade for less than two cash. HTH is a pile of cash in the hands of a proven investor in distressed banks and other financials. As a bonus the company landed aback door bank charter and will be able to bid on distressed assets and institutions. Southwest Airlines is stupid cheap, trading below tangible book value. Oil service companies like RDC and PTEN trade below net asset value at these levels. I like the idea of buying the Forest City senior debentures at a 30% YTM and what looks to be more than adequate asset coverage. Whitman has been a buyer and although struggled with everyone else last year, he is one of the best credit analysts and distressed guys around. Assets are cheap and normally I would be looking to go all in here.

So far I have resisted the urge. It’s worked for me as week after week the market has moved lower. We have seen a few little rallies but they sputter and fade. I am trying to play good defense whole accumulating cheap assets. It would be hard to play the traditional value game of buy and hold here as assets that look cheap drop another 505 or so, No mater how confident you are of your analytical ability that type of loss generates acidic vomitosis and takes a long for recovery to occur. Instead, I have held inverse ETFS to offset my long exposure. I have sold calls on rallies. The worst that happens is that the stock gets called away and I have to buy it back. In my former life as retail broker high commissions made this unpractical. Today, paying less per trade than the cost of an all night drink cup on ladies night in a dive bar, it’s not an issue. In the case of Southwest Airlines I bought 2001 $5 calls for $2 to create my position. Southwest, the best run airline in the country over 7 in two years? Hell, book value is almost seven. I ll take the bet every day.
For the most part I am avoiding the financials. I noted the other day that the giant distressed firm Oaktree Capital has almost no exposure to the most distressed industry on the planet. I agree with the choice. The major banks are just highly toxic piles of shit. Book values are fiction. Some of the community banks like SVBI and ANNB are stupid cheap but the on going real estate problems are going to plague them for a while yet. We have no idea what rules, regulations and restriction the banks will have to operate under going forward. Until we do, it is hard to make an educated investment in bank stocks. I love community Banks and traded them for years. I paid for one marriage and two divorces because of community bank stocks. I look forward to doing so again but not until we see the new rule book. Financials will not lead the market to a new bull. There are so many other bargains it is easy to ignore them and stay out of the minefield they created for themselves.

The values are there and I am confident that over a span of years I will get paid. I am aware however that there will be more downward pressure on prices and it will be some time yet before an economic and market recovery is affected. We have a ways to go as a nation. Before the bubble consumer debt was less than 70% of GDP according to reports I have seen. It is almost a 100% today. When we were great and growing a s a country we saved for what we bought. We used debt for large purchases and paid it off as quickly as we could. Wed id not take a credit card and spend our home equity on a trip to Barbados or a new pair of Jimmy Woos. We put money down on our homes, qualified for a mortgage and lived in the damn things. To really put things back on track we have to work our way back to that again. It takes time.

I ll buy a little here and there as things become too cheap not to own. But I m going to hedge my bets and use options as much as possible to create and protect positions. In my mind it is foolish for an investor not to do so. I have no interest in calling a bottom or executing short term directional trade right now. I have seen two many guys and girls carried out on their shield in the last two years to even think the reward could be worth the risks. Protect capital, find deep undervaluations and be damned careful.

Next time out I will cover really important shit like baseball and why the Orioles have a great team of position players but the usual collection of rag arms and no names on the hill will make it difficult to compete again this year. Maybe talk about why a happy many could make the Dodgers the best of the NL and Teixeira taking the Yankees back to the playoffs. Goes without saying that we will examine why the god damn scum sucking rat bastard Red Sox are the very definition of all that is evil and foul in the world today

Books, Broads and Booze

2009-03-13T22:24:00.002-04:00

There are times when one must sit around of a Friday eve and watch basketball, sip whiskey and contemplate, if not ruminate about the world and ones role within it. Such a night would seem to be upon us. Translated this means that there is not much going on around the island tonight and the ACC tournament is on. As I begin my latest epistle, Maryland is leading Wake Forest in the second half, my glass is newly filled and all would seem right in the universe for the moment. Of course, I drink faster and the Terps have blown bigger leads so we shall see how long the world stays so happy a place.

As they do so often on quiet nights my thoughts turn to the formative forces and times of my life. By any counts it has thus far been an interesting journey with twist and turns worthy of a novel, provided Hunter Thompson, SE Hinton and F. Scott Fitzgerald had collaborated on such an adventure. I would love to include Hemingway but I haven’t boxed in over 35 years and hunting and such bores me shitless. The 16 year old high school drop out I once was had no idea that life would turn out the way it has. It’s been fun, it’s been educational and quite a ride. Like all thrill rides it has had some bumps and scary times. (Although I am blessed with that special stupidity that is rarely afraid. More like curious as to just what the fuck else is going to go wrong). Somehow I have managed to have a career in an industry no one in my neighborhood had any idea existed. Hell, working on the line at GM or Sparrows Point, maybe a nice government job was the height of our ambitions. Somehow I got form there to hear and one has to wonder what the chief forces have been that drive such a life. The answer of course lies in the 3B’s of my existence. Books, Broads (yeah, yeah I know politically incorrect and all that shit but female acquaintances and companions doesn’t have the same zing does it?) and booze.

Books have been the chief driver of my intellect and what paltry accomplishments I have achieved. I cannot claim that I did anything to spur my love of reading. I was just born this way. My mother encouraged it and each week through my youth we made the trek to the Drug Fair parking lot to check out books form the bookmobile service provided by the public library. I loved that damn thing. Just a big old bus full of books free for the taking. Mom never told us what we could or could not read. Whatever struck us was fair game I could check out some Alistair McLean adventure novels , Churchill’s histories or even some racy Harold Robbins novels. I read everything and anything. I almost looked forward to being grounded when I was a teen. In the summer I would climb a tree in the yard and read for hours, hidden from the world. I was a teenager when I read Solzhenitsyn. I read damn near everything he ever wrote the summer between 7th and 8th grade. I still remember poor old Mr. Taylor calling me a liar when we did the first day of school what did we read over the summer role call. There I stood in cuffed jeans, greasy hair and Chuck Taylors talking about the Gulag Archipelago. The class ended, as did a lot the rest of the year with the hood and the teacher arguing about books while the rest of the class fucked off.

Books have been a driving force in my life. Both parents were brilliant people who were big readers. I was literally born a speed reader. To this day I read just about a book a day. I read everywhere. I have read in schools, churches and jails. I read on the beach, on planes, wherever I find myself. My apartment is a literally cluttered with books most of the time. As my son says “ya know Dad, I feel like I live in the worlds messiest library.” Without them I would probably still be that high school dropout.

Who influences me the most? I think they all did. Shakespeare who opened my eyes to the romance and excitement of words and the world they described. Hunter Thompson ,who taught me to embrace the weirdness of it all. Ayn Rand is how I finally figured out that I was responsible for my own actions. She has some fucked up ideas about relationships and has the compassion of a damn stone but she does exude a passion for life and achievement.

COMMERCIAL BREAK” Maryland did it. We beat Wake and go to the semi’s. The NCAA doesn’t put us in the dance now they should be horsewhipped like the brainless, soulless dim witted fucktards they are. We should play Duke next and I cannot with for another shot as those bastards.Books eventually set my career. As a young salesman I read all the Ziglar and Hopkins I could find. I read the Norman Vincent Peales and Napoleon Hills to discover the power of the mind. Back in the days of my door to door sales career these helped keep me focused on the next door and forget the last three slammed in my face.

A lot of value investors tell me that Ben Graham’s writings were their epiphany. For me it was when my mentor to be (reluctantly I promise you. I was a pain in the ass) gave me a copy of Marty Whitman’s Aggressive Conservative Investor. The concept of asset based investing just made an enormous amount of sense to me. From there I moved on to Graham and Ed Altman and learned equity and credit analysis. I loved Victor Neiderhoffers Education of a Speculator. His unusual and unique way of thinking about markets helped me avoid getting stuck in my ways and approach. My eventual friendship with the author after email exchanges was one of the most positive influences in my life and my career.

The lessons of history are there for the taking. Jefferson to Churchill. Thomas Paine to Ronald Reagan. He stories of the patriots, pioneers and ner do wells that birth a nation. The seriously demented authors of Mein Kampf and the Communist Manifesto who sought to destroy a world. All available for the taking merely by opening a book. Hell, you can damn near learn history by reading historical novels. WEB griffin for one has made the story of the US Military for 1940 through current time’s fun to read. Bernard Cornwells Sharpe novels make European history interesting. Patrick O’Briens Jack Aubrey books bring the life of the British navy alive and understandable.

Then there are the just for fun writers that I read just to escape. Robert parker (although truthfully one could learn to cook and fight reading the Spencer series). Randy Wayne Whites Doc Ford series has become a favorite. Travis McGee remains my hero and role model. If Christopher Moore is not the funniest son of a bitch whoever set paper to pen, he is a candidate. How can you not love a drunken lecher like Charles Bukowski? Dorothy Parker could have easily been the great love of mu life if not for that multi decade difference in birth dates. The poems of Cumming with their aggressive sensuality, Yeats with his lyrical quest for love and freedom, Baudelaire’s Be Drunk, all of these delight the mind and inflame the inner mind.
Books taught me romance. They taught me history, math, passion, and an appreciation of life.They have entertained me. My career path was shaped by them. They are easily the most dominant of the B’s.

Which of course brings us to broads. Women, the fairer sex, the delight of my soul and bane of my existence. Nothing else in life can take you as high or lay you as low as a woman. From the majesty of a first kiss to the soul crushing wine drenched break up that leaves you a blithering idiot for days on end, they are the best and worst of life. It has been my experience that it is far more the former than the latter. I have finds that have been crushed enough times in the dance of romance that they give up and avoid anything that might look like a relationship. Fuck that. There is always a chance that I find the Bacall to my Bogart and that will always be worth the risk of heartbreak (although I could do with out the lawyers and the judges when it turns out to be Sinatra and Gardner instead).

I will always be an Irish romantic. To give up on romance and the mere possibility of finding that perfect partner, she with whom I match on all levels, a partner and lover, would seem to me to take much of the meaning out of life. I confess that at 47 at times the search is a pain in the ass and I have come to loath the early stages of the dating process but sometime there is a click for however ling that continues to offer a glimpse of possibilities. If I never find it, at least I ll have a lot of fun, nights of dancing at the dock bar to blues under the stars, dinners with eyes sparkling in the candlelight,, that first anxious clumsy fingering enrobing, the comfortable sensuality of a familiar lover and all the other moments that are forever frozen in my memory.

Like everyone else my age and still single, there have been successes that did not last as well as spectacular fuckups along the way. Some were my fault. Some were not. From each of them as time passes and the scars fade I find that there are memories that I would trade for the pain of the aftermath. Quit? Not going to happen. Ill take the scars if I can have those moments that do work. A rainy Sunday morning with the coffee and New York Times, Nat King Cole on the stereo playing footsie at the breakfast table. Lying on the beach together barely touching but deeply aware of the touch. A long conversation about hopes dreams and desires over a bottle of three of wine. Goodnight kisses and passionate awakenings. Finishing each others sentences, laughing at private jokes, slow dancing with no music playing, love letters and late night phone calls. Are you telling me the me risk of getting hurt outweigh these, or the possibility they last the proverbial forever? What a chicken shit way to live.

Bringing us of course to booze. Like so many other Irishman before me I am an unabashed drinker. I really don’t give a shit what anyone thinks about it. I laugh out loud at people who tell me that drinking alone is not good for me. Shit I like MY own company. A book with a glass of wine and I m a happy fucking camper. Put a baseball game on turned down low at the same time and that about as happy as I can be with my clothes on. Bring me a bunch of friends and a long boozy dinner at the bar with lots of laughter and I consider that a great evening. Long conversations with old friends over a cigar and a good scotch are among my favorite things. Cruising down the bay with a frosty gin and tonic as the sunset paints the sky is a joyous occasion. I have toasted my weddings with champagne and endured divorce with Rumpleminz( okay so maybe that wasn’t such a good idea). I made the final decision to switch career paths last year over a glass of Famous Grouse. I have fallen in both love and lust over a bottle of wine. I have lifted a glass in a final toast after too many wakes. I miss the days when booze and cigarettes were an accepted part of life I don’t miss work because of the prior night with the exception of March 18th and the day after a jimmy Buffet concert. . I tell every first date I smoke and I drink and I have no attention of stopping. I don’t drink until I can’t work, I have never needed a drink but I do enjoy one. In the poetic words of my Celtic forefathers, fuck you I drink.

The three B’s. Now if I could just find a smart romantic sensuous woman who likes cocktail and books, life would be complete. Until then, I ll have a drink and finish my book.

Thoughts on snow

2009-01-26T23:19:00.002-05:00

from the archives but captures my thougts on the white stuff

About 11 I decided that a nightcap was the just the thing and off to bed. Pouring a tumbler of Irelands finest single malt I stepped out on the deck to see what changes the weather had wrought. The snow was falling fast and furious, racing through the lights on the edge of the grounds, dashing to and fro in a jumble of flakes, the flaky confusion resembling an airborne version of the original mosh pit at a grateful dead concert. The ground now was covered, each fallen morsel piling on the other, flake by flake, stitch by stitch, weaving a soft white blanket over the earth, the mundane parking spaces now a snow covered playground. The trees off in the distance, those stark, bare branches that usually cut the sky with slashes of winter grey ugliness, now almost majestic in appearance, branches bending into intricate patterns, ice sculptures carved by a maniac snow queen for a winter celebration. Over the frozen waters of the creek off to my right, the snow continued to fall, swirling patterns of ice shaved off some celestial diamond bouncing and skipping with the wind as they covered the icy layers of Thompson creek. The watermans work boats, usually hulking industrial looking crafts covered in netting and cages, now rose like snow covered hills off some surrealistic arctic landscape, these white masses rising from the ice, the harsh workday edges rounded off by the falling snow.The piers extended over the water ways of ice, fingers of whiteness untouched as yet by footprints, just suspension bridges of snowy symmetry and perfection over the ice.

I paused and sipped my glass looking at the newly formed wonderland of wintry excellence, listened to that unique lack of sound that comes on snowy evenings, as the snow covers and muffles the earth and the clouds hang low to earth, disgorging sound baffling clouds of wintry wetness over the earth.

As I stood there, beholding the changes upon the earth, the mundane everyday turned into a painting by some heavenly currier and ives, breathing in the quiet and dampness quality of suspended noise from the world, regarding all that had happened to the world with just the arrival of one small winter storm, I had but one thought at regarding such sights

MAN, I HATE THE FREAKING SNOW.......I GOTTA MOVE SOUTH

Letter to an adult daughter

2009-01-06T13:14:00.002-05:00

written after reading what I thought was horrible advice form a man to his daughters.

I too am big on the randy pausch book and thinking of getting a "be a tigger" tatoo. But with the exception of being competent and kind to children, my daughter would be in deep trouble should she take the rest of the advice. think horse whipped.

Tims words to a daughter:

marry a man you love and consider your equal, your friend and your partner. To marry for comfort or money demeans you, my daughter, and implies that you are capable of achieving neither comfort or financial independence on your own. Should that be true, I have failed you as a father. Dress to please your self, but if you choose to dress sexy all the time, understand that some if not many men, will treat you as a sex object and never see who you are. I would suggest a stylish and classy manner of dress that while not deemphasizing your sexuality, allows the rest of you to show through as well. A real relationship will involve your mind and heart as well as your body. Trust me, any man worth his salt can still tell you are sexy without dressing the part. Personally your father finds blue jeans and a tee shirt on a smart woman just enjoying her self and her life about as sexy as it gets.

as an side, unless I marry again, your future husband will NOT have an attractive mother in law. sorry . thems the breaks. some of us age better than others.

your sexuality is YOURS. If you prefer direct then be direct. If not, dont. The man who loves you will not only respect your sexuality but probably help you develop it along with his. Under no circumstances act like gennifer flowers. Although many men may like the accompaniment of an occasional trashy slut, as she found out we dont keep them long.

Never , under any circumstances divorce, romance from the life affirming and practical matters of your life. Do not for one millisecond dismiss a single fraction of who you are or what you believe to get a damn man. I am one. Most of us are not worth that kind of sacrifice. One who is will not ask for it nor desire it.

Indeed judge all men by what they do and not what they say.all women too. dogs and cats as well for that matter

be yourself my daughter. In all things. You are a smart capable young woman who is also beautiful. Be who you want in all things. Live, as dagny taggert did, to your highest ideal and purpose. The man who belongs with my daughter will see all that and want to be a part of it, not in control of it.

latest thoughts

2008-11-20T20:40:00.002-05:00

One is reminded that it has been far too long since I contributed so much as a word to this space. All the way back to the sweltering days of summer the space has lain vacant of new thoughts and ideas, frivolities and ramblings. The baseball season and indeed even the hallowed time of the World Series has passed wordlessly. Why, you might ask if you actually gave a shit whether I wrote here or not? Neglect, I suppose. Writing for a living has been a blast and I find I do not take the time I used to just to write for myself. But tonight, I shall again return to my pages, free of censor and unbefouled or besmirched by an edito (note” the ones I work with on a daily basis are actually very good but its such a great line I had to use it).r.
Summer is indeed gone and the flowers are all dying. It was another good one. There were the usual misadventures and boating excursions and escapades. They seemed a bit more subdued this year, The War of Tic Tac and Peru continued unabated until late summer when some sort of mysterious ceasefire occurred and the battle has fallen silent. I suspect some sort of nefarious drug is being used but since TT would swallow any combination of pills anyway, we shall never know. New York was a frequent excursion where as always I managed to liberally mix business and pleasure. I traveled I beached, pooled and enjoyed the living shit out if it as always. Ah summer you fickle slut. Dancing in with hit days and warm nights, endless waves , sweaty cans of beer and frosted gin and tonics. You brings us fast boats, bikinis, star filled nights and so many pleasures and vices that make life such a journey of pleasure. Like all true women of a certain morally causal attitude that I have come to adore, you stay far too short a time before moving on but what a delight while you tarry with us.

Now, fall is among us and the leaves swirl through the roadways in the colorful annual dance that bids fond farewell to summer. The night air sweeps in crisp with the foreshadowing of winter on its wings. Soon it shall be upon us that most evil ex wife of a season. Although there will be moments of incredible beauty and even sensuality hidden in winters icy cloak, at heat she remains an icy foul hearted bitch of a season that tears at your soul with cold snow dripped fingers and cuts through your loins with icy northeast winds. There is only one thing to do at such time. That’s right, fuck it I m going to Florida! Give me the warm embrace of the luxurious sands and the welcome feeling of the warm winds upon my soul as the sun casts its protective warmth on my face. I ll be back for the worst of winter, but I ll spend December in Florida pretending the bitch does not exist and sleep untroubled by frozen dreams.

Lt us tackle the foul tasting subject of the stock market and economy before we move on to more pleasant subjects like fetid bowl movements and mid life circumcision. When this shit started last year I wrote that the persistent government intervention would make this all much worse. Big fucking surprise they have done exactly that. Had we just stepped back and let these fucking rocket scientists and idiots that make up Wall Street. The greedy shits who bought too much house based on a pipe dream a mentally challenged six year old could see was false as a strippers tits would have lost their houses, They are losing them anyway. The greedy scum sucking mortgage assholes who sold them that dream would be waiting tables. They are. A bunch of Wall Street firms would have gone under. They have. The market would have dropped 50% or more. It has and will continue to do so. Had we not not in our governmental wisdom intervened this all would have been over. Like new growth after a fire, there would have been new companies emerging by now to keep the financial markets vibrant. The larger regional banks that did not participate in the toxic rancid stupidity created by their larger brethren would have stepped in to fill the void ny now. We would be recovering. The market would have worked. It would have been painful, but could it possibly be worse than the ass raping we are currently seeing the market? I think not. We have trashed the balance sheet of the central bank, sold the soul of our constitution to Goldman Sachs and the greedy cocksuckers that created the mess in the first place. Now the line is forming for money. Please. Let us sell our souls for federal money. Take my hear, my soul , my balls and my brains . Just give me the money. You stupid fuckers should be fired and run out of town. You ruined your banks and brokerages. You fucked up the auto industry with stupidity and greed. For that matter fuck that pious son of a bitch from the UAW. Give me a god damn break. No concessions? Fuck you then, no job. This is the biggest rip off of not just our money but the character of our nation itself. We are nationalizing our financial industry s well as others. They strip away our rights for own protection with the patriot act and now they steal our very birthright to “preserve the financial system.” Listen you miserable ass wiping motherfuckers; you cannot get away with this. We are going to revolt. Right after the Simpsons, or maybe at halftime. It seems Jefferson is tight and a prosperous people will never preserve liberty. We will change as a nation as a result of this and I wonder what we will become.

As for the market itself there is a fortune to be made over the next several years. I see companies that are profitable trading for less then 3 times E/EBITDA. I see an ever growing list of companies that sell for less than cash in the bank. We are fast approaching the depths of an ugly bear market and there is money to be made. I am buying DAR, HDNG, DOW,ASH and other like a crack addict at a rock convention. I am shorting bonds because anybody that thinks we wont have to turn on the printing presses to pay for this clusterfuck is dumber than me with a naked woman in the room. I am hedging every thing I do. You have to. There is a fortune to be made but the trick is not to lose one while trying.

Let us move on to more pleasant subjects. It has been a good sports year so far, or at least interesting. I remain an Orioles fans for reasons that escape my tortured soul. Every time I am ready to give up on this wretched franchise and walk away to a better team to exhort, they do something to reel me in. Appointing McPhail to run the team and then letting him do it may actually work. We have a decent core and a lot of talent in the farm system. I tool several trips to Bowie this year and the double a club has some serious talent that is a half season or three away from coming up to the bigs. The Weiters kid has the tools to be one of the great catchers There may be brighter days ahead. Of course, just as we got some light, the damn Devil Rays got great. .They may have lost the Series but that is a very talented young ballclub. Add them to the yankees and goddamn scum sucking whale shit slurping red sox as perennial obstacles for my beloved birds. Torre made it to the playoffs while the Steinbrenners did not and the Cubs broke Chicago’s heart once again. It was baseball and I look forward to its return.

Navys football team is playing well and is bowl eligible already. They didn’t beat Notre Dame but they gave them a run for it. Maryland has been the surprise. They were not supposed to be this good. If they beat Florida State Saturday they have a pretty good path to the ACC title. The ravens are much better than expected. The kid Flacco appears to be the real deal and the defense is just plain fucking mean. The combination of violence and half dressed women on the sidelines continues to be one of those things that make the fall and winter a little easier to tolerate. Be even better from a beach bar in Florida next month.

It has been a great book year so far. Doc Ford has shown up as have all of parkers characters. All of my favorites have been prolific this year and the UPS guy is a regular delivering the new ones hot of the press on a regular basis. I have made several journeys to the book thing exchanging literally crates of books. Right now I am reading Michael Dobbs fictional trilogy based on Winston Churchill and they are a seriously good read. There has even been a release of unpublished Bukowski material. Andrew Greely had a new one and I almost went to mass after reading it. There are more in the next month and I intend to take bunch to the Sunshine state with me. Needless to say much of the depth of the cold shitty wet, nasty ass winter that awaits my return will be spent reading.

AH women. The saga of that continues in an unending circle and circus. Women, you foul, wonderful, evil, delightful, heartless, loving, repulsive , attractive, frigid, sexy creatures. The very bane and cause for my existence. Why must you always try to change me after we meet? How can you look at me , drink in one hand, cigarette in the other, playing poker while talking to my bookie on the phone all the while sitting in my apartment that I faithfully clean every Christmas and think I am going to change? Once again a contender for the one has turned into the Nag trying to change what she liked about me in the first fucking place. But onward I plunge. Faint heart never won fair lady and it doesn’t get laid very often either. I may never find her, the Lauren Bacall Dorothy Parker hybrid of my dreams, but I shall continue to search. It may perhaps be somewhat quixotic to do so but at least instead of dueling windmills I shall be undressing attractive women. Seems like a reasonable crusade from this seat.

The journey continues. The stream of this thing we call lie continues unabated until it no longer does. We do not when it ends or what comes next. Like the mind of a woman it is unknowable. What matters then must be the journey. What a cornucopia ( I can use that now. It is almost thanksgiving) has been laid before us. Drunken nights and summer days. Good books and great music. The smiles of our children, the laughter of our friends. First time sex and goodbye kisses. Coffee in bed on a winter morning. Fast boats and slow cruisers. Scotch and steak. First love and broken hearts. Fond hopes and bittersweet memories. They are all the fabric of our lives and we weave the tapestry as we progress along the way. I briefly contemplated the idea of growing up not too long ago and taking it all seriously. I cannot. I will not. I much prefer the childlike approach to life. In his book, The Last lecture, randy pausch said that one of the most important decisions you will make in life is whether you will be a Tigger or an Eeyore. I choose Tigger with abundant bouncing from misadventure to adventure. If tears be the occasional price of laughter then I gladly pay it. If the cost of drunkenness, bit it on booze, women, knowledge or beauty, is a hangover then I pay that price happily. Life is a gift f undetermined time and value beyond understanding. To grow up and approach it a mature somber fashion strikes me as pure idiocy.

It is for friends that I shall give thanks next Thursday. I am cooking this year. The kids and all those demented young adults they call friends shall descend upon my abode demanding copious amounts of free food and drink and I will revel in it. At some point however I shall raise my glass is a quiet toast to my friend, even those who insist of getting married and having babies thereby reducing our quality drinking time. From the Chicago crew to the new Yorkers, from tic tac to the talented blonde. Mr and Mrs tire Guy (dude you so married up), the bible pusher to the shacked up freeloader, the curmudgeonly options guy to the shaky electrician, from Kent Island to California and back again, it is you my friend who add the spice to this adventure. It is for you and to you that I give thanks.

Without them there is no us

2008-07-03T11:41:00.001-04:00

Ah, the 4th of July, Independence Day is upon us once again. The smell of charcoal will waft across the nation as back yards everywhere become a monument to mans eternal desire to cook meat over open flames while consuming malt beverages and yelling at the kids. The streets of our towns and cities will be bedecked in red white and blue. There will be parades and old soldiers will suck in that gut and wear their uniform proudly down Main Street once again. High school bands will march sharply and play badly and politicians will wave at the crowd. There will be fireworks all over the country form NY harbor to Armpit Alabama there will pyrotechnic celebrations of our nations founding. I ll be right there with as always. I have a bunch of firecrackers in the closet, a few roman candles and bottle rockets to shoot up the neighborhood on Thursday. We are into gin and tonic season and I ll have a few of those as I celebrate my PETA (people eating tasty animals) membership by grilling up the largest steaks I can find. There will be friends and family, boats and fireworks and all the trimmings as we celebrate the 4th Kent island style.

I will, as I always do, stop and think of all that has gone into our 232 years of existence as a nation. So many have given so much to make and keep us a great nation. One of course think of the military, the soldiers, sailors and marines who have fought ot preserve our cherished freedoms. From the scare citizens who stood on Concord green, hearts beating wildly beneath buckskin as they held a musket in sweaty hand to the scared GI who mutters a quick Hail Mary before leaving the green zone the commitment and sacrifice they have given our country is staggering. I talked to a friend who returned today form visiting Normandy. He talked of the raw powerful emotion he felt looking at the beaches and cliffs those young men assaulted and took. He wept at the cemetery where so many of those young men found their final resting place. Our military won our independence form Britain over 200 years ago and has protected and preserved our status and place in the world ever since. There is no thank you large enough. Without them, there is no us.

I have written before of the contributions of businessmen to our nation. These are often overlooked as men of business are too often vilified and perceived as bad, or even evil. But the contributions of Thomas Edison, Henry Ford, The Rockefellers, the Bill gates and even the Warren Buffetts to our society cannot be ignored. In the name of profit and gain they have spurred technological innovation and industrial revolution. They bought light into our homes and automobiles into our garages. Beause of them we can fly across the globe, have microsecond access to just about anything form a laptop computer. They have provided jobs and contributed generously to build schools, libraries and cultural centers across the United States. Again, without them, there is no us.

Then there is the other businessman who makes our nation great. The little guy. Maybe he owns a tire shop and repair center that provides 7 or 8 jobs. He keeps his customers cars maintained and safe, saving them money and possibly their lives. Perhaps she owns a small accounting service helping others deal with intricate financial and tax problems. Or a restaurant that serves thousands of people a year good food at decent prices. Dozens of people will be employed at such a place, form youngsters with their first job to the middle aged waitress who is raising a couple of kids and works hard to give you the best possible service and dining experience. Small business owners have ink stained hands form their printing press, grease under their fingernails that will never come out entirely, they have sunburn from long days providing landscaping and yard services. They have eye strain from late nights reviewing budgets and payrolls. They live on a curious mix of Mylanta , Hope and energy. They make our r communities better places to live; they provide countless jobs, pay endless taxes and are the financial support for thousands of local charitable and cultural organizations. Without them, there is no US.

Then there is the so called average men and women. They go to work at a variety of jobs each day. The manufacture the products we sue, they provide services to make out lives better. They raise their kids to be better educated than they are and hopefully have an even better life. They spend the money that supports business and industry.hey pay the taxes that make the country function. They go to church and pray for a better world. They socialize with friends and neighbors and share each others burdens and joys. They may live in Wheatfield, Mo or the upper east side of New York City. They are us. Their daily efforts to make their own lives better is what makes the country a little better and a little stronger as the years go by.
I know we are far from perfect. There is no perfect man and no perfect nation. I know that the rest of the world is not that fond of us at times. We are perceived as arrogant and materialistic, spreading the gospel of hip hop and coca cola around the globe. Of course, if the citizens of the governments that despise u sdid not WANT hip hop and Coke, we would not be successful at this. There are more peole who are free on this planet because of us. Without us Europe would be either a German Dictatorship of a Soviet colony. Here would be no communist China. They would be part of the Japanese Prosperity Zone. Latin America would be Spanish and Portuguese America. We have never gone to war over territory. We have never annexed a defeated foe. We have taken the sons and daughters castoff by ther nations and turned them into Americans who have given the world far more than the world has given the United States. Perhaps we are not perfect, but I will take out imperfections over dictatorships and theocracies that still dominate many of the governments of the world.

Many decry our culture. Yes, I am afraid we did give you McDonalds and MTV. We also gave you jazz and Ernest Hemingway. From our lands came Faulkner, Twain, Updike, Kerouac and Mailer. Yes, Brittany Spears is our fault. But we made up for it with Bogart, Sinatra and Katherine Hepburn. From the American soul came the blues and rock and roll. Elvis, Dylan and Robert Johnson all are cut from American cloth. Charlie Parker, count Basie and Miles Davis may be well loved across Europe but they are form the United Sates and their sound and culture was born and thrived here. True we are responsible for the genetic cesspool that is the NBA, but we also give you baseball with Babe Ruth , Mickey Mantle, Joe DiMaggio and Cal Ripken. Our sports are not reserved to the upper classes. A baseball game can be enjoyed by anyone with a ticket, or on a radio while changing the oil or a local tavern television while enjoying a cold adult beverage with a few friends. The good and the great that has come out of our nation far exceeds the average or bad.

The United States of America. Born of a desire to be free to govern, worship, think and live the way each wished. Expanded by the speculations of Thomas Jefferson and the explorers who sought knowledge and land. A land where risk taking and speculation to better ones life is encouraged and supported, where an uneducated immigrant can someday see his sons and daughters attend world class universities. A country where you can, through your own vision and hard work, be who you want and live how you want to live. A place where you are responsible for you own life, but your neighbors are quick to help. A nation that is always first to respond to a disaster whether at home or in a far off land.
We are not perfect. But I still have not seen anything better. The single most important export of the US has been our concepts of freedom and principles of Liberty. It is a nation founded built and protected by the individual efforts of its citizens. It is the land of the free and Home of the brave because of the men and women who are born here, immigrate here and live here. They are US

So be it the backyard grilling burgers and hollering at little Johnny to stop squirting the damn hose all over everybody; or on a terrace in Manhattan; by the lake in Chicago, in the wastelands of Wisconsin with a G&T in hand and gleam in your eye;a boat on the Chesapeake with beer and bikinis in great abundance; or wherever this 4th of July finds you. Remember for a moment to raise a glass in honor of all those who served, who lived, who built, learned, worked, raised kids and strived for a better life. In their strivings, we have found a better nation.

Ramblings from the train

2008-06-20T15:55:00.001-04:00

Heading back form an eventful trip to the Apple, sharing a crowded Acela Express I find that I am an ready to be out of the city. I love New York but having to dress like an adult is something of a pain in the ass. Two days of having to wear big boy shoes is wearing thin. I need my faded cut offs and flip flops to feel comfortable and myself again. I went to the bull and bear at the Waldorf last night and have to agree it is a lovely bar. Wonderful old style New York décor, great bar conversations, decent drinks and a running ticker tape to keep track of the world. Of course it should be wonderful for $17 a fucking drink! Give me red eyes and cold gin in a plastic cup with a savings of about 13 bucks a drink any day. I stayed at the Double tree hotel on 51st and Lex and while the location was perfect, the hotel itself was far from it. The hotel surpassed the Algonquin for the smallest room I have ever stayed din. It was beyond tiny. Damn good thing I was traveling alone since the room was not big enough for any wild drunken sexual romps without serious injury to one or more of the participants. Over 330 dollars for a room that would fall short as a closet in a lot of places is a bit much.

The number of foreign tourists in the city is staggering. I heard half a dozen languages tossed around the bar last night. This is not necessarily unusual for me but I was still sober at the time. The one benefit of our government’s heartfelt desire to turn our currency into toilet paper is that all those wealthy Europeans and Asians who hate every ounce and fiber of the American Being and Persona can come over and swizzle scotch at a substantial discount. It is a great time to be selling week old hot dogs and stupid tee shirts in NYC as all the vendors seemed to be doing a brisk business in tourist crap and bad food. A strange world where everyone hates us but rushes to buy the tackiest crap we can sell them.

As for the market, what can I say.?It sucks. It has sucked and by all indications it will continue to suck. This is the Linda Lovelace of stock markets. Oil just will not go down. They raised the price in China and no one cared for more than a few hours. Demand is not going away. An economy that is growing at 10% needs fuel. The tow choices are coal and oil. Both a e higher and probably going to stay that way for the future. I was berated wildly last year for buying ICO and JRCC as they both went down initially. Both are up multiples of the purchase price now and the gain has more than justified the waiting. Food prices are high and getting higher. The Midwest flooding has ruined the already tight grain supplies and this will filter across a wide variety of food oriented commodities. I am not happy about this at all. First cigarettes went up because of Gov RockandRoll Dumbasses tax hike, scotch went up as the dollar fell and now a damn hamburger is going to increase because of flooding and an energy policy that has raped our food supply to make inefficient ethanol. Is this a great country or what?

Financial stocks continue to have a tough go of it as well. Key Corp and Fifth Third were thought to be conservative banks. Until they blew up this week. FITB had to raise a$1 billion to clean up its mess. KeyCorp needed $1.65 billion. The fact that banks can continue to get capital is simply amazing to me. This has to either be foreign money hoping to gain control of the US banking system or some of the dumbest rich guys in the history of the world. Investor s are giving ore money to the same idiots who caused the problems in the first damn place. Bad loans,. Securitized crap, securities they didn’t understand but put a few billion into to gain 50 basis points, the mistakes are almost ludicrous. And now they are raising billions like they had cured cancer.I once thought of changing my name to Tim.Com and doing an IPO. Now, I think I will become TimBancorp and sell a few billion of perpetual preferred stock to fund my next few marriages. The financial system has deep problems and the poor consumer is screwed some many ways right now they must fell like a gang banging porn star who just found out they are doing another take of the pile on. Higher food, higher energy, home price falling. What direction will we get fucked from next? Here’s a clue. Interest rates are starting to rise. I continue to think that only an illiterate deaf mute kamikaze could be aggressively long the US stock market. Of course there are lots of those around. We call them mutual fund managers.

At least it is summer. Last week Richard Ford the noted novelist wrote a piece in the NY Times lamenting summer as the season that disappoints. Like the character in his books it seems that the season falls short of his expectations. Actually I would suggest that Mr. Ford falls short of summer rather than the opposite. Ford is a brilliant writer bit I tire of the life as serious of failed hopes and everyday despairs. As I age I find that I prefer the characters of Richard Russo. The residents of Mohawk know that they grabbed the shitty end of the stock and have been beaten with it in many cases. But they embrace themselves as who and what they are and find a way to get the enjoyment out of life the angst ridden seldom find. You are disappointed in summer? Guess what? Summer is real fucking disappointed in you , pal.

Summer is a season of opportunities. We have suffered through dealing with the moody bitch ice queen that is winter, drudging through snow drifts on sun shortened days, winds that bite like the words of an angry wife wondering just where the hell you have been until 4 am. We have endured the flirtations of the nipple flashing virgin that is spring with her sexy promises but delivering only a peek and a peck pf what summer can deliver. Summer is the denim shorts and halter top clad, bare foot dancing girl of our dreams. She will dance the months away if you only ask.

If you sit and wait for summer to come to you, you will be disappointed. But if you get off your ass and go get it summer will be what you want it to be. There are days of great weather, there is boating ( I will even include you “we have the right of way and could you slow down because the noise hurts muffys ears “pain in my ass rotten shit sail boaters here), there are hammocks under shade tress and lemonade, docks bars and gin and tonic while the band plays rock and roll under the sweaty night sky, there is pace ball in the Bronx and at the yard. They are going t play nine at Wrigley and at fen way and 26 there stadiums this year. This of course does not include the minor league parks all over the country. There is golf if you like dressing up like schmuck and chasing a little white ball. Tennis. Swimming. Little kids playing in the sprinkler. Ice cream sodas. Cold beer. Burgers and dogs on the grill. Sleeping off a hangover on the beach trying to match the rhythm of the waves to the ones pounding in your head. Watching the girls walk down 5th avenue in sundresses. Watching the girls at Redeyes wearing damn near nothing. Fishing in a stream or a lake, trolling in the bay for rockfish
.
It doesnt matter what it is you want, Summer can deliver. But you have to get u off your dead ass and go get it. If you spend all your time whining about the heat or focusing on the everyday the you god and fucking well deserve to miss out. Can you really give a shit that the laundry isn’t put away when the Yankees and birds are playing at the yard and there is a smoking band at the deck bar. Is dusting more important than screaming across the bay at 75 mph on a clear day basking in the sun and the speed? Which would you rather do? Cut the grass and clean house or join a bunch of friends for a raft up at conquest beach, spending the day swimming in the river, drinking beer and laughing your ass off? Me too.

There are things we have to do. Even I know that. There are articles to write, the markets will be open even if they are going down with the regularity of a fat girl at closing time in a tequila bar, and we all have to earn a living. But seriously, save the mundane shit for a rainy day. Play ball, Start your engines, hell ,hoist the mainsail if you must.

But if summer disappoints you, it is your own damn fault. Shes right over there beckoning at you to come play, to dance, to live. If you sit there and wait for her to come to you, like most other things in life you will be sorry.Its summer. Get off your dead ass and go live a little.

latest thoughts

2008-04-01T18:34:00.001-04:00

I confess this new career thing is even better than I expected. Writing for a living and managing money for a few select clients is working better than even I ever imagined. On the money front I can hold cash without it affecting my income, I can short stocks without 16 different legal approvals; and trade options withut a decree from on high cosigned by six separate archangels. The writing thing has been wonderful. To write each day and get paid for it is a dream come true, something I never expected and enjoy more than I have words to express. The morning commute to the living room is relatively quick, the coffee is much better than the office and sweat pants are considered appropriate attire. The only thing I have missed is writing just for the hell of it with no assigned topic or deadline. I have not been able to write about island life, sports, or the markets in my own unrestrained voice just for the hell of it for time reasons so I am going to do so now. I find myself with a modicum of spare time (provided I ignore my children’s impassioned pleas to finish their tax returns anyway).

First, the stock market. To this market I can only say “Ipse Cummingo mingere minxi mictum vos”. Loosely translated from the Latin, “I piss on you”. This market is a joke. The rally of late is predicated on things not being any worse than they have been. Sweet freaking Jesus, if they were any worse the financial system may have collapsed. Subprime related losses are going to total almost half a trillion dollars! The fed has sold out Main Street for the benefit of Wall Street, debasing the currency and ignoring potential inflationary pressures to prop up the balance sheets of major financial institutions. They have created new ways to allow banks and brokerages to dump assets onto the public balance sheet and access taxpayer cash to offset bad investments and stupid loans. The economy is just horrible. Orders are falling, backlogs are down and inventories are rising. The consumer is in debt up to his and her eyeballs and for the first time in years they cannot refinance the family castle to pay down their credit cards. There is currently more mortgage debt than home equity in the United States and the number of houses in foreclosures is growing at a rapid rate. Business is off at UPS and Federal Express as both consumers and corporations cut back orders. Retail sales are vapid at best. Consumers are broke and as they account for 70% of our economy I can’t see any reason for a sustained rally. Today’s 3% rally on moderate volume smacks of a short covering inspired bear market rally. Even if I am dead wrong here I think the risk of being fully committed to stocks carries too many risks for the idea of a margin of safety to exist. I am willing to miss this run up to protect capital. There appears to be very little common sense being used on Wall Street these days when it comes to the overall economic and financial matters, as well as a total lack of fear. Bottoms are accompanied by fear and loathing not cheerleading and bottom predictions. The bullish arguments are laughable. Anyone who does not clearly see that the recent pullback in gold and other commodities is deleveraging by hedge funds in light of recent volatility is not looking close enough. Anyone who thinks that the bank write offs are at an end has just simply lost their mind. Yes, eventually they will write all this crap down too far and it will create an opportunity. I particularly look forward to moves like that of UBS to separate the bad assets into separate vehicles as this will create huge pools of underpriced and unloved mortgage assets that no one wants to own, reminiscent of the Texas bad Banks of the late 80s and early 90s. But that time is not now. Small community banks will thrive and benefit from the tighter credit conditions and steeper yield curve. But not yet. Patient investors will see one of the best buying opportunities of their lifetimes. But it is too soon.

I went to opening day yesterday for the first time in years. Along with Mr. and Mrs. Tire Guy I headed up to the yard to watch the birds take on Tampa. The team was as bad as I thought it would be but we had a blast at Pickles and after an extended tour of Baltimore parking garages the NGF (new girlfriend) joined me. Any day at the ballpark is a good time. A day at the park with a beautiful woman is a great time. The team is a s bad as I had feared. However, for the first time since Davey Johnson was fired there are signs of hope around the yards. Instead of just signing whatever over the hill high priced free agents were available, Peter Angelos handed the reigns over to Andy McPhail to start a real rebuilding process. It was hard to see Eric Bedard leave. It will be even harder when he pitches against us this weekend. It will be hard to see Brian Roberts get traded before mid year. But he will, hopefully to the Cubs since they are one of the two teams I am hoping to see in the World Series. A rebuilding year is hard to take from a wins and losses perspective. However, it makes going to the ballpark more fun than going to watch a team that is bad with no prospects. Now instead of watching overpriced over aged talent screw up the game, we can watch for the improvements that have positive implications for next year. Can Adam Jones learn and get better at a major league level? Can Nick Markakis add the 10-12 home runs and 20+ RBIs that take him from good to great? Can Daniel Cabrera throw strikes two games in a row? Does Hernandez’s glove make up for the offense we give up? Can Melvin Mora get hot enough at the plate so we can trade him for a young third baseman who can play defense as well as hit? Does Adam Lowen live up to his seemingly limitless potential? How long before Luke Scott takes his bible and his pistol back to the minor leagues? The wins and losses will be awful but at least there are reasons to watch the games. I am going to cheer for the Orioles to get better, the Twins to outlast Detroit and sweep the goddamn miserable shit eating red Sox in the ALCS and face the Cubs who will have crushed the damn you for 1969 you miserable bastards New York Mets in the NLCS.

The final four is upon us as well. For the first time the four number one seeds will face each other. This promises to be weekend of incredible college basketball. Look at the matchups. UCLA –Memphis is the first game. UCLA’s young star Kevin Love is having an incredible tournament. He is averaging 21.8 points a game and 11 rebounds. Can Joey Dorsey shut him down, or at least slow him down? Freshman derrick Rose of Memphis shredded the much vaunted pair of Texas guards. Can he do as well as the UCLA tandem that already play at an NBA level? Can Memphis make free throws? Will Coach Ben Howlands defense shut down the free wheeling Memphis offense? The edge here is UCLA but Memphis has been shutting up critics for the entire tournament. North Carolina was my preseason pick to win it all and they are in position to do exactly that this weekend. How will the saga of Roy Williams coaching against his old team play out? Can Kansas find a way to stop Tyler Hansborough, who is averaging 21 points and 9.5 rebounds a game? Can Brandon rush step up and have the huge game he need sot for Kansas to have a chance? Wll ty Lawson play to early season form? The edge here is Carolina who has scored an average of 93 points and beaten opponents by an average of 25 points so for in the big dance. The dream matchup here is North Carolina and Memphis in the final. Not coincidentally, it is also the one that saves my bracket!

Spring is upon the island. It may be just me but the Narrows seems to have an air of anticipation about it these days. Although the nights remain somewhat chilled, the days are warming and you can feel the hint of summer on the way. There is talk about who is putting their boat in the water when and what changes they are making. I confess to some concern that the Tic Tac kid is lightening his boat after some of the airborne adventures we experienced last year. Boating is not supposed to include passengers in the fetal position praying for mercy while we are looking down on the bald spots of guys in another boat! Tic Tac is the only guy I know who needs FAA clearance to leave his slip! Coming out of Annies Steak House the other night I could see the construction of Red Eyes new stage in preparation for another summer of bands and bikinis parading across the docks. There was just a hint of high performance gas and roiling BBQ smoke from the food stand in the air. There are steamed crabs and fresh rockfish in the near future, long nights of dock bars and music, the multiple colored summer sunsets on the narrows and all the things that make the island one of the best places on the planet to be in the summertime.

Another sure sign of spring is the fast approaching Keeneland expedition for the Blue Grass Stakes. The annual gathering fo friends and assorted degenerate gamblers and desperate drinkers is one of the best trips of the year and it is now less than two weeks away. We will suffer from the absence of the Kentucky Colonel who is apparently inconsiderate enough to schedule childbirth during racing season. The group will be a little smaller as Texas Tim bough his now wife, then fiancé, last year, and is not allowed to associate with us anymore .The Iowan is suffering from dementia bought on by excessive consumption and promotion of ethanol and other corn based biofuels and is unable to attend. However, as always Crossman and I will be there to provide entertainment and the Bet the Pink Mets fan will be there. The voodoo prof is putting in an appearance and the listmaster, with his iron Curtain contingent are scheduled to show up. So is “fuck it just sell more” Thompson from Chicago. For the first time ever in the multi years of the event (without checking bail slips and bar tabs I cannot recall exactly how many years this trip has continued) I will be bringing a girlfriend. Naturally, the degenerates have started a pool on how long before she flees in terror. I have the over on this one. She’s already seen me with a snoot full of Irish on St Patrick’s Day! We will have a great day at one of the more scenic and historic racetracks in the country, have great food at deShays and drink too much at McCarthy’s and put yet another memorable After Dark trip into the memory books.

Life could not be better right now. In a lot of respects I am living my dream and fully aware how lucky that makes me. Both kids are doing great, working and doing well in school and I have resisted the urge to dispose of my son’s menagerie while he was at work. For the first time in recent memory there is actually someone I like and care about enough to call a girlfriend. Spring is here and summer is coming. Baseball is back and it looks to be the best final four in memory. Life is an adventure and right now I seem to be on the sunny part of the trip.

2008-01-11T12:41:00.000-05:00

So far the year has started off with a bang. A lot going on around the island and of course the market is generating its own special sort of BANG. 2007 is fading into the rearview mirror and it was quite a year. Between the island crew and the after dark specs one never lacks for adventure. The year featured the usual assortment of trips with a lot of airplanes and at least one flying boat (many thanks to the tic-tac kid. I never knew a boat could get that far out of the water without a catapult!). Chicago and Kentucky figured heavily into my travels, as they seem to do every year. Melvin B’s is gone now a casualty of urban renewal and it will be missed. We have plotted the overthrow of the financial system at the outside café bar, consoled each other over women, markets and bets gone bad and I have many great memories of the joint. It was the coldest racing weekend in Kentucky that I can remember but that little fact did d not dissuade us from our usual weekend of degenerate behavior and wild eyed gambling. We did tone it down a touch this year since Hesselsweet bought his lovely bride to be. Jason bought Wendy as well but I am pretty sure she just ignores us all. New York of course was a frequent stop and we started the year in Naples Florida enjoying the warm weather, old friends and at least one difficult damn woman. The tire guy married up- way up- at years end. There were great times with old friends and a lot of new ones found along the way. The kids both continue to do well and I haven’t threatened to kill my son in at least a month now. They are both working, going to school and thriving. The markets were horrendous for much of the year, especially in value and special situation stocks as financing for transactions died off quicker than one of my relationships. No real contender for the next incarnation of the one true love of my life but the interview process was as much fun as always. I spent time with several very attractive intelligent women but none who could fill my eyes with what I now call the Hillman Twinkle. It was one hell of a year by all counts. The local sports scene was a bit dismal with the Orioles and Ravens having terrible years, the terps going out of the tournament early and the Maryland football team average at best. As usual Navy was a bright spot, beating army and going to a bowl game and playing some very exciting football.

On to 2008. The market is just horrible right now and I don’t think it gets better real soon. The next three weeks feature a string of earnings reports from financial companies and that does not bode well. In addition to the continuing stream of mortgage and credit write downs, home prices are still falling and the yield curve is not steep enough to allow profitable lending. Its ugly. It will be interesting to see if the technology report in late January, early February will give the market any legs whatsoever, I think we may actually get to my long term oversold point down around 1275 on the S$P before this over with. That level will set up one of the best buying opportunities we have seen since 2001. The plain truth is that as difficult as this environment is, not all mortgages are going to default and real estate is not going to zero. There is going to be a stopping point to the carnage sometime in 2008 and it will bet time to buy. The small local banks that trade down below book value but have positive earnings and sound balance sheets with high capital ratios and adequate loan loss reserves will be incredible bargains. There is a life cycle to this part of the industry. The small banks proliferate during boom times and after the bust comes the shares fall to lows like we are seeing right now. The larger institutions begin to buy the smaller competitors to acquire their clean loan books and reserves. A wave of consolidation moves through the banking industry, good times return to the economy and new local banks begin to spring up again. The last time we saw this was after the banking and S&L crisis of the late 980’s and early 90’s. Many of the local banks sold below book and it was about as much fun as I have ever had in this business. We were buying stocks at or below book and 10 times earnings that were taken over at twice book and 20 times earnings. It was easy money and it was extraordinarily low risk. We are coming back to that type of market and I cannot wait. I am also looking at the trading side of some of the midsize banks such as SOV to buy one-year calls once I think the slide is slowing down. WM calls look like a buy here as well as it is inevitable that someone steps in and buys them. On a sell off At the money, or slightly in the money long term calls will be a good bet. Banking aside I think the pendulum in the market will continue to favor growth stocks that can generate cash internally. It will be a bit of time before the financing needed to fuel a value revival will come to pass. Growth stocks to me are trading and surfing instruments but the surf is roiling and boiling so it will be a good time to surf in 2008. The dollar will probably stay weak and energy will stay strong so international and energy stock will provide some trades for the year as well. I am going to play special situation and activist stocks by selling puts when the market sells off and collecting the premium. It seems to be the way to make money in that corner of the market right now. The on factor that will loom large as near the third quarter of this is the dividend tax reduction that expires in December. Should that not be renewed and a democrat is winning the race for the White House we will see what I think will be the largest sell off of my life time. It is very much a traders market right now. With the exception of the little banks I have a hard time buying stocks for the long term when I think the short term could take them much lower. Buckle up. This could be as much fun as boating with the tic-tac kid when he’s been fighting with his girl friend!

So on now to 2008. There will new adventures, new books, new ideas all through the year. The Orioles will suck (news on the wire that they are probably trading the bus ballplayer on the club to the Cubs. Think I might be a cub’s fan this year. At least they are trying to get better!) ,s always, the Ravens will get a new look, Maryland basketball will be interesting and Navy turns a new corner with a new coach. There will be sunsets and setbacks, celebrations and defeats, first kisses and sad goodbyes. Some will be born, and some will pass on. There will be fast boats and slow summer evenings, rainy nights and hot summer days. Tic Tac will hit awake sideways and fast Freddie G will hit a few stationary structures in and around the bay ( he will have a tough time topping last years sandbar adventure however), Shorty will have a few poker games, I will do something stupid involving a ditch or a woman (lets hope there are no dog stories this year), we will laugh a lot, maybe cry a little at times but is should be one hell of a good year.Life has all its up and downs as we all know and 2008 is positioned to bring with it more than its share on both a professional and personal level. I look forward to it all. It should be a year full of life, full of surprises with opportunities to live life the way it should be, greedily and with great abandon.

don't think Obama can win it all?

2008-01-08T14:28:00.001-05:00

here is the bet to make on intrade.com

short obama, long any dem at 60 long mccain, guilliani, huckabee and romney for total cost of 39..

make 61 if one of four repubs win +43 on obama short lose 60 on any dem total gain 44

if dem besides obama wins..40 on dem trade + 43 on obama short total gain 44

obama wins make 40 on any dem, lose 43 on short + 39 on repubs total loss 42

two out of three win..only an obama victory is losing trade

christmas thoughts on a bullish friday

2007-12-21T13:51:00.000-05:00

As I sit here on the Friday before Christmas watching Santa and his mentally deprived elves drag stock prices higher in the long awaited rally, I find myself contemplating a long weekend full of activities, friends, family and general holiday cheer. Tonight kicks things off with the first annual Island of the Misfit Toys celebration, a gathering of the lunatic friends of Kent Island in a celebration of the resort life style we all live here, the times we have had and the friends that we have made over the years. It promises to be quite a shindig filled with great friends and excessive inebriation to the point we decided hiring a car and driver was one of the more enlightened things we could do. Good times, Good friends it gets no better.

Grocery shopping fills the agenda later this afternoon. I have lost count of how many people are coming by for the annual Melvin Christmas Eve bash. The kids and the friends of the kids will be there and a lot of my friends will be by over the course of the night. I will start cooking on Sunday right on through until dinner grumbling and bitching the whole time but loving every millisecond of it. There will be music, stacks of presents; the bar is fully restocked and ready to be emptied once again and there will be enough food to feed a small army. We put a big tree this year, Tommy cleaned the carpets last night and I even hired a cleaning service to shovel the place out for the party. It is one of my favorite evenings of the year and I love how much my kids brag to their friend’s about how incredible Christmas Eve at dad’s house is. Tomorrow’s agenda is filled with package wrapping and stocking stuffer shopping with heavy drinking in the evening around the island. Sunday is of course, the NFL and prepping for the big dinner.

It has been one hell of a year with all the usual ups downs and sideways moment (Including a few inverted but that’s what I get for boating with the tic-tac kid). Reminiscing and ruminating about the year is a subject for next week’s demented ramblings as the year-end arrives. Now is a time to think of all the good things that life has to offer and the things that we celebrate this holiday season. I know its supposed to be a religious holiday but all signs seem to indicate that Jesus was born in the summer and Christmas was realigned to replace the old mid winter pagan festivals that were a celebration of life and harvest. There is family to think off, my daughter now grown so smart and beautiful, earning success in life and in school pretty much on her own drive and talent. She has finally become a bookworm like her old man and I love it; My son, still a bit of a goofball but to my surprise after his record in high school and a hard worker and thrifty as hell. He becomes a little smarter every day and seems destined to do well in whatever he chooses in life. I am incredibly proud of both of them. There are fiends, so many that its impossible to name them all here. Friends form the island, friends form the speculative world, I feel incredibly lucky to have met and become friends with so many wonderful people. The importance of friends was driven home to me last week when one of my childhood friends passed away and it hit me hard. I hadnt seen much of Jimmy over the years in spite of the fact that we live in the same town. I felt guilty for letting life get me so caught up that I lost touch with a huge part of my life. I stopped by his brothers the other night and caught up on the years, swapping stories of the old days and the misadventures we had. We talked of those gone, some to jail, some dead, some just gone. We laughed at the memories of it all and wondered how in the hell we were still alive. Back then the rest of the world looked at us as poor white trash hoods and perhaps we were. But to us, we were king of the fucking world and all we surveyed. Its that rough and ragged background and group that I owe much of my who cares what other people think approach to life and it has served me very well as I have made my through.

This Christmas I shall raise my glass and toast this incredible life we live. Sure it has crappy moments and things do not always go our way. There will be moments of pain when some misfortune or failed relationship will strip away the flesh of our very souls and leave us stunned at how painful it is. For every one of those however, there will be five of a child being born, a first kiss, a sunset of spectacular color and glory, A symphony that fills the hall and the heart with the sounds of Beethoven, Bach and Vivaldi. There will be failures and setbacks. There will be even more comebacks and victories. Stubbed toes and bad trades are going to happen. So are long nights sitting on a friends pier drinking beer and grilling steaks, full blast boat rides and beer soaked Chicago strategy sessions. There will be tax audits and ex wives. But there will also be pretty girls in a Chicago snowstorm and nights where romance and sensuality fill the air.. Life is messy. But it also the ultimate gift of a generous creator, whether that be some deity or just the universe itself. This Christmas I shall raise my glass and toast life it all its messy, shitty, bloody wonder and glory. Amidst the flow of wine, the sparkle of lights, the colorful packages, the roasting turkey and heaps of pies I shall raise my glass and toast life. Standing there with the laughter and chatter of my children surrounding me, I shall toast you my friend. I wish you Life and a Merry Christmas

live form the new world headquarters in chicago

2007-12-14T13:21:00.000-05:00

As I sit here in my new temporary office space (why all these people keep calling it Starbucks instead of the new world headquarters of Tim inc is beyond me) on Rush Street in Chicago I take a few minutes to reflect on the world, the markets and the state of things in general. There is a lot going on in the world this December as we rush headlong into the Holidays. The markets are roiled, the economy is confused, yet the lights sparkle and friends shout Holiday Greetings and the world rushes on.

The George Mitchell baseball report is out and it seems every body used them the starts, the failures, the whole damn league down to the bat boy was going for the whole small penis bulging biceps approach to the game. The game is tarnished and will need a much stronger and smarter commissioner than Bud Selig to recover from this fiasco. What frustrates the shit out of me is apparently all of the Orioles were on the stuff except Ripken and we still cant win a damn baseball game. The ravens just flat suck in spite of a strong effort in one game against the patriots. Had they played like that all year they would be in playoff contention again this year. A very lack luster season indeed. Navy has lost its coach but I suspect the Hawaiian assistant head coach who was promoted is up to the job. He has been with Paul Johnson a long time and knows the spread offense as well as anyone on the planet. We will find out next week when the Mids take on Utah in San Diego. I had the pleasure of going to the Army navy game this year and it was an exciting team to watch. Maryland basketball team is young and so far just a step or two away from being good. Gary Williams tends to excel with these type teams so the late part of the season could be interesting. Lets hope.

The markets are interesting. Both the PPI and CPI are up strong showing signs of inflation even while other indicators point to the possibility of a recession ahead. Oil prices are off their highs a bit but remain above 90 a barrel. Interestingly the PPI was up a lot more then CP which in my limited little brain might indicate a possibility of margin pressure as manufacturers were unable to pass their higher cost on to consumers in their entirety. Large financial stocks are just screwed here for awhile In 1998, long term capital threatened the economic system when their leveraged bets turned bad threatened to wipe out its 4 billion of equity. Right now a write down of 4 billion of equity due to bad levered bets is a slow morning. I move ever loser to the opinion that one must have two portfolios to survive and thrive in the environment I see going forward. First is the 5 year and forget about them stocks. The commercial high yield reits such as JRT, NRF and CSE belong here. SO does Severn Savings. Your AMCC’s and ADPT’s as well. Buy them forget about them. They are too cheap and most will recover and thrive going forward. Changes in business conditions and outlooks might matter to these type of classic ben graham stocks but day to day market fluctuations do not. However in the type 70s style gyrating markets I see in our future I think a trading component needs to be added. I do agree with navellier and others that growth will supplant value for the next few years. The lack of buyour financing and pressure on financials will weigh hard on the value guys. But most of the growth names I think are trading stocks, not owning stocks. They tend to feature sharp moves in both directions. I have learned a lot form all the fantastically talented and weird friends in Chicago, New York and Deltaville the least 7 or 8 years and am working diligently to add these techniques to my arsenal. At the moment I still like the idea from FISJM’s long Swiss franc against the euro trade. I think Crossman is right that the carnage in large financials and mortgage insurers and am looking to sell bounces though puts and risk reversals in those situations.

Next year promises change. Changes I have been threatening to make for years and just never got around to pulling the trigger. Now, the opportunity is on the table and my bluff has been called. More details on all this later as the situation progress but it promises to be an exciting, interesting year. I find myself looking forward to the New year more than usual this year. All my life I have advocated taking more risk and not being afraid to fail. Time to live up to that pithy little saying.

Sitting here in Chicago I am again reminded that there is nothing quite like a major city during Christmas. The decorations and the lights sparkle and shimmer. The Prudential center is topped with red and green festive lights. The hawkish winds blow in off the lake and the street side lights jump and twist in the wind turning the streets of Chicago into a winter festival. Shoppers rush up Michigan ave bundled with packages of all sizes and colors. Holiday music floods the stores and clubs and you can start to feel a little Christmas in the air. Last night the Chicago contingent met for dinner at maggianos on canal and grand for a night of too much food , too much wine and too much conversation. The whole gang was there. The publisher and her builder husband with tales of puking newfies and new books in progress. The adventure traveling Eurodollar trader was there preparing for yet another trip to a part of the world where most of the inhabitants are devoted to the cause of killing Americans. FIJSM Thompson was there with stories of a the anguish and pain of only being up 17000% for the year. I feel his pain. Tonight we meet again with the stated intent of making sure the Eurodollar kids liver and blood stream are imbibed with enough alcohol to allow him to survive the trip to the booze starved Middle East.

More on this trip later as we have already produced a story or tow by crashing the Christmas party of US Scrap metal corporation at Prado’s last night and I havent even been here 24 hours yet. Parties abound and we shall slip through the frozen streets of Chicago in search of adventure and misadventure and as usual I suspect we shall find plenty of both

Signing off from the world headquarters of Tim Inc where you can worthless advice and a double mocha latte pretty much on request

the christmas collection

2007-12-04T11:08:00.000-05:00

Yes Virginia, there is a spec list.Your little friends are wrong. They have been affected by the mindless prattle of the media and the hordes of salespeople pushing inferior products and approaches to markets and life. They do not believe what is not from the lips of maria or cramer. They think that nothing can be which is not spoken on television or delivered in 4 color glossy brochures. They would have you believe, Virginia that all minds are little and that eagles are earthbound. Unfortunately in this great universe of ours, with virtually limitless knowledge available merely for the price of exploring, there are way too few willing to invest the effort and time to develop the intelligence needed to even begin to grasp the wonder,beauty and magnificent nature of the world we live in. There are a few groups of men and women who investigate, read learn explore, test, count and celebrate their discoveries.The spec list is such a place.

Yes, Virginia, there is a spec list.

It exists as surely as the market opens at 9:30 and bob prechter is bearish. The open discussion and exploration of markets, of books, of music, horse racing , math of a higher nature, and of course BBQ. How dreary the world would be if we didn’t have such discussions, if we didn’t count out our theories and swap ides with some of the best minds of the day.It would be as dreary as if there were no virginias or victors. There would be no boundless optimism, no randian faith in ones own ability to achieve ones dreams, or to recover from whatever disaster life might throw our way..as dreary as if there were no voodoo profs with bike rides and bqq lessons, no yale with silly jokes and beautiful stories, no mr e with ice cold logic and liberal baiting, no wizz with constant technical advice and back door one liners...no crossman to drink with and tell stories late at night, no omid to assess the middle east for us,no david hillman to laugh at my stupid jokes and look like kenny rogers, no jack to bring his years of experience to bear as the prez of the club...no book ideas, or musical suggestions, no trading and investing discussions, ..no bbq recipes from higgs and mcnabb...we would have no enjoyment and learning save what we found on our own The eternal light with which the search for knowledge fills the world would be extinguished.

Not believe in the spec list. You might as well not believe in ben franklin.You might watch for us and not see us, but that doesn’t mean we dont exist. At the soldiers and sailors club at 37th and lex, the starbucks on rush street, the shanty on the edge of the chesapeake, the inside rail at keeneland, in the university libraries, on the squash courts and football fields,atop floats in the mardi gras parade,hunched over chess boards and checkers games, in front of bloombergs and pcs, we are there.Just because we are not on morning squawk or paraded through barrons every Saturday does not mean the list does not exist. The lack of full page ads touting the spec list in technical analysis of stocks and commodities does not mean the speculators of the list are less real.....just that they toil and explore out of the public eye with no desire to tout their success.

You can explore the meaning of life and markets and never discover it if you stay among the accepted readings and viewings. The writings of the abelsons, the magees, the oracle of omaha and other such, along with the talking head prattling of cnbc, cnn , the false gods of technical analysis and friendly trends are places where many search for the rhyme and reason of it all. They ignore louis l amour, patrick o brien, francis bacon, they setle for the background noise of endless disagreeing commentators instead of beethoven, bach, gershwin,coltrane. They look for life’s secrets in tuedays with morrie and dr phil, ignoring cervantes, shakespeare and galton. Only faith in ones self, an unending quest for knowledge, an appreciation of the beauty , wonder and romance that is life, a belief in the markets and a free society to unlock the secrets of it all. An open mind, a searching heart, a hunger for knowledge, a desire to succeed and an ability to get up from life’s little failures are the hallmarks of the spec list. Is it all real?..Ah, Vrginia, there is nothing more real abiding and meaningful in the world than the quest for knowledge in the company of friends.

No spec list? Thank whatever god you do or don’t believe in that there is and those of us fortunate to belong have expanded our knowledge, gained friendships to last a lifetime a source of inspiration, poetry, market knowledge, poker and horse racing strategies, music and literature..and of course BBQ. We probably cannot claim the 10 times 10,000 years the new york sun granted santa, but hopefully it endures as long as minds search and hearts hope for a better, more meaningful life. So long as knowledge is discovered and shared, music inspires, books enlighten and bbq is eaten, there will be a spec list.

Happy holidays

Each year at this time, I take a shot at warping yet another holiday tale into a speculative fable, and this year shall be no different. We have in the past twisted the night before Christmas and yes Virginia there is a Santa clause with mildly amusing results and so the tradition continues.This year we shall look a the holiday classic ‘it’s a wonderful Life”. As you surely recall in the classic film, george baily in utter frustration over the trials, tribulations and broken dreams of running a small savings in loan in Bedford falls decides to end it all by leaping off the snow covered bridge into the turgid icy water below. At the moment before his final, fatal leap, Clarence the angel shows up to save him, showing him how much better the world was with george a part of it, and the difference he made in so many other lives….

Join me now as journey to the bridge, a lonely speculator, staring into the icy waters, contemplating the leap. Tired of the long hours, the pressure, the constant stress, the loneliness of fighting the market mistress, he takes one last long gulp from the Maalox bottle in his jacket pocket and climbs the rail to take a final plunge….enter our angel one Clarence ( Dow). Unlike the movie angel, our Clarence(dow) isn’t looking for his wings but reenters the earthly realm with hope of a nice 23 claret and perhaps another shot at business machines inc in the teens as his reward for saving this poor struggling soul….

Before you jump, my good lad, implores our angel, twirling his cold tipped cane to emphasize his words, lets look at what the world would be like without you, what kind of world would exist if you didn’t spend all your days buying to early and selling too soon, churning up stomach acids being long vol in a low vol world, what kind of world would endure if you didn’t continue selling the crack spread, buying cheap debt or sweating out expiration date short the 1190 puts as the market collapses closer to your position…..it is not just you my good man who suffers if you choose to end a life in front of quotrons and spreadsheets, but countless others..to say nothing of my own shiftless descendants who need the dividends from dow jones stock to keep them in caviar and champagne…..come with me now and peer into a world with no speculators, no one to risk capital to provide liquidity, price risk and capital for new innovations…

A farmer out in the heartland of America comes in at days end in early spring, tired from plowing, planting and overseeing his operations. He sees that corn is selling at near record prices. He knows that if he can sell the corn he just planted at such a price, he can pay off the debts accumulated over prior years bad crops..he leaps to the phone and calls Chicago to forward sell his crop but in the pits at the board of a trade a few lonely brokers stand staring at each other, picking their teeth with trade cards and discussing the cubs game..there is no one to take the other side of the poor farmers trade..he wants to sell. None of the other commercial interests have instructed their brokers to buy…who wants to buy at record prices? There are no locals, no speculative off floor traders to buy his crop in hopes of breakouts…the farmer shall have to pray that he gets a good crop, but not so good that prices fall to record lows over the next 4 months…..

A young couple goes into the bank to discuss a mortgage. They have good jobs and are embarking on hat they hope will be a long and joyous adventure together through this mystery called life. They enter the Potter Savings and loan, hoping to negotiate mortgage on the perfect little house on the edge of town. They are expecting their first in a short time and wish to have extra room and a yard for junior to play. The bank would of course love to accommodate them, with the standard 20% down payment, no prior credit lapses and a nice high interest rate. There’s no way for the bank to continually expand its lending capability and profits by selling off loans into the speculative market for it simply doesn’t exist….Mr Potter knows that he will have to keep this loan on the books for the full mortgage term and needs to maximize his return and minimize loss potential by squeezing as much rate and collateral out of the young couple as possible..So much in fact that their dream of home ownership must be abandoned. This scene is played out all over America and apartments flourish, Clarence (dow) shows our speculator, where he recalls single home communities with playing fields and lovely homes full of hopeful young families. There is a certain relationship between deposits and loans available and with no secondary market to sell off mortgages, lending is constrained to only the very best risk with the highest down payments…..The government has set these guidelines to ensure the safety of the banks and there is now around them..

A pension fund manager of one of the worlds largest corporations reviews his portfolio and knows that if he can find a way to increase his exposure to equity, he can earn a higher return than on the bonds and bank cds he holds. He can offer higher retirement benefits to tens of thousand of loyal workers, the men and woman on the front lines, on the factory floor, the sale floor, the mailroom..he can offer a better way of life to these thousands of people. To do this he needs to offset the risk off being wrong so that in his desire to help, he doesn’t harm….at the merc the phones rings in cavernous silence..there is no one there to take the other side of his trade,,,the building is but a large empty warehouse on lasalle street, gull of cobwebs and discarded patches of red and yellow trading jackets no longer needed in a world free from speculation…the retires will have to make do with whatever benefits he can pay from holding treasury bonds until maturity

Speaking off the government…these fellas have some problems in our brave new world as well. Without the wild eyed speculative boys from Chicago, debt issuance is pretty limited as the only buyers are those willing to buy and hold paper until maturity. They have been forced to sell off all those lovely assets. Yellow stone national park now features over 2million acres of parking, condos and resorts, all to allow visitors to the wholly owned theme park, a subsidiary of Disney and dream works inc, to witness the amazing animatronics recreation of bears, wolves, ride the amazing old faithful water ride that has a scientifically recreate splash effect from an engineered geyser….next year they will be opening the Yosemite rock wall experience where you will be able to climb actual recreations of half dome in miniature scale,,the real half dome long ago be leveled off and turned into a unique condominium complex…one department of the federal government prospers in this brave new world of no speculation,Clarence(dow) points out to our friend…the IRS is in over drive seeking new funds, collecting back taxes and creating new ones to keep the government afloat.

To the mall off this brave new world..there is of course a sears, a montgomery wards ..wait wards they went bankrupt….not in a world of no speculative capital to finance new stores and new ventures or expand old ones..there is no saks, no abercromie and fitch..no borders, no barnes and noble,,, certainly no circuit city or blockbuster..therefore there is no price competition to eliminate older unproductive enterprises. You may shop at sears, at monkey wards or a few mom and pops…but all the stores have pretty much the same stuff at the same prices. There is no need for an electronics store…there was no venture capital to create ipods, video games,dvd’s or vcrs. You can get a nice TV, perhaps a hi-fi to play your record albums. With no speculative capital to create new ventures and products, there is no need to expand creativity to hold market share, the consumer is locked into very limited choices….

Look around this world with no rooms full of specs wheeling dealing, buying and selling at lightening pace. Personal computers re limited to very high end IBM machines..they saw no need for computers for the masses and there was no money for bill gates or steve jobs to prove them wrong..who after all but a speculator would take a chance on two potheads in a garage building a computer for everyman? There is internet beyond limited academic and government use as it required billions of dollars of pure speculation to get the internet where it is today…phones are limited to ATT…there was no junk bond money to finance Mci or sprint ..without the access to capital (speculative) that milken made available to steve wynn, vegas stops at the old desert inn. In new york, there is no financial district, just the bowery and waterfront. The museums are dark and empty, unfunded by wall street grants…Chicago is just a brutally cold city of stockyards and shipping docks, no downtown, no rush street…companies that stumble are dead as there is no base of capital investing in distressed turnarounds..great ideas go unfunded as there is no IPO market, much less venture capital.

Enough of the world at large Clarence(dow) says to the dejected speculator. Without speculation what becomes of your old friends the spec..let us visit them in the new world…the chair is of course, a college professor in new England somewhere, dismayed that there is no tennis in the long cold winters, the wizz is seen homeless wandering Harvard square punching endless sequences of numbers into a tattered calculator, muttering incoherently of deviations and sequences….crossman is an overweight sporting goods salesman in Peoria with a wife of gargantuan proportions and 7 kids..mcnabb has been forced to actually get a job,,haag is teaching 7th grade music and looking forward to conducting the annual holiday concert, mr e owns a combination haberdashery and burger stand in Newark….Depew a lonely race track tout wandering the back roads of Kentucky looked for a mispriced exotic...george zachar, the world's most overeducated nanny,ross miller teaching business math at chino state community college and penal facitlity,larry williams an out of work volunteer emt and firefighter in moose fist montana,pam editing in children’s book in a suburb of Detroit, forced to have a few smallish poodles rather than the collection of beautiful newfies you yearns to own…carstens a truck driver for an Oregon paper mill, lackey a bicycle mechanic and part time Sunday school teacher in east armpit Georgia(he wanted to go to florida but ran out of money before he got to the sunshine state…) and Melvin..poor Melvin, tending bar in a strip joint at the edge of town, trying to read the latest hard case novel by disco light reflected off of flashing sequins, pouring drinks for hard men who want to drink hard liquor and get drunk fast so as not to reflect on the lack of means and method to chase their dreams…..(in a prime example of the law of unintended consequences famous grouse scotch in so longer available in the us but rebel yell bourbon at 3.99 the gallon flourishes)…

No, my speculative friend, come down off the rail..the world is a far better place when it contains you and your like…those who wish to offset their risk my sell it to you, you provide the risk capital to make ideas realities, to rescue firms in distress, to create jobs, invent markets..as george benard Shaw so eloquently put it “All progress is unreasonable..therefore all progress is the result of the actions of unreasonable men”..and you my brave young speculator are the prime example of the unreasonable…you risk your capital and your thoughts on an idea, you provide liquidity and price discovery where there is none, industries where only dreams were….the world is far better for your existence…now please my good man, begged Clarence(dow)..if nothing else before Melvin gets too comfortable at the strip joint and refuses to rejoin reality…..our man, invigorated and gals to find himself again part of the world reaches in his pocket and finds,,,yes..its zuzus trading slip..with triumphant shouts of joy we hear him run off..Hello Wall Street, merry Christmas merc, happy holidays you miserable old cboe……..

And every time a bell rings, good old Clarence ( dow) enjoys yet another sip of his 23 claret

Happy holidays specs……

the grinch

Every spec
down in specville
liked trading a lot
but the grinch
who lived just north of specville
did NOT

The grinch hated trading
The whole market, each and everyone
He didn’t even think it was fun
It could be he had bought up some losers or a flamer
Perhaps he had been trading on tips from old cramer
Maybe he had a socialist daddy and mommy
But mostly I think he was just a damn commie

But whether it was his purse, or just his mind that was a wreck
He stood there before the open hating each spec
Deep in his cave he hated each one he could see
And dreaded the open of the NYSE
For he knew that the specs down in specville below
Were ready to trade and try to prfit from order flow
And they re checking their charts and running their stats
Look at them trade the filthy damn rats
He snarled to himself that this really must stop, they must trade no more
I must find a way to keep those trades from reaching the floor

For at the open he knew

All the specs, the girls and the boys
Would holler and yell, and make all that noise
They would yell and they would holler as they keyed up a trade
Or as the market moved, Mozart and cole porter would be played
The noise, the noise, the noise, the noise He could not stand
They were just too loud as they picked and they panned

And after they would sit down to plot the next day
Each of course doing it a different way
They would count and they’d plot, they would graph and they would chart
10qs and 10ks,stats and TA would be taken to heart
they would talk and they would chat and beat each idea to death
the grinch would hate traders until his last breath

but what he hated really the most of it all
was the buying, the selling of both large cap and small
trading of options and futures and forex and grain
winners bought smiles and losers bought pain
but they bought and they sold, they sold and they bought
all day long each other and the markets they fought

they would trade! and they would trade! And they would trade!
Every damn day the trend they would fade
The more the grinch thought of the specville and specs
He knew these markets he must wreck
For centuries he thought I ve put up with it now
I must stop traders from trading!..but HOW?

The he got an idea
An awful idea
The Grinch got a wonderful awful idea

I must dress up and get into town
I ll tax and I'll regulate and close them all down
I ll write movies and books, and even tv shows
And show all the people that capitalism blows
I ll talk and the talk and look just like a spec
And from inside their system I ll wreck

So headed for Dc to wreck the whole fed
While passing through MD he saw two specs,Tim and old fred
Sitting in a dock bar arguing about stuff they had read,
Talking about stocks and girls and swilling down beer
The grinch snuck around the two quickly with fear
Thinking “though Im the grinch my livers not strong
Starting with those two would really be wrong”

On his way to Chicago to give the merc and the cboe a whammy
He ran into another spec of some note, little spec pammy
Nothing to see here he said, no need to even look
Run away now, little spec pam, and perhaps I ll have andy beal write you a book
He saw them all there,Jason and ryan and brian and all the other chi town speculators
They were all there, the breakout boys , the arbs, and even trend faders
He closed the cboe,closed the board of trade, even the merc home of the spooz
He closed them each, he closed them all,now they cant trade, they cant win, they cant even lose

Now to new york to close out them all, the nyse,amex and even the pits that trade oil
There was no one, not even one spec who could the grinchs grand plan foil
No more of this trading, no more of this buying, none of this selling
No more screaming in the phone, no one in the pit yelling
I ll take their computers, their charts and their graphs,why..I ll even take their stats
Ill take their colorful trading jackets, flaming pink pants and even their lucky trade hats
No more systems or averages, I ll leave nothing not even a candle stick or even a band
There will no more trading, we ll remove all the profit and all will be grand
No one, no man, no woman or spec these markets will be saving
Why,Not even krisrock with all his ranting and raving

I ‘ll close them all all over the land, and do without a single care
Even in Weston, I ll close down the bold one they call chair
And even spec steve and Duncan and doc, the dude and young tim
From the east to the west, Europe and even the pac-rim
I ll stop all this trading and close all the markets I find
No more of this profiting from your courage and mind
No more coaxing reward from great risk
Because all the markets,all of them, away I will whisk

And the specs will fall quiet all over the land ,no trading no more
Not even carstens or florida dan,no on the wire , not on the floor
Not even the two professors, not ross and not the bbq voodoo
nothing even the gambler or the listmaster can do
From rollert to sogi, from Nigel to ari and lackey back to young ott
From zussman to rudy, fromm north to south, east to west how silent they will have got

Back to his cave toting his load went the grinch
Closing these markets was really a cinch
I have the numbers,their charts and their q’s, theres nothing to count anymore
I ve taken their systems and books,closed the web and even the nyif store
No more brokers,buyers or sellers, no funds neither mutual nor hedge
No breakouts ,flags, stochastics,%r flags or patterns..not even an ascending nor descending wedge
No roe, roi,,current assets,debt to equity,no ratio of p over e nor value of book
No trading slips, no order screens,trading desks, all the these I closed or I took

He looked down from his cave at Specville as morning was breaking while evilly humming
Because soon the specs would rise and see no trading day was forthcoming
They are just waking up and I know just what the will do,they will stand their and sob
Now they cant trade, they cannot sell nor buy..they might even have to get a real job
And that’s sight and a noise I must hear,So he stood with his hand to his ear
It started out low and started to grow,first a slight murmer but now near a roar
Bbut the sound wasn’t sad, there was no sad sobbing, and the grinch shook to his core
Because all thos psecs down in specville were
TRADING!!!!!!!!!!

How can this be thought the grinch, how can they put in an order
There are no electronics, no internet, no brick,and no mortar?
I took their charts, their graphs,their stats and fundamentals
There are no markets, not stock, not bonds, not oilt not even grains nor even lentils
But the sounds of the market across across the land, a thousand bida t a half, sell the jan sevens
The specs of specville were buying and selling, the sound rose to the cave and beyond to the heavens

How can this be he pondered for hours,that trading goes on withoutall their stuff or their places
And then it dawned on the grinch as clear as the focus on spec faces
Perhaps trading wasn’t just noise and pointless selling and buying
But perhaps about the courage of specs to take risks, risk falling but keep trying
Perhaps trading was about providing markets to feed one and to feed all, a way to earn profits, to learn and to grow
That all the specs in spec land had learned to love risk and studied their craft with great care
Learning that the meaning of life,was just perhaps, about the courage to live and the courage to dare
That spec bet on the markets was really a bet on themselves in ayn randish type fashion
That these specs of spec ville lived unlike most others, they lived with great passion

They say the grinch burned his communist manifesto that great day
And rushed right down the mountain and entered the fray
Sold a few bonds, bought a little oil and went long a few spooze
He learned out to trade, he learned how to win and he learned how to lose
He learned how to arb, which trend to follow and which trend to fade
Into the trenches he learned the meaning of life and learned what it meant to TRADE
He learned to never quit searching nor trying,That living was learning
That traders,especially in specville, use their heart and their wit to do all their earning
He would have highs and he would have lows, win great victories and suffer great blows
Somedays flush with piles of cash, others having to count his fingers and toes
But our grinch learned that day, and went on to a life spent as a hard working trader
Out of his cave to a mansion he moved and thought that all in all nothing could greater!!!!!!!!!!!!!!!!!!!

Here we are, Early December. That can only mean one thing. That’s right dear readers it is time for Tim's annual holiday classic. Each year, for some twisted reason know only to myself..Well to be honest I don’t even know why I do it, I bastardize, plagiarize as just generally rip off some well known beloved Holiday yarn giving it a speculative, capitalist, libertarian and just plain weird spin. I of course insert characters from the spec world and sometimes from the real world to make it entertaining to all..or just because I think its funny. I like to do this early in the month so everyone has time to print it off in time for holiday bedtime reading. Surely even Mr., brooks needs a holiday classic to read this time of year eschewing those classics his kids love, the NRA manual and Bambi-He's What's for Dinner. The quest for a new story gets harder every year..We have done Yes, Virginia, It’s a Wonderful Life, naturally the night before Christmas and my all time favorite of them all, last years immortal yet easily forgettable rewrite of the grinch who stole Christmas. This year, I shall tackle the Granddaddy Christmas tale of them all..A Christmas Carol. And stand it firmly on its head

Our hero, Ebenezer Speculator sits at the end of the trading day, marking to mark his current positions. Good day for his egg nogg crack spread (long one, long one milk, short two bourbons) broke even on his march candy Cane short but as always the long Fruitcake trade settled heavily on his p and l. It seemed to him that he had been doing this forever and the watching of green and red blips fall across the screen seemed to be a non productive way to spend his days. I should be ding something productive with my life, something that adds value to the world, he thought to himself.” Feeding the poor, promoting world peace, teaching white men to dance, something that would add real and permanent value to the world. Sure, I am making money and all that and I employ a few people and helped others learn the tricks of the trade and make money. But what real value do I add to the universe sitting here greedily racking up profits for my own benefit while others fail and starve around the world. Surely, I could be a more productive member of society is some way.” At that point his nephew Fred burst through the door in his Cleveland Indians baseball cap, excited with the sprit of the season. “Quick, Uncle” he cried, “ housing starts are down, mortgage defaults are up and the world is awash in debt. We must short, we need to sell calls. Tis the season for economic collapse and profits all around!” Ebenezer look at his nephew and chided him for thinking only of profit for himself and not the plight of the poor around the world.”Bah Humbug. I am tired of all this buying and selling, selling and buying for no purpose other than to fill my own purse.”

The thoughts stayed with our hero as he made his way through the streets. He noted the homeless with their dire condition. He gave generously to the faux Santa’s ringing bells over little kettles, giving freely of his cash so they could continue the good work of forcing winos and degenerates of all forms to sing hymns to get a chicken supper and providing child care so the crack mamas could get to the corner and not worry about the fate of their little ones. He noted all the dregs and depressing things of the human condition. Of course had he lifted his eyes from the gutter he might have seen the towers of steel and glass that provided jobs for literally millions, the apartments full of people who earned their living through productive effort and cared for their families and raised their children to understand the value of education and hard work. He didn’t see the procession of cabs, buses and trains that provided cheap transportation to the public at a profit, or the store windows full of consumer goods, clothes, electronics and appliances that were sold at a profit to give us entertainment sustenance and make out lives easier while providing jobs for millions around the planet. That of course would negate the need for the rest of the story so he trudged homeward, eyes cast down not seeing the triumph of efforts and capital spread before him.

As he took his supper along with a generous glass of Irelands finest he read over the headlines of the evening papers. War here, war there, hunger, pestilence, disease. He knew that he must somehow find a way to make a difference in the world.

He awoke with a start to the clatter of chains and a soft moaning that grew increasingly louder. He recoiled in horror at the sight of a ghost, the ghost of his old trading partner when he first struck out on his own, the ghost before him was that of none other than Karl Lenin Marx Marly. They had separated after a few very profitable years when Jacob driven by the guilt of his wealth and desire to save the world. He had died in Outer Somalia when he was fried and eaten by a pack of savages who vastly preferred deep-fried ex day traders to the food presented by the various aid agencies. They were horrible fat(this was 2001. there was a excess of deep fried ex-day traders around) little men who dispatched of our crusader in quick order with a nice merlot on the side.“Karl,” cried our hero,” you have been dead now these many years. Why do you torment me at this hour? I must sleep as I have many fundraisers to attend this weekend for many liberal charities with heavy overheads and bizarre cost structures.”

“I am here Ebenezer to save form the mistake you are near making, the same fatal mistake of mistaking charity for a productive use of your time and effort..The type of mistake that leads to one being served up with a nice merlot deep in the darkest parts of the world.”

What chains are these you wear?

“The chains of every stupid do good welfare handout, government inspired relief programs that squelch the natural instinct of man to improve himself that I ever supported. The chains of every relief program that I ever collected money for only to have the cash sucked up in more fundraising drives and salaries for those who told us we were saving the world while what damn few supplies we ever sent to the poor were seized by roving warlords and midlevel bureaucrats. Tonight you shall be visited by three ghosts each with a lesson and warning for you. Take heed Ebenezer, take heed, lest you share my fate. The first shall be upon you at the stroke of midnight.”

As the ghost fade, or hero blinked in disbelief and swore he must be hallucinating. It must have been bad oysters or too much whiskey, a dream, nothing but a bad dream .Not as much of a nightmare of any his marriages, but still a bad dream. Back to bed, back to sleep he told himself.

At the stoke of midnight the first visitor did indeed arrive. Clad in pink slacks and a teal sports coat, he roused Ebenezer by smacking him firmly over the head with a copy of dimson marsh and stautons triumph of the Optimists, a most weighty tome capable of rousing one for sleep or knocking one back into it as the case demanded. “Come and see the past, of the profound impact on world history that speculators and investors have made.” With a flash they were gone into another time and another place. “But that’s me, as young man sitting at the ancient quotron cold-calling strangers to get business. Me, with no gray hair, no bifocals. Look at me so young and foolish thinking of nothing but making money.” And he watched himself as time and space compresses as I can do because its my story, watched himself in those first few years as a young salesman peddling stocks and bonds for companies no one had ever heard of, Golden Nugget, MCI, Microsoft, Amgen, Netscape. He watched as he helped raise money for companies that transformed the world with their technology and their medical devices and drugs. The specter whacked him now with Stigler Statistics on the table and they sped though days past seeing whole new industries, airlines, automobiles, computers created. Created with money raised in financial markets made possible by the liquidity provided by traders and speculated. Men who speculated to raise their standards of living and endowed educational institutions and libraries that made it possible for others to expand their knowledge, not with a hand out but an opportunity. He saw the million per cent a century return of the capital markets raise standards of living virtually around the globe and for the first time he began to realize that maybe, just maybe business and capitalism did far moregood than harm. Another smack to the head with a copy of Galtons Art of travel and he saw the history of other approaches, the complete and total failure of communist and socialist systems over the years and around the planet.

With a thump they land back in our hero’s apartment. “Why show me these things spirit. Surely in spite of these things I saw, I can still do more good acting out of charity than avarice.” With another smack of the optimist tome. Our spirit departs leaving Ebenezer crumpled to the floor.

As the clock strikes one, the second ghost, the ghost of speculative now shows. He looks disturbingly like Kenny Rogers and is wearing some sort of cheese apparatus as headgear with a twinkle in his eye like David Hillman might have if he ever did actually find someone incredible to actually agree to marry him..Oh wait that did happen and Hillmans been twinkling ever since. The spirit yanked Ebenezer from the floor, stuck a gin and tonic in his hand and off they went.

First to nephew Fred’s where he sat around with his boon companions and fellow traders Jason and Ryan. Jason sighed wearily: this market is killing me. After today’s trading debacle I m only up 913% for the year. I tell you I’m getting desperate..” Ryan was quick to agree ‘ If this keeps up next year I ll only be able to go to outer Mongolia and the north pole. I may actually have to skip paying a fortune to slip into communist dictatorships that are sworn enemies of the US. The horror of it all!”

“Guys”, said Fred, I am worried about Uncle Ebenezer. Why just yesterday I went into his office and showed him some great housing shorts and an ingenious way to be short stocks and long volatility at the same time. He didn’t pay any attention. He was too busy writing checks to the sierra club and the feed Sally Struthers s foundation! He’s losing his drive and mumbles all day of doing good.”

“Enough of the gloom” shouted Jason. “We shall go now to Melvin B’s and drink copious amounts of beer and then gather around a brightly decorated cell phone and call Chesapeake slim and berate him for his nefarious bad habits of drinking, smoking,and gambling, to say nothing of chasing women with Kentucky accents and only buying stocks under book value. It is after all, a holiday tradition.”

With the splash of a lime in a fresh G&T they were off again. They looked upon the voodoo prof and Elena living in Deltaville, va living a life of trading teaching and boating, said aforementioned Slim on his island, wring strange documents and perusing vague financial documents, mandatory glass of Famous grouse at his side enjoying the benefits of a capitalist society that allows a man to marry as many times as he likes and still figure out a way to pay for it, they saw the wiz and the Weston crew, trading and living lives, raising families, gaining knowledge as well as profits that enabled them to enjoy the fruits of their efforts, they passed over Hawaii where Mr. Sogi continues to trade and dabble in business enjoying the companionship of his incredible wife and the Pacific surf, Scott brooks , stalking profits all week and innocent fuzzy animals all weekend. All of them trading and investing in the markets, using the profits they reap for the betterment of themselves and the ones they love.

Thump back into the apartment, the spirit snatched way the gin and tonic mumbling about being in a hurry to get back and make dinner for Paula and departed. Before Ebenezer could compose himself the clock struck 2 and the last spirit appeared. With an I pod full of Cajun rock and roll tunes, a U of C bobcats sweatshirt and smelling of small town Chesapeake breezes he hurled Ebenezer into the future, a future where capital markets failed, there was no innovation. The poor die first and frequently as there are no innovators figuring ways to ever cheapen the cost of food and clothing, disease was rampant as the government stepped in and removed the access to capital markets and the profit incentive, no new drugs were discovered and those that remained were expensive. Energy costs were prohibitive as there was no capital to develop new alternative source or search for new discoveries of oil and gas. There were no new jobs created and the taxes collected to support the ever-declining system ensured that business could not expand and create new opportunites. It was a bleak world, one without the hope for improving the lives of ones self and loved ones. There were no traders or investors to put money into new ventures, no speculators to provide liquidity or generate profits that create jobs and support families. The only wealthy folks were those that worked at charities paying themselves fine salaries to collect what little money remained to dispense to those less fortunate..Which of course is everybody but you and I.

“This my friend”, spoke the spirit as he sipped a rare 30 year scotch from some obscure Scottish village” is what happens when there are no markets and no traders.” And he was off, back to fight the battle of the neighbors light pole.
“What a fool I have been” cried Ebenezer.” Thinking of my self as non-productive because all I did was trade an invest. How could I fail to notice that I have provided jobs for dozens of employees, taught many to make money in the market and support their families and put their children through school, or that the money I invested helped to create new technologies and industries, providing jobs and opportunities for literally thousands.”

He dashed to the window and cried to a young boy passing below.” You boy. What day is this” Saturday said the boy, Christmas eve” “Thank the gods I haven’t missed it..Boy do you know the newsstand around the corner. Take this 20 bucks and run round there and fetch me today’s Barron’s, FT and NY times. I must prepare for the next weeks trading.” Of course this being modern times and not dickensian London the kids was never seen again most likely spending the twenty on cheap booze and porno. We can only stretch our fiction so far. later our hero had to go to the newsstand himself to obtain copies and make his way over to starbucks to sip a large (grande,venti my butt. It’s a large coffee) coffee

An Ebenezer spent a nice Christmas with good friends and family, chatting with Jason, Fred, the voodoo prof and all the specs about trend and trades in the market, ready to return with a new zeal and new appreciation for the life of speculation.

“Heck,” he though to himself.” I may even call Slim and see if he’s got any of those weird little cheap stock ideas. It is after all the holidays.”

Best early wishes to all for a wonderful Holiday season and a may you trade well and learn much in the new year.

the foreward to the auotobiograpy I never got around to writing

2007-11-30T14:02:00.000-05:00

So as sit here wondering if gazing back though time to discover just exactly how the fuck I ended up here, daily fighting the tides and fates to not resemble a caricature of a mid 40’s oft divorced, smoke too much, drink too much, always falls for exactly the wrong girl kind of guy. I poke gingerly at the corners of history to see if the story is worth the telling. And perhaps it is.

It is, if nothing else, an interesting story, full of sordid moments and overcoming ones own stupidity. I am never sure if the high points of my life were when I was a so-called solid citizen or those moments when I drunkenly consorted with women of a certain morally casual attitude. More and more I suspect the latter. It was Wilde who said we are all in the gutter, but some of us are looking at the stars. I have been in the gutter and at times I have glimpsed the stars. I enjoyed both equally as each inspires a different sort of passionate reflection on life. I suppose somewhere in this mixed up collection of memories and lessons learned as well as forgotten there is a story to tell. I doubt that I will be able to deliver it in traditional time line fashion as my brain rarely works that way.

I look into some of the mixed up memories that are pulled form the grab bag and pause even now to savor them, mary jo porter in a hotel room in Akron fucking Ohio, she of the ungodly long legs and born to give head pouty lips; that shit smeared hell hole of a jail cell in Albuquerque new mexico where I spent 36 fucking hours waiting for the bail money to arrive; my first wedding on a frozen house day in Minneapolis, looking at my bride to be thinking, this is some stupid shit you re doing right here ,tim. Problem was she was one of the leading salespeople in our little company. I had to follow through on my drunken promises or lose the revenue. At the time, God knows we needed the revenue. Might have run anyway if she hadn’t been knocked up. Trading yen futures in my office at the crack of dawn while puking last night’s good whiskey into the can under the desk in the little desert wasteland town of Merced to raise a stake to get back on the right side of the world. Unfortunately, the bitch followed me.

Hiding in a shower stall in Blythe Arizona when the cops were trying to find me for passing bad paper (not my checks but check given to us by customers. We had developed masterful talents at passing these gems onto local merchants) all over town while my female co-conspirator of the time, wrapped in only a towel explained to the nice officer that I had left and returned to LA.then she backed the car up to the door and I jumped in the trunk and left town, quickly heading east. Walking snow blind down rush street with the great Mr. Crossman in Chicago at three in the morning accompanied by a sweet little girl from Kentucky with a melodious voice and wondrous ass; the piss and blood feeling a real honest to go someone is not walking away from this street fight, the pain numbing elation when it was me that walked away, the pain numbing morphine from the nice nurse lady when it wasn’t; Driving a purple pt cruiser already drunk out of our minds to find ourselves in a skin head bar in Louisville, Kentucky; poker hands, whiskey bottle, tumbling horses ;a chubby redheaded girl on a boat deck at sundown.

Then there is of course my grand tour of the jail cells and holding tanks of all the grand American cities and towns, the aforementioned Albuquerque. Lubbock, Texas, Hattiesburg Mississippi (a true hellhole with dirt floors and a kitchen trustee with gangrene. I was there 4 days and then spent two days on Bourbon Street drunk as blind, one legged billy goat to chase away the memory), Annapolis and of course the waxters juvenile detention center, my prolonged stay in the Albany state penitentiary at the kind invitation of the state of new york, Mars, Pennsylvania, Los Angeles, Reno, Blacksburg, Virginia, corpus Christi, Dallas (I have a love-hate relationship with the state of Texas. They loved locking me up, I fucking a-well hated it.) Boulder, Colorado, the nicest jail I have ever been in with real carpeting and macramé classes. I am sure I have left some of the fine facilities where I have whiled away the hours off the list but memories fade over time and I just cant recall all of them.

There have been the more socially acceptable memories as well. The birth of my children, of course. But for those who want to make that out to be this wondrous thing of great beauty it s a actually a bloody nasty brutish mess of a thing to actually watch, but to hold my daughter the first time and have those huge brown eyes looking at me, knowing who I was somehow, my son pulled out by c-section and taking his first piss all over the poor doctor lady; watching my daughter at age 12 playing out in the waves during a beach vacation dancing with graceless and timeless beauty as the waves lifted her, the crashing sea pushing her long thick hair forward to frame her face as she rose with the tide, floating along in a oceanic fantasy dance all her own, till the wave crashed over leaving her once again a slightly clumsy pre-teen finding her way in a gravity bound world; my son at third base moving to his right with a fluid grace his father never had, looking like a 10 year old Brooks Robinson; high school graduations, prom nights. My kids have been a grace and a blessing and I just hope I haven’t screwed them up too badly.

And the women, my god the women. Some I loved, some I liked, some, I just fucked. Others I would have liked to have loved or fucked but they were way too smart to get anywhere near me. I would be so much better off without my endless pursuit of the great two-legged North American vaginal support system but, alas, I have never been able to do so. Their look, their touch, their feel. I live for that shit.The chase, the catch, the way their eyes shimmer in the candlelight. The way the look in the morning in the unlikely event I woke up before whoever last nights she was. Hotel rooms, bedrooms, stairways, back seats, the amphitheatre stage of the Fresno zoo. So many places and memories. A plethora of memories of mammories, and the women attached to them. There have been magic moments of falling in love, star lighted nights of romantic bliss and a soft tender kiss. This, of course, being before the fucking hammers comes down and there are myriads of lawyers involved.

There has to be some talk of the stock market in any recall of my short stay here. I have toiled at many things in life. Dishwasher, cook, door-to-door salesman, car salesman and even an insurance agent. But I didn’t begin to come into my own until I realized I was spending more time trading options at the local EF Hutton office than I was selling insurance and sought gainful employment as a broker that I came into my own and started developing into the person I am today. I love the markets and have from day one. I have been privileged to have met and learned from several of the greatest investors and traders alive today, starting with a fellow broker in the Modesto, California dean witter office, a quiet unassuming ex nasd investigator who is a master at the art of value and distressed investing and to this day has the greatest ongoing track record of anyone I have ever heard of. He taught me the ins and outs of this business and although he is content to this day to work as a broker and makes his millions in his own account, eschewing the fund or hedge fund life for the quiet one he has, I consider one of the giants of the investment game. The free wheeling math genius in Weston, the inheritor of the Ben Graham legacy in new York, the car racing high performing value guy in LA, the growth stock guru from Lake Tahoe, the aged almanacer, the shaggy haired new yorker who married a beautiful boxing writer and has done more than okay in the markets, the inventor of the bands, the how I made a zillion trading this crap and moved to the virgin islands, all these and more I have met and learned much from all of them. So naturally we will have to talk some in this discourse on good trades, bad trades, epiphanies and outright fucking stupidities. In the midst of dumping the wanderings of an amorous and avaricious mind onto pages, do we dare discuss such mundane things as stock valuation, using quantitative methodologies to uncover value situation, the creative use of options to enhance returns on stock portfolios, societal and economic trends that affect the stock market and out likelihood for investment success. We must, dear reader, we must.

The friends must enter the picture here as well. From the kids I ran around with in my misspent youth, fighting, drinking, stealing and just trying to get dead or imprisoned before we could figure a way out. Sad to say the number that did not achieve even that very unlofty goal is too high to contemplate too regularly. I look at this mix of friends I have today and its a true mystery how in one mans ramble through life he could have picked up such an eclectic and wonderful group of friends. A semi retired options trade of notoriously regular habits. A tire shop owner whose affection for adult libations and naked women may surpass my own. A fast boat loving fellow broker who has become a fast friend and boon companion on many misadventures the past year or so. An Iranian Jewish futures trader who is so young I have shoes older than he is.but he is smart as hell and a damn good friend. A backhoe operator. A restaurateur. Traders of virtually every stripe in Chicago and new york. Guys from the old office in California I still talk to every day. Couple of doctors. A few nurses. Computer geniuses. Gamblers, lots of gamblers.A cloth shop owner in Kansas, A futures trading geologist. A publisher. Even a couple of lawyers. Ceos, Cfos, plumbers, builders, accountants They are here in Maryland, in New York, In Chicago, Cincinnati, Wisconsin, Florida, California, Virginia, conneticut,new jersey, Arizona,Kansas, Lousiania. Next to my children the biggest blessing in my life has been my friends.

There will be stories. Some will be hysterical. Some almost fucking tragic. Some lessons learned, many mistakes repeated. There will be no long drawn out boring discussions of what I learned at sainted ivy university. I didn’t fucking go. Could have. Was too busy being a screw up. Stories of how life on the road forced me to grow up a little and learn how to live. Of true love and failed marriages. Stories of my love and pride for my children, stories of being almost normal for a few years before the hedonistic madness sets back in. Of good trades and bad trades, champagne celebrations and hiding form the margin clerk whole vomiting in disbelief at how fast that went against me. Will there be stories of redemption. Unlikely but one never knows.

Having reviewed this, dear reader, should we write it?

Why the fuck not?

savage beatings and football

2007-11-29T12:11:00.000-05:00

Thank Christ. A break in the latest project as the somewhat twisted gold bugs have decided for the third time that we are changing direction on this book and we have to start over from scratch. With the outline I asked for the first day naturally. Ah well so I was three quarters done. I can use the break for fiscal crisis and financial meltdowns. Screw it, the check cleared. So I can take this brief break to write something of my own for a welcome change. We are deep now into fall marching to the precipice of winter and so far it is pretty uneventful. Except of course that sick sick, twisted weekend in Ocean City of which I have only the vaguest memories of long wavy hair, handcuffs, too many Manhattans (is there really such a thing?) shaky’s demented drunken laughter and some incident involving a one-string guitar. It must have been a hell of a time judging form the bruises and police reports.

College football has developed into an interesting year. What should have been an absolute coronation of USC and LSU as football dynasties has been turned into a very tight BCS race with Missouri and West Virginia the highly unlikely 1 and 2 teams in the standings. Maryland has been average with sophomore quarterback Chris Turner being brilliant when facing top ranked teams but woefully less so against run of the mill ACC teams. It does bode well for next year however to have a QB coming back as a junior. They are bowl eligible but does anybody but alumni really want to see this team play again.?I find it doubtful. Navy has been an outstanding offense team but ludicrously bad defensive team. They won what is now the highest scoring game ion NCAA history and finally beat Notre Dame after 43 years of losses to the Irish. Of course the Irish have not been this bad in 43 years but the win still looks good to the Navy faithful. All that’s left is Army-Navy this Saturday.

I know I comment on this game every year and I will try to be brief but I am going to do so again. This is not just a football game or even just the oldest rivalry in college football. Each and every young man on that field was a scholar athlete in high school and had a wide range of choices for higher education and athletics. All of the members of the brigade and the corps made a choice to enter the service if their country after 9/11 and after the start of the Iraq war. They know they are entering wartime service after they graduate. They chose to serve. That defensive tackle lowering his shoulder to take out the halfback of the opposing team may well find himself calling that guy for fire support next year. The safety who has clobbered the quarterback on a blitz is likely to be counting on that guy to fly air support as he slogs through the twisting desert sand as he chases insurgents. Opponents on the field and brothers in arms off it, these men deserve our support regardless of our feelings on the war. Looking at te resumes of past service men tells us that these young men on the filed, and the men and women on the field are the future of our nation. They are smart, they are brave and deserve out applause. GO NAVY!

ACC basketball is starting and the Terps look good. We are cursed with having North Carolina who is good enough to spank the shit out of many pro teams and the always good goddamn dukies in the conference but Maryland is young and coachable. They have played well against top teams this year including hanging in against #1 UCLA and beating Illinois last night in the big ten challenge. It is doubtful they can win the conference but they should be highly entertaining and win enough to get into the dance in march There will be some good college basketball stories this year. The Billy Gillespie era unfolds down in Lexington and we find out Saturday just how good he is when the cats take on Carolina and that phenomenal roster of freakishly good ballplayers. For now, Tennessee has replaced them as the toast of the SEC and if he expects to survive being lynched by the faithful he better be on track and soon. Racing season doesn’t start until April in Lexington and these people have nothing to do but drink heavily and watching Kentucky basketball. Everyone in town knows where Billy lives and if he doesn’t win he can expect to see a brutal pack of bourbon soaked blue-faced savages on his lawn before the winter ends. Memphis is playing a high paced game that leaves viewers winded never mind their hapless opponents. They may be the only team that truly challenges Carolina down the stretch. Going to be fun. Grab a beer and some hot browns and settle in.

Pro football. We aren’t talking about pro football. The freaking ravens are so bad they would struggle in Pop Warner for gods sake. No offense to speak up, no quarterback who has mastered the deeply complicated and complex skill of simply not dropping the fucking football six times a game and grasping the idea that you only thro the ball to people whose shirt is the same color as yours. They face the inhuman New England Patriots team on Monday. The line is 20 points and I think it might be too low. With the exception of a por outing against the Eagles last wee the Patriots have disassembled and disemboweled other teams this year and expect Belichick’s boys to be looking to improve over last week. $0 points might not be enough. The Colts are good but nowhere near the level of New England. This week also goes us Dallas against Green bay for bragging rights in the second best conference. They are both good and are probably playing for the rights to get their asses royally kicked by New England in February.

The stock markets continues to be a violent place with the mortgage and credit problems exploding across the financial markets with a diarrhea like splattering of asset write downs, loan loss provisions and earning reduction. The FDIC reported yesterday that write offs and losses at banks were at historic proportions unmatched since 2002 and 1987. The dollar is going down like a cheap tart in search of diner at Denny’s and if the Fed continues to cut it will continue to do so. I suspect the cuts will continue until fed funds trade unde 30-day tbills, which could have the effect of heightening inflation. The government continues to insist that with the exception of food and energy everything is fine. So out house prices are going down and the cost of eating, driving and staying warm are up. Sounds Perfect.

UI do think stock prices are rather steeply oversold here and may find a way to rally to year end. With that in mind, ad vol at good levels, I like the idea of selling puts on stock we like BGP,ICO,SYMC and CSE look like candidates to pick up premium and if the stock get put to me, I am comfortable owning them here. Along with my studious libertarian anarchist friend from Chicago I like the idea of being long the Swiss franc. Also I think that Eurodollar guy has a worthwhile idea with the money transfer stocks. I will be looking at these with the idea of selling puts to build a position.

In the long run, community banks are setting up a chance to make two and a half shiploads of money over the next few years. Many of what I call Jimmy Stewart banks are at or below book value and historically this has been a great place to buy them for large profits. I still dislike the money center and regionals but the tinys are appealing for the long run. SVBI is under book and a buy.ANNB is getting close. There are hundreds of these little banks across the country and if you get them near book and less than 10 times earnings it’s a steal. These are local guys; they don’t trade Cdos or other toxic derivatives. The only subprime loan they have is the one they made to their shifty cousin Leroy and that can be collected rather simply. One phone call to Aunt Ethel and she will administer a savage beating with a drumstick at the next family dinner until the worthless bastard, stinking of blood and day old gravy, shuffles in to make the loan whole. It’s a low risk business and what I think is a very low risk, high potential investment.

So we stand now on the brink of December the last bright month of the year before we descend into the despicable, dreary and dreadful crappy day of January and February. Soon enough the bay will likely be covered with a sheen of ice and nasty cold crap will fall from the skies and the damn wind will hit harder and quicker than Flay Mayweather ever dreamed of doing. But for now the bright lights began to sparkle across lawns and Giant Blow ups of Santa Clause and goliath size demented looking reindeer and elves dot the landscape. The bright call of the holiday rent the sky. Hey fuckhead get out f my parking spot” What the hell do you mean you don’t have any hooker barbies left. What the hell am I going to tell little Erlene!” Yes the holidays. An orgy of lights, visits from relatives we never really liked in the first damn place, shopping for stuff that will break by new years, Holiday parties where you accidentally end up in a closet with the chubby secretary form accounting and all the blessed events that make up the Christmas season. Here will be parties, bashes in the Chicago and this year’s inaugural bash for the Island of misfit toys. The tire man is getting married this month and one suspects the hangover will be felt by teetotal ling virgins in the woods of Minnesota after that one. I love this time of year as much as I hate it. Too much food, too much booze and just plain too much. I can hardly wait.

It is this time of year when one stops to ponder over ones life. Is it finally the time to admit that one is too old to continue reeling through life, scotch in one hand, cigarette in the other, one eye on the stock ticker, the other roving in search of Ms. Right or her twin sister Ms. Right now? Shouldn’t one be living a more serious, sober life as we head into the second half of life? Oddly enough I always arrive at the same conclusion. “Are you fucking kidding me?” Life is here; it is now. There are friends to make, love to fall into, lips to kiss, books to read, scotch to drink. Sunsets, Jazz, rock and roll, Beethoven and Coltrane, late nights, long talks, laughter to the point of unconsciousness, learning, loving, living and breathing. If this means that I eventually arrive at the pearly gates with my rock hard liver in a wheelbarrow and my lungs bleeding out my ears, it seems a very low price to know that while I was here, I lived ferociously. So bring on the holidays, light the tree, ring the bells and lets get on with it.

2007-10-24T11:59:00.000-04:00

Supposedly tonight will be the first game of this years World Series. The Boston area weather report casts some doubt upon that with an 80% chance of rain, but still it is timefor the fall classic. This years series has some great story lines. American leaguer versus national league. Junior circuit against the senior circuit. Good versus evil. Those scum sucking no good rat fink bastra..oop.. I mean the Boston red Sox with the best record in baseball against the unlikely Colorado Rockies. Boston's dominance of the league and of Colorado record breaking 20 wins in 21 games to get into the series. The Rockies were thought to be out of it as September rolled around. The Red Sox almost blew a 7 game lead with three weeks to go in the season. It has the making of, well lets be honest it has the makings of a boston blow out. They are too good. I hate them. I detest their trend following fleecer of the public owner. I wish Josh Beckett was an Oriole and that Curt Schilling would take his damn bloody sock and go back to the national league. I wish David Ortiz would get sucked into some magical vortex that made him disappear for the next week,. I wish, like Sampson, Manny Ramirez would get a haircut and lose the ability to hit a baseball. But, all of that is unlikely. They have the hitting, the starting pitching and as long as they keep Eric gagne away form the mound, the bullpen. Although Paelebon will probably have to get his era down. After all in the post season it ids a lofty 0.00! I hate them. I will be rooting for the Rockies. I suspect I will not like the outcome of this series. My only hope is that Big Poppi cant be DH in the National League Park. The man can hit but give him a glove and interesting things happen. However, the rat bast..I mean the Sox have home filed advantage so thats not really an edge. More of a delusion.

So tonight the field at Fenway Park( another reason to hate the Sox. What a great stadium!) will be draped in the familiar red and white and blue bunting. A celebrity of some sort will throw out the first pitch. It will be the world Series in all its glory. Except it wont. Today the SUper Bowl looms much larger across the sports landscape. SO does the NBA finals and the Daytona 500 for that matter. Baseball is losing its lofty perch as Americas pastime. Today we prefer the NFL with alls its violence,pageantry and barely dressed cheerleaders. MUch as ROmans eschewed chariot racing for Gladiators we have traded the stately game of baseball for the rock and roll fest of football. Please don't get me wrong. I like football. But I still have that decade long love affair with baseball. Not that , with my track record I have any knowledge of this, but I think baseball is alike a long term spouse for me. She's is perhaps fading with the years and to others she is not a s beautiful as she once was. But I look at her and see only the beautiful smiling young woman she once was.

I think back as I sit here to the first World Series I can remember. The Dodgers-Orioles of 19966. I was 5. I didnt know the combination of Drydsdale-Koufax were supposed to wipe the birds off the face of the earth. I just knew all my friends Dads were worked up about it and spent a lot more time playing catch with us and talking about the Orioles. I did not know it was considered something of a miracle that the Orioles won in 4 straight. I didnt know that it would be the last time Sandy Koufax would explode form the mound, curling and hurling his entire being into an exploding fastball or devastating curve ball. I just knew that my friends and I were enthralled and entranced by each and ever pitch. I fell in love with the game.I remember 1968 with the glorious matchup of Gibson and Lolich. Unfortunately I can still recall 1968 with the powerhouse Orioles being dropped in their tracks by the mets. 1970 with Brooks becoming inhuman to the point of godliness on the third base line, the return of heartbreak in 1971 with Roberto Clemente almost single handidly beating the Birds. The ,ong haired brightly colored Oakland teams of the mid 0's. Reggies three home runs to become Mr. October. I still cant hear We are family without recalling our second los to the pirates in 1979.Cal Ripken catching the final out of the 1983 series just days after my father passed away. One of my most vivid memories is reaching for the phone to share the moment with him before I realized he was no longer there to take the call.Th earthquake series when I lived in central California. There are literally too many to recount here.

Life has changed a lot since then. It was, I suppose, the legendary oft cited simpler time. We played baseball from sun up to sound down back then Kids play today but usually in organized little league and the game takes a second place to soccer and lacrosse here in the mid atlantic.No organized ball for us. In the street, the field across the street, the common area of the apartment complex. We didnt care where. We played with baseball cadged and cajoled from parents for the dollar was a big deal for a new ball. We played with tennis balls liberated from the courts of the upscale development across town. We played with wiffle balls and duct taped them when the splintered until the resemble silver orbs hurtling through the afternoon sky. Gloves were carefully oiled and wrapped each night.If it was raining on a Saturday we watched Joe Gargiola and the NC game of the week to watch teams from across the league play. We fell asleep with transistor radios under the pillow to listen to the RObinson Twins, Belanger, Powell, McNally, Palmer and Cuellar restore justice and righteousness to the universe in the form of 3 run homers and blistering fastballs.There was no umpire and balls and strikes were argued wit the intensity of the Mccarthy hearings.Baseball. We loved, played it, watched it, listened to it, talked about it. A simpler time.

Today, it moves too slow for most. The NFL and the NBA are the dominant sports. if kids play pick up games its probably hoops. Little kids dont get to watch in breathless wonder as the home team takes the filed in a blaze of popping flashbulbs against the red white and blue backdrop of the first game of the series. They are long in bed by the time the first pitch takes place. Life has changed. I look at the world around me populated with taxes,bills,ex-wives, ex-girlfriends, wish they were girlfriends, wanna be girlfriends and miss those days when all you need were a couple of friends, a battered mitt and dirty much abused rawlings to experience the sublime. I look at my son and feel a little sad that he never had a passion for game not involving a TV and controller.life has changed. hell, look at the markets. back then you had the American League and the national league and you had stocks and bonds. Today we have futures, options, options on futures, swaps, stradles, hedge funds, fund of funds, CMs CDO's and virtually every other derivative and contrived trading instrument you can think of. It is a small wonder that faster paced sports have replaced the timeless game of baseball. Still. I miss it.

I will sit this week and watch the games. I shall cheer, perhaps in vain, the Unlikely Rockies. I will curse the Red Sox. I will think back to a much simpler time. In all likelihood I will cook some hot dogs to watch the game. Instead of the cola in a paper cup of my youth it will be scotch in lead crystal glass. But a t some point I will, I hope reconnect with that little boy who held his breath as the teams took the field and the game got underway. With the teenager who could still be captivated away from teenage cynicism when Brooks Robinson stopped your heart with his spectacular play.With the young expectant father who missed his own. With all the moments and times and stages of my life when in October baseball was king and the World Series was serious.