Tea Parties and Stock Markets

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

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

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

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

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

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

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.

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

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

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