Wednesday, February 28, 2007

Today's close

I'm not sure why, but I was expecting a little more oomph, but we certain got a little less aaaaaaarrrgggggggggghhhhhhhhhhh!

The Morning After

I just wanted to post this snapshot from yesterday. We'll revisit in a week. Prognostications by any, and most assuredly me, are worthless.

Jose Ortega Y Gasset

Lauriston wrote the following: " . . . quote attributed to Chairman Mao Tse-Tung: "The mass of people is stupid!"

I was reminded (yes, here comes a reminiscence!) of Jose Ortega y Gassets Revolt of the Masses. Have you read this book? I urge you to read it. You'll recognize market behaviour!

I wanted to quote something from the book. I had the quote handy prior to my computer crash, so this serves as my "resurrecting" it if you will. JOYG (initials, not Joy Global!) in this book describes the rather frightful image of "mass man". If you have ever been one to think your own way and travel upstream rather than mainstream, you will recognize this immediately.

From Page 97. JOYG's intro into ordinary man, who guided by others, is thrust into self governance, accordingly there is this look at "this new type of mass man"

"If from the view-point of what concerns public life, the psychological structure of this new type of mass man be studied, what we find is as follows: (1) An inborn, root-impression that life is easy, plentiful, without any grave limitation; consequently, each average man finds within himself a sensation of power and triumph which, (2) invites him to stand up for himself as he is, to look upon his moral and intellectual endowment as excellent, complete. This contentment with himself leads him to shut himself off from any external court of appeal; not to listen, not to submit his opinions to judgment, not to consider others' existence. His intimate feeling of power urges him always to exercise predominance. He will act then as if he and his like were the only beings existing in the world; and consequent, (3) will intervene in all matters, imposing his own vulgar views without respect or regard for others, without limit or reserve, that is to say, in accordance with a system of direct action."
I always found the above helpful in understanding the lack of genuine non-partisan work. I think that the above can be attributable to any party in power in any country. And, I think that the above can be reduced to "The mass of people is stupid."


I've been at this blog since October 1. I do NO self-advertisemen of my blog. There are a few "blogger" land places that I comment (Random Roger, Tim Knight) and a just a couple of other places very sporadically where one could click on my name (like Z-stock did from Tim's) which would be a portal to here. I've been largely publicity adverse (1) because I wanted to see how this blog developed over time and (2) because I'm naturally that way. Accordingly, I've not entered my URL at Bill Cara's or Barry's--both of which places I post.

But as Russell notes, I have clever ways of attracting folks...there are millions of people daily doing a search of Montaigne and Santayana. Yep, they'll find me here. But remember that phrase "sex with strangers" in my last post? Yes, that will get the search engine humming and multi-millions will find there way here. Do not let yourselves get propositioned in the comments section!

I do appreciate your visiting and reading and the encouragement offered along the way. This will be my 188th post, but that includes my photo contributions. Writing this modest blog has been and continues to be a very enjoyable experience--not just the act, but the interaction, and I thank you for interactin.

Tuesday, February 27, 2007

Specialty Healthcare & Electronics

Specialty Healthcare. All in the red as of this post with HGRD leading the way. I still plan to pick some shares up and I have a buy order in @ 5.27 it is at $5.36.

Electronic Equipment: only three non-red: KEI, PTC & COGT

Upated 02.28.07: I picked up 500 shares of HGRD @ 5.27 and it closed at 5.37

It Matters when It Matters--It may be mattering now

I've confessed to being a private handwringer largely due to my training and experience, which required me to "prepare for the worst, but hope for the best." As I write this post, I’m reminded how similar investing can be to business planning. In business planning, you lay out your strategy, which is predicated on your making certain assumptions about your business environment and your organization's capabilities. Based on these considerations, you carefully craft a plan to execute upon that strategy. Included in that plan are milestones/thresholds that you reach and which it trigger an action step.

Having a plan with actionable steps at well defined junctures means simply this: when you reach that juncture, you execute reflexively. No second guessing, no head scratching, chin rubbing, pulling of hair, gnashing of teeth, weeping or wailing. You simply execute --like a hit-(wo)man calmly pulling the trigger because you have done the thinking beforehand. If you are thinking while you are executing, you are distracting yourself from the task at hand. To be sure, it is a good idea to make sure that your underlying assumptions makes sense. Naturally, if you survey the horizon and find that the sun is rising in the west and the earth is wobbly on its axis, then I would suggest NOT pulling the trigger and rethinking your assumptions!

Investing requires careful planning and reflexive execution. When you do the thinking up front, you take the emotion out of the back end of having to execute. And while there will be a host of people that tell you that macroeconomics don't matter and that the market is always right and you are engaging in a foolish past-time in trying to even make sense of it all, you would do well to ignore them. These are the same folks that will be telling you that one more drink will not matter prior to your getting behind the wheel and driving. These are the party boys and girls. Yeah they have fun, and they live in the moment, but they have lots of hangovers (and I bet that they have sex with strangers).

Well, IT MATTERS WHEN IT MATTERS. I think that all of the elements that have caused folks to hand wring are starting to matter. To this perplexed observer, the market is like a boxer in the ring with an opponent that is simply the confluence of all market forces. In the beginning, the market strong. Handsome, too, in its silk boxers (you pick the color). The market if full of inexhaustible energy. It is quick--dancing, ducking, punching--all the while outmaneuvering its opponent. But what the opponent lacks in quickness it makes up for in stamina and durability for it is omnipresent. And the opponent punches steadily with its reports on increasing inflation, warnings about asset bubbles, predictions about unsustainable debt, admonishments about corporate earnings slowdowns, wailing about the under-priced credit risks. And this match takes place in the center of the geopolitical arena--a generally hostile crowd that the market, with its earplugs and colorful trunks, is able to ignore.

But the opponent punches away--steadily, methodically. The market loses its bounce in its step. The opponent delivers a well placed blow to the head and knocks one of the ear plugs out. The market’s confidence wains. Suddenly, some blow comes out of the left--some exogenous event that delivers the knockout punch? Maybe. Or perhaps it is merely the “one punch too many.”

This is my own personal metaphor (poorly executed, but I don't claim to be a writer) to help me understand the market. Perhaps the making of a great investor is to be able to hold two seemingly contradictory ideas: (1) All things matter to the market; (2) They don't matter until they matter.

As an investor, understanding (1) that all things matter and the import of weight of those things enables an investor to assess risk. As an investor, understanding (2) that things don't matter until they matter and that the market is amazingly resilient ensures that you climb that wall of worry with the right equipment. Having your executable plan for when thresholds are crossed--which means having well defined exit strategies or well crafted hedging instruments in place--will keep you from being crushed when that wall of worry falls beneath you. I do not claim to have mastered any of this. As you know, I’m sharing with you my amateur ruminations. And I may never be a great investor, but I do know that it is important for me to be more aware of the world, and using the market place as a venue for cultivating that understanding is interesting and exciting to me.

Monday, February 26, 2007

Picking at a few items

I picked up the following oil service stocks: BAS and THE. I also have an IRA that can only be invested in Fidelity mutual funds (I've not converted it as I really don't need anything more to "trade"). I picked up some aerospace and defense and some energy funds with this dormant money. While aerospace and defense have done really well, I think that that we may only be seeing the beginning of a super cycle in defense spending.
Updated 02.27.07 6:33 p.m.: I may wish that I hadn't picked away!

China Housing

Read about it here:

Sunday, February 25, 2007

Pan's Labyrinthe

Do go see this movie unless you cannot abide subtitles. It's violent, humane and magical all at once. This is the second movie that I have seen by this director, both are told from the perspective of a pre-adolescent child trying to gain footing in an inhospitable world.

Stupid Stock Tricks

Yeah, it is a shameless rip-off of David Letterman's Stupid Pet Tricks, and I can honestly say that I've not seen it used yet in an investing venue, but I'm sure if I looked I find it.

Today, I thought I would bring you my USAP stupid stock trick.

If only I had gone long rather than shorted this stock! Anyway, I did cover my short before it really broke out. Not a successful short experiment.

I may offer a subscription to this website. The simple business model would be that I would post all of my picks and subcribers would be implored to take the opposite side of the trade for fun and $$$'s! Hopefully, I will not have lots of examples of the above, but I thought it fair to report back.

Saturday, February 24, 2007

Friday, February 23, 2007

Specialty Healthcare Watchlist--update

This list was begun on 01.16.07.

Electronic Equipment and Instruments--the bad

Here's the bad plus the amount of money that would have be made on this basket of stock of 100 shares each.

Electronic Equipment and Instruments--the good

In Foreclosure

Sadly, this house is listed in foreclosure. The note is for $627K. They are listing for $648K as you can see. I really do not see very many "jumbo" mortgages in foreclosure. But, prior to my starting this Friday ritual, it was rare to see homes with mortgage notes > $100K.

Trustee Sales

Well....the data is so skewed, I'm going to skip this week.

There are 2 commercial properties of $2.4M and $3.1M--both for apartments (which is now in its 3rd week).

Plus....there are 23 building lots in addition to about 22 other properties. Noteworthy is the fact that there is one for >$600K and >400K.

Assessment Side note

I thought that you would find this interesting. I was preparing my trustee sale information and there were two listing that did not have a Deed of Trust amount. I thought I could find it here, but it was not listed. However, I did find it interesting to see the increase in the assessment. Granted there may be significant improvements. But I'm going to look at a few others. There was a 10, 21, 56% increase in 2005, 2006, 2007 values. I imagine that folks are going to find it hard to pay for their ARMS along with increase insurance and taxes. This house is in foreclosure.

Thursday, February 22, 2007


I decided to pick up 500 shares, but only could get filled for 300 at my entry price. Small potatoes.

I think that I may regret this, but I unloaded my MIND position. I had a 12% gain that I wanted to lock in. It may just break out without me. I wanted to lighten up. I'm doing a little handwringing over the "stuff" going on with Iran/Russia.

Wednesday, February 21, 2007

Horse Frightened by Lion (G. Stubbs)

Declining Hegemony

Bill Cara posted a UBS Investment Research Piece "Global Economic Perspectives" (DEC 2006). I found the piece very interesting. This will be a rough post--I'm not trying to distill, merely communicate some points in the report from George Magnus. This piece really stuck in my head and I put it in my notebook. (I had also used a highlighter and margin notes! Marc Faber would have been proud of me!). I wanted to lift a particular section which was their "Known Unknowns for 2007". Some of these items are coming from "the decline in the relative power of the hitherto hegemonic United States: "

  • Decline in the relative power of the hitherto hegemonic United States and 10 sources of geopolitical risk:
    • Counter-insurgencies in Iran and Afghanistan.
    • Relations with Iran--significant adverse consequences for the global economy, energy prices (possibly) and financial markets.
    • Political violence in Lebanon and beyond (political sway and hydrocarbons)
    • Changing relations
      • Russian looking like more of an Asian Power due to its energy status, its demographic characteristics and its geopolitical interests
      • Sino-US relations that might deteriorate to the point of affecting our economic ties
      • EU project facing increased strains from Turkey
    • Strife and tension in Africa
      • Ethnic tensions
      • China falling in for natural resources which may bring it into direct conflict with other major powers and institutions.
    • Gobalisation's structural tensions and identity politics
      • Trilemma (Professor Dani Rodrik term) from economic integration among goals of deeper economic integration, natinoal sovereignty and democratic government. Generally can achieve only 2 of the 3 goals.
      • Ethnicity becoming a potentially dangerous issue
    • Erosion of our Institutions
      • Erosion of the institutions or of confidence in them (UN, NATO, WTO IMF/IBRD)...interests of significant new powers on the global stage seem either under-represented or not represented at all.
      • Confidence in US leadership low both here and abroad.
    • Energy and Raw Material Supplies
    • Climate Change
    • Pandemics
Currently, there appears to be developing Iranian tensions. The Economist had this to say in this week's editorial :"There is a real possibility that George Bush will order a military strike on Iran sometime before he leaves the White House two years from now."

Further, Russia is becoming belligerent in flexing its natural resources muscle. They are threatening to aim their missiles at their neighbors who support US bases: You can read the full story in the FT here:

"US lashes out at Kremlin over missiles

By Daniel Dombey in Brussels, Hugh Williamson in Berlin and Neil Buckley in Moscow

Published: February 21 2007 19:26 | Last updated: February 21 2007 19:26

Tensions intensified on Wednesday over US plans for missile defence bases in Poland and the Czech Republic, as Washington called on Europe to take a tougher stance towards the Kremlin.

The Bush administration’s two top foreign policy officials lashed out at Moscow’s campaign against the bases, which Washington insists are aimed at possible threats from Iran rather than Russia."

All of this amid the euphoria in the markets. . . a perplexion to this bystander, certainly. I think that these international tensions are real and they are frightening given the deep agendas and big egos of all involved.

Japanese rates went up to .5% from .25%.

There's been much opining about what a raise in the rates might do for the carry trade. I suppose we will see if the hand wringing and gnashing of teeth as forecast will materialize if this becomes a trend, but from what I've read. Here's an excerpt from the Financial Times:

"Great headlines, but the ramifications are altogether more modest. Outside Japan, investors can shrug it off. Raising interest rates 25 basis points barely moves the needle on the carry trade, since volatility is low and yawning differentials still exist with the major currencies. Indeed, some may even be unaffected. Tightening is on the cards in Europe. Just hours before Bank of Japan Governor Toshihiko Fukui spoke, his opposite number in Australia signalled further tightening there and New Zealand is expected to hike next month. So Japanese investors’ yen for Aussie and Kiwi dollar uridashi bonds will be unabated."

Santayana Poem XI

You'll read this and see why I chose it...

Deem not, because you see me in the press
Of this world's children run my fated race,
That I blaspheme against a proffered grace,
Or leave unlearned the love of holiness.
I honour not that sanctity the less
Whose aureole illumines not my face,
But dare not tread the secret, holy place
To which the priest and prophet have access.
For some are born to be beatified
By anguish, and by grievous penance done
And some, to furnish forth the age's pride,
And to be praised of men beneath the sun;
And some are born to stand perplexed aside
From so much sorrow--of whom I am one.

The last two lines sort of some up my feeling about the market--and I have definitely stood perplexed aside. {as a side note, Santayana was raised Catholic, his parents were Deists , and as an adult he was an atheist (and a homosexual, not that it matters) with a very deep respect for the religious symbology.} I still will always marvel at this man's ability to express himself so poetically in a language which was not his native tongue.

Tuesday, February 20, 2007

A Santayana Poem Selection

It's been a while since I've shared a poem. I thought this a beautiful poem of grief. Sadly, we all experience the grief of losing a loved one. I thought this a beautiful sentiment and wanted to share. I thought the last two lines (which I've marked, to be particularly compelling):

To. W. P.

With you a part of me hath passed away;
For in the peopled forest of my mind
A tree made leafless by this wintry wind
Shall never don again its green array.
Chapel and fireside, country road and bay
Have something of their friendliness resigned;
Another, if I would, I could not find,
And I am grown much older in a day.
But yet I treasure in my memory
Your gift of charity, and young heart's ease,
And the dear honour of your amity;
For these once mine, my life rich with these.
And I scarce know which part may greater be,---
What I keep of you, or you rob from from me.

The Little Guide to Your Well-Read Life

by Steve Leveen was one of the books that I pulled off of a bookcase. It's a deep bookcase, so that books can be two rows deep. It is not a show of disrespect to place a book in the row furthest back, but rather it's an honor. For it means that I had that book carelessly strewn about and picked it up first to give it a more dignified residence.

My Marc Faber post and Banker's comment incited me to rummage through that bookcase. I found The Little Guide languishing on the back shelf, but in exquisite company. A fellow book lover and former manager of mine (pres of company I worked for) gave this book to me. The subtitle of the book says it all
"How to get more books in your life and more life from your books".
I read the book again, and for you readers out there (and you all must be readers because you read blogs) I would recommend this book, or any book that allows you to capitalize better on the time that you spend on books as well as planning your reading. I must admit that I prefer a serendipitous reading route as I do most things in life. But folks that like to stay on a predetermined path, may find a more well-planned course to be preferential.

One of the tools that Leveen talks about is how to mark text. I have no problems marking text in books that I own. (But I would have rather had those little flags that I mentioned to Banker some years ago to mark pages where I had markings). Another book that I resuscitated was my copy of The Philosophy of Santayana-Collections from the Complete Works, edited by Irwin Edman copywright 1936. I believe that the first owner of this book, Richard. C. Rowland (his name neatly penned in blue ink from a fountain pen) on the fly sheet. I did a Google search and found the following.

Richard C. Rowland, retired professor, Portland, Ore., on March 14, 2000. Rowland, who was a Kellett fellow from the College, received a second bachelor’s degree from Oxford in 1940 and a D.Phil. in 1957. He taught at the College from 1946 to 1953, then at Rollins College in Winter Park, Fla., from 1955-57. He joined Sweet Briar College in Virginia in 1957, where he established the Asian Studies program, served as chair of the English department, and eventually became Charles A. Dana Professor of English. His many honors included a Ford Fellowship in Asian Studies, a Fulbright lectureship in Taiwan, and election as an honorary member of Phi Beta Kappa, the only honorary membership in the Sweet Briar chapter’s 50-year history. He retired to Portland in 1998.
I do not know if this is the RCR that owned my book, but I think that it is a good chance that he was. He died in 2000 which is where I found this. (Note that I did this search before and I came up with nothing. I literally just found this as I was writing this entry.) I picked up Santayana's work in a bookstore in Lynchburg, VA: The Little Givens Bookstore. Sweet Briar is not far away. Little Givens sell new books, but they have an extensive used book section. I visit them each time of visit my sister and always come away with an armful of promised erudition).

When I picked up Santayana, I was spellbound. I opened the book and from every page sprang so deftly crafted with the most alluring cadence that I found myself entwined in an arduous embrace from which I never wished to be disentangled. I still feel that way when I pick up Santayana. I must find the 2-3 other books that I bought at the same time.

So this book, well-loved by Rowland as I see his marks of text, is now well-loved by me, and hopefully after me, it will be well-loved by someone who will have a deep appreciation for both the art and content of Santayana. The point is that we tend to NOT mark the books we own. I remember reading about A. Schopenhauer, curmudgeonly philosopher (whose works I've read) whose notes, always in pencil, were so vigorously marked on the text that they often pierced the page or it was apparent that there was lead breakage. With his intellectual fierceness, it is only natural that such energy would travel from his brain down to his hand where he brandished the pencil as a small armament.

I really spend no time thinking about what legacy I might leave to others--that's a bit too arrogant for my taste. But it would bring me great joy for someone to pick up a text that I have loved and marked and find a passage within it that spoke to him or her much as it spoke to me.

Sunday, February 18, 2007

New Page Element

I've added the moon phase, for no other reason than I could. My husband, who is jubilant because he has won the NASCAR Daytona pool overheard them saying something about the moon. Well, I knew it wasn't a full moon, as I've nearly fallen in the ditch taking the dogs on p.m. "business" walks due to it being so dark. We're gardeners, too, so we are rather attentive to the moon (unless you worried that I was burying goat blood in sacred holes during specific phases). I also have an atomic clock which gives me the moon phases, so THAT told me that there was no full moon.

I have a Schmidt-Cassegrain telescope. I bought it for my son's b'day (and for me) some years ago as I had an interest in astronomy. For his birthday, we invited over several of his friends, made homemade pizzas from tortillas and such. I also bought from Edmunds Scientific a planetary guide. It was loads of fun. I've only had a few b-day parties for my kids--I've never considered it an imperative.

One of the super-coolest (does saying that make me sound so old) things we ever witnessed were the moons of Jupiter. It was during one Halloween and it was a beautifully clear night. The moons could be seen as pin dots, but they were visible. The other thing that is neat about that telescope is that it has a rotator calibrated to the earth's rotation. So the the super-duper-coolest thing is to focus on the moon and then watch it slowly move out of the field of view--watching the earth's rotation.

Despair, Inc.

If you don't take yourself too seriously (and if you don't suffer from having an over-active self critical mental talk radio channel), then I would recommend your taking trip to

I actually ordered some product from this company for an executive planning meeting that I was leading to make a point with my colleagues.

Saturday, February 17, 2007

From Marc Faber

The below link will get you to this text.
"Everybody gets so much information all day long that they lose their common sense." Gertrude Stein

For intelligent investors to read, watch, listen to and surf all the business news that is now available is simply impossible. We must be extremely selective in the allocation of our information-gathering time. In addition, it is not only important what we see but how and when and what we do with the information we collect. My memory looks like a filter with large holes; I take notes and file articles; I always read with a pair of scissors in my hand. I have files on a very wide range of subjects, such as capitalism, globalization, poverty, economic history, psychology, sports, smuggling, economic geography, fraud, the Wall Street industry, dubious practices, mutual funds, art, collectibles, countries, industries, forecasts by market gurus, plagues, commodities, economists, prostitution, brokerage reports, big lies, the IMF, business failures, the World Bank, economic sophistry and literally hundreds more.

I also think that, given my poor memory, it is important for me to file the collected information myself. First of all, it forces me to really read everything in order to know which file something belongs in, and if I file it myself, I may actually manage to find it again. I photocopy articles that I find particularly informative and put a copy of each in many different files, which increases the odds of finding the desired information again.

In general it is quite useless to read something without taking notes or filing it. Ninety-five percent of what we read in today's paper will be forgotten tomorrow morning. (Do you remember what you read in yesterday's paper?)

How should you read? If you have an important meeting at 10 a.m., I doubt that you can or should do serious reading just before rushing to that meeting. Also, if you are continually interrupted by telephone calls and colleagues barging into your office, your ability to concentrate will be significantly curtailed. Demanding articles and reports ought to be taken home or read in peace on a train or plane. I read with a glass of whiskey to boost my spirit, usually between midnight and 4 in the morning, after dinner and a nap.

I read just about anything that comes across my desk, but most of it very superficially. In the morning I focus on the Wall Street Journal, the Financial Times and the International Herald Tribune. I think that the three are fabulous papers, each for different reasons. The Wall Street Journal I read for its coverage of the U.S. economy, its outstanding editorials and articles about the lives and economic conditions of ordinary people in America. Personally, I don't know any other country in the world with such a great paper on domestic economic issues.

For international news I regard the Financial Times as the best source of information. From time to time it also publishes extremely well-researched and thought-provoking articles on a very wide variety of subjects and regularly produces detailed country or regional reports. The International Herald Tribune I love for its outstanding coverage of geopolitics and, it being associated with the Washington Post and the New York Times, for its sharp editorials. I also read it for its sport coverage. I may add that both the Financial Times and the International Herald Tribune have great weekend editions, as does the New York Times.

Naturally, I also read magazines and the one I enjoy the most after Forbes Global and Forbes, of course for social sciences is the Economist. The other publication I read with delight is the Spectator, a right-wing British publication that does not mince words. Its contributors are of extremely high caliber; they write in a somewhat difficult English but always manage to bring a different perspective and also, therefore, a controversial view into focus.

I also read a large number of brokerage reports and investment newsletters as well as books. The two books I recently reread, which I just love for their excellent insights into financial markets, are "Psychology and the Stock Market" by David Dreman, (AMACON, New York 1977), and Manias, Panics, and Crashes (third edition, John Wiley, USA, 1996) by the, in my opinion, best financial market historian, the late Charles Kindleberger. Both books are great reads, especially in the context of the NASDAQ's recent collapse.

But remember: The mental digestion and interpretation of what we read is the most important part of acquiring knowledge. That is why I suggested earlier that you read demanding articles and reports only when your mind is completely at peace and best of all with some nice wine or whiskey.

Remember this, too: Don't read only for the sake of acquiring money and knowledge; read also for the beauty of the language and for the pleasure that a well-written report or book can give you.

Your Continuing Erudition

My father sent the link below which is a very specific link to planets in the universe. If you have a young person in your life, this would be a nice journey for you both to undertake together. The above link is the master entry for Oracle's "Thinkquest" site.

It's worth a look.

Friday, February 16, 2007

Book Club

I don't know if I've shared with you that I'm in a book club. It's an interesting group that runs the gamut of ideoligies. We read mostly non-fiction; and I've been part of this group for about 8 years. This month's book club book is "Letter to a Christian Nation". I'm going to start it this p.m. It's all of 82 pages, so one way or another, I will have achieved the success of finishing the book prior going to Book Club(BC). Guilt-free. This is one of those books that also has a page that tells you the typeface. The typeface is "minion". It's not one of those types that I can select in my Word documents.

Our BC has a lovely format. One member hosts a dinner and all of the others bring dinner accoutrements--bread, wine, appetizer, salad and dessert. It's a wonderful format. It is relaxing and enjoyable. It's a very erudite group (excepting me) and we have lively discussions. Our BEST discussions are when there is polarity. When you have polarity you have all of this interesting middle ground that is heretofore unexplored. And plowing that ground through civil discourse is one of the most enjoyable human interactive experiences.

I also picked up Collapse, How Societies Choose to Fail or Succeed, by Jared Diamond--you may remember him from Guns, Germs and Steel fame.

Last pick is Train Your Mind Change Your Brain--How a New Science Reveals our Extraordinary Potential to Transform Ourselves, but Sharon Begley (WSJ science columnist). Perhaps you will see a difference in this blog after I read and integrate these concepts into my whatever.

Russell has probably read all of these already!

I'm off now to read my 82 page mini-tome. Enjoy your weekend. And....feel free to share what you are reading. If you are every looking for some better than average icebreakers in meeting new people, just ask them..."What are you reading these days?" It's a great conversation starter unless they don't read a damn thing and you somehow manage to make them feel badly for it.

This Market

First, this market is unfathomable to me. As I reflect on my assessment of the market--and I say this being a reasonably intelligent individual--I just stand in awe to watch the euphoria against the backdrop of what I see as some pretty nasty stuff (predominantly a slowing economy due to several areas of deceleration). It's that wall of worry, but HOW do you know when that wall is crumbling? There will always be worries and the market will climb, but how does one develop a divining wand that directs you to the sidelines, for if you continue to invest money and the market pulls back dramatically, you will find yourself pitiably offsides?

Friday Trustee Sales

Options Article

Frequent commenter, Nona, passed along the following article from the NY Post.

Thursday, February 15, 2007

The Illusionist

no....I'm not referring to Ben Bernanke (who by the way I have the utmost respect for), but rather the movie with Ed Norton and Paul Giametti.

If you've not seen it (and I really don't think that it had a very large screening), I promise you that you will find the acting superb and the characters both powerfully acted and charming.

The movie feels very authentic as it is shot in Prague. If you see it, please let me know what you think--even if you have to pull out one of Samuel Johnson's buttons (ninnyhammer springs to mind) to throw my way for recommending.

Also, thanks for the terrific comments on the last post. I really do appreciate people visiting, reading and commenting.

Wednesday, February 14, 2007

Specialty Healthcare Watchlist--update

I wanted to provide an update to the Specialty Healthcare watchlist that I began almost a month ago. Remember, I'm not providing any stock tips or investment advice, but rather am sharing with you some of the stuff that I'm looking at plus an occasional gaffe or success.

There are a 3 stocks on this list that I find interesting and will do more research on for myself: DVA, FMS and HGRD.

DVA (Davita) and FMS (Fresenious "fruh-si-nee-ous"--I'm sure Webster would note the pronunciation differently) are both dialysis providers. Unfortunately, dialysis will continue to be a growing business. Davita notes in their most recent earnings release that their revenue increased because they administered more treatments. Unless we Americans find a way to reduce the incidence rates of diabetes and high blood pressure, the two major contributing factors to chronic kidney disease, they will be able to write that script for years to come. I don't think that we'll change our lifestyle or demographics (aging population) quickly enough to make a dent in their numbers. Fresenious is another leading renal care company. They are German owned. Recently Fresenious announced with Amgen a joint effort to test Amgen's Aranesp--a drug to help treat anemia in dialysis patients.

I used to have hard fast numbers, but alas, that was another lifetime. So, I'll just tell you this...renal failure is a booming business. Did you know?......If you develop renal failure (or End Stage Renal Disease"ESRD") your costs are on the health plan's nickel until about your 33rd month. After that, Medicare pays for your expenses should you live that long. An ESRD patient costs on average $100K per year for a health plan. There was some proposed legislation rattling around to increase that time period for three more months. At $8.33K per month, that would be another $25K moved off of the government and back onto the health plan. So Medicare reimbursement rates go along way toward affecting revenue of these providers, and those rates are lower than the commercial payors.

Healthgrades (HGRD) interests me for two reasons (and these guys popped before I finished my noodling on them as they caught an upgrade. I've not position..YET). First, quality of care is a big issue in the healthcare field--and you'd be surprised by the divergences in care among healthcare providers. In fact, in Bush's speech last week, he mentioned quality of care. Healthgrades provides information about different providers. Trust me on this....this is a heckuva business model. They are projecting their revenue to grow 30% this year, and their P/E is 65+. Second, and this is definitely blue sky speculation on my part, I think that these guys would make a lovely jewel into a more comprehensive product suite. In fact, I would see them as being a pretty interesting target for someone like WEBMD (WBMD) or Healthways (HWAY). A very logical fit into a suite of comprehensive health services.

So let's see what happens with these folks in the future. I'd like to pick up some HGRD on a pull back. Here's a chronic problem that I's hard for me to pay a p/e of 65 for a stock. I couldn't buy AKAM when it had its very first break out when it was in the low 20's. I waited for a pull back that never materialized. Oh well, could, woulda, shoulda doesn't work--and THAT's a measure of success for an investor to be able to say that.

Tuesday, February 13, 2007

Chris Perruna's Blog

Chris Perruna has a wonderful blog. I think that you may enjoy reading the current post here entitled, Don't Forget About Past Trades.

Sunday, February 11, 2007

AME: Middle Eastern News site for You to Peruse

As I was looking for G-7 information, I came across this site, AME Info. It is concentrates on Middle Eastern News. They also publish some of Marc Faber's monthly commentary. It might be worth a look.

"Banker" asks....

about my views on the G7. I'm embarrassed to say that I don't have any well-formed views, but the question serves as a provocation for further exploration. Bill Cara recently opined that the Central Banks should not be independent of government. That comment, and MY WANTING to have an opinion on it, but my lack of knowledge found ME WANTING.

I have a meandering point, so bear with me......

I'm too cheap to hire people to clean my home or do my laundry. Both are really time consuming, and if you came to my home unannounced you'd see immediately that I don't spend much time there! But if you were an invited guest, my home would be pristine (though you'd be politely confined to the lower level) and you would be able to eat your dinner off the floor it would be so hygienic.

I don't watch much TV. If I'm home, though, I'll keep CNBC on in the other room while I'm engaged in other activities. When I do watch TV I fold clothes (it helps me feel like I'm not being a complete time-waster). In fact, I find folding clothes oddly therapeutic (it helps me recover from those oddly maudlin moments that Russell points out!). I even have one of those shirt folding contraptions that helps you get the T-shirts just so. It really does work.

One show that I enjoy is America's Test Kitchen on the public TV station. They test and modify many recipes as well as conduct tests on kitchen gadgets and taste various prepared foods. Yesterday it was refried beans that they were tasting. As all of the tested products were so bad, they felt compelled to come up with a recipe that you could make in 20 minutes with canned pinto beans.

It was a terrific inspiration, and as my husband loves refried beans, I made homemade chicken enchiladas, Mexican flan and the re-fried beans. The mole sauce for the enchiladas was homemade too, and nothing fills your home with such a tantalizing aroma as making that sauce! The meal was beyond delicious, but fairly labor intensive (I started with uncooked, whole chicken). But the dinner reflected the labor that went into it.

My point is simply we expand our knowledge domains, we bump up against "stuff" that leads us a little further along. Banker's comment about the G7 as well as Bill Cara's comment about the need for central banking integration with government are two areas that I really don't know very much about. So I'll pursue that, and that better formed knowledge will make me a better investor AND a better world citizen, just as being inspired by a recipe makes me a better cook. [I would say that it will be interesting to watch how China is treated in the upcoming years and whether or not we have an advance of the number 7 to 8 or if someone gets kicked off the G-7 island! (1)]

Despite one's inspiration and perspiration to build anything of meaning (a meal, a portfolio, a business, a relationship), a careless moment can bring it down irreparably. Accordingly, vigilance must accompany all worthwhile endeavors.

(1) I make this remark having NEVER watched survivor NOR American Idol.

Friday, February 09, 2007


Yesterday was a fortuitous dump of this stock. It is down $4.59 today after being down 2 yesterday. I'm glad that I trusted my judgment.

Trustee Sales

There are two commercial properties in the numbers above--both of them apartment buildings in renovated section of Richmond.

Anna Nicole Smith

I note on Rev Shark's blog on Real Money a blogger wanting to know how to short Trim Spa after learning of Anna Nicole Smith's death. I couldn't help but be a bit saddened that in the wake of a tragic death someone is looking to profit from it. That's the world we live in though, and I suppose it is not much different than shorting a stock because lots of folks are defaulting on their loans. A financial tragedy for those folks.

I don't know much about ANS other than the titillating stuff (Playboy Playmate of the Year, topless waitress/dancer? and her marriage to the profile of my next husband, a very rich, elderly man and the subsequent legal battle over inheritance). I did stumble upon her reality show once, and it was akin to watching a car accident or a train wreck--the unfolding of what you were watching was so horrible, but you could not avert your attention. Yet even with this embarrassing mesmerization, I asked, "How can they put stuff like this on TV?" It's the same content machine that brings us the OJ Simpson, "If I did It" concept.

We're mesmerized by this stuff--that is why we have such content.

Culture gone awry. (Note meaning to sound moralizing.)

Thursday, February 08, 2007

Electronic Equipment and Instruments

I've created a new watch listed called Electronic Equipment and Instruments. I like to have my own list of "stuff" to watch rather than relying on stocks that are touted in the mainstream media. I've always made my best investments when I've understood the company (10K's, conference calls) and I've watched it for some time prior to making an investment. Being a more patient investor is my mantra this year. And with cash earning 5%, its not a bad dividend to get every month.

I thought I'd share this watch list with you. I'm not a clever enough girl to know how to upload anything sophisticated, so I'm breaking this watch list up into 2 parts--today's period to date winners and losers, as that is what fits in the window that I'm taking a picture of. This watch list has a purchase date of 02.07.07. So, I'll be nosing around and learning about a few of these companies over the coming weeks.

Here are the winners (click to enlarge):
. . . and the losers (CTE)

Loan Loss Provisions

Here's the headline from FT today regarding HSBC's loan loss provisions:

shocked investors on Wednesday night by warning that its US mortgage business would push group bad debt provisions for 2006 $1.75bn (£888m) higher than expected. . . .

"HSBC said in its statement that pressure on house prices had translated into worsening defaults as borrowers were less able to refinance loans. This is also likely to lead to defaults as borrowers on floating rate mortgages struggle with increased monthly repayments.

HSBC said: “It is clear that the level of loan impairment provisions to be accounted for as at the end of 2006 in respect of Mortgage Services operations will be higher than is reflected in current market estimates.”

If you are a Financial Times subscriber, you can find the story here

I mentioned earlier, in relation to FED, that I didn't believe that we had fully seen the impact on loan loss provisions for more mainstream banks. One of the perplexions that I continually have with the market and investing is the notion that the market is so efficient and smart in its discounting of knowable things. It really isn't that smart, and one can merely look at the treasury markets last year and the perennial up/down reaction to homebuilders' news. It always gets smart, and gets smart fast, though once it catches on!

I have said in more than one venue that there could not possibly be a bottom in the homebuilder market until the builders started writing down asset classes--getting hit in the balance sheet where it really hurts. That only STARTED this quarter, and the management team at HOV expressed "surprise" at how far down the market has gone.

Calculated Risk
(which I was just going to and see that they picked up the HSBC story from Reuters yesterday) has done a tremendous job covering this area.

Wednesday, February 07, 2007

Backhoes, MIDD, MIND, Valentines Day

Backhoes: A neighbor's backhoe work put our cable out of commission. Bad news when you're hooked on the show 24. We missed it, but alas, no harm other than listening to husbando's grousing.

MIDD: Russell's observation on this short was on target. If you read that I short something, I can almost guarantee that if you go long, you will make money.

MIND: Takes the sting out of MIDD. This is a position that I established in mid-December @ $11.16 and sold at $13.80 in a non-taxable account. I've been watching the stock since then and reestablished a position in my taxable account. It is behaving well with a 14.7% gain so far. I'm watching it closely.

Valentine's Day: Take my advice on this guys---DO NOT give your significant other (SO) a VT Teddy Bear or a Pajama gram that they are panhandling on TV. Here is my suggestion (trust me, she will remember this). Your tastes and your SO's may run differently--revise accordingly. The general theme is YOUR being more thoughtful and solicitous than normal (even if you are normally thoughtful and solicitous).
  • write a note (no, not signing a card) telling her how much better a person you are because she is in your life;
  • make/purchase dinner and include wine-- For those with a clue, fix your favorite quick, delicious dinner. For those without a clue, here's a suggestion:
    • buy a roasted chicken at your market. You will not have to cook this, but you will need to procure and cook the following:
      • Purchase some red potatoes and one bunch of parsley. Try to get similarly sized potatoes. Get 2-3 potatoes per person if your kids are joining you--if they are, get them to help. Wash these. Put them in a pot and add enough water to cover at least an inch. Add salt to water and bring to boil. Once boiling, turn down to simmer (just below boil)--medium to medium high heat. Cook them for 20-30 minutes until a fork tender. Don't overcook. You can smash these or just quarter them and serve with butter and chopped parsley (wash the parsley, dry it on a towel and chop the leafy part.). Do not cut your fingers.
      • Purchase one head of broccoli. Cut off the stalk about 1 inch from the head. Steam the head for about 7 minutes. ( DO NOT OVERCOOK). Season them with butter salt and pepper or drizzle Italian dressing on them. They are plain, but manageable. [If your market has precut broccoli, go for it! OR...make a salad at your market to bring home.]
      • Buy a loaf of crusty bread at your supermarket bakery. Look for one of those artisan breads or just get a french bread loaf. Follow the directions on the package. (In general, preheat your oven to 350 and put the bread in while it is heating--set your timer for 10 minutes and look at it. You might need a few minutes more. ) Don't burn the bread! Set your timer.
      • Get a purchased dessert--cupcakes with candle would be nice. Ask for the candles if you do not see them. They will be a special touch.
      • Wine? Look for a Sauvignon Blanc or Chardonnay. Do not get the cheapest. Kendall Jackson makes a decent SB and that will be in your store. Want a really nice one? Get a Kim Crawford. To chill, put the bottle in the freezer for 20 minutes or the refrigerator for 1 hour before dinner.
    • Buy your SO a pretty silk slip at Victoria's Secret. They're comfortable and pretty. Note your SO's bra size and underwear size. Slip your handwritten note in this box.
Remember to tell her that you are taking care of dinner that evening. Otherwise, you will have an awkward moment, and what was meant to surprise and delight will just frustrate.

If NONE of the items above would seem unusual to your SO, then you are quite evolved and I bow to you in honor.

Friday, February 02, 2007

Samuel Johnson Ninny Buttons

Through our lives, we strive to hone many skills. No skill is more useful than an artfully delivered put down. As you work on this skill, you must have the right tools. Here are a dozen of S. Johnson's (who was the king of acerbity).
  • blunderhead
  • fopdoodle
  • high-viced
  • lackbrain
  • oysterwench
  • scambler
  • slubberdegullion
  • tosspot
  • pickthank
  • draffy
  • ninnyhammer
If you can not bring yourself to use these words in polite conversation, you can purchase these magnetic insult buttons at Levengers for a substantially reduced price. You may also need SJ's dictionary so that you can understand what some of the more elusive words (e.g. slubberdegullion) mean.|Level=2-3|pageid=3843|Link=Txt


Today is a day off from client work. Yesterday, Fedex brough to me Homer. That's the name of this filing cabinet/bookcase that I purchased from Levengers. It's pretty cool. It has three drawers (bbf)--that means box, box, file in furniture vernacular. Box drawers are small drawers, and file drawers are for, well, files.

On the opposite side of the file drawers is a book shelf and periodical rack. It was quite a good savings. I thought it would be a nice addition to my office--specifically, I could keep all my investment stuff on it. Books, files, research. It rolls on casters, so you could scootch it all around to have files facing you v. bookshelves.

I'm proud of myself that I put it together by myself. Unfortunately, due to brain wiring that is inexplicable to me on most days, I had to put some of it together more than once. It comes with everything, even a screwdriver. But all of the metal is crappy, and you can wring the screw heads if not careful. It took me a couple of hours, but I love it. My fingers are very sore from screwing in all of the parts. I looked for my husband's battery drill. I couldn't find it. It is probably just as well, as I can nearly guarantee that I'd be driving a nail through something irreparable.

I'm also setting up my Excel worksheet for using pivot ranges in Mark Fisher's, The Logical Trader. I'm not a trader, but I need a framework, otherwise I will rationalize myself in and out of a position. I like his system. I had set up a very elaborate spreadsheet back in the Spring for all of my positions. I also had a macro that I could use daily to reposition all of the prices to calculate a new daily pivot point base on the previous three day's data. With the macro, I was only entering just one day's worth of prices, and I didn't have to copy and past. So I'm attempting to duplicate that.

Though I've been without my excel worsheets for a while do to a hard drive meltdown. I have used two concepts religiously: (1) never buy anything for the first 20 minutes of the trading day; (2) wait for a price to stability for 1/2 the time of your opening range time frame (if you are mapping an opening range for 20 minutes, you would expect the price to sustain a point that you've determined for at least 10 minutes before making a judgment as to whether the trend has changed.) These two simple rules have allowed me to keep my wits about me when it appears that price movement was going in such a way to make my heart pound (good moves) or cause unmentionable parts of my body to seize up (bad moves).

When I complete refining my worksheet, I'll post a shot of it.

Let's hope Homer stays firmly together.

Friday Trustee Sales

Molly Ivins

Molly Ivins died yesterday at age 62 from breast cancer. She was a columnist whose work I admired. She was a regular irritant on the editorial pages of the Richmond Times Dispatch. Richmond is quite the conservative town, so Ivins with her jaunty jabs at all things that conservatives hold dear was a regular lightning rod for letters to the editor. I'm glad that I wrote (and they published) my missive defending her work.

I occasionally get worked up (from the other bent) about things I read on the editorial pages of the paper. I spent an entire day researching the facts of a particularly inflammatory editorial about how poor men shouldn't be allowed to have their Viagra pills subsidized by the government (I'm not inviting discussion on that topic) and crafting my letter. To the paper's credit, they published my letter (and also conferred a "Correspondent of the Day" status to it).

There is always a little thrill (for people like me at least who lead unthrilling lives) when you see your name in print. I read an article in Barron's (horribly boring stuff about the upcoming FAS disclosures required of companies for the pension obligations) but I was incensed by the author's position. I was absolutely tickled that they published my letter. I'm not a bragging person by nature, but I bragged about it.

So I can say that my content shared the same pages as Molly's content, though her writing was luminous and mine was merely taking up newsprint real estate. And one needn't agree with a writer's opinions to recognize the importance of the sharing of his/her voice and perspective to round out discussion on matters of import. I applaud her courage to be an independent thinker and admire her talent to voice it in a way that shocked and entertained. I hope that should I have to fight a health battle such as hers, I could do it with measures of the grace, valor and most importantly, humor as she modeled.

And if you want to read an interesting blog entry about Molly, and visit an language blog go here.