Blog Friends Fur Friends

I wanted to share some pics of fur friends of Blog Friends from Rev Shark's blog on Real Money as well as from readers here. It's a nice way to personalize the online experience a bit and sharing something that you love (and loves you) with others. I've made this a permanent tab on my blog header area.

I'll let this picture of Macy as a pup grace the top spot. It is one of my favorite pictures that I've ever taken.

Here is one feathered friend that will always shock and surprise. Here is original art from Russell120--our friend, The Black Swan:








TA Kitty's able prescience with respect to coming market events is world renown. To the left, TA Kitty warns of an approaching black swan reminding us that though we should be vigilant, by its very nature, a black swan event cannot be anticipated in advance.







TA Kitty (like many technicians) utilizes different tools. At one time it was a sock, and once that caught on, it was no longer useful.

Colorful ribbon has proved to be a valuable though elusive tool. TA Kitty tires of trying to understand the tangled message in this presentation and is hoping that by resting she is also subliminating the important message. Or perhaps she is just reading the tape. Cats are elusive and are not quick to share their secrets.

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Here's a picture of TQ's, Sweetie

"This is the picture featured on the Rescue Shelter's website and told me this little girl needed a mommy." Scroll down to see me with my new friend!
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Below is Ron's (captronva) Muffy who contracted renal disease most likely from tainted dog food.

"Our dog (Muffy) for 11 years was the best pet we have ever had. I picked her out of a litter of five other puppies. She was so shy. I put her in a cardboard box in the back seat floor and brought her home for my daughter who was ten at the time."

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Here's Mary's Mollie Mae Louise--previously posted.

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Kingsnake's Chief Security Officer's name is Riley. I'm thinking Smiley!

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Here are pics of Sharpy's Rusty. He looks ready to tackle anything! (scroll all the way down to see Nautical Rusty and how he has flourished under the care of Sharpy and his wife).



And a blast from the past------Caddie---note the DOW. Caddie lived to be 23.


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Skimamma's Babies

Schnibbles
Schnibbles muscling in on the Cat's bed:


Daisy

Lucy


Harley and Daisy
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Leisa's two girls: Macy (left) and Daisey (right):

Lucy: The original MOB! 1993 - 2007

Macy with her "big dog friend" Greta (1997 - 2007)
Macy was just a pup when she came to our home. She ended up
out bigging her BDF's!

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Here are GatorDave's Puppitos:

"Bailey is 5 years and 80 pounds. Even though he has a bum hip he still manages full speed on all fours when he is defending the backyard from invading squirrels. He's never caught one but he never gives up. He's great inspiration for me."

"Pepper is 18 months and 60 pounds"

Pepper/Bailey


Chillin' Pepper

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Our Mary has given Emma a place in both her home and heart (added 06.30.08)

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Here's Luggy's Baby Wrigley (a Carolina Dingo)


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Updated Pics of TQ's Sweetie



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Leisa's New Kittens



Minnah


Wyatt

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Here are Lugnut's Bevy of Fur Friends


Moonshine and Grits

The pair in repose

Boeing in stock-picking contemplation

Wellington: Heck with that stock picking!

"Rorschach," Wrigley (Carolina Dingo)


Here is our Sharpy's Rusty @ his first birthday--See above for "before" pictures.

Vince Farrell of Scotsman Capital-Verbatim

I thought this worth sharing with you. Used with permission.

From: vince farrell
Sent: Friday, April 11, 2008 1:17 PM

Let's deal with some other news before we get back to a GE discussion.

The International Energy Agency (IEA) lowered its forecast for 2008 oil demand by 460,000 barrels a day to a growth of 1.3 million barrels compared to last year. The reduction is due to falling demand in the U.S. due to the economic slowdown. They expect demand in China/India to be such that the price of oil will not come down. While I am a long term bull on the price of oil, weakness in the U.S. will spread to the emerging markets and to think otherwise is naive.

Import prices rose 2.8% last month which is the biggest increase in a long time. Much of it is due to the high and rising price of oil (of which we import a lot), but rising food costs and the seeming insatiable demand for imports in the U.S. will make it difficult for the dollar to strengthen.

Good news came in the form of bad news yesterday. The Fed had one of its periodic auctions that was recently introduced. They offered $50 billion in liquid assets for $50 billion in illiquid stuff owned by the banks. Only $34 billion was taken. The auction "failed", which is really good. It means that liquidity is returning to the marketplace without herculean efforts by the Fed.

The punishment being handed to GE common stock goes beyond a miss in earnings. The company fell short of estimates by .07 cents and it looks like .05 of that came from financial services. Without delving too deeply into the details, this is an area that has sunk many companies recently. (Appliances and health care accounted for the rest of the miss.) It's ok to miss estimates. Well, maybe not ok, but it happens. The big issue here is that management affirmed earnings guidance in early March. The Bear Stearns debacle then hit and the planned sale of some financial assets didn't occur due to the markets being frozen for financial transactions.Thus the nickel shortfall. Again, that can be ok, but management needed to get the news out right away. Don't ever surprise and embarass the Street. Credibility has taken a big hit.

I believe this is an exceptionally well managed company, but they are going to need to prove that. GE's stock is down since Jeff Immelt took over while the S&P is up some 20%. A lot of executives who live for stock options are going to be recruitable.

Also, management lowered their estimate for the full year by more than the first quarter miss. It could be they are being ultra conservative and will under-promise but over-deliver. Or, it could be that business is weak beyond this quarters issues. I like the price of GE for new investment (I already own it) but I don't like the timing. There are questions that will take some time to be answered.

GaryK on the Fly: 04.10.08

Usual caveats from Gary's 04.10.08 show: Quick comments

Market is back and forth. When the market is bad, we want to get you out. When it is good, I we want to get you in some of the monster stocks.

Most important thing: the news stinks. Retail numbers were terrible; retail stocks were up. NOvellus, bad; semi's are rallying. Even the Fed is admitting that economy is worse than thought. The market is hanging in there.

12767--DOW needs to get over this.
1387/88/96 S&P
2391 nasdaq
1886 Nasdaq 100

Stocks acting well: FSLR; RIMM; ISRG; NKE;MA; CRM;POT; MOS; CF (Ag stocks extended);X; MTL;AKS;SCHN; STLD.(Steel stocks are not buyable here and need a pullback). IBM; PCLN; Do not buy in front of earnings.

Set ups: I'm finding more and more.

However, if the market cannot get above levels noted above, then the market can go down, and it will take everything with it.

Quick Thoughts

John Mauldin has an "Outside the Box" written by George Friedman. Click on the graphic to reach it if you do not get this delivered in your mailbox. I have to admit that I've been a little flummoxed by the strength in oil.
This missive explains a bit of that.




FAST: Opened down today and I did something that I don't usually do: I acted without thinking. I sole 12 of my 20 puts for $1.35. Eight did not get filled. I'm keeping these as my "house" money. But I like house money and I do not necessarily wish to sweep it out the door. There's a huge short interest in FAST, and one never knows how the market will react, regardless of how egregious the news might be. It's worth noting that they surprised positively last week.

I've positions in DIVR. Which continues to do well. I also have just a fistful of HERO Jun $30 calls. I had these before, and I closed the out profitably prior to the stock moving back. P/E is very low, and if there is some hurricane activity in the Gulf region, this stock will benefit. (Though please know that I'm not doing any incantations wishing for storms!).

I'm going to have dinner with my SIL/BIL. They leave on Saturday to go to the Keys for her 50 birthday. We'll toast them away. So I'm running out the door, so no GaryK on the fly this evening early.

NG: I agree that this market is remarkably resilient--hence my partial exit out of FAST.

I also re-entered SEED. THAT might be a mistake. I did that within the last couple of days.

Pop Culture

is lost on me. I'm rarely interested in the "goings on" with any celebrity. Paris, Brad/Angelina, Ben/Jennifer, Madonna, Oprah, Martha Steward--I couldn't care less. Though I don't care, I do wish I understood it. I was reading the WSJ, and I saw an article about Katie Couric's likelihood of not completing her contract term. I never understood why CBS wanted Couric anyway. But I don't watch Today, Oprah, Good Morning America or any of that stuff. I guess I'm just a pop-culture curmudgeon.

I did see Couric interview Howard Stern, she was twirling her hair--a provocative gesture to be sure. I'm no prude; far from it. But that interview always stuck in my head. The wooing of Couric by CBS always stood at odds with that image of her. She may have charm, but she lacked gravitas. And gravitas is what one needs from an anchor--not perkiness, not hair twirling provocativeness, not toothy smiles--gravitas, talent and experience. I think of Diane Sawyer and Leslie Stahl among others.

I'd be lying, though, I I told you that I looked away from the tabloid stories that have pictures of un-made up faces and cellulite infused buttocks with a "Guess who?" tag line. Those headlines remind me that celebrities are regular people. If we spent more time developing our own talents (regardless of how meager) and less time celebrity fawning, then. . . . I was hopeful as to the many ways that sentence could be completed.

Gary K on the Fly!

GaryK: These are my rapid typing--this is his live show, so I cannot rewind. I would encourage you to always listen to the first 10 minutes of his program. He tapes all shows. Sometimes they are available right after 7 p.m. EDT. You could also listen in the a.m. over your morning coffee. Anyway...the point is that I make no representations as to accuracy:

As you know: follow through in every major index. Leading stocks are commodity based; he is amazed at their strength.

Transports down 175 points. They are at a very important juncture. They've been decently strong off of their lows. I believe odds favor that this high is the last one we'll see. UPS warns. Union Pacific and JB Hunt have broken out and failed.

Retail: I think that retail has hit the wall. BBBY broke down, and down again in aftermarket.

This is one of those days where the market was much worse than a Dow down 50 day. Transports and retail are of import.

Up/down volume atrocious. Neither Dow or S&P have broken above resistance.

I'm just letting you know that today might be an inflexion point. This I'm watching very closely, I want you to watch with me.

If we are in a bear market, this is nothing more than an interemediate term rally of unknown price and duration and it will end badly. Watch on a daily basis and watch for chinks in the armor. We got some chinks in the market for the firs time.

It was a distribution on the Nasdaq and major indices. Watch Retail, transports and financials. If they don't make it, the market does not have a shote. There are just a few too many people embracing this rally. IN all my studies of BM bottoms, none have had such a big embrace as this one has. We take it day by day and see what it brings us.

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Leisa here: As an aside, the strength in the transports has puzzled me. Yesterday I looked at all of the rails and even some put positions. I did not make any purchases though. My FAST puts started very negative today and went positive nicely. I'm going to gird my loins--I may make some partial sales into earnings depending how the stock acts tomorrow.

Boeing; And New Issues

I don't really follow Boeing but it had a very good day today. When I see price/volume action that I do not understand, I always look to short interest. I suppose that a record short level in the last year, combined with "news" helped with this move. Interesting to see if it is sustained. This is from the NASDAQ site (w/permission). Click on schedule to be transported.

Here's a 5 day, 5 minute chart.


DJ does an IPO Scorecard. I thought that I would duplicate the scorecard in a watch list.

And, since I'm being lazy using pictures instead of words, I'll give you an update on our Lucky 13:

Recession Chatter, Greenspan, and How I Might be Made a Fool

Recession Chatter: It's amusing to see how difficult news seeps into the collective knowledge base. The R-word, as offensive as the "F" word in polite conversation, seems to be avoided at all costs. However, in the last week it has finally been said. Whereas previous conversation was whether or not we were or were not (or going to be) in a recession, current conversation has moved into acknowledging that we are in one and SPECULATING on how long and deep it will be. I made my first prediction here. Sometime later, I mentioned that I thought we would be in a recession by Spring. But, I could STILL be wrong!

Greenspan: Remember my post on judging apple zone decisions in an orange zone? Isn't that what we are doing to Greenspan? Can that possibly be fair? The fickle public. He was universally lauded as rescuing our economy, now the public is trying to make him a goat. A contributing factor to this mess, is that interest rates were too low for too long. But the real culprit, to my eye, is a collective of bankers/investment bankers. Smart folks that gorged themselves on the fresh carcass of CDO's knowing full well that it would start rotting. As long as THEY were making huge fees, why raise a hand and say, "Hey, this can go very wrong--much greater risk with very small reward."

I'm just an average person, and that point is quite clear to me. And certainly, Greenspan failed to see (or speak to) the consequence of the dangers of taking on risk with an ill-priced reward. However, he, like many, publicly stated that he believed that these default swaps and the like distributed risk rather than ensnared everyone in a downward death spiral. Or perhaps folks knew, but this money was funding lots of home construction and keeping the economy going.

Regardless, with the word "recession" now part of our current vernacular, we'll continue a witch hunt to find the culprits rather than accept that business cycles ebb and flow. Further, when cycles ebb they expunge the foolish excesses and give folks time to dream up other schemes that "will be different this time." Right. The catharsis is always fleeting until the inner greed magpie is busy squawking about something else that is new, different, better and oh-so-lucrative. And, worse, we'll talk endlessly about how long and deep the recession is to be. Who really knows with certainty? I'll refrain waxing poetic on the recession in this space; however, I'll say this: Food, energy and debt service weigh very heavily on the average consumer. It will not be the high end consumer that will pull us out (do you remember those 'stories'?). And a consumer-led recession is a much broader based recession, AND it effects world economies, not just our own.

An aside: Warehouse clubs are great--but watch for non-food discretionary items to take a hit.

How I Might be Made a Fool: My everyday life provides a limitless inventory of possibilities. FAST reports on Friday. I've some APR $45 puts. The stock has been surprisingly strong, but it is one of those stocks where there is selling into strength. It's a bet--and I'll be sorry to lose my premium next week if I'm wrong. But, you can watch with me on Friday. I should note that FAST was mentioned as having a "moat" in the book review that I provided. Hopefully, I will not be swimming in it with ravenous crocodiles!

Another fool opportunity: I increased my SMN. Probably not smart given that it is the strongest frickin sector. I don't think that this contrarian stance is a smart one on my part. I was expecting a correction in these areas in the short term. Here's a perfect example of my entering into a transaction without any real clarity. I have real clarity on FAST. I don't think that with housing/commercial construction ebbing, the high cost of metals, that these guys can offer much in the way of optimism. If I'm wrong, I'll accept that, but at least I have clarity. SMN--I've opacity with maybe a pinhole in the middle--and I'm afraid that I'm letting a personal bias (incredulity) that commodity prices can continue to go higher (look at X in the last week), get in the way of my objectively evaluating the price action.

I did order some incense yesterday--perhaps there will be an anti-stupidity scent in there!

You'll be so proud of me. I'm continuing increase my mobility. I still cannot walk by the time that I get to bed at night, but the foot/leg get stronger daily and the swelling, while pronounced, is not nearly

Gark K: Hit and Run Comments

Gary K talking about what to do if the market goes up. Below are very abbreviated comments from his show last night.

BAC down, AIG, C down.

Semiconductors: Index has held the lows. Came off the lows in the last week and got whacked today. Why? We are entering earnings season. Earnings will be the driving force behind the market. That is right now, I would not get in ahead of earnings. Be very, very careful.

We have a rally right now; tepid though it might be.

He's watching financials carefully. The market cannot continue up without them.

V breaking out of an IPO base
RIMM
MA still working
FSLR--don't buy it here, but see if it puts in a handle
PCLN
Oils
Steel
Fertilizer
Coal
Metal/Ores

I'm not sure that it is good that commodities are leading.

YTD Real Estate Index--Interesting, No?

INDUSTRY GROUP TRACKER: DJ US Real Estate Index
Industry Start > All Industries > Financials > Financial Services > Real Estate > All Index Components
ALL INDUSTRY INDEX COMPONENTS
Listed Alphabetically
Symbol	Company Name	% Change
AMB	Amb Property Corp	-4.17%
AIV	Apartment Investment and Management Company	14.05%
AVB	Avalonbay Cmntys Inc	12.12%
BXP	Boston Properties Inc	5.74%
BDN	Brandywine Realty Trust	0.17%
BRE	BRE Properties, Inc. (Maryland)	23.83%
CPT	Camden Property Trust	14.95%
CBL	CBL & Associates Properties, Inc	7.07%
CLP	Colonial Properties Trust (Alabama)	11.71%
CUZ	Cousins Properties Incorporated	22.08%
DDR	Developers Diversified Realty Corporation	16.92%
DRE	Duke Realty Corp	-6.67%
EQR	Equity Residential Properties Trust	18.67%
FRT	Federal Realty Investment Trust	-0.56%
FCH	Felcor Lodging Tr Inc	-16.81%
FR	First Industrial Realty Trus	-8.64%
GGP	General Growth Properties, Inc	1.68%
HCN	Health Care REIT, Inc	4.56%
HR	Healthcare Realty Trust Incorporated	11.07%
HIW	Highwoods Properties, Inc	14.60%
HME	Home Properties, Inc	10.77%
HPT	Hospitality Properties Trust	5.31%
HST	Host Hotels & Resorts Inc	3.11%
HRP	Hrpt Pptys Tr	-5.43%
SFI	Istar Finl Inc	-32.25%
KRC	Kilroy Rlty Corp	-5.02%
KIM	Kimco Realty Corporation (Maryland)	12.06%
LRY	Liberty Property Trust	20.17%
MAC	The Macerich Company	1.97%
CLI	Mack Cali Rlty Corp	14.41%
NHP	Nationwide Health Properties, Inc	13.32%
PCL	Plum Creek Timber Co Inc	-10.84%
PPS	Post Properties, Inc	11.70%
PLD	Prologis	-2.86%
PSA	Public Storage, Inc	25.65%
RYN	Rayonier, Inc	-5.67%
SPG	Simon Ppty Group Inc New	15.80%
SLG	Sl Green Rlty Corp	-4.23%
JOE	St. Joe Company	19.32%
VNO	Vornado Realty Trust	1.80%

Trustee Sales

Long-time readers will remember that from October 2006 through April 2007, I would provide a weekly report of Trustee sales in my area. Trustee sales for homes used to be about a handful if that. Now, these notices regularly cover two pages. Also, the note amounts became larger (I used a greater than $90K cut off and noted the percentages above and below that and the note dates became more recent. As the trend had asserted itself, I suspended my reporting.

I don't plan to resume reporting regularly, but I thought an update in order. As you can see the note dates are predominantly 2005 and later What also is notable, is that of all of these, only one of these notes is less than $90K. These total 33 and 97% are over $90K.



Here's one that I did from about a year ago (by week) that noted the number and the % over $90K.

Coal

Long time readers will remember that I started this watch list. As it turns out it is exactly one year old. A nice return of 43% as of midday 04.07.08

Marinara Sauce

From: The Great Cooks Cookbook
Copyright 1974 by The good Cooking School, Inc.

The above mentioned cookbook is one of my special finds at a used bookstore. This is the most fabulous recipe. It is very easy--easier still if you have a food processor. I use this as a base sauce and add meat (ground turkey or a mix of veal/pork/beef or beef)--we rarely juse Marinara sauce on its own. With these meat accoutrements, the fine sieving called for is not required (to my eye and taste). Plus I add Italian sausages that have been cut in 1/2 inch slices and cooked and drained (brown first and then place a top on so that it cooks through). Drain, and add to sauce. I will tell you that I do NOT strain this when used with meat. You can double this easily, just adjust to a heavy bottomed dutch oven.

1/2 cup olive oil
4 cups coarsely chopped onions [Note: I cut in quarters and using on/off pulse chop roughly in food processor]
2 small carrots, peeled and cut into rounds (about 1 cup) [Note: I grate in food processor].
3 cloves garlic, finely minced [I run through a press]
8 cups canned Italian plum tomatoes with their liquid (about 2.5 28 ounce cans). [I used crushed]
Salt and freshly ground black pepper
1/4 lb of butter [I omit this with the meat addition]
1 tablespoon finely minced Italian Parsley
1 1/2 teaspoons dried oregano
2 tablespoons chopped fresh basil, or 2 teaspoons of dried basil [I used Herbs de Provence]

In a 10-inch glass-ceramic skillet, heat the oil; add the onions, carrots and garlic. Cook, stirring until vegetables turn golden brown.

Meanwhile, strain the tomatoes through a sieve into a bowl and pus the pulp through with a wooden spoon. Discard the seeds. [if you used crushed tomatoes, you avoid this!]

Add the pureed tomatoes to the vegetables in the skillet; season to taste with salt and pepper. Partilly cover the skillet and simmer for 15 minutes.

Set a sieve (conical, chinois type if possible0 into a bowl; pur the sauce into it, and press with a wooden spoon to push the solids through. Pour sauce back inot the skillet; add the butter and herbs. Partly cover the skillet, and simmer 30 minutes more, stirring occasionally. this is best freshly made, but it can be stored, tightly covered, in the refrigerator for 2 days.

Futures are Up

and, so is my foot. Tough night last night, I guess because of my standing on my foot for a bit longer than usual. My husband went to BJ's with me. It's never lack of food that generates a trip, but when we get down to our last roll of toilet paper. We have 4 heinies and 3 bathrooms--so when at least one of those rolls gets down to about 4 winds left, a state of emergency is promptly declared.

I did use the scooter--I would never be able to walk on concrete for that distance. I couldn't believe how expensive the dog food was. It has gone up considerably. But we managed to get $412 of necessities, so we can eat, drink and wipe with impunity!

Last night I made homemade marinara sauce. It's basically olive oil, 4 cups of onions, some carrots, basil and canned tomatoes. I used crushed tomatoes. I also made a double batch. In addition I browned some a mix of ground beef/veal/pork and added it. I also browned Italian sausages. With fresh grated Parmesan, you couldn't go to any Italian restaurant and get a better plate of spaghetti. We had bread. No green vegetable, though. Oh well.

Anyway, a hard floor (ceramic) on a hurt foot is not a good combination. But, everyday I get a little stronger. So, I must be patient.

Barry's blog notes the George Soros interviews on FT. You can find it HERE.

Listening to the interview is a reminder that common senses is something that Soros', Buffets' and Ross's of the world have. I was particularly impressed with Soros' saying that all of the credit default swaps should be put on an exchange where (1) values would be public; (2) counterparties would be known. I was impressed, because I made the very same comment in another forum. So I have a little sense in my head. But you can understand why there would be some "opposition" to such transparency.

Weekly Sector Spreadsheet (WSS)

Is uploaded. Look under "New Stuff."

Technical Analysis and other 'Stuff'

NG posits a couple of interesting comments regarding technical analysis, and I wanted to uplift a few and provide my lay person's understanding and use of TA. I wanted to preface this post with something that I read that stuck in my head. I wished that I could remember the attribution: When an indicator becomes widely known; it loses its potency. It is for that reason that I'm very judicious about stop losses. I believe (and perhaps I need a tinfoil hat) that there are predatory programs and market makers that actively seek to trip stop losses. I believe that there are some aspects of the stock market is that are VERY predatory--out of weak hands into strong hands: bought at a bargain price and sold for a handsome profit. My general use of TA is as follows:

• Identify support/resistance. This single use has saved/made me more money.
• Look for over extended pricing: I never buy over extended stocks. I know people make money doing, so, but it goes against my nature, and I cannot managed those positions well.
• Accumulation/distribution: I like to find stocks that are not on the radar screens of others and are showing (to my eye) accumulation AND whose fundamentals I understand and I think are good. I like to look for distribution to see if I've any risk--OR if there is an over-reaction to some news driven event that might provide an opportunity.
• Overbought/oversold conditions: I do like to look at these for the broader market first, and then for individual stocks.
  
• Regardless of good price volume indicators, I NEVER buy a stock whose fundamentals I do not like.
  

My goal: Is to do a better job in staying in stock positions that are profitable and building positions. Over the last 18 months, I've had a general distrust of the market, and I've been too early to close positions. I think that TA helps with that, too. Further to me, looking at price/volume action even if your are not engaged in the the Rorschachesque activity of looking for a pattern, is technical analysis--you're looking to at 'price action'. I have this wonderful book called The Logical Trader. It reduces trade decisions to some pretty simplistic price action patterns. But it is sophisticated. Elegance in simplicity. In fact, to stay in a position, I would use Mark Fischer's methodology. I'll make a note to talk about this book sometime.

For me, TA is a tool in the kit--not the kit. Tom Bulkowski of The Pattern Site has a number of patterns that he has studied, and he provides some exhaustive statistics on the reliability, or conversely, the failure rate of such patterns. Many patterns are little better than a coin toss, and some are remarkably prescient. I believe that there are so many "patterns" that in hind sight, one can always find a technical reason to fit the outcome.

NG notes that many of the big money movers do not use TA. I'm not disputing the fact, but I don't quite reconcile that with the weight that many on the floor (traders interviewed) place on certain technical levels of the indices. I always understood Technical Analysis to be "how one tracks the footprints of the elephants." Accordingly,while the overall indices technical levels may hold merit for most traders who are looking for the overall tone and direction of the market, I totally understand that TA matters not a whit for a large money manager intent on building or reducing a distribution. They, in fact, are the market. One only has to look at the big institutional holders in some of stocks. I've not been very frequent in providing you with some of those snapshots, but I see the weight of some of those holdings.

Personally, I accept that TA is nothing more than a Garmin-like device to help the regular folks (like me) determine what the elephants are doing--and I don't try to make it out to be any more than that. Building a position in company that is under distribution by big money can be disasterous. Similarly, building a position along with the big money is lucrative. And I'm quite certain that this big money doesn't even begin to talk about what they are doing to the investing sheeple (NG, I like that term), until their position is firmly rooted (if accumulating) or uprooted (if distributing). I think that is where the "Sold to you!" statement is appropriate.

(As an aside--a very cynical aside: if T. Boone Pickens comes on and says he's short oil, you go long. If he says that he is long oil, you go short. When he shakes his oil shaman gourds, it's best to trade in the opposite direction--I think that you'd be with him rather than "agin' him").


2nd_Ave notes that he uses sentiment indicators. 2nd, while I would see that these indicators would be useful for overall market tone, I'm not sure I understand how one uses it as a finer gauge for picking individual stocks--though I suppose one could apply it to sectors. I'm a bit of a natural contrarian. Frankly, I find it to be a detriment....well, it would be less of a detriment if I remembered that moves can go further and longer than you might expect. Perhaps I should say that my early and contrarian tendencies tend work against me! The "be fearful when others are greedy and greedy when others are fearful" is something that I try to invoke. I'd love to hear you speak a bit more about how you use sentiment.


The very best success that I've had--my post profitably investments--have come from my doing my own homework and finding sectors and stocks that are attractive and overlooked--but appear to have some promise with some steady basing. For example, in oil services (2nd, you'll remember this from BC's blog, because I posted there). I researched most of the companies in oil services, and I figured that if you wanted to capitalize on oil services, rather than buy one over the other (and we know how volatile individual names are), buy someone who sells 'stuff' to them. Well, MVK, HYDL, LSS, NSS were all companies that sold to them. And I was in them. NOBODY talked about them. Not one of these names were ever mentioned by one soul on TV or anywhere else. But they exploded, and I had options and I systematically took profits. They went up, up, up. (and I still had options) and then they imploded. My gains exceeded my losses, but I lost money at the final implosion. I should have been fearful when others were greedy. I was not very skilled then--it was two years ago. And when these names were wallowing back down to earthly prices, EVERY SINGLE ONE OF THEM were bought out for a premium that was close to their highs (though they fell far indeed). SEED was an example of my entering into a stock that I did my own research on (I spent an entire weekend studying all of the stocks in the Halter Index). I never heard another soul speak about it (that I'm conscious about). Then it went up, up up...and I got out.

I think that scaling in and out of positions is a very disciplined approach--too often I used to go in with a large position. Then, when it would "go against me" though it was a harmless pull back, I would get "sceered!". Tranching in keeps your wits about you and average in at advantageous prices--or get out early if you've screwed up! Tranching out helps you average out at advantageous prices. I have a long way to go before "practice makes perfect." I just need to practice.

Ultimately, we all have to look at our comfort level and our skills. Further, we have to be crystal clear about our time frames and the amount of risk we are willing to undertake. I guess finding one's "edge" is critical. My edge is that I have a high tolerance for sifting through lots of information and finding the nuggets before most do. The corollary to finding your 'edge' is to also find your Archilles heel. I have two feet, and I have two heels. Heel 1: impatience. Heel 2: lack of confidence. Heel 1 is a DNA quirk that I work daily in my personal life to tame. It's no wonder it spills over into investing life. Heel 2 is more of a lack of experience, and the feeling of "how can lil' ole' me have a better idea than Wall Street?". I'm beginning to realize that because I'm just a lil' ole' me that does put me at an advantage. Nevertheless, I'm clear that if my "thesis" does not catch on, then the money is dead money. I'm going to try and model Gemmastar's wonderful stick-with-it-ness on stocks that she likes.



Personally, I don't like being in names that are extended even though the mo-mo money is there. I don't read IBD anymore--if everyone is looking at the same thing, what can possibly be your edge? I don't think that you can have one.. I think that traders are in those names because they are mo-mo. These are not investor stocks, IMV. I don't like being in the stocks that everyone is talking about on TV. I like finding the quiet names that have great fundamentals but not much star power but have stable charts (meaning they are not extended and it looks like there is a solid floor). I was in TNH before anyone ever heard of it. At $19. Now look at it. I didn't go along for the ride because I was in TNH when I lacked confidence in my own discerning abilities. But I was in it at a time when there was no reason for my having any confidence in those abilities. Today, I'm much more confident in my discerning abilities. What I lack is patience at times, and that is my number 1 priority this year to develop. Oh, and not to become overconfident!

My opinion of "gut instinct" is this: If you really want to trust your gut, you'd better have experience in that which you are applying your instincts. Our "gut" instincts are a confluence of many things--emotional, intellectual, experience. IMV, experience is the great validator of our emotional/intellectual decisions. You cannot have a well calibrated gut if you have no experience. And that experience means that you have an a$$ kicking or two--and absolute disaster--and you have successes. When you've a bevy of experiences,both good and bad, then your gut can give you some good feedback. Otherwise, it is an uninformed hunch--though one that could bring great rewards!

Don't get me wrong, I'm a big believer in gut instinct and in the business world, my gut was wonderful. I had a colleague that would call me "The Oracle". (Malcolm Gladwell of Tipping Point wrote Blink that spoke of this phenomena. But that moniker was hard won, and I've the gray hairs to prove it.

Writing this post in response to these good comments has been very helpful to me in clarifying some "to do" list items--one is to bring my Logical Trader book back to my desk, and find my Excel Worksheet--Oh, and write a post on it.

Today's Transport

After several weeks of recuperation and absence from dog rescue, I helped with a transport of Chase. Chase is a beautiful, intact male. His coloring is a deep chocolate/liver flecking on white. His eyes are a medium amber. He was an exceptionally good boy. He settled down in the back seat and slept most of the way. He changed position a few times, and at one time was on his back with his legs in the air!

I'd like to share some pics with you. These are un-retouched photos--no sizing, not nothin. I had my camera set on multiple frames which is how I caught this picture that makes him look as if he is laughing (to my eye, anyway).

INvestor/traders as Market Shamans

NG posts in the comment section about what to follow to divine stock market movement--on what basis are we to judge. It always feels to me that we are shaman-like in our quest for determining stock market direction. Our tools are our talismans: we shake, rattle and roll the various chicken bones; we raise our moistened finger to see which way the wind blows; and we gaze wistfully to the horizon to see whether the clouds are fair or foul. And, we look thoughtfully upon the past and what the ancients said and thought. As strange metaphor, but and apt one I think.

I think that Carlos Casteneda smoked peyote and then walked in the desert with his eyes crossed to find "truth" somewhere in the overlapping vision. The complexity of the layering of divination trappings (TICK, technicals, fundamentals, futures, insider buying/selling) has the capacity to produce conflicting signals leaving one standing in the desert with one's eyes hurting and throat parched. A chicken bone or two might poke a hole in one's pocket and poke some tender areas. I'm not saying they are not useful (and to be clear, I've no idea how to use some of that stuff!), but at some point one saturates oneself with so much information that it is an overload and many not produce clear signals for action. In a sense, some of the tools to me (and I've a high degree of tolerance of unclarity!) become so esoteric that their usefulness becomes diminished. And these tools are SO appealing to my inner information magpie.

In the end, I have to come back to my being a sectarian and a fundamentalist(oh, but with a bagful of talismans). I believe that money, like water, seeks its own level though there may be wide swathes of disparity for uncertain durations. I'd like to think that in our consideration of asset classes and assets within classes, we are always trying to evaluate

• intrinsic value: what is the value based on objective measures (cash flow, earnings, etc)
  
• relative value: what is this asset's value relative to the valuation of other asset classes (the overvaluation of bonds in the flight to quality is an example of this). It can also be the value of a stock in the same sector as other stocks.
• extrinsic value: what value has the market place conferred upon this asset and why is there a premium (again, bonds and the flight to quality--with quality/safety being the reasons for the premium)
  

When relative and or extrinsic values become extended among asset classes or between intrinsic value, whether gold, dotcom stocks, commodities, bonds, real estate, rare cars, then speculative excess hits a climax--and then the denouement follows--though probably for just a short period. Isn't that really the story of investing and making choices among asset classes? It likely reads like a bodice tearing, romantic cheap novel--but the market is based on emotion, and emotions always involve bodice tearing and secret if not illicit yearnings!

I think that the well-grounded successful investor can identify intrinsic v. extrinsic value AND he/she can evaluate the level of risk that lies in the valuation distance between the two. I don't hold myself out as being in that camp (I'm still in the woodshed). From that evaluation s/he can make a considered decision regarding risk/reward. And risk reward always exists in the context of a time horizon. Value, time and risk--these are the contexts that a well-grounded investor minds well.

Here's a great example of intrinsic v. extrinsic valuations: Beanie babies. I could never understand the phenomena of beanie babies. How could a bean bag animal that fit in your hand command $1200 or some other ridiculous price. It's intrinsic value was $5. Its extrinsic value was based on the fickle fancy of the public. That dynamic never ends very well unless you bought at $5-100.

To my mind, when the extrinsic value becomes inflated beyond reason from the intrinsic value, you'd best be quick or your money will be dead (presuming you are playing in extrinsic values). I still believe in equilibrium or fair value--and like the "average" line that gets drawn among a scatter of points--it can be near or far to other points. So at any point in time, the market price is the extrinsic value (meaning it is set by the fickle fancy of speculators) and that value (hope, greed infused value) may have a large or small standard deviation above or below the fair value. Though as I write, I realize that fair value is still an ephemeral concept and subject to whim/fancy regarding methodologies used to determine fair value--and that "fair", like beauty, is determined in the eyes of the beholder! Always there is quicksand to step in!


To stay grounded, I believe in the power of the economic cycle and the the ebb and flow of money from sectors that will experience marginally improving fundamentals (meaning the sector has peaked and priced to perfection) in the future to sectors who have declined from their peak and will experience greatly improving fundamentals. I believe that is how money finds its own level. And I believe that trends go further for longer than one expects, though I have to fight my incredulity--and I've not found a good way to win that fight. Perhaps participating in the frolic with an appropriate hedge would be a good neutral territory that allows one to enjoy the upside but prevents one from waking up naked in a strangers front yard.

I believe as investors/traders we are market shamans. We've our particular talismans that we use because in them we have confidence in their ability to peel back the curtain of the future and allow us to make a current judgment in order to participate profitably in that future. Accordingly, I try to be mindful of understanding that my talisman's may not be the same as another's talismans. Moreover, 'different' does not confer 'better' or 'worse.' Ultimately you have to have talismans that grant you success--and that is the journey that each investor needs to undertake. And hopefully it doesn't involve our smoking peyote, crossing our eyes, and walking in the hot desert.

FSO Technical Discussion Between Tim Wood (Host) and Martin Goldberg (Guest Technician)

I've just fired up the FSO Saturday. Martin Goldberg is the Technical Analyst. I've always liked Martin's work. His writing clear and his analysis thoughtful. Most importantly, he is flexible. He also has a website, and I've included it under "New Stuff".

Jim Puplova is out for the first hour and Tim Wood is filling in. I will paraphrase/quote elements of their conversation. As always, I think that it is worthwhile your listening to these 10 or so minutes. Also, they do a transcript later in the week.

Tim Wood--Dow Theory, non confirmation (transports v. DOW), has a bullish twist. It is not a buy signal, but it warns that the trend might be changing.

(Background given my TW): Jim's oreo theory--tough times ahead, we would get to the creamy filling where things would seem okay, and then more tough times. Jim stated last week that he thought we were getting near the creamy filling. JP is out and TW is taking his place. To Marty: Have we got to the creamy filling?

MG: Since October/November, the S&P had a top, but it made a series of lower highs and lower lows. The bounces have been dramatic, but in all cases have failed. The bounces have been produced on the news that the Fed is going to do something and everything is going to be okay. The bounces have been in smaller in magnitude and shorter duration. This week was different. For certain,the market had a great week, but on less than stellar volume. The market is at a critical juncture. This would be an appropriate place for a failure, but that failure has not begun. Gives examples of charts that failed and have retraced to their neckline: FedEx, Dillards, Tractor Supply, Capital one--have completed reversal patterns and rally to neckline).

S-t benefit of the doubt goes to the bulls. L-t benefit of the doubt
goes to the bears. Skeptical of rally so far due to leadership.
Pretty much been sectors with the lowest quality fundamentals
(financials, retailers, homebuilders). [Peanut gallery note--these are also the most highly shorted sectors, and I always come back to Art Cashin's comment about the shorts in this market being the most weak handed--neither MG nor TW mentions this].Tim Wood concurs--also looking at banking. Nothing has happened to invalidated the current down trend. The Transport non confirmation warns that the trend is trying to change (from down to up), but does not tell you that the primary trend has turned up.

MG: You do not want to be too married to your feelings or technical position. In terms of transports---looking at Federal Express--it has very well defined technical levels. With the recent rally, the stock has moved to the neckline. If the stock breaks above the neckline, then you have rethink your opinion. Re the homebuilders, the homebuilders, they are trading at 2003 and 2004, you have to buy into the premise that they were extremely cheap from 2003/2004. MG doesn't think that the fundamentals or the chart have. TW thinks the creamy filling will last months, not years. MG thinks that it could end very soon--perhaps just a couple of weeks [echoing Cat's sentiment about earnings]. Still have 3 lower highs. If that is decisively broken to the Feb 1 upside, then the benefit of doubt goes to the bulls. The high made this week at 1380 (week)--still a lower high.

Gold--There you have the opposite. A secular bull market with a sharp correction. Gold has not acted well in the last month. The technical pattern look good: Royal Gold and Agnico Eagle. in HUI 420 is an important level. If that is taken out, would need to re-evaluate.MG thinks that the week coming up is really important. Still believes that the trading pattern TW thinks we'll see some weakness from s-t overbought conditions. Hold above the previous low.

Somewhat Surprising Day

A year ago, I would have called today a Stupefying day. As I watch the market and seek to make sense of its reactions to this and that, my choice of adjectives has tempered. I think that is my realization that market dynamics are not necessarily fathomable much less logical. I'm not in the camp that markets are random despite research that says otherwise.

Despite the market's antics, whether we agree or disagree, there are plenty of folks who want to rationalize the move whether up or down. We see that everyday, and I grow weary of the stories. I've learned that when the stories grow tired and begin to sound cliches it's time to put your wallet or purse on lock down.

I'm not really sure what to make of this market. Alan Farley (a trader) was writing on Real Money and warning folks of the serial bottom callers. My particular feeling (yeah, my story for the market) is that it was down for so long it had to get up. The market (meaning us) is opportunistic. What could be more opportunistic than goosing the gas just before some empiricism (earnings/forecasts) rains a cold shower on the parade goers? I'm parading a bit, but I've got my umbrella in case it rains. I'm with Cat in the distrust camp. I included Alan's "Hard Right Edge" website in the "New Stuff" and in the info mosaic. He has some great information there. I've not been there in a while, so referencing his column was a good reminder.

NG wonders, "Does anyone know if it is possible to make money without making predictions?" I asked specifically of him that question---"How does one make any decision without making a judgment about future direction?" Whether it is rhetorical or not, I've no answer. Nevertheless if there is an answer to that seeming riddle of a question, then it would be terrific to put it out on the table to discuss.

Regarding technicians being right 100% of the time. I don' know of anyone who claims that, so I do not see that as a transgression on the part of technicians that needs to the thwumped in any way. I do believe that equilibrium is always reached--if but for a moment--and equilibrium lies some place between over optimism and excessive pessimism. Even when earnings get reported, the fact means little, but rather how it slaps up against the wall of expectation. But over the long term, there is some helix of stock price around the core of fact/fundamentals. I do believe that technicals help a bit in divination, but it is like probability tables. One goes through much effort and aggravation to come up with probabilities of x, y, z happening when in truth, only one can happen and when it happens it is assigned the probability of 100%.

I'm fond of saying that one cannot judge past information using current information. In fact, anytime any of us engage in a coulda, woulda, shoulda, we are doing that. Generally we are doing that when we (1) left a big gain on the table; (2) failed to enter a transaction that would yield a tidy gain (RIMM, MOS before earnings); or (3) overstayed our welcome. The time frame for our considering transactions is cloaked in uncertainty regarding the ultimate outcome. We really do not know what the outcome will be. In fact, today with the magnitude of the loss in jobs, who really expected the market to act the way it did?

Once we have an outcome we are now bathed in the light of knowledge and fact. We too easily slap our forehead like an actor in a V-8 commercial and say "I could have bought RIMM ahead of earnings". Judging the genius or foolhardiness of a decision that you made (to make or forego an investment) in a state of ignorance (ignorant because you are not clairvoyant) can be dangerous, IMV. What merit does judging from a perspective of full knowledge have? I think that is why having disciplines that you follow without thinking about them is helpful:

• "I will sell if I lose 10%;" "I will sell one half if I double my money;"
• "I will only buy if a stock is not over extended;"
  
• "I will never short a stock that is above it's 50dma.
  
• "I will never margin my account to the max.

These lists go on and on, and you've seen many of the same ones that I have. NEvertheless, whatever the rules, when you have these steadfast rules AND (more importantly) when you adhere to them, you absolve yourself of ever having to look back (and saying you are sorry!). You divorce yourself from the emotional aspect which can be so psychologically damaging. The relationship with that stock either met or didn't meet your needs with the information that you had at the time and you moved on.

Reviewing an event after the fact is, well, fact. Fact is an apple. Uncertainty is a an orange. You know what they say about apples and oranges. Plus, you can ascribe any credible story to any apple outcome, and you only have to chose one story. But when you are in the orange zone of uncertainty, you have a veritable string of outcomes--some of which you may ascribe a greater probability over others. But you've got a book of fairy tales--and some of these stories have really great endings where you will live bathed in riches to a ripe old age. Unfortunately, some have endings that just involve your trying to cross a bridge becoming a snack for a troll. If RIMM had slowing sales and fell 20%, someone would say, "Well, RIMM's client base is the financial community and they are losing jobs, etc, or China is slowing." So while politicians say "A chicken in every pot," Wall Streeters say, "There's a story for every outcome".

So it is useless. Okay...now I'm giving myself pause in writing "useless"; therefore, I 'm going to qualify it. If you made a decision absent a rule, then it is perfectly okay your using the apple zone to judge the orange zone and make some judgment about whether or not a rule would have supported your decision making. I don't write any of that to sound emphatic, and perhaps this is just Leisa-land logic, but this is how I make sense of it. If you know that trolls live under bridges, but do not like the daylight, then you'd have a rule to ensure that you don't walk across a bridge from work to home during the evening hours without taking on great risk.

An aside...A friend an former colleague that I've not seen in a while just called me. He is in NC and saw the redbuds. He knows that I love redbuds, and he did an outreach to let me know he thought of me. That was very considerate, and it gave a lift to my spirits. It's a good reminder to you that if you are thinking of someone that you've not made outreach to, Spring is a time for renewal, so think about how you can renew some connections in life. Though I don't watch Oprah, I think that sounds Oprahesque. I think of my friend when someone says "shoulder seasons". He was commenting on how nice Virginia's shoulder seasons were. Until he said that (he is from Maine), I had never heard it uttered. And...I heard in on CNBC yesterday, and thought of him. So it is a happy, albeit strange, coincidence to hear his voice.

Tomorrow I'm going to do an English Setter rescue. He's a bad, bad boy (but he is so beautiful, and we women know that the two go hand in hand). He's on foster home number 3. Maybe 4. He chases cats (bad, but not unexpected). He doesn't like small children (that earns the double bad, as he growled and lunged at a 3 year old). Setters are so docile, it is almost hard to imagine. Couple is divorcing and no one can keep him. I stated that I could not really walk the dog properly on the potty break, but I can drive.

I've been a good patient, and I've been walking with full weight on my foot. I can only do it in the mornings, but NOT first thing in the morning (foot is numb, calf muscle is very sore). I'll lean on a crutch the balance of the evening as my foot is quite sore now. My ankle of course has no strength, and any bump in the terrain is not easily navigated. By the time I go to bed, my poor ankle looks like it belongs to a pachyderm. At least for an hour or so in the morning it looks like it actually belongs on my body!

I hope that you have a good evening. I'll update my sector report and post if for you over the weekend. I'll listen to Gary K this evening or in the morning along with FSO and give some summary comments.

Have a terrific evening.

Loews Corporation

I don't know if you are familiar with Loews Corporation. They have their fingers and toes in quite a bit of things--Here is a snapshot from the NASDAQ site (used with permission). Please click on the graphic to be transported there.


Here's a chart (CTML):

AS you can see, it has been a bit beleaguered as many of the insurance companies have been. In fact, long term readers my remember when I bought some puts on this last year. I closed them profitably, but left lots of money on the table. You know what, though? Since I've been closing my options (when I use them, which is not all that often) leaving lots of money on the table either for puts or calls, I've had very few options close worthless. So, I'll keep leaving money on the table and taking real profits! I've certainly learned the value of base hits, but everyone wants a home run now and again. I got mine last year with SEED. I'm not sure what this year's will be.
I bought some June 45 calls on this. They are in quite a few things, and that is the purpose of my sharing this with you. Certainly it is not a recommendation of any sort. The following is from the company's website.

NYSE: LTR

Loews Corporation, a holding company, is one of the largest diversified financial corporations in the United States. Its principal subsidiaries are listed below. For information on classes of common stock issued by Loews, click here.

CNA Financial Corporation (89 percent owned) is one of the largest property-casualty insurance organizations in the United States.
(NYSE: CNA)
www.cna.com

Lorillard, Inc. (wholly owned) is America's oldest tobacco company. Its principal products are marketed under the brand names Newport, Kent, True, Maverick and Old Gold. Substantially all of its sales are in the United States.
www.lorillard.com

Boardwalk Pipeline Partners, LP (70 percent owned) is engaged through its subsidiaries in the operation of interstate natural gas pipeline systems.
(NYSE: BWP)
www.bwpmlp.com

Diamond Offshore Drilling, Inc. (51 percent owned), one of the world's largest offshore drilling companies, offering comprehensive drilling services to the energy industry around the world. The company owns 44 offshore drilling rigs.
(NYSE: DO)
www.diamondoffshore.com

HighMount Exploration & Production LLC (wholly owned) is engaged in exploration and production of natural gas.

Loews Hotels (wholly owned) is one of the country's top luxury lodging companies. It operates hotels and resorts in the United States and Canada.
www.loewshotels.com

The Jobs Number

The market seems strong in the wake of this lousy news of -80K jobs. Click on the graphic above to be transported to the BLS page.

I've created....

a "New Stuff" element that will be the first thing that you will always see. It will include the Weekly Sector Spreadsheet (WSS) as well as some new stuff that I've included in the sidebar.

Gary K was in the hospital with TIA. He's back today, and I'm glad to hear his voice. TIA, while it doesn't cause lasting damage, is still a serious event. Very serious.

I'm feeling lazy today, and I'll not provide a blow by blow. He's not bearish, but he's not bullish. He is adding. I re-entered by DIA APR 130 calls.

MA is a leading stock but. . . . Watch V. Mentions ISRG. RIMM. He's worried about receivables. OI--close to breakout. FLS--held up well. Rails acting well. Volume not great. CSX strongest name in group.

Steel is breaking out, but volume not compelling. AKA Steel. Price Line....good so far; keep on watch list. American Movil...nice pattern. STT--take a look. Put these on your watch list. That is all that I want you to do. Semi's are trying to bottom. I don't trust the financials.

If the market is going to go higher; these are the leading names.

Your Eyes Do not Deceive You

I have to admit that I've some perfectionist tendencies; but there are many areas in my life where you would see no evidence of it! Yes, I was messing around some more with the blog. And, I'm more satisfied with the color scheme. Hopefully this satisfaction will last more than a week. I still have to monkey around with one thing: the link test in my posts. It does not show clearly that it is a link. I've not been able to get it to work without changing a host of other things. Almost there.... .please continue to bear with me with the changes. If you find any of the background or text colors too difficult to read, kindly advise. Thanks!

I did listen to the hearings. They were some of the more competent hearings that I've listened to.

Everyone is waiting for the jobs number tomorrow.

I uploaded the weekly sector information for you--look to the sidebar. As I write, I realize that I did NOT update the best/worst performers tab. I'll do that this weekend. I've been surprised by the strength in OIH.

It's Not What You Make; It's What You Keep

William B's comment reminded me of the aphorism: It's not what you make; it's what you keep. It's something that we tell our kids.

When Mark and I were just starting out, we had no money. Buying land, building (ourselves) our home seemed like gigantic stretches. They were. I can remember laying awake at night fretting about the money. We were definitely over the line, but we managed our way through it. Fortunately, my income grew quickly enough (as we knew that it would) to close the gap. My husband was in an industry (electrical contracting) that was subject to the vagaries of the economy. And the economy in 1981-1983 was not very kind. As we planned our home and the size mortgage we felt that we could handle, it had to always be with the consideration that MY salary had to be able to cover it.

Once the employment picture for my husband improved (and at the time, he earned almost double what I earned), we felt like we had died and gone to heaven! Because we were already living off of the shoestring of my post- college first job (public accounting) salary, we were ablet to save most of his paycheck. It allowed us to pay off the land loan (we purchased 6.5 acres which was owner financed). We also bought a television and a microwave!

However, outside of my deferred savings, I cannot say that we were the best savers. We probably should have bought used cars rather than new cars--though I should add that we drove those new vehicles until there was not an ounce of life left in them!

I don't want to lose the point, which I know that I'm doing reminiscing about the past. As we counsel our children, it is what you keep, not what you make that matters. My daughter is a good saver. Sadly, she inherited from me this OCD work ethic. She works, goes to school and saves. She "gets" it.

My son, though, does not. Money in his hand or pocket is restless. It nags incessantly that it must be spent on any of the magpie items that appeal to a 17 year old boy interested in video games and motorcycles.

But this aphorism extends to our investments. It's not what you earn, it is what you keep. The lavish returns before 2000-2001 were nothing short of delirium inducing. But coming out of market rocket return delirium was akin to coming out of a drunken stupor and finding yourself naked on a stranger's lawn.

I'm of the belief--and I recognize that this is MY bias--that the plain-vanilla advice of "investing for the long term" is designed for money management professionals to gain the most fee for the least amount of work. However, to be fair, for individuals to gain enough confidence to do this for themselves is not something that comes easily for most people. And, expensive mistakes can be made. So perhaps the pablum of investing for the long term produces results that are no less attractive than an inexperienced investor turned loose on the market. Further, the "investing for the long term" also assuages the pangs of "where did my money go" for investors.

In the end, then, it is the differentiation between active investors and passive investors. And there are some wonderful success stories of long term term, passive investors that allow investment professionals to hand out this "advice" without fear of being tarred and feathered. Nevertheless, I'm forever reminded--no, HAUNTED--by the paper my friend, Russell, shared with this blog: Irrational Optimism. So much of the "industry's" advice is based on a time slice of data that is country (US) and time specific. Again, just look at the Japanese market. If one listened to the standard fare advice, one would have just a 1/3 of their investment--even some 20 years later. I guess that the severe deflation that accompanied the market tumbled numbed the pain a bit.

Protect your capital. There are always opportunities; never be fearful of missing them--you have only yourself to present performance to. It is not what you earn but what you keep. And when probabilities are in your favor, act.

Happy April Fool's Day

As I type, the DOW is up 368 points. The smartest thing I did yesterday was to by some additional DIA 130 APR calls for .17. My cost basis is .50. It helped offset where I was in the hole, and the position is now green. It hurt to do so as I was already in the hole (it was a modest position). But I'm participating in the terrific rally, and that is good. I also bought shares of FAST to hedge my puts. That was smart too. I DUG out of DUG, though I still have SMN. My spec account is below $20K. Wah!!!

On this day 17 years ago at 2:20 p.m. I gave birth to my son. My labor was induced. I was so heavy with child that when I went to the doc he scheduled me for a inducement (I think it was a Monday) unless I went into labor first. After returning home, I realized the date was April Fool's day. I debated for about a minute as to whether to reschedule. Given that I felt like I was carrying a bowling ball between my knees (yes my knees, that is how it felt), I sacrificed my son's self esteem for my own comfort. Bad Mother!

Actually, my son has suffered no harm. To the contrary, I think his having an April 1 birthday has been interesting for him. My daughter's birthday on the 27th. In Va, April birthdays help one avert the terrible summer months of oppressive heat. (I was an Aug birthday!). Though I remember little about some of my life, I remember vividly the birth of both of my children. Let your breath out! I'll not regale you with birthing stories today.

I've been walking on my foot, but I've reached my threshold of discomfort!

I hope that you've had a good day today. It will be interesting to see how the balance of the week finishes. I still remember A. Cashin's note that these shorts are the most skittish that he has ever seen. I still don't like the fundamentals of the market, but I think that it is one of those places where absent any horrific news, this market NEEDs to go up. I'm happy to be participating, albeit modestly.