Fidelity Select Sectors

Here's a list of Fidelity's Select Sectors for the year--From best to worst. Only one is green: Money Market.

		10/10/2008
Select Money Market Portfolio (FSLXX)	Money Market	2.39
Select Medical Equipment and Systems Portfolio (FSMEX)	Health Care	18.05
Select Biotechnology Portfolio (FBIOX)	Health Care	20.46
Select Transportation Portfolio (FSRFX)	Cyclicals	26.32
Select Consumer Staples Portfolio (FDFAX)	Consumer	27.5
Select Pharmaceuticals Portfolio (FPHAX)	Health Care	30.73
Select Construction and Housing Portfolio (FSHOX)	Cyclicals	31.55
Select IT Services Portfolio (FBSOX)	Technology	31.6
Select Retailing Portfolio (FSRPX)	Consumer	32.05
Select Paper and Forest Products Portfolio (FSPFX)	Natural Resources	33.55
Select Environmental Portfolio (FSLEX)	Cyclicals	34.19
Select Consumer Discretionary Portfolio (FSCPX)	Consumer	35.12
Select Health Care Portfolio (FSPHX)	Health Care	35.14
Select Banking Portfolio (FSRBX)	Financials	35.94
Select Chemicals Portfolio (FSCHX)	Cyclicals	36.34
Select Leisure Portfolio (FDLSX)	Consumer	36.57
Select Industrials Portfolio (FCYIX)	Cyclicals	38.02
Select Gold Portfolio (FSAGX)	Natural Resources	39.3
Select Communications Equipment Portfolio (FSDCX)	Technology	40.34
Select Multimedia Portfolio (FBMPX)	Consumer	40.69
Select Computers Portfolio (FDCPX)	Technology	40.77
Select Software and Computer Services Portfolio (FSCSX)	Technology	41.78
Select Industrial Equipment Portfolio (FSCGX)	Cyclicals	43.13
Fidelity Utilities Fund (FIUIX)	Utilities	43.49
Select Defense and Aerospace Portfolio (FSDAX)	Cyclicals	43.62
Select Materials Portfolio (FSDPX)	Cyclicals	44.51
Select Utilities Growth Portfolio (FSUTX)	Utilities	44.56
Select Electronics Portfolio (FSELX)	Technology	44.8
Select Networking and Infrastructure Portfolio (FNINX)	Technology	45.97
Select Technology Portfolio (FSPTX)	Technology	46.25
Select Medical Delivery Portfolio (FSHCX)	Health Care	46.69
Select Brokerage and Investment Management Portfolio (FSLBX)	Financials	46.74
Select Financial Services Portfolio (FIDSX)	Financials	46.74
Select Wireless Portfolio (FWRLX)	Utilities	48.26
Select Air Transportation Portfolio (FSAIX)	Cyclicals	49.24
Select Telecommunications Portfolio (FSTCX)	Utilities	51.01
Select Automotive Portfolio (FSAVX)	Cyclicals	51.24
Select Energy Service Portfolio (FSESX)	Natural Resources	55.01
Select Natural Resources Portfolio (FNARX)	Natural Resources	55.5
Select Energy Portfolio (FSENX)	Natural Resources	56.89
Select Insurance Portfolio (FSPCX)	Financials	57.33
Select Natural Gas Portfolio (FSNGX)	Natural Resources	57.98
Select Home Finance Portfolio (FSVLX)	Financials	58.12

Tontine Partners

I found the following letter from Tontine Capital Partners at Michael Covel's website which you can reach here. Apparently they are liquidating along with many other hedge funds. I saw them mentioned on Real Money, Googled them and found MC's piece.

After reading this letter, I've decided not to self-flagellate any more. Read a bit of it and see if you would let them boil water on your stove much less manage your hard earned doe.

A Rout by Any Other Name

. . . . is still a ^#!$!^&& rout.


I don't have anything to really say about today that you do not already know. Unprecedented---comes to mind. Unprecedented wealth funded by debt ends badly. Whether we are invested in the market or not, we will be affected.

Prudent savers and investors trusting the markets to eek out a reasonable return so that they can live a financially independent life may now have to re-write some of that.

Capitalism and consumerism fed all of this. The indictment is squarely resting there--oh but wait. Aren't capitalism and consumerism the centerpiece of our American value system? Somewhere we squandered the deeply felt and hard-won values of freedom and independence for these two whores that promise only fleeting pleasure and a very dear price.

I've surmised here that underlying concept of the 'NEW MIDDLE CLASS' in emerging markets. Always said do breathlessly and full of hope that the appetites of the rising Asian and Latin American populations would prove bigger than our own. The pay off: lucrative goods and services. Of course, we'd have to inculcate the values of spending v. saving. I still hear the echo of the money managers saying that while the middle class American wasn't really important anymore and the luxury good makers would weather just find. IN fact they would IMPROVE. The chart below--a massive head and shoulder that broke within the last few days--tells a different story.


For those of you who employ technical analysis, I (layperson that I am) encourage you to employ a longer term view--10 year. Would you buy this chart? Looks like some roll over potential there.


What about this chart? Perhaps IBM will find support at $80 or so. Their revenue grew at 5%. I don't see that revenue growth accelerating in the upcoming economic environment do you?


Husband is in West Virginia. Hopefully there will be no accidents. This Mercury Retrograde has been pretty devastating so far. My son's wreck on the first day. Then the market's wreck each and every day it seems. Click on the graphic below to read more about Mercury Retrograde. You may find it interesting to not that RIMM had a major snafu under a Mercury Retrograde (remember when their systems went down). Mercury rules communication.

Currency and Reserves

Bloomberg has this story (click on title below). I've been watching the stocks of the Latin American Complex get ripped apart. I have sector chart with just South American stocks. The banks were the first to lead. Stockcharts is down, otherwise I would put an SDA chart up which is mentioned in the article.

Latin American Banks Dig Into Reserves to Salvage Currencies

By Adriana Brasileiro and Andre Soliani

Oct. 9 (Bloomberg) -- Latin American central banks are being forced to draw on record foreign reserves built up during the six-year commodities rally to stop their currencies from sinking in the worst financial crisis since the Great Depression.

I do not have as good a command on the role of currency refers on foreign stocks. But the charts know! I think that you will find the chart interesting, and if you are like me and do not have as good a command on this issue as you should if you are doing investing in these types of firms, this article may be a wake up call.

I woke up parched. As I laid in bed wondering if I should get up, my brain governed by my parched body seized on the simple fact that I had enough ingredients to make a decent limeade (from concentrate). I'm no good this time of day. But as I was hydrating, I was reading. And...in reading I wanted to share this.

Lesson for you: stay hydrated properly and understand currency risk in changing times. Night, night.

Morning Post

When I closed my post last night I closed my post with the Nikkei being down 383. Looks like there was reinvigoration.

Our blog friend, Selden, dead but wise as ever instructs:

The great cause of loss in times of panic is the failure of the investor to keep enough of his capital in liquid form. (p. 71)

What is particularly unfortunate--and you may label me a conspiratorista (I still remember a commenter calling me a recessionista)--is that much of this demise comes from the wealth of average investors. I absolutely believe that there is no more destructive advice than to buy and hold. This is a zero sum game. Someone sold and locked in profits--it is not the Average American's portfolio that participated in that preservation of capita, preservation of profits. It's the most insidious type of wealth transfer that there is. And it is something that NO one talks about.

About face in the futures with the rate cut. Another interesting day ahead.

Market Grab

I suppose that the market was not satisfied with giving back thos 500 points yesterday, and snatched them angrily back from surprised investors. I've no great insights, but I know this, that no matter who you listen to, you have to own your investment decisions. Part of me wishes that I had made more money in this environment. But at least I've preserved capital. I was too early to exit some of my juicier positions. OCT DUG 35 calls and SEP DIA 125 puts. Both were bought in April. Both would have been worth mucho dollars--but no, Leisa was afraid of a monstrous rally.

You see, I've had some very expensive puts expire worthless. HIG--I was early to that pig. I had about 5200 in put premium that expired in May of this year. Yep. That's alot of money to me. The BEST lesson that I've learned, and paid handsomely (but not lethally) for is this very simple fact: Reality and the market's perception (or cognition) of reality can be separated from a fairly wide gap. I new that HIG was in trouble last year. Waited a whole year--a faint whiff of trouble but then stability. Now look at it.

I'm a much better observer than a trader! But my capital is intact. I've just enough short and long positions to be balanced. I closed my XLU puts for a nice 130% gain. But I could have waited just a wee bit longer. But as high as the VIX was and as sustained as a downtrend and OCT expiration....the sure thing seemed to be the smart thing.

Because I've not paid much attention to the market through a full cycle prior to this one, I did not have a full appreciation of (1) how far things can go up; (2) how far things can go down. Of course I've seen these things written, but until experiencing it, I could not appreciate it very well.

Long time readers will remember my uber-nerd project at the begining of the year of loading all the blasted symbols in by each sector. That project has more than paid for itself. HOWEVER, had I a more systematized way to tag things, it would have been all the more better. I'm still of the mind that being spider like--spinning one's web, crafted with fundamental expectations coupled with technical analysis (confirming the timing/accuracy of one's fundamental theses) , and then watching and waiting patiently is really the best mental model for being successful in the market.

I may have to re-do my blogand put a spider theme in it. It's a mental model that I like very much, and Halloween is coming soon and all of that.

I'm slipping into old habits. I'm drinking a glass of wine. Dinner is on the grill--pork tenderloin and baked potatoes. Grilled asparagus will be the accompaniment. I'm enjoying Va's Horton winery, Viognier. It is really nice. I used to enjoy wine nightly. I've not had wine since last Friday. I'm toasting my SIL's father who died one year ago today. Clink.

In another week, I'll be down in Hatteras for a few days. My SIL/BIL generously invited us. They go every year. We've not been on vacation for a bit. It is hard to get my kids' to go at their ages. We are mostly home bodies--but we've taken a few vacations here and there. Frankly, my husband and I do not travel well together. Despite my inate bitchiness (a blogger on another blog accused me of being the bitchiest woman on the blog), I generally try to find the non-confrontational line. But--once I'm on that line...well...it ain't pretty.

Nikkei down 383 as I write and sign off. I hope that you are faring well in this madness.

Morning Post.

Yesterday was an extraordinary day in the market with the DOW plunging 800 points before closing just down 357 or so. Yeah, a 300+ fall in the DOW and I use 'just'. A reminder that everything is relative--Albert Einstein reminded us of the power of that.

I've mentioned here in my amateur musings. In fact, I did a little search of my blog to see when I started to talk about it. I see that I was chatting about it for a while. De-leveraging and de-flation go hand in hand. It's not complicated. How far for how long is anyone's guess. But if we've been building this up for so long (more than 20 years), then... Well, you can connect the dots.

Minyanville had a interesting article which you can access HERE.

Morngin Post

No doubt you are waking up to a financial world in turmoil. Jim Cramer is in outright panic mode--when his show gets canceled on CNBC, we will know that the bottom is finally in. (That is not an original thought on my part. I found this on my blog from August 27, 2007. A simple reminder that I'm not a dolt.

If I had to guess--not that I have any special knowledge, but just for the fruitless task of stating an opinion--I guess that the minute that the market hears some bad news it is going to bolt like a skittish colt again. I don't think for a minute that we've seen the worst of this correction. We have only had investor cognition that the problem in the credit markets really is a problem. Further, if the magnitude is bigger than the market's expectations--and frankly, I don't see much quantification of the magnitude--then that skittish colt is going to hit a yellow-jacket's nest.

This weekend was more event-filled than normal. Unfortunately, I had to put Chloe, my geriatric poodle, down. She's been steadily deteriorating. She was deaf and blind. Her simple, shadow existence was pain-free and revolved around sleeping, piddling on the floor, and eating. Most recently she stopped eating. Yesterday I noticed that her eye had puss coming from it. I suspect that she had an abscessed tooth. She had terrible teeth--apparently a hallmark of poodles.

She hated baths, hated to be clipped and was very particular about her feet. Forget about brushing her teeth. This is a dog that we found in the wild some years ago. She also had two other comrades. One was found dead on the road by a neighbor. My husband, kind hearted soul that he is, buried it and then rescued the other two. We named them Sophie and Chloe. They were the most miserably looking dogs (they are miniature poodles) you could imagine. Scraggly, long nails, detritus in their hair (which continues to grow unless clipped). Sophie was so nasty and smelly I had to take scissors and clip close to the skin as the outside of her coat was a matted mess. But....they were not thin, so obviously they were quite effective in foraging.

These dogs were never able to learn effective potty training. Thank goodness we have no carpet. Sophie met her demise under the tire of my car, running out to greet me. She had done it for years, but this particular time, she ended up under my wheel. It was not a happy day. She died quickly, but not before biting me badly enough through the joint of my left ring finger. I had to go to the hospital and cancel a business trip.

We estimate that Chloe was about 17 or 18. She had a good life, even though she would not submit to the ministrations (grooming) to keep her looking cute. She was a rugged girl from having to fend for herself for however long in the wild. So I buried her under the redbud, next to Greta. I imagine that before my life comes to an end, the red bud will be the hub to the spoke of beloved pet carcasses. Perhaps, even mine (ashes) one day.

Hold onto your hat.

I'm Outing Myself

No, I'm not gay, but I have here never before published photos of me. You can now put a face with this space. I hope the reality is not too jarring!

Last night was the expiration of the last of my getting-older reminders. Last night was my 30th HS reunion. I'm embarrassed to say that I had to look at lots of name tags, but most fessed up that they had to do the same.

Lest you have to wonder, that is me in the middle of those two good looking fellows, Buster (l) and Allen (r). My husband and I split our social obligations. He attended the party of a dear friend's surprise 50th birthday party. My BIL, who also graduated in this class, was on a fishing trip. So I was on my own.

Well, not quite on my own. The only reason that I went to the reunion was because my best girlfriend from high school was coming down from Northern Virginia. Here's a pic of me and my friend, Robyn, taken at her home. Even at 48, our fathers somehow treat us as if we are still teenage girls. Hers insisted on driving her down to the Richmond Convention Center, the site of the reunion.

After brief consideration I told her that I'd pick her up and take her back to her parent's house. It was in the immediate circle of driving that I would need to accomplish to fulfill my other chauffeuring duty which was to collect my husband from the party.

As another reminder of the ever increasing space between our tender teenage years and our hard-bitten advancing years, I had a hard time finding Robyn's home. Oh, I was on the right street, and as I was slowing down in front of her home, a home that I had been to hundreds of times in my life, it did not quite look like 'it'.

A few doors down, I could see a young fellow 12-13 sneaking a smoke. He was lurking around one side of his home. As he saw me driving slowly down the road, I could see him worming his way around the back--but not quite wanting to turn the corner. No doubt he would be visible to his parents inside. I found it laughable that he thought that in such a neighborhood he could sneak anything outside.

Ultimately, I resorted to calling to get Robyn's parents' phone number, as my call to R's cell phone went unanswered. So I was talked in (embarrassingly) from 3 houses away! Sigh . In fairness, I had LINGERED in front of the right home, but 15 years or so time, the LAST time I had been by there, small trees/bushes become BIG trees and bushes.

I'm not sure how Robyn and I became friends. She was outgoing, I was not. But she had transferred in from another school and was in my Algebra class. Though shy, I did outreach. Our friendship blossomed, and over those two or so years in high school we did fun stuff. Some of that included sneaking downtown the the "Shockhoe Slip" and ordering drinks though we were under-aged. Never once did we get carded. Picking up guys was never our intention. And we never did. We were good girls on an adventure.

We'd find guys, certainly. Rather, they found us. Robyn was always so dazzling with her blond hair and pretty tan, she was like a light to these man moths! And while our potential as a 'coupling opportunity' was degraded rather quickly with these guys, we were unique in that we could hold our own in any conversation. Even better, we had perfect comedic timing. So we'd have these guys howling with laughter. I guess if you're not going to get sex, a good laugh is a reasonable compromise. (I realize that I'm writing that from a female perspective and the testosterone infused opinion on the matter is likely a wee bit different!)

My friendship with Robyn is very special. Geography and family/work responsibilities are life's wedges in interpersonal relationships. The same is true for both Robyn and I. However, though she's not part of my everyday life, and she has not been for some time, she's NEVER forgotten one of my birthdays over all of these years. I cannot say the same. Ultimately, we carry our friendships in the pocket of our hearts, easily reaching in to pull it out when life's wedge is temporarily removed.

Even 30 years post high school, Robyn's and my differences are still the same. Here I am in my unimaginative black dress, and Robyn dazzling, as always, in something both stylish and colorful. And in yet another testament to timelessness of the "things never change" aphorism, Robyn's Dad suggested that she wear her shawl and NOT take it off.

Right.

Sweet Sadie

I've mentioned in this space my SIL's dog who was diagnosed with terminal cancer. Today, Sadie was transitioned. Her quality of life up until yesterday was quite good: healthy appetite, pain-free movement, enjoyment of her family. Yesterday the cancer felled her, and she was listless and uncomfortable. My SIL made the difficult but compassionate decision to have her put to sleep. Her blood pressure was so low the doc and personnel had difficulty finding a vein.

My SIL had the good fortune to have three of her life long friends with her. They have been getting together for every year since they've graduated from high school. This year, my SIL had the girls over to her home, as it was a fishing weekend for her husband.

So in today's brilliant fall sunshine, these long time friends took turns spading the ground for Sadie's grave.

A.M. Post

681 Days....I'll be joining the prestigious club of 50 year olds. Fifty is the new 30 right? Right! That I have my fitness goal firmly in sight AND I've been systematically pursuing it, I'm feeling good about the approach of that day. That I can run for two miles without keeling over is satisfying. I've been surprised at how easily my body has conjured up the old breathing and moving rhythms. Bodies are amazing things, though they can turn on us rather viciously if we don't care for them.

This a.m. WFC is announcing a stock for stock offer of WB. Should be good for financial stocks. I took a flier on some $20 UYG OCT calls--a small bet on a bounce in financials. Sometimes these 'flier' ideas of mine don't fly. Sentiment is so low we are bound to get a bounce here soon.

I'm waiting for a washer repair person. Hopefully it can be fixed today. I'm very reliant on this machine. We've lots of socks, underwear towels and clothes to process on an ongoing basis. I overfilled it and the door blew open--apparently breaking the latch internally. My husband groused with a litany of "you always...." Oh well. Married life....we can script all of those conversations, can't we?

The Line between Objectivity and Emotionalism

On the Myers Briggs test, I am an ENTP. I'm a mild extrovert, highly intuitive, peg the score on the thinking end of it, and I'm mildly erratic on the perceiving v. judging. I NEVER make decisions on how I feel. I guess I'm just a cold fish.

In business life, among the hardships--and I mean life or death--in corporate life--I was not emotional. I always felt clear eyed about what needed to happen. I never doubted my decisions, and I was confident that the end would be satisfactory (not meaning to sound boastful but earnest in my duty). But there were times when that confidence was overcome in my private moments where I felt an abject terror of the consequences of my being wrong. I didn't have those conversations with anyone. Not even my husband. But in this blog format, I can cheerfully tell you my abject terrors!

The singularly most important lesson that I've learned over the last year is the extraordinary lag between when facts are available to the market v. when the market chooses to act (only today did HIG spook the insurers--I wrote about them in April of 2007). I've reasonably side-stepped the downdraft. That's only one half of investing success--and only 1/2 of the hurdle. The second half is stepping in during the hopeless period and bellying up to the bar (I guess you could say "bellying up to the bear"). With respect to market matters, I do not have such confidence as others are able to muster and roll up and jump in with a "damn the torpedoes" type of swagger.

Now, what if my reluctance to wade into this market is not emotion but reason? And what if the 'reason' of others, based on past markets and patterns, is merely emotion? An inversion of the two so to speak. Here's the thing that I have trouble with..... We've had a credit bubble of such magnitude that has built for so many years, how can the global economy possibly rebound without the engine of funding (credit)? How can any bounce be sustained in any meaningful way?

While the credit markets have blown up, we've still some body and psychological blows that have not been dealt, not been felt. We've yet to see evolving unemployment numbers and declining consumer spending over successive (not just 2 or 3) quarters. How many times can WMT be recommended? At what point in time does the consumer just buy groceries and not the higher margin items? How can we have the despair needed to form a real bottom until we see these things?

I'm an ignorant nobody with no fear of being wrong! I will gladly say that if this is the type of bottom that is formed, and I'm too fearful or ignorant to see it, then I'm just a cloven hoof in the crowd. Maybe I'll be referring to this post in the future as an example of where I was wrong in remaining cautious--a common mistake among the average investor. But I cannot see, nor has anyone pointed to, where the liquidity bellows are going to be pumping in a way that is efficacious in providing additional liquidity.

We may be keeping the balloon from deflating, but we are not making it bigger. It's got to get bigger to have growth, unless I have some fundamental misunderstanding of the way things work. We're merely trying to prevent collapse, nothing more. Worse, there is a hole in that balloon: the consumer. How is the consumer to fare with reduced lines of credit, loss of jobs, frozen wages?

Perhaps Larry Kudlow with his prickish smugness has an answer. He's a monologue. (You can insert names of others). Never changes his point of view though circumstances change. Free market and capitalism! Yeah, right. Free market and capitalism gone wild put us in this pickle jar. And the pickle jar isn't Claussen. No this pickle jar is a special one where a mad scientist consigns Nature's aberrations in the horror movies. This pickle jar will be one that every eccentric economist will have on their shelf. Students will look sideways at it for fear of looking at it head on would bring about palsey. That felt better.....

And what we did for the financial institutions--which is to give them enough money to not go under---we will be doing for the consumer. The consumer too will have to de-leverage. The consumer is the smallest unit. Like the financial institutions, the bellows (two-man bellows with Ben and Hank) are fixing over-leverage with the consumer. We will not be creating new funds for goods and services--we'll be creating funds for the consumer to de-leverage. If the financial institutions get this money and then fail to help the consumer, then I believe the worst. Do not forget that the consumer is 70% or so of GDP. Based on what you see, how do you see a reinvigoration of the world economy?

Should the bill pass this evening, we may get a temporary reprieve through a relief rally, but I see a steady drone of bad news coming. But maybe that is emotion and not reason. And I will own my being wrong. And, I'll be jubilant to be wrong. Ebullient, ecstatic and crazy happy in my wrongness. I may change the T to a S (thinking v. sensing) on my M-B score. I truly will be transformed into a different person.

I'd like to reprise with my friend Selden's quote--he's dead of course, and I don't know him, but his lovely little book has been my compass, and I feel close to him:

Historical parallels are likely to be misleading. Every situation is new, though usually composed of familiar elements. Each element must be weighed by itself and the probable result of the combination estimated. In most cases the problem is by no means impossible, but the student must learn to look into the future and to consider the present only as a guide to the future. Extreme prices will come at the time when the news is most emphatic and most widely disseminated. When that point is passed the question must always be, "What next?". (p. 54)

What next indeed. I'm fearful of the answer to that question in weighing the elements and looking to the future, and I do not believe that we've seen the most emphatic news and most extreme prices. Why? Everyday the story gets worse. Another unanticipated stalwart has fallen. Bottoms are not violent--he counsels, too. They are dull. This is violent. Reason? Emotion? I would trust you to tell me.

Two Years

Today is my second anniversary of my blog. This is my 1044th post. Thank you for reading and your encouragement over these two years!

Worth A Look: The Economist

The Economist's reprisal of this 11.23.29 article is well worth your time. The beauty of finding clever articles is that it relieves me from having to work too hard!

Another One for the Record Books

Gary K calling out Cramer (JJC) as a miscreant and a fraud. Apparently Gary listened to JJC's show this evening for 5 minutes. I stated here that JJC said that THE bottom had been put in. Probably the most important thing about the market is listening to the right people. JJC is not one of them. Gary K is certainly one of the right people.

Another Day (week, month, year) of Goofiness

I'm still have two feet rather firmly planted in the land of deflation. Yes, I am a 'nobody', and I know that my opinion is not based on any informed experience in navigating a portfolio consciously (I was unconscious for too long) through bull/bear markets.

But I still have to ask the question, "What will lead us out of this bear market?" I've still not seen any piles of sparkling jewels hidden in the bushes like in some video game. In fact, I feel like I'm in one of those video games....going round and a'round because I cannot find my way out. Attacked on this side, that side by evil gnomes wielding sharp instruments. Wizards in the distance saying come here, go there and all will be well.

I'm putting on my magic cloak that makes me invisible and mutes everyone else.


I have a subscription to SFO magazine (www.sfomag.com) There was a wonderful "Tech Take" at the end of the June 2008. You can find the article here. I strongly urge you to read it. I only recently found it in my reading basket in the WC. You gotta make good use of your seat time!

Miscellaneous ramblings:

• Meredith Whitney seems to have incontrovertibly won in the bank analyst smack down with Dick Bove.
• Letting Lehman fail---that the ramifications of this were not apparent to those making the decision makes me less confident.
• Though I've been on the fence about the election, I have made my choice--not so much through my being enamored with my choice, but rather through my ruling that I was completely incapable of voting for the other candidate. I consider it my duty to choose as a citizen between the two candidates offered. So there....I've made my decision without offering a disparaging comment about the other candidate!
  

A. M. Post

John Murphy continues to say it is too late to sell and too soon to buy. Rev Shark thinks that the news driven market is a gamble. Bill Cara thinks that the next bull market is underway. Gary K thinks he'd like to get bullish because everyone is negative--but there's no real leadership. Leisa thinks it's nuts out there. I don't mind waiting for the smoke to clear.

A great man, Paul Newman, has died. Here was a man that had enormous beauty, talent and integrity.

I've completed Week 6 of my plan. Today starts Week 7. Day by day, I'm making progress on my goal. My bike is back from the bike shop. I bought some new tires which Mark and I put on both our bikes. I bought a less aggressive tread so that I could ride more easily on the road. This tire, a Continental Flow Protection Kevlar, seems to be a good mix of road/trail ability. The old tires are hard--these bikes have stayed out of the weather, so the rubber has not dry rotted. But soft rubber is good.

I'm still training with my HRM--I was pleased to note that the same home trail cycle loop was being met with lower heart beats. My top end was 158 after making a climb--now it is 150. A heart zone range is 20 points--that is quite an improvement, and I could feel it.

I've not been attentive to my diet. I've not gained weight, but I've not lost any more either.

My son is still grumpy, but medicated! Everyday he'll be in less pain.

As I Write....

Son is home. Surgery successful, but he's uncomfortable. Listening to the debate. Markets did not melt down. I wrote a letter to my congressman and told him of my expectation for him to step into the conflict and reconcile.

Checking In

It has been another eventful 24 hours in our household. My son was injured in a dirt bike accident at a friends' house. He suffered a concussion, a badly broken collar bone that will require surgery, and slight breaks in the humerus and the tip of his thumb. All on the right side.

It could be worse from a physical standpoint (head injury, neck injury etc). But from a trust standpoint, it could be no worse. He is grounded this week. He has a job. He told us that he was going to work. When I received the phone call on my cell that my son had been injured, I immediately believed that he had been in a car accident, as he would have been driving to work.

In my household, I like to be in charge of these events. My husband received the phone call, and informs me of the accident, and then proceeds to tell me that Reade felt like he could drive home. A broken collar bone and a stick shift don't compute. I indicated to him that he should get Reade. As it turned out, his friend brought him home, and Mark shuttled him to the hospital.

I had my KPMG alumni event that evening. It was at a nice hotel (The Jefferson), and I invited a friend to have a drink with me prior to the event. (I gotta get all my social stuff sandwiched while in town). When I received this phone call, I had a long pause as to what my response would be. Do I attend my event? Do I go to the hospital to meet them?

I let my maternal instincts be subjugated by my rather extreme anger that my son had purposefully lied to me about his whereabouts. In fact, the first thing out of his mouth in walking in the door was a lament that he had to go to work. He then went to stage two of his ruse by asking me if I minded if he took a month off from work. Would I be disappointed?

Now there is a classic irony--it's best not to tempt the fates. He'll get not a month, but about 6-8 weeks off from work. And there is no current measurement for the depth of my disappointment in being lied to in such a deliberately calculating way.

As such, I attended my event and reconnected with people with whom it was a privilege to work with. We remarked that though so many years had passed, getting together made us feel like family. We worked so many hours together, these people were indeed our family and our colleagues. Those four years forever shaped my career: it instilled a solid work ethic, the ability to meet deadlines, the facile working with other people of varying difficulties, the need to make choices against judiciously weighed evidence, and the value of happy hour in cementing relationships and blowing off steam! My career was immensely helped by these folks who recommended me for positions. I owe them much.

I'll be out all day tomorrow with his surgery.

Nothing makes sense in the market to me; so I continue to have little to say. Well....I'll say this...I don't see how we can avoid a protracted recession. I believe us already to be in a recession. Would that it stays in the r neighborhood of the alphabet.

Jeff Saut and Old Age Reminders

“Glass or no glass (read: no class)”
September 15, 2008

Jeff Saut has another wonderful column. I hope that you'll take time to read it above.

A friend of mine (who worked in banking most of his post public accounting career) e-mailed me this after essentially telling me that my notions about the banking system were likely over stated:

And Leisa, you get the crystal ball award for forecasting the downfall of the American banking system as we once knew it. All those years in healthcare, when you should have been running the Federal Reserve Bank.

I have an alumni event with this firm on the 24th. Every couple of years they host one--and it is pretty nicely done: open bar, heavy and delicious hours d'oeuvres. I've been gone from the firm since 1986--22 years. It is always great to catch up with old colleagues. I was 22 when I started there!

I also have my 30th high school reunion on October 4th. And....my 26th wedding anniversary on October 1. Geez.....

Fit by Fifty Update

I've just completed Week 5. The time has flown by. Here's my record keeping on my progress using my minutes in cardio, points and average Z-factor (my cardio zone). Aerobic Zone would equate to 3. My fitness level does not allow me to work in that zone comfortably, YET. My goal is to be there in another three weeks.


I recovered from my over-training from WK2. I tapered on WK3/4. I then increased my intensity on Wk5. My minutes went up marginally, but I was able to increase my intensity to finish with 2.25 for the week. I'm going to add one more workout (last week I did 4) at the same intensity. I plan to do 5 workouts in the 2.2 - 2.4 range for weeks 6-8. Already, I can feel that my heart and lungs are getting conditioned--and the smartest thing that I did was listen to my body after WK2.

While the chart shows my cardio, I've been strength training and working on my flexibility. Accordingly, in addition to transforming my heart and lungs, I'm transforming other parts of my body. Most notably, I have lost 1 inch from my thighs. Admittedly, I've not been very good with my diet this past week, but I know that I have more active tissue (muscle)--my body is getting tighter and stronger. The nice thing about making changes in your diet and exercise, you do not have to wait long to see results.

I had a great joy this week too. I was able to take both Macy and Daisey on the firebreak behind my home sans leash. It made for an enjoyable trail run. Macy stayed by me, and Daisey made her great English Setter concentric circles. Though I had not earthly idea where she was most of the time, she was keenly aware as to my and Macy's whereabouts. IN fact, I could hear her great thunderous strides and breathing coming to and fro on the trail (I think that a horse would make less noise). Though I have plenty of room for her to run on my property, she was clearly enjoying the long trail stretch.

Would that I could run that way! I hope that our dear Mark M is still training for the Boston Marathon. I secretly envy people who have such high aspirations. But through their example, I'll set a more modest goal of running a 5K or 10K race in the Spring.

I took my bike to the bike shop today, and I ordered some new tires. The rubber on my tires feels terribly dry though there are no cracks. I've been enjoying cross training with my bike on both the trail and the road as well as running on the trail and road. I bought some new road running shoes, and I look forward to trying them out when they arrive next week. I'm not ready to get new trail shoes yet.

We are beginning to ease into Fall. I'm glad for the hot, humid weather to end.

Apocalypse be Gone!

Four Horsemen of the Apocalypse

by Albrecht Dürer

The secret formula of Apocalypse be Gone (a rip off of Bug be Gone) has been perfected over the last weeks, shipped to central bankers around the world. They were instructed to spray at the same moment yesterday.

I missed some of death spiral of GS/MS yesterday as I was checking on my SIL's lab, Sadie. She has terminal cancer, and her time is quite limited. I let her out so that she can potty (she is on prednisone), and then give her some comfort. Outside of her belly being swollen, she is not in any overt pain. Though, she is clearly a little uncomfortable--like a pregnant woman is uncomfortable.

With the extraordinary worldwide response of the markets to this news, it is easy to say, why am I not exposed more, if you are neutral. If you are heavily short, you are likely pegging your sphinctometer.

I do not believe that short selling should be banned. I do believe that stock manipiulations to the upside as well as the downside should be against the law. As you know, I'm dismissive of the parade of stories---the sausage in the media casing--that lured investors into the believing that the global liquidity boom would go on forever. They were peddling those stories right at the top. I still remember a breathless Maria B talking about global liquidity boom, infrastructure boom, third world middle class boom etc....

One of the most important things that I've learned about anomalous stock behavior is to look at the short positions. Modest, even mediocre news, is sometimes met with extraordinarily positive moves in the stocks. It made me scratch my head, until I realized that short covering rallies are very powerful.

Short sellers are the first buyers. They are not 'real' buyers per se, as they are merely buying to neutralize a position. To be fair, I should say that short sellers are not really real sellers either, as they are selling something that they do not have. On the selling side, relentless short selling takes out stops of the real holders and produces a cascade effect. And if you were a long time holder of GS and had your stop taken out at $85, only to have it go up as high as $120 and then settle at 108--and the current bid as I write is $137--how would you feel?

While there will be much weeping and wailing about the intervention, I believe that intervention was needed. And the seeming euphoria that we are witnessing is a scramble to cover shorts. The market will likely go back into price discovery mode for stocks of specific companies to find out what is out of synch with the fundamentals of the economy and the the company's prospects withing those fundamentals.

I still don't see how we have created additional liquidity to flow into the economy. We are unfreezing the credit markets by assuaging fear, and we are making institutions list less in the tubulent credit waters. Our underlying problem problems of deleveraging have not gone away. But we have mitigated the number of bodies (or parts of) on the field by allowing a bit more time to sort things out.

Yesterday's Market Close

Epic Events and a Couple of Charts

I'm not certain what the sense of fear was in the savings and loan crisis. I was a busy professional and new mom. I never paid any of these matters much mind. But given that there are respected professionals such a Dennis Gartman and Art Cashin suggesting that these contemporary events are like nothing that they've ever experienced says something.

In a couple of weeks I'll be celebrating the two year anniversary of this blog. The space has been more silent than usual, as I really have so little to say--largely because I said so much earlier. This blog effort has been singularly helpful in my process to becoming a little less perplexed about the market. Without this space, I would not have found and tackled Hedge Funds and Systemic Risk. Without this space, I would not have had a venue for writing my thoughts to which I can return for reference or refer others.

Stumbling upon that paper directed my efforts to investigating CDO's and the mechanics of this debt: how structured, risk tranches, loan composition, guarantors, size of the market, size of the guaranty market. That paper also made me want to step back and look at the root cause. It was never the subprime issue--and that was the initial snow shoveled on the pile of shit. Rather the inflated price of houses to the earnings of buyers COUPLED with the extraordinary yearning for yield that compelled lenders to come up with innovated ways to put buyers in homes as well as earn handsome fees.

Those things are merely market forces. But unfettered market forces produce some pretty noxious behavior. Child labor laws came about not because of overzealous government regulation, but rather through overzealous capital putting children in harm's way. If history has proved anything it is this: we will have periods of expansion, funded with leverage; and we will have periods of contraction that will result in de-levering. This current period of over-levering though is historic given the use of synthetic liquidity/leverage in the form of derivatives.

While I don't think that what we are witnessing in terms of an event should be surprising, but the MAGNITUDE of it should be frightening. And I believe that the market response reflects that fear with gold having it's single best day yesterday since WW2.

None of this would have been terribly problematic had (1) risk been priced effectively and (2) we had effective regulatory oversight. Cheap money and the search for yield certainly does engender creative ways to satisfy that yearning--but had risk been priced in appropriately we would have reduced the magnitude of the crisis, but not avoided it. Effective regulatory oversight--to include the rating agencies-- would have sent up some red flags sooner.

In effect investors have been flying blind. Investors depend on executives to price risk effectively. Reports yesterday say that AIG had no idea of the magnitude of their own issues. If those close to the situtation do not understand it, how is the hapless investor to know?

These crises are the free markets' way of purging the system. Accordingly, they should not be eliminated. However, these crises should not be laid at the foot of the taxpayer. If the organization is so endemic to the health of the financial system AND the central bank will ultimately have to step into the morass, then there are two simple things that can be done:

• Simple Thing 1: Tax these organizations accordingly--allow the taxpayer to enjoy some of the heyday if they are expected to participate in the mayday. (Hey, I like that!)
  

• Simple Thing 2: Provide effective regulatory oversight with rules that are designed to optimize the protection of the public's interest with successful operations of the organization.

Of course, I'm just a layperson, but that is my rather over-simplified suggestion!

~~~~~~~~

On August 10, I mentioned Farmer Mac, ticker AGM. They were trading at $30. Yesterday, they traded below $10. Farmer Mac is the last man standing in the GSE family. I didn't see any reporting on it. Did you? I took no position on that musing. There are no options; otherwise I would have bought puts. The chart (click to make larger) says it all.



And if you really want to see some nonsense on a stock, you can look no further than CEG This is a 2 day (not 2 year!) 1 minute chart.

And look at Sempra Energy--at the same fated time, 2 p.m

Both of these stocks (and there may have been more) were funded by LEH for their commodity trading. Now I know I will never be a trader because for some reason I was watching CEG and when it hit $13, I hesitated and passed. Sigh. Perhaps I'll get a testosterone shot!

One for the Record Books

John Murphy notes in his missive: too late to sell; too soon to buy. Makes sense to me.

Historic Day?

Of the large investment banks, Lehman, Goldman, Bear Stearns, Merrill Lynch, three of them have failed in a way that has required being bought or bankruptcy (Lehman). While MER is being bought by BAC at a premium above Friday's closing price, Lehman will likely go bye-bye. MER/LEH outcomes are a good example of betting v. investing. How would anyone know the outcome ultimately? Who gets bought; who goes away? I've not even mentioned AIG which is looking for a $40B loan from the government.

But there are some that have speculative money cached for just this purpose, and prudent speculation can be well rewarded. And when one cannot determine the line between prudent v. imprudent, there is much to recommend about standing on the sidelines.

Jeff Saut

Click on the link above to see the September 8 comments by Jeff Saut of Raymond James. His missives are important to people who value stuff and not fluff.

LEH: Top 5 Holders of Lehman as of 06.30.08

You'll need to click the image to see clearly.

VIX

Marty Chenard made an interesting observation about the VIX, and it is available at his Stocktiming website--free stuff. His observation is that if there is institutional selling, then the VIX will not face upward pressure.

A simple, but rather elegant statement. So VIX is not just about fear per se, but rather when it acts in seeming incongruence to our expectations (conditions are yucky, but the VIX does not budge), then one explanation is that there is distribution in the market. And...if there is distribution, you are unwinding your position. Unwinding positions do not requiring put hedging.

Reflation Yields What? Inflation? Deflation? Flatulence?!!!

It seems to me that the single biggest question looming is the outcome of reflation of our insolvent institutions. Inflation? Deflation? I saw a news crawler on CNBC that said that Allan Greenspan endorses what the Treasury has done. BFD. Greenspan's endorsement of anything should immediately call it into question.

There's a delicious irony that so many of our self-professed free market folks who rail against the seemingly putative tax system that takes from the wealthy and gives to the the lazy are happy to take (even demand) a government handout when their bacon is sizzling on the griddle.

I'm in the camp of deflation first, then real reflation then real inflation. I just don't see how the central bankers can reflate anything right now until prices come down. Once the 'excess'---those asset prices that are brought down through de-leveraging--is out of the system, then the central bankers can act in some meaningful way. I've always been of the mind that the credit crisis was too big for the CB's to have any meaningful tools in which intervene.

In fact, as I write this, such a scenario makes a lot of sense (though you are welcome to call me on it). There are many who went to hard assets (precious metals, oil) thinking hyperinflation. I think that was too soon.

I see that oil output is being cut. Where are all of the "demand driven fundamentalists" who were incessantly (if not manically) making their case that we were running out of oil and the world as we know it was ending? That global demand was so voracious that we'd be burning our homes for fuel. Sigh. I had a few flashbacks from "Road Warriors"--the apocalyptic film about a world that has run out of fuel except for those stockpiles that are in the cross hairs of those with a real need for fuel!

In the end, I'm convinced that that the world had a diet too rich in debt and now it is being transformed into a giant gut grenade (as my son would put it) that once cleared from the world's financial system ensures that most of us will be wiping shit off our collective faces. And though we may wipe it off of our faces, the stench of it all will likely be around. I just don't see the switch for the exaust fan. I shudder to think that there is something in my eye!

I hope that you are weathering this nonsense in the markets well. To me, this is the lesson of a lifetime--and my tuition has not been too steep.

Here's a pic of FINVIZ performance for various Sectors. You'll have to click on the image to read it.

FINVIZ Features

http://finviz.com/map3d.ashx

FINVIZ has a couple of new features: 3D view

The other feature is an archive, but I'm not sure that I "get it".

Gary K's Friday Show

Gary K's Friday show---

Gil Moralis was Gary K's guest on Friday.

Gil (has covered his shorts on Friday) and is talking about the concept of forced selling by institutions (de-leveraging). He covered because now Bill Gross is talking about it, as well as others. When it is in the popular media, that means that it is more known.

Gil believes that the July lows will be tested. Hedge Funds are affected as well by institutions that need to liquidate their holdings to raise liquidity. Gary asks Gil to suggest to listeners what they should be studying to understand

Understand the underlying conditions-is there enough liquidity to sustain a bull market? Look at the leading indexes to understand if they are under distribution. Look at their own positions and back away from losses.

Gil Closes with this: In the end, credit drives liquidity and liquidity drives the market. It's worth remembering.


You can find a print interview with Gil HERE. You can also sign up for Gil's free newsletter here. I don't currently receive it, but I just signed up for it.

Gary notes these:

• No characteristics of a washout.
• No leadership to speak of. Most stocks look a mess; in a downtrend.
• Great time to NOT lose money.
  

---

I'm off now to do a transport--we moved it due to Hanna passing through. The storm brought some welcome rain, and not too much unwelcome stuff. We did not lose power, but other parts of our county did.

Physically, it is a rest day for me. Last night I was able to wear a pair of pants that I've not been able to wear in about 6 months. I sure did feel good.

Girls, Girls, Girls!

I was looking at Asian Times on line and I saw these ads. There's a point here....

The Nikkei Market is tanking, down 322 as I write. I tried to listen to Gary K, but someone loaded the 08.21 tape. Perhaps tomorrow it will be correct.

I missed most of the ugliness. But it was a good day to be out.

In another forum, someone stated that they thought that Sarah Palin's daughter's pregnancy reflected poorly on Palin's values. I have to say that prior to my having children, I had this sense that if kids were f'ups, it was the parents' fault. After the manifold time of saying (most particularly to my son), "I didn't raise you to say/think/act this way." A million prior false judgments come to roost when you have kids of your own.

There's a point in time when we parents cease to have influence over our kids (there are studies to confirm this fact that every parent knows). If kids are miscreants, mendicants or deviants, does that really reflect OUR values? (Assuming that we didn't beat, molest or otherwise harm our children growing up).

Adolescents are a randy bunch--it's life's way of ensuring that there will be progeny. A lackluster, when-I-feel-like-it sex drive is liable to spell doom for the future of that genus/species. Accordingly, Nature made sex first and foremost on the mind of our young people (most particularly our men-folk).

I think that Palin's daughter and beau understand that actions have consequences. Seems to this pair of eyeballs that they are facing those consequences within the parameters of their values: supportive family, marriage and life for the unborn child. In the past, unfortunate girls were sent away, shunned by their community and their family. What sort of values does that behavior imply? Kids are going to have sex even though they know there will be consequenced. But it is like the drunk driver or the smoker--it's going to happen to someone else.

Someone always has to be the statistic. I doesn't mean that their behavior was abnormal, but that it was their turn to be an unfortunate statistic. And Palins' family is doing what families ought to do--bear up under hardship and provide love and support. Providing love and support does not mean that you condone the behavior. Quite frankly, the manner in which this has been handled garners quite a bit of respect from me (and I say that as a partyless observer).

And if we didn't care about sex, then all of the ads on the Asian Times website would not be for sex (or the promise of). I think that there was a belly fat one too....but we all know why folks want to get rid of belly fat. (Personally, I want to get rid of mine so my clothes fit---but hey, if it makes me a sex magnet, then so be it!).

And....I have to say, if McCain could make good on a promise of "ending partisan politics" that sure is eye catching. But is it possible. I don't know, but my ear is a bit more tuned in than it normally would be.

Markets, Politics and FbF

On the market front: I cannot make any sense out of this market. I believe that some HF's have blown up in the energy area. I've said here that the commodities--should be the last area to collapse for the economic cycle to be complete. The key question (and no one knows this answer) is whether or not the drops in the other sectors (financial, retail, etc) have appropriately priced in the slowing global economy.

I was looking at charts and noticing that the rails are failing and that semiconductors are rolling. You know my rail against the rails, as I've been writing about it since the beginning of the year. In my typical fashion, I was early. I'm still trying to figure out what is going on with utilities--particularly natural gas utilities. I exited my SDP, and may re-enter.

What is particularly satisfying is that I'm listening to GaryK (as I write) from last night, and he's commenting on the semi's (and technology in general) and rails. I feel some vindication on the training of my eye on charts. Do listen to Gary K's 09.3 broad cast. The first 10 minutes generally have the pith of most of his commentary. In fact, that is generally all that I listen to. For a free resource, I find his opinions priceless.

Here are just a few charts for you.

Here's a 10 year Kagi chart on XLU:


It's worth noting that the insurance index has been pretty strong. Take a look:

And retail of all things:

Precious Metals---



On the political front: What a historical moment, regardless of your political affiliations, on both tickets. I only wished that I felt some affinity toward either message. I don't. But that's my issue!

On the Fit by Fifty Front: I've lost weight (5-6 lbs); I've increased my muscle tone; I've lost 1.9% in body fat (though the scale seems to have some erratic moves!); I've lost 1/2 inch on my thighs. My arms have not lost any inches, but they are more toned; hips, waist--all getting smaller.

I'm finding that staying within my calorie allotment much easier this week. Perhaps it is training my head/stomach. I bought some Scottish oatmeal, ground flax seed (which is my breakfast with fresh blueberries and soy milk); brown rice (though I've not made it yet). It is rib-sticking! If I eat a little later in the morning, I can eat lunch later. A later lunch means I'm not so hungry for dinner.

My foot hurt yesterday; and I did no cardio. No nothing really. Today I have a lunch date, but will move around in some fashion this evening.

Oil

How funny that just a month ago the world energy markets were collectively afraid that we would run out of oil and the peak-oilers had their "end of the world" sandwich boards on. That there were never any lines was my simple clue that there wasn't an oil shortage.

I still think that long-term, energy is in an up trend, but as it has led the market for the last 5 years, it's likely due for a rest. Again, I cannot help but marvel at the stories that get spun for the benefit of handing overpriced stocks to others.

Fitness Goals/Oil down $4

I elected to create a FreeMind file of my fitness goals. You can click on the image to get a better view.

-------------------

A fire sale on oil? Down $4. My idea of hell (other than being consigned to driving the roads of Sicily for eternity) would be to be consigned to the energy pits for eternity!

I feel punk!

Okay....I overtrained last week. After my somewhat perky morning post, I realize that I really did not feel well. I was overly tired and just lacking in energy. Well...this week, I'll aim for somewhere in between Wk1 and Wk2..

A.M. Post.

As I was researching something for you yesterday, I ran across this website blog forum (click on the image).


I created a blog there called Fit by Fifty. http://leisa.sweat365.com/ I hope that you'll consider dropping by (though you can be assured that I'll be boring you here).

I'm a singular person. I do not like to exercise in groups or even with partners. I think that because I've always had dogs (and dogs like to run more than anything else!), they have been my eager exercise partners. In fact, I would say that they have been my greatest motivators.

Lucy and Greta were my original training partners. When they would see me donn my running shoes they would get so excited--Lucy would tremble all over. Well, when you see that sort of excitement, then even if you were NOT planning on running, their enthusiasm might make you think differently.

Daisey and Macy are no different. Because they are so bad, I have to take them on the road with a leash (26' retractable). If you've never put an English Setter on a leash, you are in for an experience. For the first 1/2 mile, all Daisey does is pull--and pull hard. Once we've set a pace, though, she criss-crosses, minimizing pulling. Macy is VERY GOOD on a leash. She never pulls but her beagle nose (her nose and her bark are the only vestiges of beagle blood) sometimes causes her to be a laggard!

I think I'll update my sidebar later, with some fitness resources. It may seem weird for THIS blog, but....I don't want to have too many blogs going.

And Dr. Bob--it's quite easy to point me to a resource that I don't know about! Thanks for the recent link!

Fit by Fifty: The Close of Week 2; and More Penis Talk

Two gold stars-one for each week. While you might find my calorie counting and routine mapping compulsive, it is important to me because if I don't measure these things two things will happen. Thing 1: Without measuring, I'll not be able to systematically map my progress or monitor feedback; Thing 2: I'll lose focus--and likely not do it at all. Having an outcome (a graph etc) ensures that I complete the process.

In order to measure my physical activity in terms of quality and quantity, I set up an Excel worksheet. Here's WK 1. I exercised for 86 minutes. You can see that I've kept track of my time in each zone. (My hrm does this for me).

Because each zone is different in terms of load, I've adopted Sally Edward's point system. I get one point for each minute in Z1, 2 points for Z2....


Here's WK 2. I exercised for 233 minutes--144 minutes longer than WK1. It was a little lower in WK2 @ 2.31 v 2.39. But I had 5 days of activity.



I'm sure that you must be asking, "Why bother measuring time in zones?" It is an excellent question, and I promised in an earlier post that I would discuss the importance.

Your body burns different types of fuel at different workout levels. The fuel your body burns is the same fuel that you stuff in the gas tank: carbs, fats and protein. Protein is nominal in all zones. Your body is smarter than you are and alot more efficient. Accordingly, it is going to burn the most effective fuel for the exercise load. As you can see from the figure below, as your exercise intensity increases, your body switches to stored glycogen (carbs).

You understand, then, why it is important for athletes who must compete at these high intensity levels must carb load. They have to have as much glycogen in their muscles to fuel their activity (to include replenishing it throughout the activity). When the fuel runs out, you bonk (you get stopped dead in your tracks, maybe pass out from low blood sugar).

It is true that you burn more calories at higher intensities and ultimately a calorie deficit enables you to lose weight. Nevertheless, it is useful to keep in mind that if you are fat and not fit then you cannot exercise at a higher capacity for very long--you risk injury to yourself by overloading your heart and your body's infrastructure.

I have to put myself in this category (though no one would call me fat to look at me). Exercising more moderately will help you build a base from which to condition the body. You will NOT be uncomfortable, and you will be improving your fitness. The key is to exercise for longer periods at these lower intensities more frequently.

As I'm building my base, I want to be in the 2.3-2.5 range for at least the first month--maybe two-- to get in the habit of exercising and to not re-injure my foot. Understand that I'm doing the same types of exercise as I did with a 5 year younger body previously. Accordingly, I'm trying to listen to this older body! So far it is not yelling at me.

I've been surprised by my lack of foot pain. Also, my ankles have not rolled in the past two weeks.

Here's my final chart. I took Macy and Daisey out for a 2.6 mile walk/run. I saw a neighbor on the way. He was diagnosed about 3 years ago with Type 2 diabetes. He took control of his health at the time by losing 60 lbs, stopping smoking and exercising. I asked him about how he was doing. Well....he's not doing so much. We commiserated. I evangelized a bit, and I told him that by managing his diabetes, he would help keep his penis healthy. His ears perked up. He was surprised to learn that diabetes contributes to erectile dysfunction. If you'd like, you can read about it here.

As I was going through my cool-down, I encountered two dogs, Toby and RJ....both are un-neutered males and were intent on sniffing my two girls (who are spayed). This could not happen as a dog fight would ensue. I had a nightmarish vision of leashes tangled around limbs (Daisey already had Macy's tangled around her leg) and then great skin burns and bone snaps from them tightening. When we have these dog threats, both M and D start snapping at each other.

You can see the spike in my heart rate. I was already tired, and I was putting a load on my heart by tugging my two girls and commanding "This way". They dutifully followed with the boys wistfully following behind.

A Couple of Things of Interest.

A couple of items to bring to your attention.

First, Barry Ritholtz had a post from MACRO MAN--it was so clever, I visited MM's blog. You will want to as well. You can find it here: http://macro-man.blogspot.com/

Second, Financial Sense Online had an Market Wrap by Brian Pretti called "Stool Pigeons" regarding some interesting trends with respect to previous support of equity prices and how that has eroded. You can find it here: http://www.financialsense.com/Market/pretti/2008/0829.html

Books a Zillion! and Waxing Philosophical on Health and YOUR PENIS!!!

Hang with me on this one dear readers!

You know the little hand held game where you have equal rows and columns of interlocking/sliding squares with only one of them vacant? That is how my book project is going as I move books from bookcase to bookcase. Naturally, before one can undertake such a project, there must be some sort of 'scheme' for grouping books. Let's just say that this scheme is evolving.

Most of my books are non-fiction, so that eases things a bit. I have several bookcases--one being a very deep bookcase. So there is opportunity to place books 2 deep. The occulted books should be those that I don' reference often. I'm electing to put my business/strategy books back there there. Once I get things lumped together, I'll go through the trouble of creating a database for them. Hopefully, I'll not have any insights into yet another scheme that would involve another migration.

I have a pitifully small pile of 'why do I have this?' books. I'll give that to the library. I don't have a library card anymore, so I cannot buy the damn book back for .99 after I've already donated it. I'm always afraid that if I go to a Goodwill, I'll see one of my donated articles of clothing and buy it back. Though I like to think that I'm not attached to things, clearly I've developed some an unhealthy affinity for some of these things. Somewhere between an aesthetic and a hoarder, I'll find some reasonable balance. My husband is even worse than I am.

While, I'm quite sure that I'm not pregnant, I cannot really explain this restless, nesting compulsion. Perhaps, like investing, 'stuff' in my home has suffered from my lack of attention. Frankly, I'm just coming to realize the dual edge of focused will: focus and determination in one or two things can lead to a dozen things languishing. I hope I don't have more than a dozen things languishing.

As I grapple with the 'stuff' problem (and what an embarrassment it is to say that when there is so much want in the world), I realize the great wisdom of B. Franklin's aphorism: "A place for everything; and everything in its place." There should be an exclamation point there. I at least have a moratorium that we are not to build any more storage space! (I'm still trying to figure out where my 'ethics' books go).

The project, though, is quite satisfying. I've squealed in delight in having put my hands on a few books that I had forgotten about. I started a 'must-read' pile, but I realized that it was growing too rapidly. All things in moderation....I'll just put them on a shelf of their own.

Fit by Fifty Update: I almost went a opened a bottle of wine--I'm writing, and that act seems to 'call out' for a glass of wine. I limited my foraging for dog food, and fed all of the anxious looking canines and felines.

I continued my reclamation efforts of the 'next door' 'upstairs' room (the room over the garage). In doing so, I found my old Callanetics book as well as an extra chest strap for my heart rate monitor (the one that I was using, was a little sagged out). I did some of the Callanetics exercises (which were hard), AND I did my trail running. (Confession--I had to get up, and I was thinking about that glass of wine so now I have it!).

Already I'm seeing/feeling muscle definition in my arms and legs. I'm sleeping better, and I have more energy. I think that my husband is waiting for all of this energy to be channeled into another type of energy!

I did uncover an old fitness binder in my bedroom that I had from some years ago. It had all of my measurements from a point in time--but I don't know what point in time. I think that they are 10 years old--before I was forty, so I would not have been very fit. Yes, the fitness binder traveled downstairs to then go upstairs into the fitness room (yes, I have book storage up there too!).

I was inspired by Doug's recent comment to visit Covert Bailey's website. You can find it HERE.
He (CB) has retired, but there's some great stuff on his website. Do take a moment to read through some of his articles, which you can find HERE. I note that he has a an article entitled, Is There Such a Thing as Too Much Protein?. Do read it. I'm finding that since I picked up my Sharkey book and modified my protein intake on my diet that I'm exceeding my protein goa--an interesting intersection between Sharkey and Bailey.

Since I've been measuring every frickin' thing that I eat, I've become very aware of periods of hunger as well as the profile (calories, prot/carb/fat) of my meals. I'm not starving myself, mind you. That's a foolish way to lose weight. However, I'm very MINDFUL of WHAT I eat and HOW LONG the gas lasts in the tank. (I've several 'mindfulness' books, too!).

Our bodies really are our temples (my Mother always impressed upon me that worthy concept, but I think that it had more to do with premarital sex than anything else. I was a skinny kid, so it surely did not center around food). Nevertheless, I think that it is a useful message to young girls as there seem to be a lot of would-be temple worshippers along the way--they are omnipresent!

Why don't you keep your own food diary for a week? Note your total intake and the amount from fat/carbs/protein. Also, ask yourself, "What am I doing to either get fit or maintain my fitness?" Here's an easy, free way to do it: http://www.thedailyplate.com/ I use my Crosstrainer, but it is not a free service, though it is inexpensive.

I worked in healthcare---and on the ugly side of what the cost of chronic diseases cost. Trust me when I say this: The most beneficial thing you or I can do to help this country's finances is to ensure that we both arrive to Medicare age as healthy as we can be.

The cost of chronic disease is staggering. I know, because I had to work with the data. You cannot change your genetics, but YOU can CHANGE your habits. Proper nutrition (I did not say diet) and appropriate exercise are two habits that can make a huge difference in your future healthcare costs (that taxpayer dollars pay for). I'm a baby boomer, maybe you are too. We're the bolus of folks that are going to hit Medicare and likely bankrupt it if we have metabolic syndrome (which a staggering amount of our population has).

Have you not heard of metabolic syndrome? Well forget the terrorists, metabolic syndrome will do this country more harm than the terrorists! Trust me on this--it will bankrupt Medicare. Metabolic syndrome is obesity, diabetes, hyperlipidemia (high cholesterol), hypertension (high blood pressure). It is epidemic in this country. And hypertension and diabetes combined are the 80% contributors to chronic kidney disease. Hyperlipidemia is a contributor of coronary artery disease in addition to diabetes. Uncontrolled blood sugar affects your organs--your heart and kidneys are your crown jewels of organs (sorry guys!). Hyperlipidemia affects your heart while hypertension destroys the delicate vascular structure of your kidneys.

Oh...and for the guys...why do you think there is so much erectile dysfunction? Your kidneys have delicate vascularization to remove waste from your body; your penis has delicate vascularization to have and maintain an erection--blood pressure and diabetes control will mitigate this epidemic. If the amount of money was spent to educate people regarding their kidneys as there was to educate regarding erectile dysfunction, we'd be so much further along! Priorities! Sex vs. blood cleansing. Sex always wins! (That has to do with the tenacity of life, so I understand that, though I've no books on it!).

So if you value your heart and kidneys (and if you are a guy, I know that you really value your penis, and please know that in my own way I value it too), then join me by beginning your own personal fitness quest. Like the market, everything is relative. So do something tomorrow that will make your health relatively better than today. Our health investment is an easy one. There are only two choices: diet or exercise. A concurrent choice would be the penultimate.

GaryK from Last night

Here are some 'leading' stocks that GK mentioned on his show last night. I notice the LMT and GD as I was reviewing charts. Glad to know that my eye is not blind!

WMT, TJX, URBN, ROST, ARO, FINL
PNC, NTRS, RJF, AMTD,
MFE, SYMC
LMT, GD, FAST, MCD