Sunday, March 12, 2006

We live in times of spiritual and technological crisis

These words, spoken by Dr. Melfi to Tony in a Soprano's episode, struck me as an unusual combination at the time. For a psychiatrist to mention a spiritual crisis that in some way needs to be recognized did not seem at all unusual but to combine it with technological crisis was somewhat provocative, so it stuck in my mind. This weekend gave an example of why.

Apart from anxiety about loved ones, there is little that gives me more angst than dealing with the call centers of health insurance providers, technology providers, financial institutions etc.
On Thursday, our home's newest computer refused to function beyond some error messages on a blue screen. We tried everything, but it was simply frozen and unresponsive. Oh God, we had to call Dell. Briefly, it took almost three hours on the phone and five transfers to come to what will hopefully be a resolution. On each call I had to give full information(name, address, phone, computer serial number, warranty information etc.). The first three were bounced around India, presumably moving up the hierarchy of experience. In each of these first three calls I had to go through, at their direction, all of the maneuvers and keystrokes that I had already done before I called. On both calls two and three I was told that it would cost $99 to be transferred to a software specialist despite our three year warranty(like some banks they tried to sell something to a caller who was only focused on problem resolution). On the third call I held my temper and was at a point of begging as I tried to explain that, regardless of the warranty, the result of the three repetitive calls so far had been that it was a hardware problem, not related to software. Finally, without a fee, I was transferred again but to an American voice, which I must admit was a relief at that point better than any pill could provide. Again however we went through the same protocols, but at least with a sense of cultural understanding on the other end of the line. There was still no resolution, but it felt like progress as I was transferred once again, back to India. This time, however, I had finally moved far enough up in the hierarchy to reach intelligence. He understood the problem, came up with a few new maneuvers to identify it better, agreed that it was a hardware problem that was under warranty, and now we will have a house call in a few days for replacement of parts and repair(unfortunately to repair it and save any data would entail an additional charge and I'll not get into that, but most of our data is backed up on discs or another computer so we'll have some inconvenience but no charge). After all of that it felt like a relief but I did have a slight tremor from exhaustion. How did I hold my temper for that long?

Technology can do amazing things, but perhaps we are in the early stages of realizing the real benefit. Today if it works, fine, but if it doesn't the layer of intelligent human beings that once existed has been replaced by low paid call center operators working off of set protocols. Problem resolution can be amazingly frustrating and difficult, and sometimes seemingly impossible(I hope to do a follow up on healthcare which deserves its own post).

So to get back to our fictional Dr. Melfi's comment, spiritual crisis and technological crisis---one requires some kind of faith and one may be beyond faith.

Postscript---To my friends who read this---some of my historic e-mail, especially recent, was not backed up, so if you could send an e-mail, no note necessary, that gets your e-mail address back into my system I would appreciate it.

Saturday, March 11, 2006

"Mad Money" --- The market's Crazy Eddie

Adult New Yorkers certainly remember Crazy Eddies, the chain of consumer electronics stores that had a television advertising campaign in the 70's and 80's led by a hyperactive pitchman shouting out the latest deals and ending by yelling "it's insane".

The equity market now has Jim Kramer and his CNBC "Mad Money" program as it's own Crazy Eddie. While, for me, it is incredibly irritating to watch, the program has a dedicated following and significant clout. A major buy call by Kramer will send retail buyers out in force the way a Morgan Stanley buy call sends out pension fund managers. Kramer is manically knowledgeable about seemingly any stock and always ready for an instant opinion. I watched occasionally in amusement until two months ago when I was watching and he completely pumped a stock, RIO, rang some bells, honked some horns, and I had a Pavlovian response, wrote the name down, and bought a small position the next morning, a dollar above the prior days close. A month later it happened again. The bell rang and the next morning I bought HXL, again a small position. This is disturbing, since I had never heard of these stocks before.

Some background is appropriate, not that it will mitigate what I have just described. RIO is a Brazilian company that apparently controls rights to the largest magnesium reserves in the world which are in Madagascar. Country risk, political risk, perhaps near a peak in commodity prices, who cares, a dominant position in a commodity sounded good to me if it was good for Kramer and that bell rang and horn sounded. HXL is a company that is one of two leading manufacturers of some(see how knowledgeable I am) lightweight material that will increasingly be used to build airplanes in order to save on fuel costs. On this one I did at least check the institutional ownership and see that the best hedge fund manager that I am aware of owns/or owned a top ten position. And at least in both cases I took a "toe in the water" position, meaning something small enough to not be so important but enough to make me follow the stock, learn more, and decide later whether to actually jump in or run back to the beach chair. At this point both stocks are down around 10% since my purchase date.

Why did I do this? If you have seen the program may see the Crazy Eddie analogy as apt. I have followed Kramer for maybe eight or nine years on his website "the". I once met him at a reception and in that kind of setting he was unassuming, softspoken, and somewhat ill at ease, believe it or not. In the late 90's I did act on some of his website picks and they often worked(what didn't then), and most of the time I had enough fear in me to at least take some and in a few cases all of the money off the table before 2000. Of course, I bit on a few dogs as well and learned that Kramer is actually a trader at heart, and what he says one day may be totally different a week later, and how was I to know. In the last few years I have avoided that kind of investing but did follow the advice of his website writers twice. One was ODP(Office Depot) which I was alerted to by in January 2003, did some brief research of my own, and it is up 145% since the purchase date. The other was PHO, the new water ETF, which I learned about there three months ago and bought immediately because I had wanted a way to invest in water and because I have done well with VMT(Valmont Industries), a company that has a global irrigation component. PHO is now up 13%. And finally, in May of last year when I saw Kramer's company, TSCM,( trading at a three year low at the same time that Kramer's currency as a financial celebrity was at a new high, I bought in and that position is now up 160% since purchase date.

Nevertheless, my actions with RIO and HXL could well be the sign of some sort of market top.

Friday, March 10, 2006

Spontaneous comments

---The stock market of late has been unsettling. Having read an obscure mystery entitled "The Fractal Murders" three years ago, I of course view myself as a expert in fractal geometry. Therefore I am concerned that the market of the last week is turning in a jagged downward direction that will persist for some time. It will take time to know, but fortunately chartists using fractal geometry suggest that when volatility is high trends persist for shorter than random periods. By the way, I noticed a few weeks ago that "The Fractal Murders" from Muddy Gap Press is now available in national bookstores, so anyone can now enjoy this light read and see how little I know.

---I had a big bowl of cafe au lait and a blackberry tart today at my favorite coffee and pastry shop in Manhattan. It's called La Bergamote, and it's located at 9th Avenue and 20th St. in an area of Chelsea on a block with two dry cleaners, a self service laundry, a funeral home, a lower end deli, and an antique store. It's definitely not the upper East Side where you would expect to find this type of place. It's small and unassuming in appearance but the pastry, breads, mini-baquette sandwiches, and coffee are "just great". I blogged La Bergamote a few weeks ago and one food writer wrote that her two favorite croissants in the world were at some place in Paris and this cafe. I note this to underscore the somewhat out of the way location. And, also, compared to the upper East Side, mid-town, or Soho it's a deal. So having bought some chocolate and almond croissants to take home, I squeezed through the small tables to the banquette on the other side with my snack and began to read and sip, shoulder to shoulder with other patrons. It was relaxing, and observing is also easy in such close quarters. To my right were a European couple speaking in English by necessity. He was French and well heeled middle aged, she was younger, taller, and Scandinavian. They talked, fed each other pieces of their croissants, and she at one point pulled a photo out of her wallet and said "if I give you my picture do you think your wife would find it?". On the other side of me a slight man in his mid-sixties meticulously edited the proofs of a book, and seemed set for the day. Further up another man(mid-50's perhaps) who was dressed in a perfectly casual way, meaning in my mind not really casual at all, sat prim and proper with an empty table in front of him and did absolutely nothing almost the entire half hour that I was there, before finally getting up, going to the counter and politely asking when he would be waited on. "You have to order here" was the response, which he did. I guess that wasn't in the guidebook. Others were there, and many others(young, old, mothers with toddlers, construction workers) were quickly in and out, pastry or bread and coffee in hand.

---Does anybody need all of this sports media orgasmic commentary about Barry Bonds. He never tested positive for steroids. He probably used them. Steroids don't give the quickest bat hands in baseball. They do give strength. In the 50's and 60's some of baseball's greatest legends drank all night and got up for games with diet pills or other types of amphetamines. Is the extent of the frenzy over this what the public wants, or is it what the sports media, some attention seeking politicians, and baseball's front office want to do a fiercely independent and sometimes difficult character?

---The Dubai port issue is over. Of course there was never any full review of the issue that was called for because politicians of all stripes had agendas. The media, however, seemed to cover the issue in a radically more balanced way than the opportunist and/or scared politicians. The best commentary that I heard was on McNeil Lehrer by a, I believe, Council of Foreign Affairs member and former senior security expert somewhere, who when asked if the Dubai port management issue was a concern said, paraphrasing, "on my list of concerns about port security it's just about on the bottom of my list. Port security will and would have remained in Federal hands and there is much to be done". So with the political bs out of the way, many have noted that this may serve as a good alert to the real issues.