Saturday, November 28, 2015

Another traffic crazed night here

This is just too much.  We realize now that the ground our house now stands on is worth more than the house. And, the house is not bad.  This migration of wealth to our 29 year hometown is omnipresent. There are fine houses being knocked down in the best of neighborhoods to clear the way for greater grandeur.  That is no doubt what has led to shoppers overwhelming the small four block downtown and nearby stores.  It is just remarkable this year.  The entire little town was a mile long traffic jam, for what?  The movie theater for sure with the best thoughtful current films, steak from A&F, sushi from Misaki, espresso drinks from Starbucks, bad doughnuts from Dunkin', great bagels from the bagel store, or perfect sandwiches from the main deli, it's all there but can it accommodate the demand now.  What a good problem to have for a business.

What a challenge for a shopper.  Going out tonight was impossible, as no parking was available at any grocery or shopping area.  It is raining lightly and cool.  My mood is definitely not one to wait and jockey for a parking place. I have no patience.  Delivery is now on the way, but there is a yearning here for more social contact.  So it goes.

The girls are fine in Nicaragua, doing serious hiking up a volcano and now going to Ometepe Island, already wishing they had more time there just a few days into their trip.  Bless them.

Christmas presents

Now comes the thought of presents for Christmas,  Who to give them to and what to give.  It's already started, it seems, with the allocation of Thanksgiving to various folks.

Who are the reliable vendors.  Zingerman's of course, LL Bean maybe, Harry and David's for sure, Hale maybe, MOMA catalogue has been used too much in recent years so is now kaput.   A few local merchants will do anything that we choose, send to anyone, but what.  A&F is the only special stuff.

Danville, Chapel Hill, Austin,  Durham, Mt. Airy, Richmond,  Bangkok, Denver, Albuguerque, Los Angeles, Chicago, Naples, Aiken, LaGrange, Austin, Tampa, Arlington, Beaufort, Lyman, Greenpoint, Burlington, Richmond, D.C. , and all of these and more need cards.  It's time to start.

 More to come, or maybe not much will be done.

Friday, November 27, 2015

Welcome resolution coming...?

The Thanksgiving holiday has ended with a possible surprise resolution of a major financial issue. How nice it will be to put this behind us before year end, pay taxes on a gain, and leave all liability behind.  That has been the hope for many months, even years, and it just may happen.  That will certainly lead to better sleep, at least it should.

Thanksgiving Day ends

What a pleasant holiday as always I guess, well almost always.  Our turkey, stuffing,  turkey parts gravy, green beans, squash, cauliflower, and yams all worked, not just worked but was entirely enjoyable.

Tonight, a very long Thanksgiving tradition of eating the fresh cooked turkey late at night has continued.  This was not intentional.  Upstairs watching some film, a hunger surged,  Downstairs I went and what was there but turkey.  What a complete treat, realizing only then that this experience had been going on for so many years.

Any year is a year to be committed to this totally American tradition.  It is ingrained in us.  It is hard to understand the perils that we in the West now face.  There are mass killers, pure psychopaths, and lost souls on the loose with impunity in parts of the world under the guise of being part of some religion.

All of that we know, but Thanksgiving is beautiful holiday that will be preserved.  It is a special part of us, no gifts, just food, family, and friends. This is something to defend.

Wednesday, November 25, 2015

Market behaves like in the old days

There were once certain truisms about the U.S. equity market that could be relied upon.  One was that during August and during holidays the market would be quiet.  In recent years that has rarely been the case, as anything can happen anytime has been more of the rule.  Now, these three days before Thanksgiving, the market behaved like days of old, before smart phones and trader raiders of various types.  It was quiet.  With the market only open for a half day on Friday, it will likely stay quiet through the weekend.  What a good time to reassess and, for the retail investor who has no impact on the market, make a few changes without fear of whiplash.

Monday, November 23, 2015


Tonight, dinner was cooked here.  That's not unusual, but increasingly take-out or delivery have become a much used option.  The simple reason is that cooking for just the two of us is at times not motivating enough to do the work required and, worse, doing the dishes in the evening is simply a chore.

When thinking about writing this post, it was remembered that in the early days of ENS food would often be a topic.  As the header says, "almost anything else that comes to mind."  In fact, since Google began doing better tracking of blogspot in 2009, the fourth most read comment here is "What to do with leftover corn on the cob", a 2010 post.  Maybe that says something about the posts here in general but in any case, why not a food post?  Why not dinner?

When cooking now, it's almost always fresh fish.  K likes it immensely and eats well when it's cooked. Tilapia in Rao's sauce with onions is a regular, broiled swordfish is periodic depending on price and quality, sole lightly cooked in olive oil with salt, pepper, and lemon juice shows up on the menu from time to time, sea bass baked for 10 or 12 minutes at 350 works if it's not outrageously expensive, and the mainstay is salmon, K's favorite, usually baked in the oven as well at 350 with times varying depending on the size and cut of the fish.

Tonight was a trip back in time a year or so for three large oven baked chicken breasts.  They were marinated in soy sauce, worchestire sauce, Stubbs barbecue sauce, maresh red pepper flakes, and some chicken broth to turn it all into a more liquid marinade.  Turned over a couple times and successfully not splashing it on myself, but on the counter, the chicken soaked for a little over an hour.  Then into an oven pre-heated to 425 degrees that was immediately turned down to 350.  I popped a couple of baking potatoes in there as well, rubbed with olive oil, knowing that K would only eat half of one at best but a little addition to breakfast eggs will surely work.

Oven closed, never opened for forty minutes, while sitting in front of this machine seeing if anything happened in the market today that could shake a comment from my mind, plus checking on a couple investments that are at that threshold  --- that threshold being, is it time to sell or is it time to buy more.  As is clear, the performance of these two stock so far has not been pleasing.  No decision was made.

After 40 minutes the chicken was done perfectly, and the potatoes stay in while already cooked brussels sprouts are warmed up, ditto some hand rolled couscous, whatever that means, and some frozen Birds Eyes mixed steamed vegetables go into the microwave.  Within 15 minutes dinner is ready and the potatoes are fully cooked and come out of the oven.  Half of a lemon is squeezed over the chicken.

It all worked.  K ate all but two bites of her large cut up chicken breast, and that's no small amount. She has always accused me of liking my own cooking, and that's true.  This was terrific.  Clean up, well to be honest we have some help in the house from time to time, and this was one of those times. It was feet up on the hassock for the news, some of NBC, some of PBS.  No ice cream tonight as it is becoming far too regular.  A break can be justified after a satisfying dinner.

Will anyone read this food post.  They once did.  We will see.

Sunday, November 22, 2015

"The Man in the High Castle"

A few days ago an observer of the film business was quoted as saying that "The Man in the High Castle" could be for Amazon what "House of Cards" has been for Netflix.  After two episodes it can be said that on that score Netflix has absolutely nothing to worry about.

"The Man in the High Castle" has as a high point simply the overall premise, and the template for the story line is set.  While assuming that word is out now broadly, the story imagines that the Axis powers won World War II and the United States has been under the rule of the Germans in the east and the Japanese on the west coast.  The center of the country, cut by the Rocky Mountains, is a dystopian neutral zone.

The story is based on a science fiction novel by the great writer Philip K. Dick.  While at least 20 years removed from reading one of his books here, the strongest memory is one of clever and thought provoking tales with a large dose of humor, decidedly unlike most science fiction.  It seems that the screenplay writers of "The Man in the High Castle" completely missed the humor.  Having not read this particular book, no specific comparisons can be referenced.  It must be noted, subject to follow up, that one review read suggested that the brutality of the new rulers, which is explicit in this film, was not part of the book.  It is a gratuitous addition by the show's creators one could guess.

The visual look of the film carefully integrates the symbols of the Nazis and the Japanese into the landscape of a country that did not recover from the war.  The cities, New York and San Francisco, are gray and smoggy looking and the people do not look prosperous.  Only the victors presiding over the lands look like they are experiencing a life that is marked by good fortune.  This set-up leads into a story of the underground movement of a people rebelling against fascist tyranny, at great risk to themselves.

The comparison to "House of Cards" does not work because both the acting and the writing are not at the level of that show.  With the exception of one awkward character in particular, the acting is fine, it just could not be called close to exceptional.  The writing veers toward melodrama at points, but again still works to keep what may turn out to be an increasingly interesting story on the move. What is fascinating about "The Man in the High Castle" is the efforts the show's creators have gone through to create the detail that follows their theme.  There of lots and lots of little things that seem to be about right, nice touches, and keep a 1962 country under foreign rule somewhat plausible.

In the world of turmoil that we live in presently, I could not help but wonder what current day Japanese and Germans might think as they see themselves projected into this scenario as brutal and heartless rulers.  In a sense, the timing of this fluff seems all wrong.  Two of our strongest allies today are depicted in a way that is part of a distant past, one which those countries want to see long buried.

It is not clear that this film is constructive, even as it may pull viewers into its style of entertainment.    

Saturday, November 21, 2015

Traffic may not be too festive for the holidays

This Saturday afternoon in our small town and in neighboring areas the traffic was overwhelming.  I ventured out at mid-afternoon to buy some food for dinner at North Shore Farms, one of the more interesting area grocery stores and the one with the largest and on most days the best prepared food selection.  My usual comment on the store, said many times, is that "the parking lot always looks full but you will always find a spot."  Not today.  In fact the parking lot with one entrance and one outlet was so crowded that I spent ten minutes stuck there with no food to show for it.  Circling back around 15 minutes later hoping for a let up, there was no change visible so I drove on.

The next destination of hope was Whole Foods.  Getting there was bumper to bumper down the same road.  I couldn't find a radio station with any music that was interesting, and not being a market day Bloomberg was useless.  I was clearly beginning to fray. Whole Foods and few other stores in the same location have an L shaped parking lot the size of a football field and guess what, no parking except a partial spot at the farthest point away, and there were no carts nearby to ease the long journey.   Abandoning that idea meant heading to our town, which was an exceptionally bad idea but at that point I was not thinking clearly.

Into the middle of the town, what became immediately clear was that the quaint old triplex movie theater with good films was attracting people from far and wide.  Not only were there not parking spots in the main town parking lot, there were none at Rite Aid's heavily monitored lot where I could have bought a Weekend Wall Street Journal as an excuse to go across the street to A&F Market, expensive, friendly, and the right place to go anytime if fresh cut meat is on the menu.  Anything could have been on the menu at that point.

It was time to go home.  Well over an hour out and nothing to show for it.  That's with Thanksgiving not yet here.  Thanksgiving and Christmas will be a time for logistics and serious planning of food acquisition.  Does that sound festive?  It's time to get the wreath ordered so it will be.

Friday, November 20, 2015

The goal of ISIS now

The major goal of ISIS in the medium term is to subvert Saudi Arabia and the House of Saud.  That is the belief here, and it may seem far fetched.  ISIS claims to be the leader of a global Islamic caliphate, something they are not remotely close to being or achieving.  Saudi Arabia would be part of the path to their goal.

The actions of ISIS in Syria and Iraq are meant to establish their base.  The actions of ISIS in Paris, Lebanon, Egypt, and other places are meant to terrorize those who are opposing them and to get the publicity for doing so.

Saudi Arabia may be especially vulnerable to ISIS due to the explicit or implicit agreement made there in the early 1980's between the House of Saud and the Wahhabi Islam sect that dominates the country.  At that time the House of Saud was becoming incredibly wealthy due to the huge spike in worldwide oil prices over the late '70's and into the '80's.  At the same time the House of Saud had just watched the fall of the Shah of Iran and the establishment of an Islamic Republic, a Shiite one, a rigid theocracy that was a natural adversary to them.  Additionally there had begun to be some unrest within Saudi Arabia that was a concern to the ruling family.  The deal was that the House of Saud would share its immense wealth with the Wahhabi's in a major way to finance its mosques, its schools, and its efforts to spread their view of strict view of Islam widely, a view committed to a theocratic society, Shariah law, the subjugation of women, and seeing the Shiite's as apostates.  In return, the Wahhabi's would let the House of Saud rule and not focus their attention on them and their actions or western behavior.

Here we are today with widespread social media, a Saudi Arabia that shares its wealth with their citizens but citizens who must mostly now know how the House of Saud behaves in the modern world beyond their borders and the lifestyles of extreme wealth that they lead in their country and elsewhere.  If the actions of ISIS that attract headlines around the world are attractive to some within the Wahhabi Kingdom, that is potentially powerful.  The fact that, with the captured oil and wealth that they have accumulated, ISIS has built a formidable propaganda machine of its own is not trivial.

Saudi Arabia is the next huge steppingstone for ISIS.  Terrorist attacks against the West do not advance their goal of an Islamic caliphate unless they reverberate back into results for their bigger goal.  One would like to think that their goal is impossible if in the Middle East they are referred to as Daesh, which is now widely known and which is more or less an expletive that relates to their name in Arabic.  Certainly Daesh has the world's attention now, which one could guess has been their near term goal, now achieved.

Unusual market opening today

Today's U.S. equity market is having an unusual open.  When the main account here was checked at 9:40am, out of maybe 70 positions there was only one that was down, and not by much.  In turn, there were no major gains anywhere as well, but rather all just positives reflecting overall market performance.  By 10am the situation was only slightly different as there were a few more tiny losses. This pattern was the same across other accounts managed or watched here, as they were checked quickly a few minutes ago.

It was strange to see such uniformity.  One can only wonder which way this will break as the day goes on and traders set themselves up for the weekend.  Will they be defensive for fear of any troubling exogenous events over the weekend or will the market rise as more cash finally comes off of the sidelines for what some expect to be a December rally?  Could everyone just sit and watch as is often done here but is rarely done in the volatile market of recent times?  This is unlikely.

Wednesday, November 18, 2015

The move by Congress to limit Federal Reserve powers is a mistake

There is apparently bipartisan support in Congress for limiting the ability of the Fed to avert a severe financial crisis.  The coming move will not allow the Fed to address the problems of a single company, such as AIG during the 2008 financial crisis. The Fed will only be allowed to take broad actions to create liquidity under the new regulation.  This is a mistake.

When there is an in your face and severe financial crisis, there is no time.  Actions must address problems directly and immediately.  What if a major financial institution has a rogue trader or operating systems manager who creates, unbeknownst to management, a devastating trade or a crippling insider hack?  Or what if terrorists find a way to attack one institution in multiple places around the world, attacking their people, entering their systems, and bombing their buildings?  There are lots of "what ifs" that suggest what a bad idea this is. Giving more liquidity to the system will not address the failure of counterparties around the world related to one institution.  That institution will need to be dealt with fast, fast and furious one could say, and there will be zero time to go back to Congress and get this law amended.

Elizabeth Warren and others on the right and left feel that allowing the Fed the ability to address individual institutions gives those institutions the incentive to take more risk.  They will expect to be bailed out, so why not take more risk than is reasonable.  Do the legislators not know that deferred compensation, stock options, and outright stock grants that have at least three year vesting periods, more in many cases,  represent the great majority of compensation in these institutions.  Many top executives own significant amounts of stock as they are required to report their market activity, and most do not want to seem as if they are voting against their company.  The losses that employees will have in a market damaging loss would be devastating.  This is a major reason financial institutions are incented, in an overwhelming way, to control risk.  Admittedly, really bad actors sometimes cause problems in all endeavors, not just finance.

The bias against financial institutions by many can be understood.  It is misguided to some extent and exploited by politicians, but it has a rationale.  That does not mean that it should lead to legislation that ties the hands of the Fed and the Treasury in a severe crisis.  Dodd Frank has already drastically cut into the liquidity of the fixed income markets by limiting securities trading by the large institutions.  Those institutions created significant liquidity through their market making activity and, truth be told, market making is rarely a risk taking exercise of any significance.  With the Dodd Frank limits on bank trading activity, there is already a significantly higher level of risk in fixed income markets should there be a financial crisis.  This new move by Congress will decrease flexibility and add to rather than alleviate risk during a crisis.

At some recent point, there was talk by many about how to roll back or alter the Dodd Frank trading limits so it did not impact systemic liquidity.  Somehow, in this political season, that is off the table and this new restriction on the Fed is front and center and about to be done.  Ugh.  It is frustrating to see how little politicians understand, other than what is easy to sell to their constituents.

Tuesday, November 17, 2015

"The market is tough, but we're fine"

Following up briefly on yesterday's market comment, it is interesting that investors who are interviewed on CNBC or Bloomberg almost all forecast a potential poor market, say it's been tough this year, but "we're fine".  Maybe only people who have done well dare to come on the programs, but that's unlikely.  Is it possible that all investment managers who come on the shows are there to tout their product, an opportunity that they need to take.  They can find a way to look at the best of what they have to be positive about and at the same time not look naive.

The other thought here is that this has possibly been a market in which individual investors have an advantage over institutional investors.  Individual investors, or perhaps more specifically retail investors, have limited ability to be as networked as hedge fund managers or traditional institutional investors, but they can do their own research and rely on their experience.  What they have that is a big advantage is liquidity.  They can move in and out of the market unseen and without impacting the price except in the smallest of stocks.  They have no one to answer to but themselves and maybe their family or a few friends.  Hmm, that's important but not job threatening.

Recent performance of hedge funds even suggests that being networked is not necessarily a positive. In the old days before Reg FD and more regulatory oversight, being networked could mean trading insider information with the network and coordinated spreading of rumors to move a stock one way or another.  This was mostly confined to some hedge funds and hedge fund wannabes.  The now departed SAC was the leader of this behavior.  Of course, no one would be doing that now, we wish. Today though, as more hedge funds just play follow the leader, they may not know where they are headed.

Monday, November 16, 2015

Equity market resiliance

There are those in the know who say that more than 80% of hedge funds are down for the year.  The market itself stays volatile as today and Friday indicate with their offsetting moves, but overall the major indexes keep stubbornly moving around being flat for the year.  So it is surprising that so many hedge funds and in fact some mutual funds are down around 2% or more, some much more, for the year.

It seems as if the market could be moving towards some major directional shift, one of those that leave everyone watching and knowing that the market is not tradable for a day or two.  That's a worry for tomorrow and is always out there.

Certainly this year's market overall has been led by a few powerfully popular and successful companies like Google, Amazon, Netflix, and Apple, as many pundits like to point out, and to an important extent by many many more than a handful of large corporate stalwarts with strong balance sheets and attractive dividends, as few pundits care to mention.  It has been a narrow market of success overall but there has been success.  This lack of breadth is a concern.

One area that has become perilous is the small cap area, where trying to find bargains now just feels dangerous and, as a beneficiary of this sector in the past, here it can said from experience that the few tries in 2015 have not been home runs, or singles.  Exogenous event risk now seems high but the all knowing market chose to ignore that today.  No predictions here, but building liquidity for tax season and unexpected events seems wise, while staying in healthy large corporations should anchor a portfolio.

Mainly just watching here.

Thursday, November 05, 2015

Market calm suggests a change

The steady pace of the equity markets over the last two days is not reassuring.  For the weekend it is likely that investors will back off in the event of no news.  The need to sell to offset gains takes off this month, and that will be a downdraft.  That said, November and December often are months of optimism, and thoughts of the positive can overwhelm skepticism. Who knows?

Wednesday, November 04, 2015

Lewy Body Dementia finally discussed in NYT

Today's New York Times discusses Lewy Body Dementia at a reasonable length for the first time, in "The Arts" section of all places.  It relates to the death of Robin Williams, and the "research" for the article would have required the post teen writers to Google the disease and no more.  Looking at Google for prior mentions of the disease in the NYT show mentions in two articles, one in 2012 and one in 2013, but no more.

As a hybrid of Parkinson's disease and Alzheimer's disease with some other unfortunate bells and whistles, Lewy Body is a big deal and a devastating one for those unlucky enough to contract it, and for their relatives and caretakers.  It strangely, for better or worse, leaves the mind intact to know what is going on currently and experience fully the disease even as it erases past memory.  The physical impact is a relatively rapid decline, the mental one slow but sure, and with the added kicker of some of daytime hallucinations and attendant extreme anxiety as they develop. It can be much more aggressive in many ways than Alzheimers.

There are obsessions that are associated with the disease, each to their own "choice".   There is more to be discovered about this disease, one that is well known to most neurologists and all geriatric psychiatrists but not especially to the NYT and the general public.  It must be a lonely disease to have.

Tuesday, November 03, 2015

What a beautiful morning...

When the realtor sold us this house 18 years ago she sat at the then kitchen table and looked out of the window, then said, "what a beautiful view".  It still is, more so on this autumn morning with the trees in their glory.  Our situation has evolved into one that is not so easy, but it is easy to wonder how the heck we ended up in this wonderful building that is our house and the surroundings that are generous to the eyes.  We were fortunate, and we work to share some of our modest prosperity now.

Monday, November 02, 2015

Today's equity market lifts, the cycle continues...

There was a grim U.S. equity market in August and September, and then came an upbeat October, that supposedly most challenged of months.  October market sessions closed just before Halloween and there was no treat that day, but today followed with no trick, in fact a big treat.  What can one make of this other than to say it's just the market, as in that's just Susan, or that's just Dad, or that's just life.

There are many reasons that the market is rising over time in fits and starts.  Merger and acquisition activity is robust, with low interest rates and new areas of consolidation in health care, biotech, finance, and communications, among others. There is still beaucoup money on the sidelines with corporations, retirees, millennials, sub-millennials or whatever they might be called, and those retail investors in their fifties with money to invest but overcome by fear of losing what they have worked for.  The case could be made that the money in most of those places is never coming back, and if it does that is the sure sign for a bubble burst set-up, no win situation short term.  That considered, it remains a major backstop.

What is known is that it is wise to participate cautiously and stay the course with good choices. If good choices go down broadly so does everything else, so money saved will not be worth much.
Today's market highlighted the dilemma that investor's face.  They can't sit on the sidelines.  They must buy and sell at least sparingly, maintain enough liquidity for a year or three or more depending on risk tolerance and potential liquidity needs, and react to good news and bad news in whatever they own in any way they choose, hold, reduce, or add, but act.  That makes a market.

Buys here over the last two weeks, AXE and FLWS as new positions and CUBI, UTX, and JNJ as additions to existing ones all went well, but of course they would, no genius required in the market of the month.  Sales of SPLS and half of an ORCL position happened for good reason, loss only at ORCL.  Ellison is paying no attention to the company, and who would given the company he keeps at his age.

There are reasons for the market to go up that have nothing to do with the overall economic environment.  The U.S. is still the deepest and most transparent financial market in the world, and at the moment is the only major country in the so-called developed world with a claim to some sustained growth, low as it is.  The U.S. equity market is relatively attractive, and money globally follows relatively attractive opportunities.  The strength of the dollar is a major part of these equity flows to the U.S.  Catch the good companies with dividends or techs with momentum, and catch a currency gain as well?  One could ask why the U.S. market is not up more if this is really a global market.