Tuesday, April 24, 2018

Equity market has distinct sell-off

There are sell-offs that seem completely broad based and there are those that are focused.  Today's equity market was distinguished by major declines in large tech names.  High P/E Amazon, Facebook, Adobe, and Netflix fell significantly.  Low P/E Apple and the Alphabets did so as well.  Valuation was not the issue, the sector was.  Recent volatile highfliers like Freeport McMoran tanked, while the once reliably rising 3M did as well.  Defense related stocks like Lockheed Martin and Boeing jammed on reverse.  Those stocks that did well seemed to be ones that had been showing weakness, like Kimberly Clark, Hexcel, Trinity, and Insteel.  It is presumed that any portfolio will have stocks like these that were only randomly connected on a day like this.

Not having tuned in to any pundits today, what a relief, it can only be said that tomorrow will be a day to be watched.  For a reasonably well performing market, this one has had an unusual edge of uncertainty around it.  The techs have been bellweathers, and questions about consumer replacement cycles are out there with Apple.  Questions about higher capital expenditures surround Google, aka Alphabet, but the thought here is most investors do not have a good understanding of what this company is working on, and Google has always preferred it that way.

The question here is whether the consumer can keep up with the technology.  That consumer includes yours truly.  With wage growth still modest and wealth disparity still widening, with the efficacy of the education system broadly being an open question, is there a growing knowledge disparity as well.  Those are big questions which may be part of the market overhang.  And then there's Trump.

Valuations of property...

Due to events here, there is a need to have the value of our house assessed and the value of all items within the house assessed.  That is according to my attorney and is apparently necessary.  It seemed to be a straightforward request.

For assessing the value of the house, that was the case.  It took an hour and a half for an assessor to check out the important infrastructure elements like plumbing, electric, heating, and air conditioning, inside and out.  Square footage had already been documented and counting the rooms and their purpose was simple.  They could eyeball the condition of the house, which is fine since there had not had any major renovation from the time it was purchased in 1997.  The house was built in 1972 and we were the second owner.  In fact, while the appliances in the kitchen were updated substantially by necessity 13 years ago, the cabinetry did not change and the counters remained the original yellow original yellow laminate.  No marble countertops, shameful, or now deemed retro?  And actual wallpaper from 1972 remains in the hallway and kitchen.

Overall  that inspection was straightforward.  I do not yet know their conclusion, particularly since one of the most important aspects of this type of assessment is relative.  What the value is of comparable homes in this particular neighborhood and school district, as well as the walking or driving distance to the town and train station, is fundamental.  How does it fit in?

What was not at all straightforward was the valuation of the contents of the house.  Two women who are apparently specialists in this field, certified in some way, were joined by the attorney and spent more than four hours going through the house.  I stayed as quiet as possible, spoke when asked once or twice, and once offered an opinion when they were looking at an Ethan Allen knock off and admiring it as a fine antique.  Otherwise the attorney led them around, but their voices carried.

They opened cabinets and examined dishes packed in cases.  What apparently was Lenox china was examined and counted one by one, what was heavier Chinese china was looked at but not counted.  They removed everything from the den mantle and referred to some miniature chairs as collectors items as they did some small pottery items bought in Portugal in 1998.  Vases were inspected and large Chinese floor standing pottery was photographed.  Overheard once was "that is ivory?".  Whatever that was, was not, but my silence remained.  They photographed paintings on the walls, including two done by a daughter when she was eight.  A "Victorian chair"was repeatedly mentioned, and hopefully they were referring to the style and not the condition or age.  "This is Shaker" was overheard, an utterance that must have been meant to sound informed but was used in reference to Piedmont Virginia/North Carolina cabinets and dressers.  They oohed and aahed about a desk purchased by my father in the 1970's as if it were a pre-historic gem.

The results are awaited.  Our attorney told me that their conclusions do not need to be accepted, but that this needed to be done.  The outcome will be interesting.  One clear fact is that they really had a good time exploring the house and making their judgments.  The joy of a small power.  It felt like a violation of privacy.  That must be the timing of it all.

Wednesday, April 18, 2018

The focus on personal spending, sex, and pay-offs may be fine with the Trump adminstration

That's a long title for a post here.  The point is that a focus on Michael Cohen, Stormy Daniels, Tom Price, the Billy Bush interview, George Papadapolous, Michael Flynn, the firing of Comey, and multiple crude, uninformed, and callous comments by Donald Trump is playing into the hands of the Trump administration agenda.  Robert Mercer could not have written a better script.  The many important and dangerous things going on are in danger of being overshadowed, and a public not accustomed to drinking out of a fire hose to get their news could be fed up with it all.

The more important stories should be about the decimation of talent within various areas of government.  There has been some attention to the empty senior positions in the State Department around the world, and Michael Lewis had done reporting on the Energy Department and the Agriculture Department that is alarming but not unexpected.  Whether multiple positions are empty broadly within the government and inexperienced political hacks with more concern about lunch than policy are now rife is unfortunately likely.

U.S. foreign policy is now chaotic.  Trump apologists suggest that this is intentional, part of Trump's "art of the deal" intuition.  It should go unsaid that too much is at stake for this approach to be defensible.  We wait, watch, and try to focus on what's important.  Being diverted by unpleasant personal trivia may be newsworthy in the sense that it reliably attracts some segments of viewers and readers, but it underestimates the need for intelligent reporting that is required now.  One would like to think it underestimates the American people.

Enough bully pulpit, as if this blog has one.

Monday, April 16, 2018

A Sprint/T-Mobile merger...

A combination of Sprint and T-Mobile has been talked about for the last year.  Several discussions led to nothing and now they apparently are back at it.  On the face of it, this would be a good deal, and maybe a necessary deal.  Both firms are at a distinct disadvantage competing against the top two, AT&T and Verizon.  Both Sprint and T-Mobile are maintaining their customer bases, but with various types of discounts and special offers.  This will not set them up well to invest in new spectrum.

It is Japan vs. Germany, as Softbank's mercurial megalomaniac Masayoshi Son controls 85% of Sprint and Deutsche Telecom owns approximately 60% of T-Mobile.  Sprint's U.S. management seem to be corporate functionaries while T-Mobile is actively managed by the outspoken and at times controversial John Legere(always entertaining when infrequently interviewed on CNBC).  T-Mobile's stock is down 3% for the year while Sprint is off a material 30%.  The consummation of a merger is more about cosmetics that agree with both owners rather than the financial rationale for the transaction.

More than most deals, the costs that could be reduced by a merger, both overlaps and more market power in purchases, are attainable without wrenching change.  The creation of a third major wireless choice could reverberate beyond the U.S.  The window to get this done is closing as Trump's unpredictability will only grow.  At the moment, he has no beef with these two firms, and does publicly against the ATT/Time Warner combination.  One would think that whoever thinks for Trump would not want him to be seen as repeatedly obstructionist to economically advantaged mergers.

Now is the time.  This deal can be done, and it should be.  It should be noted that a speculative position in Sprint is held here.

Postscript:  In a way, this brings back the memory of my involvement in the merger of Manufacturers Hanover Trust and Chemical Bank in 1991.  They were two well known, even storied, names who did not have the critical mass to compete on their own.  They combined to have a fighting chance.  And the rest is...

Sunday, April 15, 2018

A trove of stamps...

In a binge of cleaning and sorting through old stuff, at the bottom of a drawer yesterday what amounts to a disorderly stamp collection was found.  They were always one of her many interests, but in recent years it had not been thought about.  Sheets of 29 cent Elvis stamps, 32 cent Nixon stamps, 22 cent Duke Ellington stamps, 32 cent James Dean stamps, Friendship with Morocco ones, 22 cent Enrico Caruso's, Knoxville World Fair(?) ones, clean sheet of Marilyn Monroe's, 29 cent Gene Kelly's, Francis Ouimet,  A. Philip Randolph, John Dewey, and Chinese New Year stamps from multiple years.  Those are the large aggregations.  There are numerous other small set of utilitarian stamps, 1 cent, 2 cent, 3 cent, four cent, and five cent, plus one two cent post card that must be from the 1950's.  Odds and ends are still being sorted, including stamps from Taiwan, China, and Columbia where there were family interests. 

There is much more to be done around this place.

Television tonight...

The program mentioned in the last post, "Killing Eve", is on BBCA at 8pm.  Eager for that one.  "Homeland" continues its season on Showtime at 9pm.  It's not as edgy as it once was, but still is superior to any network television, despite annoying aspects of the lead character.  At 10:30pm the quirky new HBO show "Barry" has its fourth episode, socially awkward assassin aspires to be an actor.  I guess the half hour break is for ice cream.

At times television is watched fretfully as a substitute for reading.  Tonight will be a welcome break from needing to chose.  The latest book can play its role after the programs.

Wednesday, April 11, 2018

Bits and pieces...

The following suggests too much television but here goes.

---The members of Congress interrogating Mark Zuckerberg about Facebook suggest that there is broad public outrage, by users and followers, over Facebook's actions.  The media pundits are suggesting the same.  What is the evidence of this?  It is unclear that this is true, and completely clear that the most of the members of Congress reading their staff written scripts have little idea of what they are talking about.  The use of Facebook is not in jeopardy.  The real risk is ill-conceived legislation.

---There is an exceptional new television series on of all places BBC America.  That's "Killing Eve", with Sandra Oh as an M15 intellegence agent who is tracking a lithe blond haired assassin for hire as she travels across countries for her hits.  Presumably the first episode will be replayed during the week.

---There are many advertisements on television for various prescription medications.  "Ask your doctor about...".  In the first instance this seems odd, but after promising relief for some terrible health problem the ads always close with multiple disclaimers.  Most have the ultimate disclaimer, such as "Don't take if you are allergic to Otesla(or choose your drug)".  How would you friggin' know?

---A  program is interrupted by a litany of wonderful events.  People helping others, dogs rescued, happy folks dancing in the streets as they go about their day, smiling faces and greetings at work, a crosswalk signal just passed, all is well... and then there will be a logo and a short statement about an insurance company, a tech giant, a drug company, or other corporate behemoth.  Is the message that they are secretly a non-profit working solely for the greater good?   It's a wonderful world.

---Not being a native New Yorker, I have the right to be for both New York baseball teams.  The Mets' start is attention worthy, and being a fan comes with the deed to a house on Long Island.  Are they really a good team?  We take what we can get.  Twenty minutes away on the LIRR, going to the stadium was once routine.  Do they really have a good manager again, good coaches?  This is promising...

---The posting of photos to Facebook continues from here.  If not now, when.