Thursday, January 31, 2019

Confused... equities, buildings, jobs...

---Amazon's choice of New York's Long Island City for a primary east coast location, split with D.C., continues to arouse opposition in that neighborhood and beyond, and on the New York City Council.  Demands for an agreement to recognize a union from the outset are rife.  With hourly wages at a minimum estimated by the company to be between $17 and $23 an hour, in an area of Queens that has few such jobs, shouldn't that be welcome.  Things will change.  The immediate area around Amazon will be developed.  But think about this.  Five minutes further out on the 7 train there are tons of workers who would welcome those jobs.  For the highly skilled tech jobs, many will live in Manhattan or close to the facility.  The pols want attention, their take.

---A city commission of unknown patricians wants to make The Strand a "landmark" building.  The owners of The Strand, the iconic New York City bookstore, want no part of it.  The actual building is typical of its area, at 12th street and Broadway.  The owner says "leave me alone".  Being a landmark building has significant burdens.  All construction or improvements of any type, interior or exterior, would need to be approved by this commission.  It is an incredibly tedious process.  Kathy's father owned a landmark building downtown.  When the area was not so safe, he put a steel door at the front.  The Commission objected.  He had tenants that he wanted to be safe and businesses there as well.  It was unpleasant, he was fined, but did not give in.  The harassment continued until the building was eventually sold.  Last I looked a few years ago, the new owners had not improved or touched the building, and there were no permanent businesses there at the time, a historic building in inventory.

---The stock market is befuddling, at least here that's the only clear thought.  Up today, what's next tomorrow.  Banks down today.  Visa down 4% and Master Card up 3%, two similar mid-cap tech stocks invested in a few months ago have been different, one up 40% since then, the other down 15%.  Five small to medium cap techs bought on a day in December when I was bored(DBX,  DXC, ON, SQ, SPOT) were in the aggregate down 30% two weeks ago and now are up 15%.  PYX, a recent addition mentioned here previously, bounces like a ping pong ball week to week, up 25% in the last two days, making it up 12% since purchased.

The point --- finding patterns here is difficult.  Finding value is not easy.  It was once said that value stocks were a value for a reason.  Famous investors and analysts always made their reputations by sifting out the best of that bunch.  Those types of leaders don't seem to be visible now, and the jabber on CNBC is no help.  Still trying, after all these years, and doing ok.

Postscript:  Fidelity index funds for Extended Market, Total Market, and S&P 500 were all up by 0.88%, absolutely identical, first time that has ever been seen.  Is this why they call it  programmed trading?

Saturday, January 26, 2019

A few passages from the book "Telex from Cuba".

In yesterday's comment on this book, I made a point of not including quotes, there were too many.  Some either linger, or on looking back seem interesting enough to repeat.  Well, I have time.

---"Anyone who buys a psychic telephone doesn't really believe it's going to work.  That all you need is $19.99.  Buy the machine.  Take it home.  Plug it in.  Dial a number and hear the living voice of someone dead and vanished.  People buy things for other reasons.  They weren't born yesterday.  They don't need the law to tell them that the equipment is faulty.
     Let the people learn for themselves:
     You don't call the dead.
     The dead call you."

And that is the end of the book.

---"That is incredible---our chauffeur, mayor of Preston!  But that's communism.  Ho Chi Minh started out as a fry cook at the Ritz."

---"He refused to believe that anyone who should be loyal wasn't.  Just as Batista wasn't capable of understanding that none of the girls was loyal... it was beyond the scope of what he deemed possible, even as he made himself aware of every last detail."

---"Mother had been a May Queen, and she was president of Kappa Kappa Gamma at DePaux.  I had to return her sorority pin when she died.  Harlan Sanders---that's Colonel Sanders---he was from Indiana, and had always been in love with Mother.  We were his guests at the Sanders Motor Court once on our way to Cumberland Falls. You could tell he had that fatal thing for Mother. His hands shook and his face turned red when he greeted us.  I think Daddy was amused."

---"Suppose you could speak to someone you love who's no longer living.  Would you cross a continent to speak to that person for just fifteen minutes?
     You would.
     When it's someone you love, the answer is that fifteen minutes is limitless if it means getting information about how to proceed without them.  The chance of a clue is worth the journey.  Because you don't know what that person will say to you.  You can't guess what you might be turning down."

---"He said he wanted the pictures for when he was old and depressed, Mrs. Carrington said.  To remind himself of the good times he's had.
    Her husband's secret catalogue of mistresses.  Mrs. Carrington seemed strangely proud of the photographs, as if they belonged not to Tip Carrington but to her.
    My husband loved life.  And she had proof."

Friday, January 25, 2019

"Telex from Cuba", Rachel Kushner

This book was published in 2008, but it is not dated.  The novel captures a time that is still a part of the history known here.  It is set in late 1950's Cuba, and focuses on the American families, mostly serial expats, who run the massive United Fruit Company sugar plantations, and their interactions with the locals.  The rise of the Castro brothers, from the prosperous upper middle class of the countryside, and the reign of the lower class leader Batista, are the backdrop.  Rural beatniks topple slavers.  It is based on history and well researched, and leads to a reality that is stranger than fiction story.  Fiction based on truth.

The book is like a collage.  Differing types of abstraction develop and ultimately turn into a coherent story.  Or to be more pedantic, at times it's like trying to look at a Bruegel painting without focusing on distinct parts.  Anxious reading does not work.  Read on.  It all comes together.

Rachel Kushner's writing is spectacular.  For no good reason her work had not been on my radar, which was obviously defective, troubling thought these days.  Good books are often read here with pen in hand or nearby, to mark a special passage and then dogear the page.  For picking the book back up here later, they may at some point be reminders.  For purposes of this comment, they are too numerous to be useful.  Some could lead back to me, not the best idea.

This is my type of book, real characters, real history, and believable fiction.  Just checking Wikipedia, she was born in 1968 so none of this is personal storytelling, it's cut from whole cloth.  The second paragraph's lead sentence on Wiki is "one of her influencers is American novelist Don Delillo."  That makes sense.

Thursday, January 24, 2019

Where is Mister Ed when we need him?

In one of his more bizarre interviews, speaking on CNBC this morning Commerce Secretary Wilbur Ross seemed to need Mister Ed's help.  Wil...Bur.  Feeling free to jabber without thinking about his role as a government spokesperson, he said that "we are miles and miles away from resolving the trade war with China...that is very complicated with lots and lots of issues."  This vague statement was casually said to highlight his importance but was not at all helpful to financial markets.  Why would Wilbur be remotely be aware of that?

More alarmingly, of federal workers not being paid he said, "I don't really understand why they are going to homeless shelters to get food... or why they can't get loans... borrowing from a bank or credit union is federally guaranteed."  People go to food banks, soup kitchens, and even homeless shelters because they are hungry, or need food for their families.  Sort of simple!  And what the f..k is he talking about?  Bank and most credit union deposits are insured by the FDIC, loans are not.  Loans are based on credit scores and credit history, and often cannot be obtained in a few days.  Credit cards can be used but many federal workers have only adequate salaries, and may not want to tarnish their credit scores for a short term event.  Or they may be maxed out.  Is Wilbur senile or callous may be the right question.  Maybe both, but the best answer seems to be that he is calculating, or call him wily Wilbur.

When filing with the Department of Government Ethics as he entered office, he listed assets of $700 million.  Huge of course, but he had always told Forbes Magazine, that "richest" list, that he was worth $3.7 billion.  The back story from Michael Lewis's recent book, "The Forbes reporters were accustomed to having rich people mislead them about the size of their wealth, but nearly all had been trying to keep their names off the list."  To quote a Forbes editor, "In the history of the magazine only three people stand out as having made huge efforts to get on, or end up higher than they belonged.  One was Saudi Prince Alwaleed.  The second was Donald Trump.  And the third was Wilbur Ross."  A former senior partner of Ross said, "Wilbur doesn't have an issue with bending the truth."

So why is he Commerce Secretary, a job he knows almost nothing about...

Tuesday, January 22, 2019

A few observations...

---The docudrama "Brexit" on HBO last night was not exactly stirring television, but it was revealing, saving its best punch for last.  Bypassing the standard political campaign system in the U.K. through data mining and digital/social media, an apolitical low key brilliant eccentric builds a successful nationalistic anti-immigrant campaign, with analysis from Cambridge Analytica and funding from Robert Mercer.  Could one then consider digital advertising and the exact same scenario in the U.S., adding in Steve Bannon with Facebook, Twitter, and Instagram.  Reflecting on this, the odd thing is that Clinton and Trump seemingly had no idea what was going on.  Clinton had no need to continue intense campaigning and Trump thought it was all about him.

---Fund manager Seth Klarman's letter to his investors has received significant attention today.  While he warned of increasing debt levels being built up by corporations and countries as others have, his characterization of the negative impact of growing wealth disparity separates him from other market watchers. He suggests that this situation will become unhealthy for markets and, while not being explicit, he clearly sees Trump as toxic for both global leadership and for the financial markets.

---Why are the Democrats putting Hakeem Jeffries into the spotlight?  He seems to be a somewhat inarticulate congressman with no distinguishing accomplishments.  At least he does not make us watch him go to the dentist, i.e. Beto O'Rourke.  Are the seeds already being sown to snatch defeat from the jaws of victory.

---The HBO program "True Detective" is now in its third season after a lengthy break from the first two.  Season One was watched with the thought that I obviously should like it, with its star cast and quirky approach.  I tried and did not.  Season Two was unwatchable, obviously just a personal observation.  That Season Three is now being watched is indicative of a need for late night entertainment, and it has my attention.  It's not a pretty story, but the script is incredibly well written.  Whether it eventually all hangs together is yet to be known.

Tuesday, January 15, 2019

My beef with the New York Times...

The New York Times is an institution.  "All the News That's Fit to Print" is there everyday top left, front page.  It is a daily part of life here, and has been for 39 years.  Certainly I don't admire every article or writer, and almost by definition some articles can seem to have an NYT slant, angle, some would say bias.  That's part of any paper not written by robots, and so far they have not been outfit with algorithms to do that.  Certain publishing conglomerates push an agenda.  That's a given and can be too apparent.  From this perspective the New York Times strives for fact based reporting, even if a point of view must be maintained for coherent articles.

Perhaps the most biased piece ever seen here in the Times was the obituary for Dodi Fayed.  It detailed the life of a simply horrendous playboy with absolutely no redeeming characteristics.  That may have been true, but in an obituary...  It was unfortunately or fortunately hilarious to read from that perspective.  The piece has long been buried by the Times, so to speak.  It can't be found, but reading it with Kathy at the kitchen table is a vivid memory.

But getting to my beef.  The NYT is a global, national, state, and city newspaper, but it's local and  even a personal one in a few aspects.  This week's Sunday Styles section is a prime example.  The lead story is about a divorce, headline "A Messy Split For All to See", another full page follows.  They were a power couple in the New York art world.  The patriarch of the husband's family, the Mugrabi's, "emigrated to Columbia from Jerusalem and made a fortune textiles, leading to a net worth of $5 billion", not including the current valuation of a huge number of paintings by famous artists, with more than 1,000 Warhol's, many Basquiat's, Koons', Hirst's, and on and on.  So how do you make that kind of money in Columbian textiles(?) and what else is Columbia famous for?  The article does not ask.

There is a photo of the divorcing wife that is one of the most alluring photos of a fully clothed individual ever seen in a newspaper, nothing straightforward like the "Sun".  The couple's stunning jet setting life is detailed.  The cause of the break up and divorce is also detailed, from skinny dipping at a packed party, to a liaison on a couch discovered in the early morning hours, to "an unreachable husband while she was shuttling between vacations in Sardinia and London".

This is in the newspaper that highlights "New York's Neediest Cases" each day.  Hey, obviously I read the article, but is there some incongruity here.  So that is one aspect of the Times that boggles some days, with the style section and at times with straight news articles about Manhattan.  The other local and personal areas are the wedding and obituary sections.  It is clear that being famous, highly talented, or from the upper east side of Manhattan play a big role in being included.  The wedding section has made huge strides at diversity, almost overdoing it at times perhaps, but those left out in the past do have some catching up to do.  The obituaries are the most puzzling.  Of course those very well known in politics, science, and the arts are often included.  There are also obits of people with seemingly few accomplishments.  It was written in a lengthy obit two days ago - "but the highlight was his annual croquet party that drew a huge crowd every year."  Notable northeast prep schools abound.  So do Palm Beach and Naples as final residences of Manhattanites.  Then there is The Frank E. Campbell Funeral Chapel, a mainstay of those who perish with an upper east side background that can qualify for Times publication.

So that's just the way it is and ever will be.  There was a perfect New York story, from Chinatown, to Francis Lewis Boulevard, to Long Island; from Queens public schools to Herricks school district, to Northfield, one of those prep schools, to Simmons and then Syracuse for a B.A. degree in three years, to Columbia for a Masters;  from a women's cooperative in Boston, an admin job in Palo Alto, back to Manhattan and Manufacturers Hanover and on to Goldman Sachs; from large family dinners in Chinatown, Little Italy, and Flushing:  all of these seemed like a real New York story.  It was not accepted.  A bit of a beef on that.

Sunday, January 13, 2019

"The Fifth Risk", perspective on current governance by Michael Lewis

The writing of Michael Lewis has been long followed here, but in recent years his work has not been as compelling as remembered.  "Flash Boys", in particular, was soft on any real insight, and what was meant to be provocative was old news.  "The Big Short" was not viewed as ecstatically here as by critics and most readers.  It was fact checked here as one of the main characters was known well to me during my career.  It was regulation that was either inept or corrupt,or both.  He did well for his investors and himself, and followed the rules as they were.  "His" humor and good nature was barely picked up, as predatory behavior seemed to be necessary for the book.  Oh well.

So reviews of  "The Fifth Risk" were read, and it was picked up months ago.  The fact that it did not directly have anything to do with finance was a big positive, so my inclination was not already set to be snooty.  Yet when I began reading it seemed familiar, and quickly it became clear that this had been read, yes in Vanity Fair articles that were terrific.  Finally the book was picked up again and reopened, realizing that the final chapter had not been published in the magazine, so would be new material to me.

The actual "Fifth Risk" is incompetent government leadership.  This is Lewis back to form, yet what seems ludicrous and in a way humorous is serious stuff.  The Prologue, Lost in Transition, sets the table for that fifth risk.  The first chapter, Tail Risk, is about the Energy Department, now led by Rick Perry, 'nuff said.  The second chapter, People Risk, is about the Agriculture Department, now led by Sonny Perdue, former governor of Georgia.  The third chapter is about the Commerce Department, now led by Wilbur Ross, a successful investor in bankrupt companies whose specialty was laying off large numbers of people and then cashing out.  There is much more that is appalling about each of these characters.

In each case, the new cabinet secretaries had no idea what their departments were responsible for, and reading this book it is clear that most people, myself included, have no idea of the breadth of responsibilities of these departments of the United States government.  It's fascinating reading until one realizes they too, based on knowledge, could have been appointed to one of these jobs.  Hey, "I know nothing too".

The department head then appointed Trump administration dictated assistants, and they appointed the leading workers.  To quote one example, "Into USDA(Agriculture) jobs, the Trump team had inserted a long haul truck driver, a clerk at AT&T, a gas-company meter reader, a country-club cabana attendant, a Republican National Committee intern, and the owner of scented candle company, with skills like "pleasant demeanor" listed on their resumes...  What these people had in common was loyalty to Donald Trump."

So you get the picture.  This book could be read twice if everything was to be internalized.  Nausea might ensue.  And I say again "Oh well", but things are not well, not when the book was written and not now.

Wednesday, January 09, 2019

Questions of the day...

---What is pushing this equity market up other than the lack of alternative investments?  Not complaining but some stability would now be reassuring.

---Why do I think of Stephen Miller as a canker sore on the Presidency?

---When they have the advantage, why do Democrats sabotage themselves with thoughtless far too broad characterizations ... see "deplorables" by Hillary Clinton and now "immoral" by Nancy Pelosi?Trump is completely amoral and his supporters favor his symbolic concrete wall, but they are not immoral for doing so, just sort of stupid, but don't say that either.

---This season's Ray Donovan has one more episode left and one thing is certain.  It seems impossible that everything could be resolved in this much darker New York City version of the series.  That means another season is in the works.  Will family "values" eventually override everything and Bridget become the new Ray?

---Is Marco Rubio still keeping his sights on the Presidency?  As a fabulist Trump apologist, he appears to be laying the groundwork with the Trump base while saving his supposed socially liberal thoughts for an eventual Trump tumble.  Or does he believe in anything at all other than political expediency?

"Asymmetry", a novel that befuddles, yet works

This book by Lisa Halliday was published 10 months ago and has been widely reviewed.  The reviews read here could be summarized like this.  "WTF, not to be a spoiler, I like this book."  Meaning that reviewers did not know what to do with this book, although knew that their review should be positive.  The two stories are to some extent incoherent stream of consciousness rambles that over time coagulate into something that makes sense.  The first story, Folly, has a quote to begin, "We all live slapstick lives under an inexplicable sentence of death...".   It does develop as a story line that has reasonable sequencing, almost like a play that works better on stage than in print.  The second story "Madness" has a starting point that quickly vanishes into a haze of disorienting events. Its initial quote is "Our ideas about the war were the war".

This is a book that is about the writing.  There are relationships, family issues, unexpected turns, political events, all of the components of many novels.  Done with sensitivity, irony, humor, yes humor for sure, and a touch of the roll out of destiny... Yes, my book reviewer imitation.  It recently was named one of the NYT book review section's ten best fiction books of 2018.

I like this book.

Monday, January 07, 2019

Volatility here to stay?

The U.S. equity market continues to gyrate or hesitate in fits and starts as if not knowing what to do.  There are many market analysts and pundits who speak of the market as if it were a person who thinks in some cohesive way, best understood by those suits speaking.  The truth seems to be that it is confounding to most.  Explaining a day, today at this moment only, when Google, Apple, and Facebook are down materially while Amazon, Nvidia, AMD, and Anet are decently up can be done, but not easily.  Also, various tech small caps bought here several weeks ago with seemingly precise bad timing are now erasing losses, even two of the five moving slightly to the plus side.  The dubious overall position in PYX is now moving into distinctly positive territory, albeit with a position that is now disturbingly large due to stubborn bottom fishing.  Even the almost preposterous JCP position began in November and doubled in December is now at par.  Should I get out, yes, will I, unlikely at the moment.

This volatility will continue until some base is established, if this is possible to find in these Trumpian times.  Earnings and risk drive stock market pricing, but completely random political chaos creates an environment that defies any confident speculation.  If one attributes the persistence of consumer spending partially to boomer wealth, that may slow as they do.  If analysts and commentators focus on low unemployment levels and the manufacturing index as positive indicators, that is close to folly.  Wages broadly are only rising modestly and manufacturing is far less important than the service industries.  The vaunted $15 minimum wage would yield an annual income of $31,200 dollars for a forty hour week, before Social Security taxes(that is what they are). That modest level exists almost nowhere, and across the United States my guessed at average of the minimum wage is $11.  Shortages of workers in some areas are only being met with modest wage increases, contradicting economic thought, because the problem is not only pay but qualifications to do the jobs.

Looking at annual performance here, not so swift but with the S&P down over 4.7% not horrible.  With a concentration of stocks buffered by bonds and money markets, the more aggressive account was down 7% and the other down 2%.  Accounts managed for family were both down 1%  So overall not so bad when considering that the often exceptional Fidelity Contrafund which was down 2% and the closely followed Dodge and Cox Stock fund down 7%. 

As this post was being written with breaks during the day, the market has continued to strengthen.  Money must be invested somewhere.  The outlook for the year is murky here, but nowhere to run to.  Still in with equity allocation toned down just slightly.