Friday, August 30, 2019

From 1999 to 2019, has anything really changed?

Much of the market talk is focused on consumer spending, which makes sense as it is widely suggested that it represents 70% of the U.S. economy.  As the consumer goes, so goes the stock market.  There are many other issues of note that are discussed by the pundits, a favorite being the shape of the yield curve.  That's a bit more problematic.  The well known formula for determining stock price is based on return on capital over cost of capital.  What is the formula when there is no cost of capital?  Does that require new math?

CEO's speak confidently on business networks and assure us that they will take advantage of artificial intelligence, cost saving new technologies, cybersecurity innovations, and more sophisticated risk management systems.  They know their lines and read well.  A few are brilliant, many are not.  Is this 1999?  "Twenty years ago today..."

We will surely benefit from a bioscience revolution that is only in its earliest stages.  DNA coding will help us do what?  Health care costs will drop dramatically as surgery can be guided remotely by whom? 

As summer ends, reality sets in. What are the real job numbers, college payments are due, and what are the best new car models?  So much to think about.  Fortunately we have a leader for whom thinking is not a problem.  He doesn't do it.  He simply reacts.  He says "it's his way of negotiating".  We can understand that.

If investing in the stock market required understanding all of this, it would be impossible, and that's ignoring global systemic issues that cannot be predicted.  So the Oracle still rules.  Invest in good companies that can be understood, have moats related to products or brands, financials that make sense, and competent leaders.  Simple really. 

Tuesday, August 13, 2019

Call center blues...

With reported unemployment levels well under 4%, is it possible that those boring, modestly paid, call center jobs are scratching the bottom of the barrel for workers.  India is no longer the call center location of choice as the pay was too low for their growing economy, and management there was difficult.  The Philippines brief run as a preferred location was brief for some reason. More and more companies seem to be locating call centers in Texas, Oklahoma, and southwestern states.  Competency does not seem to be a criteria for employment, wherever located.

Today, working with a call center in Oklahoma, to get my online subscription to up and running, was a minor nightmare, and unsuccessful, a bad dream that ends badly.  The newspaper is owned by Berkshire Hathaway, the venerable Buffett firm that owns local newspapers all over the U.S.  Having received a letter confirming my subscription and approving debiting my account, it still does not work.  There is still "your five free articles this month are complete. To subscribe...".  It is impossible to believe that this person who was trying to help was looking at the same screen that I was.  He argued with me, saying it works, don't you see it.  When I asked to speak to a supervisor he refused, saying "I am very competent", and when he talked fast his accent was difficult to understand.  I tried this over a year ago, did not work. Again, did not work after 18 minutes on the phone this morning.  Is it me?

Today as well, tried to finalize a master securities lending agreement with Fidelity.  There is one in place with Schwab and it has been useful.  Interest rates have at times been extremely high for less liquid securities. I know the risk, and understand financial analysis.  The Fidelity call center individual suggested that I fax back the agreement in its entirety in order to get the agreement in place, and gave me a little lecture on why Fidelity does not trust the U.S. mail.  Could he have been an off script overly friendly trainee.  I suggested that he send me a return UPS envelope as Schwab had done.  He wanted to talk more.  Maybe he will send what is needed, and here's hoping that the opportunities seen now are still viable.  No big deal.

My optimum remote broke a few days ago. It was old, and this has happened before.  A new one was picked up a the local Optimum store a few miles away. The directions for set-up were unclear, both in content and in text.  The print was so small on the instructions that they were almost impossible to read, and yes my eyeglasses prescription has recently been updated.  With this call, lo and behold, after 20 minutes on the phone there was success.  It was then that I decided to tell this fellow that recently I had been getting a pop-up from Optimum that was asking for information, and it seemed to be unusual, you know as in needing an immediate response or my service would be stopped.  He wanted to talk about it. Politely trying to tell him that this is something he should tell others, as it looked exactly like Optimum branding, he did not get it.  The pop-up showed up again a few hours ago.  You can lead a horse to water but...

An unknown company had a call center in Danville and that closed... what does that say?  Is it me?

Friday, August 09, 2019

Loose ends...

---Reading about the amazing life of Toni Morrison, there was one completely unexpected fact. In 2008 and 2009, she and Fran Lebowitz toured together as a talking tandem.  That's a combination that was not expected.

---Apple's decision to enter the credit card business seems odd on the surface, but then again maybe not.  Teaming with Goldman Sachs, not remotely known for retail banking, the card will be available widely.  Subprime credits are being accepted.  Huh?  Apple products are not cheap, but they are ubiquitous.  Would a consumer rather plop down an Apple card or a United Miles one.  Chase Freedom, Discover, or Capital One Quicksilver?  The cachet of an American Express card is long gone, and so are most of its once unique attributes.  The rewards on the Apple card could be interesting, and it will be a brand extender.  Question here is, do they really care about making money on this business and how much of the credit risk will be absorbed by Goldman?

---The stock market is hard to decipher at the moment.  Recently sold a large position in the old style conglomerate 3M as they just sit and do nothing, sold Morgan Stanley as see more downside than upside now, bought Kraft Heinz after their collapse yesterday thinking how could things get worse, added to Square and to Salesforce(CRM) as these payments technologies are creative financial intermediaries without credit risk, and added to a beleagured position in recent IPO of LEVI. Get out the weak hands and it will pop is my thought.  Am I doing real investing or do I just have too much time on my hands?

---Those seeing my activity on Facebook, Messenger, Blogger, and e-mail would probably say the latter.

---Bought some over the counter CBD oil today.  Oh, my knee hurts and anxiety abounds.  There is no THC in this now widely used hemp derivative, but some say there is a hint of a good feeling at times.  My doctor says it's just a placebo effect.  That might be nice.

Monday, August 05, 2019

"Mama told me there'll be days like this"

Today was not a good day for the equity markets.  They were almost uniformly down significantly .  Across five accounts with multiple investments, there were only three in positive territory today.  They were GLD, LYFT, and WORK, aka Slack Technologies.  Two closely watched barometers of the economy are Master Card and VISA.  They are a function of expected flows in economic activity, have no credit risk, and they were both down around 4.7%.  Many mid-cap tech names were crushed and the QQQ as a proxy for tech broadly was down 6%.  Overall there was no shelter.

Tariffs are a tax on the global economy.  They will soon become a tax on middle class Americans.  Competitive currency devaluations stop capital investments in their tracks.  Build walls, plow under the fields, punish multinational American companies, and use trade as a form of hostile diplomacy.  It puts a man in the spotlight who craves nothing more than attention.  His understanding is limited, but his so-called base could care less.  Democrats think that talking policy will reach his base.  Good luck with that.

Interesting is not the word for this. 

Sunday, August 04, 2019

A personal way to look at the Democratic candidates...

This will be a different look at the field of Democrats who want to run for President.  None of what follows is an endorsement or indication of ultimate preference here.  It is personal opinion.  First, here are the most interesting candidates, based on not saying the routine stuff.  And they are:  Pete Buttigieg for being able to say the expected in an articulate and unexpected way;  Andrew Yang for his comprehensive look at a future economy and what it may mean, always tying back to his guaranteed income;  Marianne Williamson for saying strange things that often make sense;  Tulsi Gabbard for an approach to foreign policy that is unique, at times refreshing, at others a bit scary;  and Michael Bennet for monotone plain spoken common sense, almost boring bipartisanship that surprises at times.

The least interesting candidates are, hands down, Bill deBlasio and Beto O'Rourke for their entitled manner in delivering random opinions, based on trying to say what will get a headline or have a remark be one for the history books and television forever.  They are completely unconvincing.

Leading the completely BLAH category are Cory Booker, Julian Castro, and Kristin Gillibrand.  They pound the table on the obvious, and have absolutely nothing new to say.  Booker is well regarded by some, but seems here to be orchestrating every move without taking any risk.

Those that are presumed to be the leading candidates, Biden, Warren, Sanders, and Harris, are respectively too old and backward looking; a compulsive attention seeker in the thrall of her own ambition;  too old, too rigid, with no comprehension of how to fund his goals; and one who moves seamlessly from clear sighted comments to mistakenly stepping on a rake.  Classifying Amy Klobuchar has been difficult, and she seems to still be working on it herself.  She is clearly from Minnesota, that I know.  Each of these, despite comments here, are viable candidates.  Nobody's perfect, never were never will be.

For those not mentioned, you may be deemed lucky.

This comment is subject to revision daily!