Watching the game just now watched pitcher and catcher talking with their mouths covered ( carry over from bill belicheck lip reading )
Even when I am in trouble in a Checker game I try and remain calm and not give my opponent any signs I am on the ropes.
Market implications ?
I note even more metal roofs being applied to residential roofs. I have kept a close eye on a few that are a few years old. I note them now dulling and one funeral home roof is faded and now beginning to peel.
I asked my banker how appraisers are looking at value and he indicated there is now some concern over valuations of metal roofs.
I feel the newer metal roofs, like some investing methods, are untested. I readily admit my strength is in residential construction and apartments.
For now I will take a 30 year dimensional shingle roof over metal until positive tested methods show me otherwise.
Ralph Vince writes:
I was just in Punta Gorda, Fl., which was spit-shined, pristine and caught my eye. I notice all of the homes there have metal roofs and came to learn that it is the result of Hurricane Charlie a few years ago that came ashore there. Those roofs DO look a lot less wind-peelable than their shingle-based counterparts.
It seems lately the TV is flooded with AARP and those reverse mortgages we discussed. A Colonial Penn salesman called me (wont give my actual number anymore) 9 times, then I finally answered. To me it seems the more the Market and our economy "improves" the more these charlatans proliferate.
What correlation do you experts see?
When a niche expands, such as it did in this case with the Great Bust of 08, there is a rush into the new territory. The effort is to get there first, to beat the competition to the new territory. When the niche gets saturated or starts to shrink, then it will test the character of the marketplace. If it is a fair free market, the competitors will battle amongst themselves by giving some combination of lower pricing and better service to the customers. If however, some believe they have a government favor or regulatory advantage, rather than serve the customer, they will press that advantage. They will try to beat their competitors by oppressing the customer.The sales will become more deceptive and fraudulent. Everybody is happy when there is plenty of food. The wars start when food gets scarce.
The fraud becoming the norm rather than the exception in the mortgage markets started when home-ownership peaked.
Ralph Vince adds:
And when "food gets scarce," leaders (often little more than self-appointed) and media have seemed to exacerbate the divide, seeking to use the weight of one side are all, to their advantage by stoking the flames to points beyond unreasonable — whether A French writer of early 19th century, an Austrian convict in the 1930s, a South American or Latin American of (fill in the blank) or a ……
It isn't so much the leader, but rather the gullible that follow, convinced that their fellow man have been the problem.
For lawyers and media gullible public, fines, prisons (or lack there-of) and arms certainly can be how they think they can gain a governmental advantage.
I have a renter and a good worker at our local Auto Zone. Many go there to do their own vehicle repairs. Due to an improving local economy his hours have been severely reduced. He tells me people don't have the extra cash at present to fix their own cars!
Jim Lackey writes:
When I was a kid, the local parts store, like the local ace hardware, was owned by a neighbor. They knew what they were doing. It wasn't difficult. There was only a few brands and few suppliers. The first push to cheaper is better and super sized stores wasn't all bad. Chains of Western Auto/ Sears auto parts is now Autozone, O'Reilly's bought up the regional chains over a Pep Boys that attempted to take the service business from the local car dealers service department near affluent neighborhoods. My dad's buddy got rich by selling out. Those that fought the trend, went bust.
The prolific professor Haave has pointed out many times the local retailer didnt do much for the customers on his way to the country club. How many times have we heard, I can order that for you and it will be here in a couple of days? They cashed out, sold to the chain stores and went to country club full time.
The big box stores offered lower prices on the same brand names with a huge stock. The crash of 2008 changed the way Home Depot, Sears, and too many auto parts men stocked the stores. In the rush to reduce costs and raise margin, there is a limited lowest price stock. The staff is a kid that will run around in circles attempting to figure out the puzzle of where a tool, part, or product may be located. The nice working mom is best as she quickly goes for her radio. She calls the manager in charge and he replies, we are out but will have it in a couple of days.
The current box stores are worse than the local retailer that we lamented as kids. The new toy wasn't in stock 30 years ago. Now the simple tools that have been produced for 50 years are hard to find. No one works on their own stuff anymore. Everything seems to be produced as cheap as possible. When it breaks we toss it in the garbage. I've been married for 18 years and I have bought 5 vacuum cleaners and never once changed a belt. In their genius to lower costs and close stores, the auto parts men are circuit city- ing their way out of business. Auto Zone and O'Reilly have spent a fortune on their websites offering free shipping. Once a do it yourself shade tree mechanic is at that level, it's the same as shopping at Best Buy and ordering off Amazon, with a bonus. Now we find out where the auto parts are manufactured.
A problem with do it yourself, (DIY carz) was having the correct proprietary tool for each make and model car. Many can't comprehend why cars are so complicated and difficult to fix. They are designed to be produced cheap and quick. Car models have a different so called upgraded part for every model year. That, coupled with low cost aftermarket parts, did away with many rebuilt, remanufactured, go to the junk yard and buy a used part for your beater car. The cost of replacing a damaged car with goofy insurance rules on salvage titles has created a business. There is a flood of rebuilt titled cars on Craig's list. The demand for totaled cars by shops that rebuild a crashed out Camry with cheap after market Chinese knock off parts has left the junk yards picked bone dry. (This post was wrtten months ago before the storms, do not even buy a flood damaged car unless you rewire the automobile. That's a big job, I've done it twice.)
The dealer buys his network and charges premium shop fees for high skilled labor. The pep boys of the world or chained repair shops buy non branded premium OEM parts, with a skilled man and a few apprentices and offer slight discount. Many times a Honda dealer charges a lower price to change a timing belt than a chain store. A V-6 Honda timing belt, water pump and seals are the same in most Hondas. The dealer can buy in bulk and have a few mechanics that are so efficient they can do a few per day vs. all day yourself to save 200 bucks. Dealer, 499$ on mailer, me/parts 300, local guy, 500, chain shop, 800 bucks. The dealer is competitive on sale and puts the local guys and chains out of that service. DIY shade tree mechanic says, why bother. It's worth the 500.
For brakes, at over 100k miles you need, rotors, pads, some brake clean and maybe a few tools, impact driver to get screws out of rotors and a air hammer or drill bits when one strips out. We can do autozone duralast branded cheap parts, or made in China and save 50 bucks. O'Reilly brake best which are Affina same factory as Raybestos. You can buy good ceramic or premium Wagner coated rotors and your confusion and parts bill is 300-400 bucks vs 600-800 complete OEM from the local shop, which has their parts delivered from the local Napa store. There is no way a DIY guy will pay 400-800 to have his brakes done, when he can buy the OEM for 300 shipped to his door and have the job done in a few hours.
The DIY guys say give me the cheapest on sale brand for the beater 3rd car or truck. We go OEM for the daily driver and aftermarket premium for the hot rod. What we learned many years ago was a Western Auto parts store electrical switch or new cheapo alternator was junk. It was much smarter to buy a rebuilt Delco or new OEM. One would have never thought this would evolve to all car parts. What is a brake rotor? It's a cast chunk of steel machined to spec. My gauche, they have been making disk brake rotors for 60 years. Brake pads have evolved. The newest cheapo metallic pads slice up a cheap worn brake rotor in a year. Ceramic brake pads are awesome if the rotors are aligned. Guys claim all sorts of problems,with the cheapest pads and rotors from autozone, yet its usually a bad caliper frying one corner of your car. Mechanics swear what were premium brands years ago are now junk as they must file off bad stamping before install.So, what does a car guy do? Go to rockauto.com Now we can buy premium products at low prices. We can buy OEM parts at discount prices. We can know where the parts are made. They tell you strait up where the factory is that makes the parts.If the local parts store doesn't have OEM quality parts for the daily driver in stock, one can buy premium parts for daily driver for the same price. Most likely what I will do from now on is buy OEM quality for daily driver and now the beater eats OEM, no more junk. Buy all filters, seals, that we will need for fall and spring maintenance at once vs stopping at the parts store a few times a year.
The guy at the autozone may be suffering from the Internet. After all they tell you at the checkout to look at .com and the parts can be delivered right to your door for free. Once you go net, do you ever go back? In the old days you could go to the parts store and tell the guy the problem, show him your parts as we always had a core charge,so you took the car apart before you went to the store. They would look, test offer some advice on how to fix a big problem. Now a days we go strait to YouTube, bust out the list and have it shipped UPS or Fed X. One or two parts chains will survive. Perhaps napa as they supply the locals. I do not see a need for the three other big chains, Autozone, O'Reilly and Advanced auto parts. One will be around forever to sell the cheapest priced batteries, oil filters and brake pads and proprietary tools. There is demand for cars that need a jump start to drive directly to the parts store and have a new battery installed. I dunno why jiffy lube doesn't do it.
Every 3-4 years you need a battery. Kids with the subwoofers and amps need optima yellow top, 150-200 bucks and most likely a more powerful alternator. It's amazing how interested a 17 year old will be working on his own car vs the family truck. When he talked stereo equipment it took me an hour to figure out all he wanted vs how many amps of power it would use. Which reminded us how to calculate Mr OHMs how much power watts a stereo would really produce amps x voltage as they don't advertise the loss in heat. Talk about confusing! Car audio equipment is hilarious.
Sure son I can save you the few hundred in install fees and the overcharge on wiring kits and we can wire the car. Yet I have some bad news for you. The 600$ you were quoted turns out you need more electronics to be correct, so the boom boom doesn't drown out the vocals. Dad I do not want real loud. It doesn't matter, just add up the head, amplifiers max amperage and think of driving on a hot summer night with headlights and the air con running and explain to me how a big amp draw is going to work? Your boom boom with be a click click next time you go to start the engine. You need battery and alternator or go with low amps draw big buck class D. I think he has decided to save for a good car and listen to his headphones.
These stereo stores must make a fortune selling mono amps for subwoofers as the kids must come back for a good amp and speakers for the interior of the car then an alternator and battery for when it all dies. I see 2,000 dollar cars cruising around with 1500$ dollar stereo systems. These kids today! We had 1,000 dollar cars with 3,000$ engines. You may ask where did the other 500$ go? We didn't have cell phones.
I visit my local McDonalds a few times a week for coffee.
Today for the first time i was asked if I wanted to contribute a dollar to the Ronald McDonald House and I said yes as it is a very good cause.
I wonder if their usual donations are now down due to a weak economy?
Jack Tierney writes:
Alan, you can almost bet that contributions are down — maybe significantly. In the past week I've attended two board meetings. One at my church, another at our local Help Center. As you might expect, church contributions are down quite a bit — but that can happen for a variety of reasons. The real "tell" is reflected in the participation by those who tithe. This is an important number as those who practice it, keep it up even in hard times. When that figure drops noticeably, as it has, the most dependable sources are making less or nothing at all.
The situation at the Help Center isn't much better as many regular contributors are also church goers and their first contribution goes to the church, what's left to the Help Center. A big percentage of our money comes from big and small local businesses. That, too, has taken a hit — and despite several seasonal appeals has met with poor response.
The situation is particularly acute at this time (for all agencies like ours) because of a change in the Food Stamp payment schedule. Up until October of this year, most recipients received their electronic deposit on the first or second of the month (a major reason why Wal-Mart has revealed that the first of the month is usually their busiest (with many stores reporting their busiest hours are immediately after midnight). However, the recipients now receive their payments any time between the 1st and the 20th of the month. Since most barely scrimp by on a 30 day cycle, those who found themselves having to wait an additional week or three, flocked to our doors - and pretty much stripped us of all our stocks.
With little time, fewer dollars, and less enthusiasm, this will not be one of our better Thanksgivings (and we receive a lot of help from the local grocery stores who leave bins in prominent places for canned good and other non-perishables; the Library, Police, and Fire departments also give us a lot of help - yet things remain bleak. Generally,we dispense anywhere from 150-200 turkeys (9-12 lbs.) As of this morning we have only 71 available. So I wouldn't be at all surprised if McDonald's is experiencing smaller donations.
And after reading the Robert Reich piece that Kim submitted this morning, suggesting that 501(c)(3) charities could be run more efficiently and "equally" by governmental types like himself, I wouldn't be surprised to see usually generous individuals become reluctant to contribute to causes where the proceeds are re-directed to more "deserving" recipients.
I wonder how many homes are not covered due to lack of flood insurance or not being able to get coverage on Jersey Shores etc. ?
Flood insurance is easy to get. There is a "basic" version and an add-on. The basic version on our Jersey Seashore house cost $20 per $100k of coverage and the add-on was an extra $47, PER YEAR. It is subsidized by the Federal government, which is why it is so cheap. Only an idiot would not have it. And yes, there are idiots out there. If you are in a flood-prone area, you want as much insurance as you can get.
If you are not in the defined "flood plain" it can be difficult to get flood insurance because the Feds do not subsidize it. We also had a lakefront property that somehow managed to be out of the designated flood plain. Coverage for that property was about 3 times that of the beach house. And that property did have some minor flood damage, although I chose not to submit it.
Bill Herrmann adds:
Federally subsidized flood insurance is a very good example of government incentives pushing the economy in the wrong direction. Just as “Too Big to Fail” encourages some institutions to take larger risks then they would otherwise, federal subsidized flood insurance encourages building in the flood plain. (Which is generally not a good idea.)
Friday October 26th in 1861 the Pony Express made its last run as the telegraph was established
Made me think back to my Boy Scout years and i had to get a message thru and learned Morse code.
Jeff Watson writes:
Believe it or not, we still use a lot of CW(Morse Code) on the amateur bands. For the past couple of years, I've seen an influx of real high speed operators, all with perfect form and perfectly even spacing between the dits and dahs. The thing about them is that they are fakes, just guys who use computers to crank out Morse Code. They use the same kind of program that deciphers(CW) up to 120 words per minute. No human can send that fast, only a computer. There is no personality, no individual style with the fakes either.
An average "real" CW operator on the amateur bands is about 50-85 years old. Some of those old guys can copy 60+ words per minute in their heads. They can also send 60 with a good keyer. They are all, to a person, very unique individuals. It takes a bit of craziness to still use CW, and do it well.
Old time CW operators are very humble about their skills and will admit to copying CW to 35-45 words per minute. Like golfers, old timers sandbag a lot. One is officially considered to be an old timer if they have been licensed over 25 years and active in the hobby. Everyone knows who the real old timers are.
Fakes, on the other hand are quite boastful about their abilities on CW. The average "fake" CW operator is in his 20's-30's, very computer savvy, and could care less about learning the craft of CW. I don't know why those fake CW ops play with computer generated CW when there are so many easier modes of communication. They do brag in a conversation about being a CW op, but drop the ball when questioned by a real CW op.
If I'm seeing a decline of traditional skills in the noble hobby of amateur radio, what does that say about the rest of the world? Are other important skills in other areas eroding? Does the speculation community have a similar decline of skills? Are computers making us stupid?
I wonder what percentage of today's speculators cannot do very quick, accurate math in their heads without a calculator? Quick, accurate math was a primary job requirement for both speculators and bookies in the 1900's. There have always been many tricks and shortcuts to doing quick math in your head. Have computers replaced traditional short cuts in out minds?
As an aside, I suspect that the extremely pleasant and humble Mr Milhone would make a great CW operator.
Picking a good renter is akin to picking a good stock. You interview and evaluate, then hope for the best.
I use e-renter.com for background checks after an application is completed.
I NEVER rent to anyone without a full deposit being paid.
Also it helps to have the possible new renters go through the unit and then I slip out to inspect the interior of their vehicle. This is a tip off as to how they will keep my unit. Hopefully they are driving their own vehicle!
To me choosing a good stock has similarities to picking a good renter.
With either you may end up with a lemon.
Pitt T. Maner writes in:
Here's an odd side effect of South Florida's foreclosure crisis: Some immense homes with pools and three-car garages in gated communities are being rented out to unlikely tenants — poor people paying with Section 8 aid. Among the properties are homes with up to 4,500 square feet of space in private communities with guardhouses and regal names such as "Monarch Lakes" and "Bellagio at Vizcaya."
Some of the owners are teetering on foreclosure and gambling they can earn enough money from the federal housing vouchers to stave off the banks. Others bought the properties cheap in foreclosure auctions and want the guaranteed rental income.
The Sun Sentinel examined federal housing subsidy data from housing authorities in Broward and Palm Beach counties and found 230 homes commanding rents of $2,000 or more, up to $3,375 a month, from Section 8 families. Typically, tenants pay about one-third of their income toward the rent and the government pays the rest.
Full article here: "Section 8 Gated Communities"
I notice a lot more metal roofs being installed on residential home roofs of late. I asked my banker CEO how appraisers feel about metal vs. shingled roofs and he had no answer for the present.
I note most of the roofs I see being applied are metal over existing shingles. I am old school and prefer a 30 year dimensional shingle. I have a couple of my apt units that will need roofed (I tear off and never do a tack over) and will use shingles.
T.K Marks writes:
Alan, you underestimate yourself. You transcend old school. You're paleo-school. Straight out of a Norman Rockwell painting. Never change.
I recently wrote to my friend Bob in Hawaii. Thought he had some interesting news from Hawaii and Asian Markets:
It's summer here which means overnight lows are 72 rather than 65. Tourism to the islands is way up this year. The big increases are in Asian tourists, with many Japanese and the Chinese market starting to boom. What it means for us, especially here in Waikiki, that the low price places are on their way out — a long-standing sports bar just closed because the tourists are now looking for more "upscale" locations. As an example, a new bistro just opened in the Halekulani Hotel; a beer is $20 (not that I drink, but still).
I've got a start in the local writer's market; I'm having a 5,000 word story published this fall in "Tales from the North Shore" and I'm hoping that will get me some exposure for publishing longer work.
Of course, the Checker Maven is still top priority.
Regards to you and family,
I note Henry Winkler and Fred Thompson touting the merits of reverse mortgages.
Without any facts my gut says they are bad?
Any Specs have any facts to share?
Russ Sears writes:
Those considering this should shop around. The commissions are high and the margins are also. This is especially true if they are not in perfect health, as the actuary tables assume anti-selection. A much better option, for those with family that can afford it, is to have a family member monthly buy a higher percentage of the resale value at time of inheritance.
Walking is one of the best forms of exercise. Better yet is walking uphill which causes higher cardio rates, and even better yet is climbing up mountains. Running seems to cause many injuries. The recent book, Born to Run, is an interesting look into running injuries caused by modern running shoes.
There is a move to more flexible or barefoot type shoes for running. A number of years ago, Carlos Castaneda wrote of the high involved in walking long distances. 20 minutes of walking is good, but it can easily be done for 6 hours. New Yorkers appear trimmer due to more walking than their western counterparts who drive everywhere.
The car culture is destroying the walking. Walking is very meditative and relaxing, healthy, safe, cheap. Highly recommended. Good shoes, a hat and a walking stick are helpful. Its good to bring some water on a belt or hydration pack.
Alan Millhone writes:
Hello Mr. Sogi,
My late friend Dr. Tinsley loved to take very long walks. I carried his magnetic checker board and as we walked he would chat with me and play blindfold Checkers. He was trim and in very good shape to play at tournaments and matches for long grueling hours. I miss him.
My friend Jim Loy sent me these general observations about checkers. I find them quite enlightening:
Among amateurs (beginners to middle of the road Majors), I would say that wins and losses mainly occur because of:
1. Lack of planning.
3. Failure to realize that we are in trouble.
That third one is very important for tournament players, both Minors and Majors and the very bottom of the Masters.
Among Masters, wins and losses occur in these broad and important categories:
1. Shots and other tactical errors.
2. Ending maneuvering.
3. One or both players king early, and threaten to win pieces from behind.
4. Half-blocked positions in which neither player is going to king soon,
and in which both players will move up most of their back rows to gain time.
Of the four, I am beginning to think that number four is the most common source of wins and losses. I don't know how to improve a person's skill in that direction, except to make them aware that that category is of great importance.
Among the Masters, draws most often occur when:
1. One of the players breaks the tension (much tension or very little tension) by trading into an easy or known ending.
2. The game is still a book draw (sometimes early in the game).
"Try to keep your pawns coordinated. Think of them as the foundation of your house. Every crack and every hole can eventually lead to disastrous consequences for the whole house."
- Jonathan Edwards, US Correspondence champ.
Tom Wiswell couldn't have said it much better. How does it apply to markets?
P.S It is interesting to note that in checkers the traps and gems are every bit as complex, hidden, and far removed as in chess. During the 25 years I took lessons from Wiswell, and he played against people like Leopold who was as good across the board, and his thousands of games with me, I never saw once that a good player fell into a trap in go as you please. Perhaps the Checker Pres will correct me but the main point is true. To play a good player and set a trap is the seeds of death or as Wiswell would say, "beware the spider".
Alan Millhone, the Checker Pres, replies:
I moved myself into the Masters. I like playing the best. When you lose to the best rated players like Luba or Suki etc you never have to make an excuse for the loss. I also learn from every loss as the astute Market player should.
I never play for traps. Usually setting a trap will weaken your position if your opponent does not make the move you had hoped he would. I make my move assuming my opponent will always make the best reply.
"Come into my parlor said the spider to the fly "
In Checkers as the Market , research is critical before moving or execution of a trade.
Anatoly Veltman writes:
There is difference between checker tactics and speculation, in that checker outcome is near binary (win, lose or draw) - while one sets up its market position based on a multi-dimensional scale of odds/size of risk VS reward. Thus, your checker inclination against playing for trap - doesn't profoundly manifest in speculation. My recollection of Silver Monday April 28th, 1987 is perfect example: because a record number of speculators fell into a limit-up trap, the TRADE OF THE LIFETIME proved to be SHORTING, if only for minutes! And multiple cases of not hearing about "that local" ever again.
Reminded me another war story: Tuesday October 20th, 1987 Eurodollar futures pit. That contract normally moved 10 points on a good day. But in the wake of Black Monday, the contract was called to gap in Chicago pit "much higher". How much? Well, speechless clerks and brokers speculated 100 higher!! So seconds before the opening bell, the Salomon Brothers runner fights his way to the pit broker with a ticket sporting conspicuously much ink on the left side. It turned out to be 3000-lot to buy at the market!
So instead of opening between 94.50 and 94.75 (a usual monthly range), the broker tells the offers to shut up and announces 97.00 bid for 3000. Everyone freezes up - except for one regular local, who leaps at him over multiple pit steps with a samurai grunt "Sold!" Price traded back down below 95.00 by the end of the opening sequence, the local covered and was never heard from again in continental United States
Michael Chuprin writes:
As the game begins, lets say within the first 5 or 10 moves, the players inform each other the kind of game that is going to be played by the way that they develop their pawns, whether it be a defensive or offensive or deceiving (luring into a trap) type of structure. After the "mood" is set, the rest of the game proceeds with the development of the heavy pieces and the pawns now act as a buffer between the two armies. Highly ranked players know that the pawns set the terrain as the heavy pieces approach each other, and this is why the accidental loss of a single pawn can shift the entire scaffolding the entire structure, much like a puncture in the hull of a battleship may incapacitate all of the ships cannons. It is no wonder why in many situations strong players give up after miscalculating a position and losing a single pawn. It may be like two martial artists fighting and one breaking a finger, the damage is relatively small, but its effects are conclusive.
Anatoly Veltman writes:
I can easily think of market analogy: personally, it was a memorable first loss of a million dollars on a single commodity position I had. The day was Monday April 28th, 1987. Silver futures were locked limit-up for third straight day, and the freely traded spot contract rushed up yet again to an $11.25 pinnacle. It may not sound high today - but it was a multi-year high back then, and more than double the price in one month! Why - a huge squeeze was put on Mexican and Chilean producers, biggest mines were stricken by labor woes, etc.
Lo'n'behold, Japan Finance Minister is a scheduled White House guest that day - what does that do to getting any more Silver out of the ground? Suddenly, as Silver, Gold and Platinum slowly edge off their intraday peaks - the financial wires begin spitting out lightly co-operative language of the bi-lateral Forex co-operation between the two economic powers, totally periferal to Silver production. Normally quiet lunch-time turns into history's never-before seen massacre, with Silver futures flipping from limit-up to limit-down lock across the board in the time space between the salad and the main course! Physical Silver plunges $4 (more than a third of its morning value), and next day brings further depreciation due to margin call liquidation… But of course nothing changed in the mines - and following the two down days, Silver rose every day for the next three months to achieve the same valuation. Only some Silver Bugs remained buried deep in the April 28th ruins. That day's volume stayed the Exchange's record for decades, although some locals' trading cards have been never found in the aftermath…
In Ohio when you get a DUI you have to turn in your plates and pay for dark yellow DUI plates for a year.
On rare occasion I would see a set on a car. Lately I have seen many more in my area.
A sign that more drink and drive or a tie to a troubled economy?
Or is law enforcement more aggressive?
Mark Schuetz writes:
I find this very interesting. I grew up in Ohio, but have been in NYC for about the past 7 years. Even when visiting (about once or twice a year) I have never seen these plates before. Drunk driving was a huge problem in the community I grew up in, and from the news I get now, it sounds like it still is. However, I imagine Ohio as a state sits somewhere near the national average as far as fatalities and arrests.
As far as your questions, there are numerous studies about drinking habits as the economy is better or worse. Most are about substitute goods (most notable example is substituting beer for wine in bad times) or about the relative resilience of sales of alcohol during recessions (One example: "Drinking Habits Steady During Recession" and a contradiction). Beyond that, I cannot think of any economic logic underlying a correlation between a healthy economy and drunk driving habits. Law enforcement may be more aggressive, especially because in certain communities it has become such a problem. However the question is: is the purpose of the yellow plate to warn other drivers? Or some kind of deterrence (public shaming?).
Though I have lost friends to drunk driving and see it as a real problem, I'm not sure exactly what the yellow plates would do. Those who go to the bar then get in their vehicle probably don't have the fear of yellow license plates in the back of their mind. It seems it would make more sense to deal with reality (people are going to drink no matter what) while coming up with a preventative solution (better public transportation, or possibly a private service that provides affordable 24hr transportation).
February 14, 2012 | 1 Comment
I received this letter from my friend's Orthodox priest. I thought it might give you some light on the problems in Greece.
Theophane, kali mera!
As much as it pains me to read the news and see the photos from Greece, one must remember a few things:
1. Have you ever thought why so many Greeks left and still leave the country?
2. Do you know how corrupt the Government and the public service was and still is?
3. Do you remember that those who demonstrated and vandalised yesterday were the ones who elected those politicians they now curse?
4. Do you remember that these same people accepted the money from the European Union and in fact hundreds of them sent false statistical data to the EU in order to get more money?
5. Do you know that after the death of historical communism Greece is the only country in the world with more than six communist political parties?
6. Remember one thing: Greeks are never wrong; it is always somebody elses's fault!!! So today it is the fault of the European Union, the French and the Germans. Before them it was the Americans' fault. Before it was the English. Before it was the Turks. NEVER , NEVER , NEVER THE GREEKS!!!
I can give you more information if you are interested. I tell you this: every Greek in the US, who knows a few things about me, asks me why I went to Australia. No one is asking me why I left Greece.
If you want to share this with other people feel free.
Have a blessed day,
Fr S M
February 7, 2012 | Leave a Comment
Does the pressure of being in the lead make you take greater risks to maintain it, or do you feel like you have to prove yourself, and show everyone you're a well deserving winner, allowing hubris to rear its ugly face.
In Golf, Kyle Stanley bounced back from a bitter defeat to win the Phoenix Open on Sunday, erasing an eight-shot deficit to claim victory a week after his last-round collapse at Torrey Pines.
Alan Millhone replies:
I have had the honor of being referee at several world title checker matches. The top Grand Masters when in the lead will be content and play for draws and thus force their opponent to take chances to get a win.
Leo Jia writes:
Being in a leading position is generally tough. First, the leader in a group doesn't automatically get enough motivation to advance. Secondly, he is in an unfair situation where the next win is generally considered a nonevent while a slip to the second position is considered a disaster.
In Chinese idioms, there are some that promote leading. Such as:
First argument occupies the mind; Act first to get the advantage; Voice up the strengths first to forestall the opponent; Be like a crane standing among chickens;
Then, there are many that are against leading:
Sticked-up head gets shot; A man dreads fame as a pig dreads being fat; Protruding rafters rot first; The outstanding tree gets destroyed by wind; The excellent craftsman gets most denies from all craftsmen;
Generally there are more negativity toward leading. Looking back to historic events, a crown prince (a leader of all princes) is perhaps the most dangerous position one can get. From similar reasoning, one key teaching of Confucius is the doctrine of the mean , which basically tells everyone not to stick his head out.
The relative advantage of the leader from the rest (the second and the third for instance) is also very interesting. Consider A, B and C to be the leading, the second, and the third parties respectively. The difference between B and C relative to the difference between A and C is a determining factor in relationships. If B is closer to C (than to A), then generally, B and C will form a union to fight A. Conversely, if B is closer to A, then A and C will very likely form a union to fight B. In either situation, C always has an illusion of being the most advantageous to form a union with A, which as a matter of fact is the most detrimental to itself as well as to B.
A famous ancient novel based on real history called Romance of the Three Kingdoms depicts the above relationships very well. The story happened between 169 AD and 280 AD, when the three kingdoms within the current China's territory: Wei (A), Wu (B), and Shu (C) dealt and fought amazingly amongst themselves, with incessant conspiracies and strategies, all seeking to conquer the entire territory.
While in Korea many years ago the "slicky boys" were on the streets with wrist watches running from their wrist to their upper forearms.
I cannot believe all the watches hawkers are selling on TV.
I have several nice pocket and wrist watches —- and wear none of them.
My favorite is my father's 1940 curved face Bulova.
Do you have a favorite watch?
Robert Redford wears a leather strap Timex.
I am researching and reviewing my contact with hats over a not uneventful life. I am considering their value, their uses, their symbolic significance, the great people I know who have worn them, the hat corporation of America I bought as my first trade, the hat that Tom Wiswell always wore to prevent sunburn and cover up baldness, the hat that Shane wore that made him an icon, the hat that the accountant in Monte Walsh wore that Hat Hendersson just couldn't resist noting was just right for a pistol shot, the hat that I wear now to show my respect for those previous, the man I called Hats H. because he always had a million different conflicts of interest while working for us. The importance of a hat outdoors in the West to shield from rain, sun, and the elements. Et al. What value do you see in hats these days? What anecdotes? They seem to have gone out of style because of the automobile. You don't need protection from the elements any more. Also they're hard to store. How do they relate to markets?
Alan Millhone writes:
I remember well the hat Tom wore. The ball cap I wear has a board on it (see picture). The Market trader might wear such a hat to remind them to look ahead and make the right moves (trades).
Sam Marx writes:
On the subject of "Hats". I am reminded of the aversion that John F. Kennedy had to hats and the picture that has stayed in my mind, since 1961, is of his carrying and not wearing his hat at his inauguration. I believe it was his attitude that caused the downswing in hat wearing in the U.S.
Tim Hesselsweet writes:
Seems like a good example of ever-changing cycles. The hat has been making a comeback for the last several years. Kate Middleton has become a popular figure and she frequently wears hats. Upscale department stores like Saks now carry a large selection of hats as well.
Alston Mabry responds:
Yes, but…mens hats are a different dynamic:
Scott Brooks writes:
When I graduated high school, the guy who measured my head for my mortar board said, "Young man, I've been doing this for 35 years and you have the biggest head I've ever measured".
As a result of my freakishly large cranium, hats rarely fit me. I wear one from time to time, but only out of necessity, and occasionally for functionality.
Necessity is when I need to keep my bald head from burning in the sun or freezing in the winter or dry in the rain. Never under estimate the insulating and protective qualities of hair.
Functionally is because I need a hat when I hunt to keep the sun out of my eyes when I'm scanning for game, peering through my scope to place the cross-hairs on the shoulder of my intended quarry, or placing the aiming pins of my bow in the middle of said quarries chest cavity.
I avoid hats otherwise as I can rarely get one big enough to fit. If I wear one too long, it gives me a headache. Therefore, when it comes to trading, if you see me placing a trade while wearing hat, fade my position as I'm likely making a losing trade because my mind is clouded by the hat that is squeezing my brain all to tightly.
Pete Earle writes:
I wear a hat, and have for seven or eight years. When I began to wear one, I expected to be lightly razzed by friends; that not only didn't deter me, but never occurred. Instead I've received unexpected compliments, and over the last few years other have seen a higher frequency of hat wearers in Manhattan, Washington D.C., and even when I'm down in Auburn and Atlanta.
Christopher Tucker writes:
The grandfather of my best friend from college was one of the kindest and most sensible men I have ever met. He was a traveling sales rep for the John B. Stetson company. The man always had the best (the absolute BEST) hats.
GAP Capital comments:
Born and raised in Chicago, so "hats" remind me of only one person…Dorothy Tillman!!!
Anton Johnson writes:
"By some accounts, Christopher Michael Langan is the smartest man in America……….he has a fifty-two-inch chest, twenty-two-inch biceps, a cranial circumference of twenty-five and a half inches–a colossal head, more than three standard deviations above the norm"
Esquire article on "The Smartest Man"
Alan Millhone sends another photo:
Here is Tommie Wiswell with his trademark hat tilted back. Might also been used to keep
overhead light from his eyes while he focused on the many boards.
Russ Herrold writes:
I am traveling, and so cannot conveniently post, but I placed orders this week for a new Stetson, a couple of Fedora designs, and some other … I forget …and have in my car, for the conference I am at this weekend, easily 5 or so, which I use both for their protection of my head from the cold, and also so I can 'do some branding' work in the community the conference represents (I also have other 'branding' in my clothing, and appearance), such that people I deal with, who don't know me by sight, can recognize me anyway.
Marion Dreyfus adds:
I think I am fairly well known as a hat person, and have been since I wore unusual chapeaux /to synagogue and school when 12 or 13.
Aside from style and stating an individualistic aspect, I think a hat harks back to a gentler, more mindful age, perhaps 100 years ago. It also keeps the head, inside of which are all these excellent ideas and scenes for a better tomorrow and a niftier evening today, comfy-cozy. Hats also show, oddly enough, respect. Hatless men in the 1970s were declaring their freedom from the mindfulness of suit and hat, and perhaps we are the poorer for having abandoned hats.
They also keep milliners in funds, and milliners I went to grad school with in the early 90s were aghast at the drop in hat-wearing citizens, alleviated only by temporary crazes or fads that fade as swiftly as they arise.
As a biker, for me, even mild days produce a breeze when one is on that leather seat, and a hat prevents sunstroke and sun in one's eyes as well as too much wind over one's head.
In the Orthodox world, wearing a hat connotes one is married, so it may be foolish of me to wear hats, because i communicate a status I do not currently entertain. But i do like the fashion and focus statement being made by wearing a lid, many of which, actually, i create myself.
Finally, one can maintain a superior air of mystery in a hat, which is impossible to the same degree in a hatless state.
Alan Millhone adds:
What really amazes me on hats are the clods at football games I attend who don't remove their head cover when the National Anthem is played.
Ken Drees muses:
The baseball cap trend: rappers wearing the caps askew, wearing caps with logos of designers and companies, wearing caps for status/advertising, caps as gang signal, wearing caps in restaurants/indoors, wearing hoodies in lieu of caps, caps as fashion, caps on backwards, caps with brim curved just so, it all has to do with being cool. Lebron James wears Yankee cap to Indians games–it's all about me, fool.
Gary Phillips writes:
"Wearing a cap backwards is a baseball fan tradition that started with Yankee fans. It wasn't because they liked Yogi Berra, either. The Yankees and Red Sox have a century-old rivalry. A group of young guy Yankee fans, around 1980, took the train up to Boston to catch a couple of games. Boston fans are loud and boo other teams. The young Yankee fans were seated in front of loud Bostonians. The New Yorkers didn't want to start an altercation, but made statement. Those guys turned their Yankee caps around backwards to show the Bostons that they were Yanks fans and proud of it."
Anton Johnson writes:
On baseball's rally cap superstition:
"A rally cap is a baseball cap worn while inside-out and backwards or in another unconventional manner by players or fans, in order to will a team into a come-from-behind rally late in the game. The rally cap is primarily a baseball superstition."
And hockey's Hat-trick.
Victor Niederhoffer writes:
It would be nice if this worked in the market. But then the adversary could always tell if you were weak or strong, especialy if signals could be reflected from the hat. I was surprised to see that in all the uses for hats I have collected, including flopping the rump of your horse, and fanning a fire, and collecting water from a stream or the rain, I did not see many variants of using it as a signal to get a cab or alert a Native American that a interloper was near, or to collect bets, or to conceal a salt shaker. This latter is particularly effective in the west because to ask a man to remove his hat is akin to a date with boot hill.
Gary Phillips adds:
Surely not a hat, barely a cap, let us not forget the kippah or yarmulke. The Talmud says that the purpose of wearing a kippah is to remind us God is the Higher Authority over us. He alone is Lord of Lords and King of Kings. When we pray and worship with our heads covered, we are saying that we are in total and complete submission to the will of God Almighty now and forever.
I was recently in the hunt for 2 of the crocheted variety for my 2 and 4 year olds to wear to school. My elder son demanded that the kippah be white with a blue Magen David. The synagogue gift shop was unable to fill our order, so I turned to a higher authority - E-bay. As J. Peterman would say, it is 6" in diameter — one size fits all. Handmade in Israel with a *very small* fine stitch. The yarmulkes are from Israel and are made by people who have made Aliyah; low income and handicap people, generating income to make a living.
I grew up and observant Jew until I had my first taste of bacon and blondes, and I never looked back. However, I now find myself lighting the candles, saying the hamotzi, and making Kiddish on Friday nights… Nice.
Jim Sogi writes:
A hat is essential in Hawaii to keep off the sun, rain and wind, to keep glare out of your eyes, and at night on the mountain for warmth when it gets cold. There are different hats for different situations. A baseball cap is good all around since it keeps the sun off your face, stores easily, can be worn in a car and is cheap and stays on in a brisk wind. A good brim hat is good to keep the sun and rain off the back and shoulders as well. A nylon hat is light and can be washed. A waterproof rain hat is good for extended rain, and a light nylon brim is good for hot sun. A small brim bucket with a strap is worn in the water while surfing to keep intense sun at bay for hours in the water, and to stay on in the surf. A knit or fleece watch cap is good for boating at night or sleeping in the cold. A helmet is good for sports to protect the skull from boards, rocks, trees and impact. The Original Buff is an adaptable piece that can be worn as a hat, scarf, or facemask. A balaclava is good for winter conditions and can be used as a hat, or face mask in windy conditions. I must have 20 or more hats.
As with all equipment, each type of hat is specialized for specific conditions, and there is not one that is good for all conditions. As with markets, its good to have specialized systems and rules for the differing conditions or cycles and no one rule is good in all conditions but must be tailored to match the expected conditions.
Rudy Hauser writes:
I do not wear a hat indoors with the exception of trains and planes or if there is no good place to put the hat. If there is a draft from air conditioning it helps to keep me from getting a headache. But more important is that unless I just want to hold my hat in my hands there is no good place to put it. I prefer to read, not hold a hat. I once made the mistake of putting a Panama hat in the overhead rack in a plane. The motion of the plane bounced it around enough to ruin it. That gives me little choice but to wear it. If I have a hat without a brim, such as my winter hat, I can a do take it off aside from trains which are not that warm.
Bill Rafter adds:
Glare, particularly from lensed overhead lights or high-hat floodlights can cause headaches and eyestrain. That can easily be counteracted by wearing a baseball cap or other large-brimmed hat indoors. I have kept one at my desk for decades.
For years I noticed that whenever I saw a certain actor & director, he was always wearing a hat, even indoors. Then I saw him entering a food emporium at a ski area and he removed his hat. I immediately understood why he always wore one — his particular baldness aged him at least 10 years. So his vanity choice was either a wig or a hat, and he chose the hat.
Hats indoors also provide a level of anonymity for those who do not want to be recognized in an airplane or robbing a bank.
My first "real" hat was a Homburg, which was required for one of my college jobs: pallbearer.
Just left my local 7-Eleven and the fellow ahead of me paid the cashier with a 2.00 bill and a clad Ike dollar coin. The cashier looked shocked and had not seen them in transactions.
I assured her both were legal tender. After she put the bill in her drawer I said aren't you going to mark it with your special pen? She retrieved it and marked it and smiled at me and said happy now?
Up till now I had not seen these coins or currency presented for payment at places I frequent.Is what I witnessed a sign of a growing economy or an isolated incident or a sign of things getting worse for many folks?
The man bought a sandwich and a drink with the coin and the bill.
December 30, 2011 | 3 Comments
In my area in the past year I have seen an increase of people holding signs that they are homeless and begging for money. I note more couples doing the same and note more women begging at intersections etc. Also note more men on foot with back packs that look "bummy" traveling through town. Most without gloves. I have given out several pairs now that it is colder in Southern Ohio.
Phil McDonnell writes:
Every four years the number of highly visible 'homeless' people rises significantly in sync with the presidential election year. The number of real homeless people or residents of drug houses does not really change much but at this time certain unions and re-election committees hire low cost people to man the highly visible street intersections. In my area I have seen them change shifts at even hour intervals. When the replacement approaches about a half block away the one on the corner sees them and puts his or her sign down and casually walks in their direction and does not acknowledge the replacement in any way–as they pass–on the sidewalk. The replacement then picks up the hard luck sign and begins their shift.
I'm at my local lumber yard and a salesman for various materials is here and stated that on the first of next year all drywall manufacturers are increasing their prices 35 per cent!
That should really help new homes built and all remodeling… and all commercial jobs.
Rocky Humbert writes:
Firstly, I'd like to thank Alan for bringing this to my attention. This sort of anecdote can have some important market significance. However, in order to analyze it, one needs to ask the following the questions:
1. What is the marginal cost to produce drywall? How does the current (and proposed) price compare to the marginal cost of production?
2. What is the price history of drywall? If the price has previously dropped steeply (due to the economy), then a 35% price hike (although eye popping) might be reasonable.
3. What are manufacturer and lumber yard inventory levels? Could the announcement of a 35% price hike be an attempt to front-load orders/purchases before year-end? … to clear out inventory?
4. At what % of utilization are drywall plants currently running? Has capacity left the system over the past few years? And if so, at what price will that mothballed capacity come back online?
I think an ambitious spec could call US Gypsum's investor relations office with these questions; get the answer; and have a better understanding of both the drywall market; the state of the housing market; and the state of the economy. I think there is also some risk that this 35% price hike could stick — not because the economy is healing, but because productive capacity has left the system ….and will not return until growth is considerably higher. This is the stagflationary outcome that some people fear….
The bottom line is — a few well placed questions and answers will turn Alan's anecdote from dinner party chatter to an economic/market insight.
Henry Gifford writes:
1. Energy is a significant part of the cost, as is shipping the materials and shipping the finished product.
2. I dunno the price history.
3. In urban areas, there is no significant inventory - the stuff just takes up way too much space. For jobs involving multiple apartments, or one large house, the lumber yard is not really a dealer, but more of a broker, as the boards are "drop shipped" from someone else to the job site, only the money goes through the local lumber yard. Maybe in Alan's neighborhood they can build up significant stock, though.
4. Someone in the business told me all plants generally run at full capacity all the time, including through downturns, because during a downturn they take their slowest plant and shut it down and revamp it with the newest electronics to become their fastest plant, restarting in time for the next boom. He said with a smile that they never worry, the timing is always reliable - boom and then bust. They haven't added any new plants in decades, they just speed up the old ones, like the paper industry has done to keep up with the "paperless" office.
There is really no substitute for gypsum board on the market - no boards means no new houses or other buildings.
The industry is now shifting to "paperless" gypsum boards - fiberglass instead of paper - because of increasing mold problems with paper-faced boards. Buildings are starting to get significantly insulated, which means walls have a cold side in the winter, and a cold side in the summer, and cold means damp, which can mean mold. Also, backup materials used to be masonry which absorbed a lot of water from leaks, then were wood, and are now metal, which absorbs zero, meaning a small leak gets to the paper and causes problems. Combine cold and no absorption/storage with no attention to stopping air leaks in construction, you build a recipe for disaster, not all just insurance or hysteria driven rumors. If anyone invented paper faced gypsum boards now, the lawyers would never let them sell it. I expect it to all be gone soon, the changeover will be "interesting" somehow.
Seems like a couple years ago this site had a discussion on sleep each night. Scott, you posted on this I think?
Note tonight H. Cain gets by on four hours a night. Is this a plus for a candidate?
Scott Brooks comments:
As long as he gets what he needs.
I can only make a few days on 3 - 4 1/2 hours of sleep before I need a night of power sleep. If I can get 6 - 7 1/2 hours of sleep a night, I'm usually fine.
It's also a function of what you're doing with your life, too. I'm up at the farm right now bow hunting. When I'm here, I usually work pretty hard, so I need a bit more sleep. Something about being out on the farm taking in the fresh air that makes me a little more tired at night.
But everyone is different. The key is find out what you need and make sure you get it in 90 increments (+/- a few minutes on each side of the 90 depending on your personal sleep cycles).
World 3-Move Championship Title of 2011. At the Agora theatre, Cleveland, OH. Alex Moiseyev on left and Michele Borghetti on right. After eight games a win each and six draws.
Ginsberg would have smiled last night as players drew dyke opening from deck.
A world title 3 Move Restriction match is set to begin this morning downtown Cleveland at the Agoa Theatre and a few days at the Cleveland Public Library. Full details can be found at the ACF web site. Also live streaming of the match by Mr. John Acker will be shown on our ACF main page and at the usacheckers Facebook page.
This the first time a European from Italy has won the right to challenge since 1847.
Last night chatting in the Italians room the economy was brought up and I made a comment about the USA economy. The Italians said in Italy they are accustomed to a bad economy all the time, where we are not. I found the comment interesting.
We all stay the week at a Value Place in Mentor, Ohio. When I checked in I found that the Value Place runs your name and will not give a room to a registered sexual offender.
Tone is as important to music as pitch. You've heard a new violin player playing the notes on the chart but the tone is awful. Yo Yo Ma plays sweet modulating tones. Focusing on just price without regard to tone leaves out relevant and important information.
The market has tone. Quiet, jumpy, weak, anxious, thin, bullish and dense internals. The environment, political, news, economic, social, international also establishes a mood and tone to the market that cannot be ignored except at your own risk. The prior tone is also relevant as music is not discrete tones and notes, but a integrated statement over time. Emotion is the main vehicle of music and also with the markets.
Tone both creates emotion and is the result of emotion. Voice carries emotion: The cry of a baby, the angry tones of politicians, the whine of the complainer each has distinct tonal qualities. The tone carries meaning and has persuasive force. The question is how to quantify it or even qualify it to learn the meaning in the market.
Emotion also has established patterns: Denial, anger, acceptance; fear, capitulation, numbness; catastrophe,catharsis; infatuation, love, boredom, hate. If tone both reveals and creates emotion, understanding the tone of the market will reveal its emotional state and reveal its emotional stage giving a clue to the next phase.
Jordan Low writes:
The yogis believe in seven chakras in the human body, each corresponding to one of the seven pitches, each corresponding to a different emotion. The stages of grieving you describe go from lower chakras/pitch to higher.
Soros reacts in his gut, which is one of the lower pitches — probably a survival type of emotion. The tone probably is the intensity of the energy at that chakra — I am thinking market volume. We are probably saying the same thing — I find it interesting but am adding quite little.
BTW, the chakras also correspond to the colors in the rainbow, red with the lowest frequency is below.
Laurence Glazier writes:
For these reasons I find alternating attention between composing and trading congruent, as they are carriers of emotion at different scales.
From my point of view the Elliott Wave framework fits well, being a sequence of eight stages whose final three are labelled A, B, C. As I often use a fractal structure in music, that is another similarity. I may be slow, but it has taken me years to internalise patterns which are lately becoming clearer to see.
Yesterday I put sixty years of the S&P into Advanced GET. The astonishing rise from the doldrums must, in part, be a distortion reflecting the love of printing money, but even were this transcribed from dollars to ounces of gold, I think the ascension of computer followed by internet technology would show how much these developments have added to the wealth of the world.
As I move between Monthly, Weekly and Daily views, the software messes up the precision of my placement of wave counts, and I am thinking to move the whole thing into a graphics program, with the different scales, whether grand or minuettes, callable up via layers. This would help me watch day by day what's going on, a work of art within an art program.
It is impossible to experience in full a piece of music from a short excerpt, and I think likewise the Market, with all its waves and eddies, needs attention from up close and afar.
Also, the rainbow, the universal belief that there are seven colors in it may stem from Isaac Newton's assertion, which was based on his mystic ideas about numerology.
However if you look at a rainbow and count, it is not clear whether blue, indigo and violet are really three colors or two. Also the yellow band is very narrow, though often depicted as equal to the others.
I think context in time is part of what the Market (like a human being) experiences, so as well as volume one might want might look at moving average based indicators, and fractal perspectives.
Laurel Kenner writes:
Mr. Sogi is exploring an endlessly fascinating topic with his exceptional lucidity and depth of experience. Great performers play the heartstrings by varying tone within phrases. (They also vary dynamics and duration of individual notes in phrases.) They learn how to do this by spending years with master teachers and figuring things out on their own. That's why synthesized music can sound only like an approximation of the "real thing." Because the market is a bazaar of human voices, expressing workaday practicalities, aspirations, fears and strategies, I don't think it's unduly anthropomorphic to look at it as a great performer. And while some of a great performance is spontaneous, much involves muscle memory that training has made reflexive, and must therefore be susceptible of being "sussed out."
Rocky Humbert writes:
There's an old game/tv game show called "Name that tune". The gist is that competitors would try to identify the title of a song by hearing only the first X notes; the winner would correctly name the tune in the fewest notes. Human memory being what it is, it was possible to name many popular pieces and classical symphonies by hearing only the first measure of a piece.
However, if one picked a RANDOM measure from somewhere in the middle of the same piece, it was vastly more difficult to identify the title correctly with the same consistency.
This is a reflection of how our memories work; and this phenomenon may have relevance for people looking for patterns in the middle of time series — as opposed to the beginning and ends of time series.
Alan Millhone writes:
My old friend and top Master checker player, Karl D. Albrecht from Michigan was walking around the playing room full of players at the Tennessee tournament. As Karl walked by many games that were being played into the mid-game he could by sight and memory accurately tell you from what checker opening each board position originated. I found this remarkable.
Last year our national checker tournament was held in Springfield, Illinois. I stayed over an extra day to visit the beautiful Lincoln Library and educational center. Near the site of the Lincoln Law offices was a lovely old book store. Soon as I opened the door I could smell the books that filled every aisle and stacked on the floors and on tables and chairs. What a delight! I bought a couple "still" iron banks while there. I asked to see their Checker books and found a dozen stacked on a chair. I bought them all which included a scarce hardbound HORSFAL's problem book and GOULDS and other early books at a more than fair price for the lot. Glad I had my car and not flying with the extra weight of the books. Amazon has its place as does the Kindle. However, nothing will ever take the place of one browsing through old books and the aroma of those books.
Noted that ending the space shuttles will end 9,000 jobs. One man interviewed who is losing his 60,000 per year job hopes to start an internet business. I suppose the laid off will draw off unemployment and be eligible for federally funded job retraining and keep all health benefits and the list continues for miles. How will the 9,000 be crookedly figured in job loss and unemployment numbers ?
Tim Melvin writes:
I was in South Texas last week and all the headlines in area papers are related to job losses and lost income form shuttle programs.
Btw those who would like a seaside vacation without the crowds but all the amenities of a great town would do well to check out Rockport/ Fulton area of Texas. It really reminds me of west coast of Florida twenty years ago…with a Texas flair of course. Lots of great mexican and bqq joints….
Mobile phones in prisons are worth 3000 a month. To get one in England a dead pigeon was thrown over the wall, and inside was the phone.
Alan Millhone writes:
Ran into a fellow today who spent two years in an Ohio prison. He never
saw one but knew they existed and said they were like Gold to have one.
Your post reminds me "a bird in the hand".
How would we function today without cell phones and texting and internet?
I love the camera feature on my Blackberry Torch. Many business uses.
Two years ago with the camera I sent photos of storm damage to three
buildings to an adjuster in Wisconsin and measurements etc and basically
adjusted over my phone.
Uncle Ben says that high prices curtail demand.
He reminds me of one of the Duke Brothers in "Trading PLaces".
Gary Rogan writes:
What's more important, he is speaking to the lawmakers in the language they understand, "stock market" just like in '08. He hates the idea of curtailed spending so now he wants drive the stock market lower (which he is in general so eager to keep high) until the Republicans cry uncle and approve the debt limit increase without preconditions.
From some AP article:
"Bernanke also issued a stern warning to lawmakers in Washington who are considering aggressive budget cuts, saying they have the potential to derail the economic recovery."
If this isn't a "soft dictatorship" I don't know what it is. A highly-placed official is using credible threats (or implied credible threats) that threaten the economy in order to get his way. Or at least that's my interpretation of an unclear picture. "Approve the debt limit increase or this puppy gets it."
I notice in my area at month's end lots of pick-ups loaded with belongings of people who are obviously moving.
I have a renter moving today because she can't pay her rent to me yet has money for cigarettes and wine coolers in her fridge!
She has three small children who I feel suffer through all of this.
Do people like her sway our economy or is she part of the fray and is lost in the shuffle?
It may take Trump to get the photos released to the public.
News now cautions USA about too much jubilation!
After 9/11, we were cautioned that America might be showing too much patriotism!
G. Humbert writes:
Trump will not get involved in this as this is a loser issue for him any which way you look at it. He is just biding his time, waiting for the hoopla to die down before starting the next phase of his claims and demands. I bet OBL owes his untimely demise to Trump's success in garnering the media's attention. You've got to admit this was pretty effective in derailing Trump's momentum. Plus it takes time to do the forensic analysis on the birth certificate and decide what to do next.
Spoke to a 65 year old Checker player in Florida also with a most of the year residence in Paris. He travels all the time and he has never worked. I assume inheritance by him or his wife. I did not ask.
He recently was in SF and notes the Chinese are coming over and buying up every Chinese stamp they can. Chinese stamp prices are on the rise.
Take a unofficial poll: how many of you actually think this govt shut down will actually occur?
Note oil and that yellow metal and silver on the rise today as world unrest continues.
March 31, 2011 | Leave a Comment
I am a decent chess player.
My rating in the room I play in is good, but it varies as much as 250 points. Sloppy play is the obvious factor and is driven by a multitude of reasons: Distractions while watching and trading markets, watching my son, watching tennis, playing after consuming a handful of pints of Stella at the local after the market close with my buddies, or, perhaps just an inconsistent mental capability.
I am often charged with cheating (using a program on the side of the online board). I am not always accused when I beat an opponent who is rated a few hundred above me, but it is often. I don't get upset or offended. Just highly amused.
Chess is a fantastic experiment and exercise of the ego. The fragility of some who typically assume one is cheating when they should just say "well done".
Allan Millhone comments:
At tournaments I always shake hands with my opponent and never make excuses when I lose. I strive to be humble when I win and do my best to guard my ego. I am an average player.
I enjoyed your post and your points.
Dirty tables. I'm at a place I like for a Boli and the place is busy. I dislike seeing dirty tables and the seats not cleaned. To me for a food business to maintain an edge over the competition they need good food and a clean place to dine.
This place is individually owned. Watching the girl now cleaning tables and chairs with the same rag! Also note our local Panera has the same table and seat issues. Panera and our local free standing Chick Fil A use two cloths for tables and chairs.
Likely all of this has Market implications when an investor chooses a restaurant stock to purchase.
Charles Pennington responds:
I almost always try to hit restaurants when they're not crowded. I'll grab lunch at 11am or 3pm, or I'll get dinner at 5pm or 9pm. It's a great strategy, except that always, always,always there is someone sweeping the floor while I'm eating. I try to cover up my food, but there's really no way to protect it from small pieces of airborne debris. I understand that restaurants are in a quandary–they have to sweep sometime, but I wish they'd come up with a better solution.
Also Alan is very fortunate to have a Chick-fil-a in town. The Chick-fil-a people should invade the northeast and show everyone how it's done. When I was a kid, Chick-fil-a was mostly a mall destination, but now they are also a highway exit destination. I'd drive an extra hundred miles if it would get me to a Chick-fil-a, where I know the place is going to be clean and they're going to treat me with wonderful courtesy.
Two things we can learn from kids are how to:
1) stay happy, for no reason in particular.
2) keep busy, doing something or the other.
What else would you suggest we could do to keep the child in each of us active, so as to be better adults?
Alan Millhone writes:
3) Young children are very honest and seldom tell falsehoods.
Jeff Watson suggests:
To stay a kid at heart, one should spend at least an hour a day engaged in exercise and another hour playing some kind of childish game, it doesn't matter what. It also helps to hang around with kids as they will keep you young.
Mark Goulston writes:
4) Every morning think of someone you are grateful to: a) what they did; b) the effort it took for them to do it; c) what it personally meant to you.
5) Make an effort to reach those people (or next of kin) and thank them for those three things
I'm watching Pawn Queens on TLC. I have also been watched Pawn Stars about the Gold's pawn shop in Detroit.
I've caught Warehouse Wars lately where the locks are cut off storage units and you bid on what you see without entering the units.
Is the increase of these shows a result of the economy getting stronger?
Also the Market goes up today after a prior two day decline. Is this done so not to run off everone?
My best friend (aside from my favorite wife) has over time ingratiated himself into a small group of doctors. He goes out with them (they always pay) he uses them for free office calls for himself and his wife. He has begun to covet where they live and what they possess and what they drive. He let one Dr. talk him into getting a Schwab account for all his stocks. I give him hell all the time over all of this. He is becoming too self important.
I am property poor. Have a few collectibles. Drive an old truck. I have no interests in his other circle of acquaintances and tell him so. I like people for just who they are and nothing more.
We should all accept each other for who we are. Easy to say and tough to do at times.
There are so many distractions that try to take your focus off the market when you need it the most. Wailing sirens every hour, tsunamis, earthquakes, movies, pretty girls, boats, music, food, the news, the mideast, the electrical workers strike, thunder, lighting, vacations, family obligations, phone calls, bills, errands, and the list goes on. Obviously some require a balance. Its a common strategic trick used in other contexts of battle, combat, negotiation, art, humor, magic, romance.
Alan Millhone writes:
You make good points on distractions. I know that many on the list have no TV which plays on our emotions.
At Checker tournaments I pretty much block out all around me and concentrate on the board before me. My opponent is there but only to make their move or reply to mine. I keep a legal pad handy and record my moves and on occasion make a note beside my move here and there or same with my opponent.
I suspect the Market trader should conduct themselves in a similar way.
Craig Mee writes:
Remember Tiger Wood's father used to either yell at him or play music super loud on the putting green– one or the other, from a very early age to combat distractions.
No doubt the scalpers in the pit that excelled had mastered that area as well.
I leave tomorrow for a yearly checker tourney that is 500 miles each way. Regular at 3.55 today.
The oil companies must track my upcoming trips.
Russ Sears writes:
My training friend in the 90's had a similar lament about his marathons and training vacations…
He was on a tight budget to squeeze in a many trips as possible. I think he made 2 mistakes. One, I always thought he over-weighted the times he lost due to gas prices and did not complain the prices went down, and 2 because he planned more trips when the prices were low.
Paying the entry fee and the preparation time of training made it hard for him to back down. In other words, he always bought high because he sold low like many 401k investors do.
I believe his trip to England to race one year was nearly half price his original budget due to favorable currency rates. But then he did look at it as a trade and "hedged". He bought pounds early over-hedged because he thought they were under valued, when he came back sold at a nice profit.
If you do "hedge" your trips, you might remember to including vig and taxable gains, makes it hard to break even in a hedge that is not recieving IRS hedge treatment.
Blue cross Blue shield gets low marks. This company in W. Va health care recently let go over forty workers and out sourced those jobs to India. My wife had a friend who worked there 13 years and at 62 was one of those terminated.
I am confident this is very widespread. The talk of jobs being created etc is a ruse to try and fool the voters.
Obama care will stop employers from hiring. My friends son has two Chick Fil A restaurants and employs over 100. He said he will lay off many if this type of forced health care becomes reality.
One notes limits in Bunds price size "84 478 83 292 82 533 81 43 80 1030 79 181 78 696 77 211" thus the even numbers show a preference from the public relative to the odd ( as is true for migratory salmon? )
One puts on the bath robe, and starts to walk to shower at 7 am,but sits down at the trading for a minute before hand, and gets up 6 or 7 times, but has not taken more than 2 steps, as he waits now for the useless weekly employment numbers, with their ersatz moves, too close in time to get in and out of shower.
Alan Millhone writes:
I am at VA in Chillicothe. I was up at six AM to shower. Dark at that hour and Market in US closed. If I were a trader of Dow only I would shower very early and no distractions.
Note watching news in lobby that DOW and NAS down nicely waiting for poor unemployment numbers to surface.
How can the lunacy of going up on increased sales above expectation and earnings below expectation go on , and isn't this a symptom of flexionicism ?
Vince Fulco responds:
Everyone being led to believe 4% plus growth is baked into the year for sure.
Alan Millhone comments:
There is a election in two short years and all need to be very wary of all stats coming out of Washington.
On another note two local gas stations have been back and forth from 3.06 to 3.15 twice today. This afternoon I was at our ACF Bulletin printer and had a nice chat with the owner who like me is a small businessman. He feels when regular hits 4.00 it will be a killer for what he sees as a struggling economy. His business is in parkersburg , W. Va. The council there recently passed a 2.50 " user fee " per employee per week of anyone who works in the city. Yet the city has 1.6 million of uncollected fire and police and flood wall fees.
Craig Mee comments:
It could be a relative symptom of lack of striking negative news after a period of so much and then the shear relief of a being able to breath. Bit like a sick person, who is able to walk and go to the park, after months in bed but still has a chronic condition. When the immune system gets hit again, and white blood cell count gets nasty then it will be back to bed….but in the meantime , the flowers are amazingly beautiful.
The president says the most important thing is to "spur" the economy in 2011. I wonder how much more being spurred we can stand! BHO now says he is willing to work with Congress– he now has little choice. I have lost all faith in any of them. They have no conception nor compassion for the average citizen.
The new health care will not address eye care nor dental. You have to be a government employee to benefit in those never discussed areas of health care.
December 31, 2010 | 61 Comments
- 31 Spec-listers contributed to the 2011 Investment Contest with "specific" recommendations.
- Average 4 recommendations per person (mean of 4.2, median and mode of 4) came in.
- 6 contestants gave only 1 recommendation, 3 gave only 2 and thus 9 out of the total 31 have NOT given the minimum 3 recommendations needed as per the Rules clarified by Ken Drees.
- The Hall of Fame entry for the largest number of ideas (did someone say diversification?) is from Tim Melvin, close on whose heels are J. T. Holley with 11 and Ken Drees with 10.
- The most creatively expressed entry of course has come from Rocky Humbert.
- At this moment 17 out of 31 contestants are in positive performance territory, 14 are in negative performance territory.
- Barring a major outlier of a 112.90% loss on the Option Strategy of Phil McDonnell (not accounting for the margin required for short options, but just taking the ratio of initial cash inflow to outflow):
- Average of all Individual contestant returns is -2.54% and the Standard Deviation of returns achieved by all contestants is 5.39.
- Biggest Gainer at this point is Jared Albert (with his all in single stock bet on REFR) with a 22.87% gain. The only contestant a Z score greater than 2 ( His is actually 4.72 !!)
- Biggest Loser at this point (barring the Giga-leveraged position of Mr. McDonnell) is Ken Drees at -10.36% with a Z Score that is at -1.45.
- Wildcards have not been accounted for as at this point, with wide
deviations of recommendations from the rules specified by most. While 9
participants have less than 3 recommendations, those with more than 4
include several who have not chosen to specify which 3 are their primary recommends. Without clarity on a universal measurability wildcard accounting is on hold. Those making more than 1 recommendations would find that their aggregate average return is derived by taking a sum of returns of individual positions divided by the number of recommends. Unless specified by any person that positions are taken in a specific ratio its equal sums invested approach.
- A total of 109 contracts are utilized by the contestants across bonds, equity indices (Nikkei, Kenyan Stocks included too!), commodities, currencies and individual stock positions.
- The ratio of Shorts to Longs across all recommendations, irrespective of the type of contract (call, put, bearish ETF etc.) is 4 SELL orders Vs 9 Buy Orders. Not inferring that this list is more used to pressing the Buy Button. Just an occurence on this instance.
- The Average Return, so far, on the 109 contracts utilized is -1.26% with a Standard Deviation of 12.42%. Median Return is 0.39% and the mode of Returns of all contracts used is 0.
- The Highest Return is on MICRON TECH at 28.09, if one does not account for the July 2011 Put 25 strike on SLV utilized by Phil McDonnell.
- The Lowest Return is on IPTV at -50%, if one does not account for the Jan 2012 Call 40 Strike on SLV utilized by Phil McDonnell.
- Only Two contracts are having a greater than 2 z score and only 3 contracts are having a less than -2 Z score.
Victor Niederhoffer wrote:
One is constantly amazed at the sagacity in their fields of our fellow specs. My goodness, there's hardly a field that one of us doesn't know about from my own hard ball squash rackets to the space advertising or our President, from surfing to astronomy. We certainly have a wide range.
May I suggest without violating our mandate that we consider our best sagacities as to the best ways to make a profit in the next year of 2011.
My best trades always start with assuming that whatever didn't work the most last year will work the best this year, and whatever worked the best last year will work the worst this year. I'd be bullish on bonds and bearish on stocks, bullish on Japan and bearish on US stocks.
I'd bet against the banks because Ron Paul is going to be watching them and the cronies in the institutions will not be able to transfer as much resources as they've given them in the past 2 years which has to be much greater in value than their total market value.
I keep wondering what investments I should make based on the hobo's visit and I guess it has to be generic drugs and foods.
What ideas do you have for 2011 that might be profitable? To make it interesting I'll give a prize of 2500 to the best forecast, based on results as of the end of 2011.
David Hillman writes:
"I do know that a sagging Market keeps my units from being full."
One would suggest it is a sagging 'economy' contributing to vacancy, not a sagging 'market'. There is a difference.
Ken Drees, appointed moderator of the contest, clearly states the new rules of the game:
1. Submissions for contest entries must be made on the last two days of 2010, December 30th or 31st.
2. Entries need to be labeled in subject line as "2011 contest investment prediction picks" or something very close so that we know this is your official entry.
3. Entries need 3 predictions and 1 wildcard trade prediction (anything goes on the wildcard).
4. Extra predictions may be submitted and will be judged as extra credit. This will not detract from the main predictions and may or may not be judged at all.
5. Extra predictions will be looked on as bravado– if you've got it then flaunt it. It may pay off or you may give the judge a sour palate.
The desire to have entries coming in at years end is to ensure that you have the best data as to year end 2010 and that you don't ignite someone else to your wisdom.
Market direction picks are wanted:
Examples: 30 year treasury yield will fall to 3% in 2011, S&P 500 will hit "x" by June, and then by "y" by December 2011.
The more exact your prediction is, the more weight will be given. The more exact your prediction, the more weight you will receive if right and thus the more weight you will receive if wrong. If you predict that copper will hit 5.00 dollars in 2011 and it does you will be given a great score, if you say that copper will hit 5.00 dollars in march and then it will decline to4.35 and so forth you will be judged all along that prediction and will receive extra weight good or bad. You decide on how detailed your submission is structured.
Will you try to be precise (maybe foolhardy) and go for the glory? Or will you play it safe and not stand out from the crowd? It is a doubled edged sword so its best to be the one handed market prognosticator and make your best predictions. Pretend these predictions are some pearls that you would give to a close friend or relative. You may actually help a speclister to make some money by giving up a pearl, if that speclister so desires to act upon a contest–G-d help him or her.
Markets can be currency, stocks, bonds, commodities, etc. Single stock picks can be given for the one wildcard trade prediction. If you give multiple stock picks for the wildcard then they will all be judged and in the spirit of giving a friend a pearl–lets make it "the best of the best, not one of six".
All judgments are the Chair's. The Chair will make final determination of the winner. Entries received with less than 3 market predictions will not be considered. Entries received without a wildcard will be considered.The spirit of the contest is "Give us something we can use".
Bill Rafter adds:
Suggestion for contest:
"Static" entry: A collection of up to 10 assets which will be entered on the initial date (say 12/31/2010) and will be unaltered until the end data (i.e. 12/31/2011). The assets could be a compilation of longs and shorts, or could have the 10 slots entirely filled with one asset (e.g. gold). The assets could also be a yield and a fixed rate; that is one could go long the 10-year yield and short a fixed yield such as 3 percent. This latter item will accommodate those who want to enter a prediction but are unsure which asset to enter as many are unfamiliar with the various bond coupons.
"Rebalanced" entry: A collection of up to 10 assets which will be rebalanced on the last trading day of each month. Although the assets will remain unchanged, their percentage of the portfolio will change. This is to accommodate those risk-averse entrants employing a mean-reversion strategy.
Both Static and Rebalanced entries will be judged on a reward-to-risk basis. That is, the return achieved at the end of the year, divided by the maximum drawdown (percentage) one had to endure to achieve that return.
Not sure how to handle other prognostications such as "Famous female singer revealed to be man." But I doubt such entries have financial benefits.
I'm willing to be an arbiter who would do the rebalancing if necessary. I am not willing to prove or disprove the alleged cross-dressers.
Ralph Vince writes:
A very low volume bar on the weekly (likely, the first of two consecutive) after a respectable run-up, the backdrop of rates having risen in recent weeks, breadth having topped out and receding - and a lunar eclipse on the very night of the Winter Solstice.
If I were a Roman General I would take that as a sign to sit for next few months and do nothing.
I'm going to sit and do nothing.
Sounds like an interim top in an otherwise bullish, long-term backdrop.
Gordon Haave writes:
My three predictions:
Gold/ silver ratio falls below 25 Kenyan stock market outperforms US by more than 10%
Dollar ends 10% stronger compared to euro
All are actionable predictions.
Steve Ellison writes:
I did many regressions looking for factors that might predict a year-ahead return for the S&P 500. A few factors are at extreme values at the end of 2010.
The US 10-year Treasury bond yield at 3.37% is the second-lowest end-of year yield in the last 50 years. The S&P 500 contract is in backwardation with the front contract at a 0.4% premium to the next contract back, the second highest year-end premium in the 29 years of the futures.
Unfortunately, neither of those factors has much correlation with the price change in the S&P 500 the following year. Here are a few that do.
The yield curve (10-year yield minus 3-month yield) is in the top 10% of its last 50 year-end values. In the last 30 years, the yield curve has been positively correlated with year-ahead changes in the S&P 500, with a t score of 2.17 and an R squared of 0.143.
The US unemployment rate at 9.8% is the third highest in the past 60 years. In the last 30 years, the unemployment rate has been positively correlated with year-ahead changes in the S&P 500, with a t score of 0.90 and an R squared of 0.028.
In a variation of the technique used by the Yale permabear, I calculated the S&P 500 earnings/price ratio using 5-year trailing earnings. I get an annualized earnings yield of 4.6%. In the last 18 years, this ratio has been positively correlated with year-ahead changes in the S&P 500, with a t score of 0.92 and an R squared of
Finally, there is a negative correlation between the 30-year S&P 500 change and the year-ahead change, with a t score of -2.28 and an R squared of 0.094. The S&P 500 index price is 9.27 times its price of 30 years ago. The median year-end price in the last 52 years was 6.65 times the price 30 years earlier.
Using the predicted values from each of the regressions, and weighting the predictions by the R squared values, I get an overall prediction for an 11.8% increase in the S&P 500 in 2011. With an 11.8% increase, SPY would close 2011 at 140.52.
Factor Prediction t N R sq
US Treasury yield curve 1.162 2.17 30 0.143
30-year change 1.052 -2.28 52 0.094
Trailing 5-year E/P 1.104 0.92 18 0.050
US unemployment rate 1.153 0.90 30 0.028
Weighted total 1.118
SPY 12/30/10 125.72
Predicted SPY 12/30/11 140.52
Jan-Petter Janssen writes:
PREDICTION I - The Inconvenient Truth The poorest one or two billion on this planet have had enough of increasing food prices. Riots and civil unrest force governments to ban exports, and they start importing at any cost. World trade collapses. Manufacturers of farm equipment will do extremely well. Buy the most undervalued producer you can find. My bet is
* Kverneland (Yahoo: KVE.OL). NOK 6.50 per share today. At least NOK 30 on Dec 31th 2011.
PREDICTION II - The Ultimate Bubble The US and many EU nations hold enormous gold reserves. E.g. both Italy and France hold the equivalent of the annual world production. The gold meme changes from an inflation hedge / return to the gold standard to (a potential) over-supply from the selling of indebted nations. I don't see the bubble bursting quite yet, but
* Short gold if it hits $2,000 per ounce and buy back at $400.
PREDICTION III - The Status Quo Asia's ace is cheap labor. The US' recent winning card is cheap energy through natural gas. This will not change in 2011. Henry Hub Feb 2011 currently trades at $4.34 per MMBtu. Feb 2012 is at $5.14. I would
* Short the Feb 2012 contract and buy back on the last trading day of 2011.
Vince Fulco predicts:
This is strictly an old school, fundamental equity call as my crystal ball for the indices 12 months out is necessarily foggy. My recommendation is BP equity primarily for the reasons I gave earlier in the year on June 5th (stock closed Friday, June 4th @ $37.16, currently $43.53). It faced a hellish downdraft post my mention for consideration, primarily due to the intensification of news flow and legal unknowns (Rocky articulated these well). Also although the capital structure arb boys savaged the equity (to 28ish!), it is up nicely to year's end if one held on and averaged in with wide scales given the heightened vol.
Additional points/guesstimates are:
1) If 2010 was annus horribilis, 2011 with be annus recuperato. A chastened mgmt who have articulated they'll run things more conservatively will have a lot to prove to stakeholders.
2) Dividend to be re-instated to some level probably by the end of the second quarter. I am guessing $1.00 annualized per ADS as a start (or
2.29%), this should bring in the index hugging funds with mandates for only holding dividend payers. There is a small chance for a 1x special dividend later in the year.
3) Crude continues to be in a state of significant profitability for the majors in the short term. It would appear finding costs are creeping however.
4) The lawsuits and additional recoveries to be extracted from the settlement fund and company directly have very long tails, on the order of 10 years.
5) The company seems fully committed to sloughing off tertiary assets to build up its liquid balance sheet. Debt to total capital remains relatively low and manageable.
6) The stock remains at a significant discount to its better-of breed peers (EV/normalized EBITDA, Cash Flow, etc) and rightly so but I am betting the discount should narrow back to near historical levels.
1) The company and govt have been vastly understating the remaining fuel amounts and effects. Release of independent data intensifies demands for a much larger payout by the company closer to the highest end estimates of $50-80B.
2) It experiences another similar event of smaller magnitude which continues to sully the company's weakened reputation.
3) China admits to and begins to fear rampant inflation, puts the kabosh to the (global) economy and crude has a meaningful decline the likes of which we haven't seen in a few years.
4) Congress freaks at a >$100-120 price for crude and actually institutes an "excess profits" tax. Less likely with the GOP coming in.
A buy at this level would be for an unleveraged, diversified, longer term acct which I have it in. However, I am willing to hold the full year or +30% total return (including special dividend) from the closing price of $43.53 @ 12/30/10, whichever comes first. Like a good sellside recommendation, I believe the stock has downside of around 20% (don't they all when recommended!?!) where I would consider another long entry depending on circumstances (not pertinent to the contest).
Mr. Albert enters:
Single pick stock ticker is REFR
The only way this gold chain wearing day trader has a chance against all the right tail brain power on the list is with one high risk/high reward put it all on red kind of micro cap.
Basic story is this company owns all the patents to what will become the standard for switchable glazings (SPD smart glass). It's taken roughly 50 years of development to get a commercialized product, and next year Mercedes will almost without doubt use SPD in the 2012 SLK (press launch 1/29/11 public launch at the Geneva auto show in march 2011).
Once MB validate the tech, mass adoption and revenues will follow etc and this 'show me' stock will rocket to the moon.
Dan Grossman writes:
Trying to comply with and adapt the complex contest rules (which most others don't seem to be following in any event) to my areas of stock market interest:
1. The S&P will be down in the 1st qtr, and at some point in the qtr will fall at least
2. For takeover investors: GENZ will (finally) make a deal to be acquired in the 1st qtr for a value of at least $80; and AMRN after completion of its ANCHOR trial will make a deal to be acquired for a price of at least $8.
3. For conservative investors: Low multiple small caps HELE and DFG will be up a combined average of 20% by the end of the year.
For my single stock pick, I am something of a johnny-one-note: MNTA will be up lots during the year — if I have to pick a specific amount, I'd say at least 70%. (My prior legal predictions on this stock have proved correct but the stock price has not appropriately reflected same.)
Finally, if I win the contest (which I think is fairly likely), I will donate the prize to a free market or libertarian charity. I don't see why Victor should have to subsidize this distinguished group that could all well afford an contest entrance fee to more equitably finance the prize.
Best to all for the New Year,
Gary Rogan writes:
1. S&P 500 will rise 3% by April and then fall 12% from the peak by the end of the year.
2. 30 year treasury yields will rise to 5% by March and 6% by year end.
3. Gold will hit 1450 by April, will fall to 1100 by September and rise to 1550 by year end.
Wildcard: Short Netflix.
Jack Tierney, President of the Old Speculator's Club, writes:
Equal Amounts in:
TBT (short long bonds)
YCS (short Yen)
GRU (Long Grains - heavy on wheat)
CHK (Long NG - takeover)
BONXF.PK or BTR.V (Long junior gold)
12/30 closing prices (in order):
Bill Rafter writes:
Buy: FXP and IRWD
Hold for the entire year.
William Weaver writes:
For Returns: Long XIV January 21st through year end
For Return/Risk: Long XIV*.30 and Long VXZ*.70 from close today
I hope everyone has enjoyed a very merry holiday season, and to all I wish a wonderful New Year.
Ken Drees writes:
Yes, they have been going up, but I am going contrary contrary here and going with the trends.
1. Silver: buy day 1 of trading at any price via the following vehicles: paas, slw, exk, hl –25% each for 100% When silver hits 39/ounce, sell 10% of holdings, when silver hits 44/ounce sell 30% of holdings, when silver hits 49 sell 60%–hold rest (divide into 4 parts) and sell each tranche every 5 dollars up till gone–54/oz, 59, 64, 69.
2. Buy GDXJ day 1 (junior gold miner etf)—rotation down from majors to juniors with a positive gold backdrop. HOLD ALL YEAR.
3. USO. Buy day 1 then do—sell 25% at 119/bbl oil, sell 80% at 148/bbl, sell whats left at 179/bbl or 139/bbl (whichever comes first after 148)
wildcard: AMEX URANUIM STOCKS. UEC, URRE, URZ, DNN. 25% EACH, buy day 1 then do SELL 70% OF EVERYTHING AT 96$LB u http://www.uxc.com/ FOR PRICING, AND HOLD REST FOR YEAR END.
Happy New Year!
Ken Drees———keepin it real.
Sam Eisenstadt forecasts:
My forecast for the S&P 500 for the year ending Dec 31, 2011;
S&P 500 1410
Anton Johnson writes:
Equal amounts allocated to:
EDZ Short moc 1-21-2011, buy to cover at 50% gain, or moc 12/30/2011
VXX Short moc 1-21-2011, buy to cover moc 12/30/2011
UBT Short moo 1-3-2011, buy to cover moc 12/30/2011
Scott Brooks picks:
Evenly between the 4 (25% each)
Sushil Kedia predicts:
3) Japanese Yen
30% moves approximately in each, within 2011.
Rocky Humbert writes:
(There was no mention nor requirement that my 2011 prediction had to be in English. Here is my submission.) … Happy New Year, Rocky
Sa aking mahal na kaibigan: Sa haba ng 2010, ako na ibinigay ng ilang mga ideya trading na nagtrabaho sa labas magnificently, at ng ilang mga ideya na hindi na kaya malaki. May ay wala nakapagtataka tungkol sa isang hula taon dulo, at kung ikaw ay maaaring isalin ito talata, ikaw ay malamang na gawin ang mas mahusay na paggawa ng iyong sariling pananaliksik kaysa sa pakikinig sa mga kalokohan na ako at ang iba pa ay magbigay. Ang susi sa tagumpay sa 2011 ay ang parehong bilang ito ay palaging (tulad ng ipinaliwanag sa pamamagitan ng G. Ed Seykota), sa makatuwid: 1) Trade sa mga kalakaran. 2) Ride winners at losers hiwa. 3) Pamahalaan ang panganib. 4) Panatilihin ang isip at diwa malinaw. Upang kung saan gusto ko idagdag, fundamentals talaga bagay, at kung ito ay hindi magkaroon ng kahulugan, ito ay hindi magkaroon ng kahulugan, at diyan ay wala lalo na pinakinabangang tungkol sa pagiging isang contrarian bilang ang pinagkasunduan ay karaniwang karapatan maliban sa paggawa sa mga puntos. (Tandaan na ito ay pinagkasunduan na ang araw ay babangon na bukas, na quote Seth Klarman!) Pagbati para sa isang malusog na masaya at pinakinabangang 2011, at siguraduhin na basahin www.rockyhumbert.com kung saan ako magsulat sa Ingles ngunit ang aking mga saloobin ay walang malinaw kaysa talata na ito, ngunit inaasahan namin na ito ay mas kapaki-pakinabang.
Dylan Distasio comments:
Gawin mo magsalita tagalog?
Gary Rogan writes:
After a worthy challenge, Mr. Rogan is now also a master of Google Translate, and a discoverer of an exciting fact that Google Translate calls Tagalog "Filipino". This was a difficult obstacle for Mr. Rogan to overcome, but he persevered and here's Rocky's prediction in English (sort of):
My dear friend: Over the course of 2010, I provided some trading ideas worked out magnificently, and some ideas that are not so great. There is nothing magical about a forecast year end, and if you can translate this paragraph, you will probably do better doing your own research rather than listening to the nonsense that I and others will give. The key to success in 2011 is the same as it always has (as explained by Mr. Ed Seykota), namely: 1) Trade with the trend.
2) Ride cut winners and losers. 3) Manage risk. 4) Keep the mind and spirit clear. To which I would add, fundamentals really matter, and if it does not make sense, it does not make sense, and there is nothing particularly profitable about being a contrarian as the consensus is usually right but turning points. (Note that it is agreed that the sun will rise tomorrow, to quote Seth Klarman) Best wishes for a happy healthy and profitable 2011, and be sure to read www.rockyhumbert.com which I write in English but my attitude is nothing clearer than this paragraph, but hopefully it is more useful.
Tim Melvin writes:
Ah the years end prediction exercise. It is of course a mostly useless exercise since not a one of us can predict what shocks, positive or negative, the world and the markets could see in 2011. I find it crack up laugh out loud funny that some pundits come out and offer up earnings estimates, GDP growth assumptions and interest rate guesses to give a precise level for the year end S&P 500 price. You might as well numbers out of a bag and rearrange them by lottery to come up with a year end number. In a world where we are fighting two wars, a hostile government holds the majority of our debt and several sovereign nations continually teeter on the edge of oblivion it's pretty much ridiculous to assume what could happen in the year ahead. Having said that, as my son's favorite WWE wrestler when he was a little guy used to say "It's time to play the game!"
Ill start with bonds. I have owned puts on the long term treasury market for two years now. I gave some back in 2010 after a huge gain in 2009 but am still slightly ahead. Ill roll the position forward and buy January 2012 puts and stay short. When I look at bods I hear some folks talking about rising basic commodity prices and worrying about inflation. They are of course correct. This is happening. I hear some other really smart folks talking of weak real estate, high jobless rates and the potential for falling back into recession. Naturally, they are also exactly correct. So I will predict the one thing no one else is. We are on the verge of good old fashioned 1970s style stagflation. Commodity and basic needs prices will accelerate as QE2 has at least stimulated demand form emerging markets by allowing these wonderful credits to borrow money cheaper than a school teacher with a 750 FICO score. Binds go lower as rates spike. Our economy and balance sheet are a mess and we have governments run by men in tin hats lecturing us on fiscal responsibility. How low will they go Tim? How the hell do I know? I just think they go lower by enough for me to profit.
Nor can I tell you where the stock market will go this year. I suspect we have had it too good for too long for no reason so I think we get at least one spectacular gut wrenching, vomit inducing sell off during the year. Much as lower than expected profits exposed the silly valuations of the new paradigm stocks I think that the darling group, retail , will spark a sell-off in the stock market this year. Sales will be up a little bit but except for Tiffany's (TIF) and that ilk margins are horrific. Discounting started early this holiday and grew from there. They will get steeper now that that Santa Claus has given back my credit card and returned to the great white north. The earnings season will see a lot of missed estimates and lowered forecasts and that could well pop the bubble. Once it starts the HFT boys and girls should make sure it goes lower than anyone expects.
Here's the thing about my prediction. It is no better than anyone else's. In other words I am talking my book and predicting what I hope will happen. Having learned this lesson over the years I have learned that when it comes to market timing and market direction I am probably the dumbest guy in the room. Because of that I have trained myself to always buy the stuff that's too cheap not to own and hold it regardless. After the rally since September truly cheap stuff is a little scarce on the ground but I have found enough to be about 40% long going into the year. I have a watch list as long as a taller persons right arm but most of it hover above truly cheap.
Here is what I own going into the year and think is still cheap enough to buy. I like Winn Dixie (WINN). The grocery business sucks right now. Wal mart has crushed margins industry wide. That aside WINN trades at 60% of tangible book value and at some point their 514 stores in the Southeast will attract attention from investors. A takeover here would be less than shocking. I will add Presidential Life (PLFE) to the list. This stock is also at 60% of tangible book and I expect to see a lot of M&A activity in the insurance sector this year and this should raise valuations across the board. I like Miller Petroleum (MILL) with their drilling presence in Alaska and the shale field soft Tennessee. This one trades at 70% of tangible book. Ill add Imperial Sugar (IPSU), Syms (SYMS) and Micron tech (MU) and Avatar Holdings (AVTR) to my list of cheapies and move on for now.
I am going to start building my small bank portfolio this year. Eventually this group becomes the F-you walk away money trade of the decade. As real estate losses work through the balance sheet and some measure of stability returns to the financial system, perhaps toward the end of the year the small baileys savings and loan type banks should start to recover. We will also see a mind blowing M&A wave as larger banks look to gain not just market share but healthy assets to put on the books. Right now these names trade at a fraction of tangible book value. They will reach a multiple of that in a recovery or takeover scenario. Right now I own shares of Shore Bancshares (SHBI), a local bank trading at 80% of book value and a reasonably healthy loan portfolio. I have some other mini microcap banks as well that shall remain my little secret and not used to figure how my predictions work out. I mention them because if you have a mini micro bank in your community you should go meet then bankers, review the books and consider investing if it trades below the magical tangible book value and has excess capital. Flagstar Bancorp(FBC) is my super long shot undated call option n the economy and real estate markets.
I will also play the thrift conversion game heavily this year. With the elimination of the Office of Thrift Services under the new financial regulation many of the benefits of being a private or mutual thrift are going away. There are a ton of mutual savings banks that will now convert to publicly traded banks. A lot of these deals will be priced below the pro forma book value that is created by adding all that lovely IPO cash to the balance sheet without a corresponding increase in the shares outstanding. Right now I have Fox Chase Bancorp (FXCB) and Capital Federal Financial(CFFN). There will be more. Deals are happening every day right now and again I would keep an eye out for local deals that you can take advantage of in the next few months.
I also think that 2011 will be the year of the activist investor. These folks took a beating since 2007 but this should be their year. There is a ton of cash on corporate balance sheets but lots of underperformance in the current economic environment. We will see activist drive takeovers, restructures, and special dividends this year in my opinion. Recent filings of interest include strong activist positions in Surmodics(SRDX), SeaChange International (SEAC), and Energy Solutions. Tracking activist portfolios and 13D filings should be a very profitable activity in 2011.
I have been looking at some interesting new stuff with options as well I am not going to give most of it away just yet but I ll give you one stimulated by a recent list discussion. H and R Black is highly likely to go into a private equity portfolio next year. Management has made every mistake you can make and the loss of RALs is a big problem for the company. However the brand has real value. I do not want town the stock just yet but I like the idea of selling the January 2012 at $.70 to $.75. If you cash secure the put it's a 10% or so return if the stock stays above the strike. If it falls below I' ll be happy to own the stock with a 6 handle net. Back in 2008 everyone anticipated a huge default wave to hit the high yield market. Thanks to federal stimulus money pumping programs it did not happen. However in the spirit of sell the dog food the dog will eat a given moment the hedge fund world raised an enormous amount od distressed debt money. Thanks to this high yield spreads are far too low. CCC paper in particular is priced at absurd levels. These things trade like money good paper and much of it is not. Extend and pretend has helped but if the economy stays weak and interest rates rise rolling over the tsunami f paper due over the next few years becomes nigh onto impossible. I am going take small position in puts on the various high yield ETFs. If I am right they will explode when that market implodes. Continuing to talk my book I hope this happens. Among my nightly prayers is "Please God just one more two year period of asset rich companies with current payments having bonds trade below recovery value and I promise not to piss the money away this time. Amen.
PS. If you add in risk arbitrage spreads of 30% annualized returns along with this I would not object. Love, Tim.
I can't tell you what the markets will do. I do know that I want to own some safe and cheap stocks, some well capitalized small banks trading below book and participate in activist situation. I will be under invested in equities going into the year hoping my watch list becomes my buy list in market stumble. I will have put positions on long T-Bonds and high yield hoping for a large asymmetrical payoff.
Other than that I am clueless.
Kim Zussman comments:
Does anyone else think this year is harder than usual to forecast? Is it better now to forecast based on market fundamentals or mass psychology? We are at a two year high in stocks, after a huge rally off the '09 bottom that followed through this year. One can make compelling arguments for next year to decline (best case scenarios already discounted, prior big declines followed by others, volatility low, house prices still too high, FED out of tools, gov debt/gdp, Roubini says so, benefits to wall st not main st, persistent high unemployment, Year-to-year there is no significant relationship, but there is a weak down tendency after two consecutive up years. ). And compelling arguments for up as well (crash-fears cooling, short MA's > long MA's, retail investors and much cash still on sidelines, tax-cut extended, employee social security lowered, earnings increasing, GDP increasing, Tepper and Goldman say so, FED herding into risk assets, benefits to wall st not main st, employment starting to increase).
Is the level of government market-intervention effective, sustainable, or really that unusual? The FED looks to be avoiding Japan-style deflation at all costs, and has a better tool in the dollar. A bond yields decline would help growth and reduce deflation risk. Increasing yields would be expected with increasing inflation; bad for growth but welcomed by retiring boomers looking for fixed income. Will Obamacare be challenged or defanged by states or in the supreme court? Will 2011 be the year of the muni-bubble pop?
A ball of confusion!
4 picks in equal proportion:
long XLV (health care etf; underperformed last year)
long CMF (Cali muni bond fund; fears over-wrought, investors still need tax-free yield)
short GLD (looks like a bubble and who needs gold anyway)
short IEF (7-10Y treasuries; near multi-year high/QE2 is weaker than vigilantism)
Alan Millhone writes:
I note discussion over the rules etc. Then you have a fellow like myself who has never bought or sold through the Market a single share.
For myself I will stick with what I know a little something. No, not Checkers —
Rental property. I have some empty units and beginning to rent one or two of late to increase my bottom line.
I will not venture into areas I know little or nothing and will stay the course in 2011 with what I am comfortable.
Happy New Year and good health,
Jay Pasch predicts:
2010 will close below SP futures 1255.
Buy-and-holders will be sorely disappointed as 2011 presents itself as a whip-saw year.
99% of the bullish prognosticators will eat crow except for the few lonely that called for a tempered intra-year high of ~ SPX 1300.
SPX will test 1130 by April 15 with a new recovery high as high as 1300 by the end of July.
SPX 1300 will fail with new 2011 low of 1050 before ending the year right about where it started.
The Midwest will continue to supply the country with good-natured humble stock, relatively speaking.
Chris Tucker enters:
Buy and Hold
Wildcard: Buy and Hold AVAV
Gibbons Burke comments:
Mr. Ed Seykota once outlined for me the four essential rules of trading:
1) The trend is your friend (till it bends when it ends.)
2) Ride your winners.
3) Cut your losses short.
4) Keep the size of your bet small.
Then there are the "special" rules:
5) Follow all the rules.
and for masters of the game:
6) Know when to break rule #5
A prosperous and joy-filled New Year to everyone.
John Floyd writes:
In no particular order with target prices to be reached at some point in 2011:
1) Short the Australian Dollar:current 1.0220, target price .8000
2) Short the Euro: current 1.3375, target price 1.00
3) Short European Bank Stocks, can use BEBANKS index: current 107.40, target 70
A Mr. Krisrock predicts:
1…housing will continue to lag…no matter what can be done…and with it unemployment will remain
2…bonds will outperform as republicans will make cutting spending the first attack they make…QE 2 will be replaced by QE3
3…with every economist in the world bullish, stocks will underperform…
4…commodities are peaking ….
Laurel Kenner predicts:
After having made monkeys of those luminaries who shorted Treasuries last year, the market in 2011 has had its laugh and will finally carry out the long-anticipated plunge in bond prices.
Short the 30-year bond futures and cover at 80.
Pete Earle writes:
All picks are for 'all year' (open first trading day/close last trading day).
1. Long EUR/USD
2. Short gold (GLD)
MMR (McMoran Exploration Corp)
HDIX (Home Diagnostics Inc)
TUES (Tuesday Morning Corp)
PBP (Powershares S&P500 Buy-Write ETF)
NIB (iPath DJ-UBS Cocoa ETF)
KG (King Pharmaceuticals)
Happy New Year to all,
Paolo Pezzutti enters:
If I may humbly add my 2 cents:
- bearish on S&P: 900 in dec
- crisis in Europe will bring EURUSD down to 1.15
- gold will remain a safe have haven: up to 1500
- big winner: natural gas to 8
J.T Holley contributes:
The Market Mistress so eloquently must come first and foremost. Just as daily historical stats point to betting on the "unchanged" so is my S&P 500 trade for calendar year 2011. Straddle the Mistress Day 1. My choice for own reasons with whatever leverage is suitable for pain thresholds is a quasi straddle. 100% Long and 50% Short in whatever instrument you choose. If instrument allows more leverage, first take away 50% of the 50% Short at suitable time and add to the depreciated/hopefully still less than 100% Long. Feel free to add to the Long at this discretionary point if it suits you. At the next occasion that is discretionary take away remaining Short side of Quasi Straddle, buckle up, and go Long whatever % Long that your instrument or brokerage allows till the end of 2011. Take note and use the historical annual standard deviation of the S&P 500 as a rudder or North Star, and throw in the quarterly standard deviation for testing. I think the ambiguity of the current situation will make the next 200-300 trading days of data collection highly important, more so than prior, but will probably yield results that produce just the same results whatever the Power Magnification of the Microscope.
Long the U.S. Dollar. Don't bother with the rest of the world and concern yourself with which of the few other Socialist-minded Country currencies to short. Just Long the U.S. Dollar on Day 1 of 2011. Keep it simple and specialize in only the Long of the U.S. Dollar. Cataclysmic Economic Nuclear Winter ain't gonna happen. When the Pastor preaches only on the Armageddon and passes the plate while at the pulpit there is only one thing that happens eventually - the Parish dwindles and the plate stops getting filled. The Dollar will bend as has, but won't break or at least I ain't bettin' on such.
Ala Mr. Melvin, Short any investment vehicle you like that contains the words or numerals "perpetual maturity", "zero coupon" and "20-30yr maturity" in their respective regulated descriptions, that were issued in times of yore. Unfortunately it doesn't work like a light switch with the timing, remember it's more like air going into a balloon or a slow motion see-saw. We always want profits initially and now and it just doesn't work that way it seems in speculation. Also, a side hedge is to start initially looking at any financial institution that begins, dabbles, originates and gains high margin fees from 50-100 year home loans or Zero-Coupon Home Loans if such start to make their way Stateside. The Gummit is done with this infusion and cheer leading. They are in protection mode, their profit was made. Now the savy financial engineers that are left or upcoming will continue to find ways to get the masses to think they "Own" homes while actually renting them. Think Car Industry '90-'06 with. Japan did it with their Notes and I'm sure some like-minded MBA's are baiting/pushing the envelopes now in board rooms across the U.S. with their profitability and ROI models, probably have ditched the Projector and have all around the cherry table with IPads watching their presentation. This will ultimately I feel humbly be the end of the Mortgage Interest Deduction as it will be dwindled down to a moot point and won't any longer be the leading tax deduction that it was created to so-called help.
Short Gold, Short it, Short it more. Take all of your emotions and historical supply and demand factors out of the equation, just look at the historical standard deviation and how far right it is and think of Buzz Lightyear in Toy Story and when he thought he was actually flying and the look on his face at apex realization. That plus continue doing a study on Google Searches and the number of hits on "stolen gold", "stolen jewelery", and Google Google side Ads for "We buy Gold". I don't own gold jewelery, and have surrendered the only gold piece that I ever wore, but if I was still wearing it I'd be mighty weary of those that would be willing to chop a finger off to obtain. That ain't my fear, that's more their greed.
Long lithium related or raw if such. Technology demands such going forward.
Long Natural Gas. Trading Day 1 till last trading day of the year. The historic "cheap" price in the minds of wannabe's will cause it to be leveraged long and oft with increasing volume regardless of the supply. Demand will follow, Pickens sowed the seeds and paid the price workin' the mule while plowin'. De-regulation on the supply side of commercial business statements is still in its infancy and will continue, politics will not beat out free markets going into the future.
Long Crude and look to see the round 150 broken in years to come while China invents, perfects, and sees the utility in the Nuclear fueled tanker.
Long LED, solar, and wind generation related with tiny % positions. Green makes since, its here to stay and become high margined profitable businesses.
Short Sugar. Sorry Mr. Bow Tie. Monsanto has you Beet! That being stated, the substitute has arrived and genetically altered "Roundup Ready" is here to stay no matter what the Legislative Luddite Agrarians try, deny, or attempt. With that said, Long MON. It is way more than a seed company. It is more a pharmaceutical engineer and will bring down the obesity ridden words Corn Syrup eventually as well. Russia and Ireland will make sure of this with their attitudes of profit legally or illegally.
Prepare to long in late 2011 the commercialized marijuana and its manufacturing, distribution companies that need to expand profitability from its declining tobacco. Altria can't wait, neither can Monsanto. It isn't a moral issue any longer, it's a financial profit one. We get the joke, or choke? If the Gummit doesn't see what substitutes that K2 are doing and the legal hassles of such and what is going on in Lisbon then they need to have an economic lesson or two. It will be a compromise between the Commercial Adjective Definition Agrarians and Gummit for tax purposes with the Green theme continuing and lobbying.
Short Coffee, but just the 1st Qtr of 2011. Sorry Seattle. I will also state that there will exist a higher profit margin substitute for the gas combustible engine than a substitute for caffeine laden coffee.
Sex and Speculation:
Look to see www.fyretv.com go public in 2011 with whatever investment bank that does such trying their best to be anonymous. Are their any investment banks around? This Boxxx will make Red Box blush and Apple TV's box envious. IPTV and all related should be a category that should be Longed in 2011 it is here to stay and is in it's infancy. Way too many puns could be developed from this statement. Yes, I know fellas the fyre boxxx is 6"'s X 7"'s.
This is one category to always go Long. I have vastly improved my guitar playin' in '10 and will do so in '11. AAPL still has the edge and few rivals are even gaining market share and its still a buy on dips, sell on highs empirically counted. They finally realized that .99 cents wasn't cutting it and .69 cents was more appropriate for those that have bought Led Zeppelin IV songs on LP, 8-track, cassette, and CD over the course of their lives. Also, I believe technology has a better shot at profitably bringing music back into public schools than the Federal or State Gummits ever will.
Long - Your mind. Double down on this Day 1 of 2011. It's the most capable, profitable thing you have going for you. I just learned this after the last 36 months.
Long - Counting, you need it now more than ever. It's as important as capitalism.
Long - Being humble, it's intangible but if quantified has a STD of 4 if not higher.
Long - Common Sense.
Long - Our Children. The media is starting to question if their education is priceless, when it is, but not in their context or jam.
Short - Politics. It isn't a spectator sport and it has been made to be such.
Short - Fear, it is way way been played out. Test anything out there if you like. I have. It is prevalent still and disbelief is rampant.
Long - Greed, but don't be greedy just profitable. Wall Street: Money Never Sleeps was the pilot fish.
I had to end on a Long note.
Happy New Year's Specs. Thanks to all for support over the last four years. I finally realized that it ain't about being right or wrong, just profitable in all endeavors. Too many losses led to this, pain felt after lookin' within, and countin' ones character results with pen/paper.
Russ Sears writes:
For my entry to the contest, I will stick with the stocks ETF, and the index markets and avoid individual stocks, and the bonds and interest rates. This entry was thrown together rather quickly, not at all an acceptable level if it was real money. This entry is meant to show my personal biases and familiarity, rather than my investment regiment. I am largely talking my personal book.
Therefore, in the spirit of the contest , as well as the rules I will expose my line of thinking but only put numbers on actual entry predictions. Finally, if my caveats are not warning enough, I will comment on how a prediction or contest entry differs from any real investment. I would make or have made.
The USA number one new product export will continue to be the exportation of inflation. The printing of dollars will continue to have unintended consequences than its intended effect on the national economy but have an effect on the global economy.. Such monetary policy will hit areas with the most potential for growth: the emerging markets of China and India. In these economies, that spends over half their income on food, food will continue to rise. This appears to be a position opposite the Chairs starting point prediction of reversal of last year's trends.
Likewise, the demand for precious metals such as gold and silver will not wane as these are the poor man's hedge against food cost. It may be overkill for the advanced economies to horde the necessities and load up on precious metals Yet, unlike the 70's the US/ European economy no longer controls gold and silver a paradigm shift in thinking that perhaps the simple statistician that uses weighted averages and the geocentric economist have missed. So I believe those entries shorting gold or silver will be largely disappointed. However in a nod to the chair's wisdom, I will not pick metals directly as an entry. Last year's surprise is seldom this year's media darling. However, the trend can continue and gold could have a good year. The exception to the reversal rule seems to be with bubbles which gain a momentum of their own, apart from the fundamentals. The media has a natural sympathy in suggesting a return to the drama of he 70's, the stagflation dilemma, ,and propelling an indicator of doom. With the media's and the Fed's befuddled backing perhaps the "exception" is to be expected. But I certainly don't see metal's impending collapse nor its continued performance.
The stability or even elevated food prices will have some big effects on the heartland.
1. For my trend is your friend pick: Rather than buy directly into a agriculture commodity based index like DBA, I am suggesting you buy an equity agriculture based ETF like CRBA year end price at 77.50. I am suggesting that this ETF do not need to have commodities produce a stellar year, but simply need more confirmation that commodity price have established a higher long term floor. Individually I own several of these stocks and my wife family are farmers and landowners (for full disclosure purposes not to suggest I know anything about the agriculture business) Price of farmland is raising, due to low rates, GSE available credit, high grain prices due to high demand from China/India, ethanol substitution of oil A more direct investment in agriculture stability would be farmland. Farmers are buying tractors, best seeds and fertilizers of course, but will this accelerate. Being wrong on my core theme of stable to rising food/commodity price will ruin this trade. Therefore any real trade would do due diligence on individual stocks, and put a trailing floor. And be sensitive to higher volatility in commodities as well as a appropriate entry and exit level.
2. For the long term negative alpha, short term strength trade: I am going with airlines and FAA at 49.42 at year end. There seems to be finally some ability to pass cost through to the consumer, will it hold?
3. For the comeback of the year trade XHB: (the homebuilders ETF), bounces back with 25% return. While the overbuilding and vacancy rates in many high population density areas will continue to drag the home makes down, the new demand from the heartland for high end houses will rise that is this is I am suggesting that the homebuilders index is a good play for housing regionally decoupling from the national index. And much of what was said about the trading of agriculture ETF, also apply to this ETF. However, while I consider this a "surprise", the surprise is that this ETF does not have a negative alpha or slightly positive. This is in-line with my S&P 500 prediction below. Therefore unless you want volatility, simply buying the S&P Vanguard fund would probably be wiser. Or simply hold these inline to the index.
4. For the S&P Index itself I would go with the Vanguard 500 Fund as my vehicle VFINXF, and predict it will end 2011 at $145.03, this is 25% + the dividend. This is largely due to how I believe the economy will react this year.
5. For my wild card regional banks EFT, greater than IAT > 37.50 by end 2011…
Yanki Onen writes:
I would like to thank all for sharing their insights and wisdom. As we all know and reminded time to time, how unforgiven could the market Mistress be. We also know how nurturing and giving it could be. Time to time i had my share of falls and rises. Everytime I fall, I pick your book turn couple of pages to get my fix then scroll through articles in DSpecs seeking wisdom and a flash of light. It never fails, before you know, back to the races. I have all of you to thank for that.
Now the ideas;
-This year's lagger next year's winner CSCO
Go long Jan 2012 20 Puts @ 2.63 Go long CSCO @ 19.55 Being long the put gives you the leverage and protection for a whole year, to give the stock time to make a move.
You could own 100,000 shares for $263K with portfolio margin ! Sooner the stock moves the more you make (time decay)
-Sell contango Buy backwardation
You could never go wrong if you accept the truth, Index funds always roll and specs dont take physical delivery. This cant be more true in Cotton.
Right before Index roll dates (it is widely published) sell front month buy back month especially when it is giving you almost -30 to do so Sell March CT Buy July CT pyramid this trade untill the roll date (sometime at the end of Jan or begining of Feb) when they are almost done rolling(watch the shift in open interest) close out and Buy May CT sell July CT wait patiently for it to play it out again untill the next roll.
- Leveraged ETFs suckers play!
Two ways to play this one out if you could borrow and sell short, short both FAZ and FAS equal $ amounts since the trade is neutral, execute this trade almost free of margin. One thing is for sure to stay even long after we are gone is volatility and triple leveraged products melt under volatility!
If you cant borrow the shares execute the trade using Jan 12 options to open synthetic short positions. This trade works with time and patience!
Vic, thanks again for providing a platform to listen and to be heard.
Phil McDonnell writes:
When investing one should consider a diversified portfolio. But in a contest the best strategy is just to go for it. After all you have to be number one.
With that thought in mind I am going to bet it all on Silver using derivatives on the ETF SLV.
SLV closed at 30.18 on Friday.
Buy Jan 2013 40 call for 3.45.
Sell Jan 2012 40 call at 1.80.
Sell Jul 25 put at 1.15.
Net debit is .50.
Exit strategy: close out entire position if SLV ETF reaches a price of 40 or better. If 40 is not reached then exit on 2/31/2011 at the close.
George Parkanyi entered:
For what it's worth, the Great White North weighs in ….
3 Markets equally weighted - 3 stages each (if rules allow) - all trades front months
3 JAN 2011
BUY NAT GAS at open
BUY SILVER at open
BUY CORN at open
28 FEB 2011 (Reverse Positions)
SELL and then SHORT NAT GAS at open
SELL and then SHORT SILVER at open
SELL and then SHORT CORN at open
1 AUG 2011 (Reverse Positions)
COVER and then BUY NAT GAS at open
COVER and then BUY SILVER at open
COVER and then BUY CORN at open
Hold all positions to the end of the year
3 JAN BUY PLATINUM and hold to end of year.
. Markets to unexpectedly carry through in New Year despite correction fears.
. Spain/Ireland debt roll issues - Europe/Euro in general- will be in the news in Q1/Q2
- markets will correct sharply in late Q1 through Q2 (interest rates will be rising)
. Markets will kick in again in Q3 & Q4 with strong finish on more/earlier QE in both Europe and US - hard assets will remain in favour; corn & platinum shortages; cooling trend & economic recovery to favour nat gas
. Also assuming seasonals will perform more or less according to stats
If rules do not allow directional changes; then go long NAT GAS, SILVER, and CORN on 1 AUG 2011 (cash until then); wild card trade the same.
Gratuitous/pointless prediction: At least two European countries will drop out of Euro in 2011 (at least announce it) and go back to their own currency.
Marlowe Cassetti enters:
FXE - Currency Shares Euro Trust
XLE - Energy Select
BAL - iPath Dow Jones-AIG Cotton Total Return Sub-Index
GDXJ - Market Vectors Junior Gold Miners
AMJ - JPMorgan Alerian MLP Index ETN
VNM - Market Vectors Vietnam ETF
Kim Zussman entered:
long XLV (health care etf; underperformed last year)
long CMF (Cali muni bond fund; fears over-wrought, investors still
need tax-free yield)
short GLD (looks like a bubble and who needs gold anyway)
short IEF (7-10Y treasuries; near multi-year high/QE2 is weaker than
Watching an episode of Pawn Stars. In reality I like to see what items people bring to the pawn shop to either sell or pawn.
The owners seem to a have large shop full of all kinds of collectibles. My main concern is Rick (owns shop with his father ) constantly has to call in outside experts to evaluate or verify authenticity. To be in that business you better know a little bit about ephemera and coins and ball cards and cast iron toys and still and mechanical banks as knock offs are everywhere that antiques have risen in value. Also include art.
Is this like the Market trader having to rely on others to make important buy or sell decisions and not learning on their own to make critical educated decisions?
Sam Marx comments:
I've watched Pawn Stars a few times & the gullability of people when they need a loan is amazing. It's like watching a car accident. Also, I would venture that the average of all the IQ's of people pawning items is below average. I would also guess that the vast majority of those items pawned are never redeemed. Confession: I pawned an item once, an emergency, but I took it out of pawn 2 days later.
I know that junk car yards are connected to find parts between themselves, it's like having a vast inventory. I don't believe pawn dealers are connected this way.
Has anyone ever thought of working a deal with these pawn brokers and putting their items on an internet website. Something like an Ebay for pawn brokers or maybe they are doing it themselves ?
Thomas Miller writes:
This show is a great example of the ageless advice "never try to bullshit a bullshitter" you'll never win. I suspect most pawnbrokers love the art of haggling and would rather sell to someone one face to face to use their skills to get the best price, rather than through internet auctions.
Art Cooper adds:
Related to this, see the article "Payday Lenders Go Hunting" on p. C1 of today's WSJ, on the expanding operations of such companies as Advance America, which make unsecured loans at annualized interest rates as high as 391%.
December 20, 2010 | 2 Comments
One has been reading a book on speed mathematics by Bill Handley. Most kids who take the course can do all arithmetic operations much faster in their head then with a calculator, a very useful thing I've found. To multiply 98 by 97 take 2 from 97. That becomes 9500. Then add 2×3 for 9506. To multiply 11 by any 2 digit number, like, 11 x 32, the answer has a 3 and a 2 in it at the ends, and the sum of digits 4 in between 3 4 2. I'm not that good at it yet as there are as many rules as memorizing the tables almost.
But… one wonders whether there are any speed rules for making a profit that apply to all markets.
Alan Millhone writes:
Tom says. Move in haste - repent in leisure.
Does that fall under the "speed rule" for the Market?
Jeff Watson writes:
Most successful pit traders had a mastery of "quick arithmetic" out of necessity. In fact, I never ran across one that wasn't an arithmetic whiz.
Steve Ellison writes:
Arthur Benjamin's Secrets of Mental Math has many similar techniques. For example, the square of any 2-digit number ending in 5, let's call the number n5, always ends in 25. The product of n and n+1 goes before the 25. For example, 75 squared is 5625 (7×8 with a 25 tacked on).
Professor Benjamin recommends solving math problems left to right, contrary to the standard method of solving right to left and carrying digits. An advantage of solving left to right is that if one wants to instantly answer a problem called out by the audience, as Professor Benjamin does at his public appearances, one can start speaking the first part of the answer while still working out the final digits.
My daughter and I were watching a video of Professor Benjamin in which he showed a standard multiplication table from 1 to 10 and asked what the sum of all the results was. In 2 seconds, my daughter called out a formula, which was easily solvable using one of the mental shortcuts.
There are some mental shortcuts for the stock market that have become part of Wall Street lore and seem to have some validity, although they are far from 100% accurate:
- "Sell in May and go away"
- "Don't fight the Fed"
- "Never short a dull market"
- "Cut losses and let profits run"
My suggestions for the stock market would be: - Liquidity premium (when there is forced buying or selling as evidenced by a sharp price move, it often pays to take the other side)
- Follow the insiders
- "Always copper the public play" (Bacon)
For physical commodities:
- Buy backwardation; sell contango
- "The trend is your friend"
Sushil Kedia writes:
Vedic Mathematics, a book I remember having sent to you by post a few years ago is a brilliant SYSTEM of only 10 rules that will facilitate a very wide variety of calculations. It can calculate as good as instantly a multiplication of any digits of numbers multiplied by any number of digits too. There are recipes in that…
December 11, 2010 | Leave a Comment
Bowling and the Market.
Every Saturday watch my two grandsons league bowl. They try to make a strike each time they are on the lanes much like the trader attempts a perfect trade on each trade execution. Bowlers do their best to stay out of the gutters as the trader attempts to avoid bad trades and stay on course. Overhead monitors keep score and also show how to pick up spares. The Dow etc also has overhead screens to track the Markets. The hand written stock trader manuscript serves a similar purpose of tracking prior errors.
To a rube like myself I see a weak dollar. More mortgage problems. Continued unemployment. Inflation.
To me metals has to be good as a hedge. Bank CD's are a joke and will be for several years. Money market accounts the same dismal returns.
The average person has little to no faith in our government. We are engaged in two more Viet Nams where political correctness holds back our generals from winning.
These are just my own personal observations as a 62 year old small businessman from Southern Ohio. I love America but am badly disappointed in our leaders.
November 15, 2010 | Leave a Comment
A Game for All Ages, by Marion Tinsley (about 1980)
I think that checkers must be somewhat unique in its ability to boast grand masters at advanced ages. What a wonderful hobby it is in which people can practice, enjoy and even excel during an entire lifetime!
Although Asa Long at 76 is a truly unusual phenomenon, he is by no means exceptional in the history of checkers. James Wyllie was actively competing in his eighties and Newell Banks played the best tournament checkers of his career at Bethlehem, PA in 1958 at the age of 71. Another grand old man, T. J. O'Grady emerged from a 20 year retirement in 1946 and played actively for years. In his seventies he told me that he was playing the best checkers of his life. Harry Lieberman at 83 competed against a strong field in the 1974 Eleven-man Ballot tourney and placed 5th in spite of a retirement of nearly 50 years. One could also cite George W. Bass who at 90 was playing 500 mail games and affirmed that checkers gave him a reason for getting up each morning. And then one could mention a host of accomplished analysts and problemists (Boland, Mantell, Wiswell, etc.) who, without competing, have found a special niche in checkers literature.
It is true that there is much strain in competitive checkers and many masters are forced to give up this side of their favorite hobby because of stress related problems. However it appears true also that if a player can gain certain victories over himself, then checkers can become a therapeutic hobby greatly enriching his later years. When I was young, I thought of checkers as a young man's game, but now with the passing of years, I think a bit differently.
November 13, 2010 | 2 Comments
Do you all have any suggestions for childrens money books? Any ideas for a ten year old? I read The Richest Man in Babylon when I was 22– if that gives you any idea on the lack of money/market books in my young life.
Alan Millhone writes:
The money books I had when ten were by Whitnam, and there were slots for collecting dates of Lincoln pennies and buffalo nickels and mercury dimes etc.
Dylan Distasio responds:
Thanks for bringing back some wonderful childhood memories for me. My father passed on coin collecting as a hobby to my brothers and myself when we were children. I haven't been very active with it as an adult, but I used to love sorting through change bags from the bank in search of silver coinage or old pennies to fill my Whitman coin folders. I grew up in the 80s when you still had a chance to come across some silver ones (granted they were not in very good condition). I also have some old Morgan heads and other assorted issues. One of my favorite coins as a child was the "steel" penny from 1943.
More recently, I've collected proof sets of the state quarters series, although not for hopes of financial gains, I just love the look of a proof struck coin and find the state quarters interesting.
November 9, 2010 | Leave a Comment
Today I stopped at Third Street Deli. I have dined there for many years. I always have their iced tea. Up until today they gave you a sturdy plastic cup with their name and logo on each cup with bright green lettering. Today they have begun using a mediocre generic paper cup. I asked if out of the others? Was informed it was a 'cut back' .
Victor Niederhoffer comments:
I think the paper cup may be much healthier. This reminds me of the purveyor of paper cups for Dannon yogurt that owned the old dixie cup plant that I was trying to sell. They told me they had a lock to grow exactly as Dannon did because Dannon needed their cups. I asked, "what about all the colorful plastic cups the other yogurts are beginning to use?" "No way," they said, "yogurt can't be sold in plastic cups because it doesn't taste as good or ferment as well."
Shortly thereafter the company was 1/5 its former 15 mm size. A strange follow up came when I read Roger Kahn's book about running a minor league team. Roger accroding to Larry Ritter was an egomaniac who fancied himself a great baseball player and tried to place it prominently in every book. But Roger found a backer for his minor league team. It was the same owner who assured me nothing could go wrong with the dixie cup. They fought like cats and dogs, and the book makes a hilarious reading as the two of them tried to impose their will on a down trodden minor league team with all the problems of selling ice cream and peanuts and programs to cover the salaries. Paper cups look pretty good in my book.
There's an interesting chart illustrating Livermore's point that when a market goes above a round number (1000) it is bullish. Gold approaching 1400, - round numbers at 1200 were temp turning point but runs through other 100s show no tendency to reversal. A whole study has to be done with as is data on individual stocks.
Alan Millhone writes:
All I know is reg gasoline over three now and killing the average citizen. Gold will push two the way things are faltering.
Ken Drees writes:
I am not hearing the gas price complaint yet as it seems that many are very conditioned in the high 2's and even the low 3's may seem not worth complaining about.
I think a round "4" handle on the gas price will start up the wailing and gnashing of teeth this time around.
Sam Marx prophesies:
$4 gasoline will occur at or before the 2012 election.
Exiting trades is always the toughest part of the game for me on a speculative basis, especially wanting to book trades to protect P and L, after taking a few hits. But what I find interesting is some trades are easier to let run than others with the same risk on the board. And it will come as no surprise to all that these are the low volatility plays… but what is it? Realistically the high volatility are the trader's saviors, and can turn a 3 bagger into a 8 bagger in a heartbeat. These are precisely the ones we should be putting on the risk and shutting down the screen. But hey the risk of scratching in a heartbeat is only too real as well, and there lies the trade off.
Alan Millhone writes:
The late Tom Wiswell said, "keep the draw in sight" at the Checker board. Knowing when to execute a trade at the board certainly carriers over to stock trading and knowing when to liquidate your position on the board or at the big board.
I spent this past week in Medina,Ohio as referee for a world title "Free Style" Checker match of 24 games between reigning Champion , Ron "Suki" King of Barbados and challenger Dr. Richard Beckwith of Ohio. I know a little about Checkers and watching these two Grandmasters all week was quite a treat.
Games one through twelve were all drawn and the players knew when to liquidate their position and make effective trades to exist the game. Suki "changed up" in game 13 and won as Dr. Beckwith stuck around too long and got into trouble by not having an effective exit strategy and lost.
I sat and witnessed game 22 as Dr. Beckwith improved on an ending that Suki and the late Derek Oldbury of England played off another opening that transposed into the line of play that was used in game 22. After 4 hours and 22 minutes Dr. Beckwith emerged as the victor after a hard fought ending that Suki could not escape. Dr. Beckwith had previously studied this ending that arose in game 22 and knew how to win the ending. Hand held notes as the Chair admonishes at the Checker board or the big board are critical to survive.
Suki drew game 22 and won the final game with an odd line of the "Tillcoultry" opening that Dr. Beckwith failed to meet correctly and did not trade out early enough and lost on a ending bind that he could not escape.
"Knowledge is power" on both boards. I was a first hand eye witness to this all last week watching these two greats do battle over the checkered squares.
As Chair points out, there are direct correlations to board games and stock trading and stock exit strategies that will help keep you unscathed.
Phil McDonnell writes:
One strategy I use with certain option spreads is something I call stop profit exit. I talked about it in my book. For strategies such as butterflies and calendar spreads the profit peaks out at a certain definable point relative to the underlying asset. For many ratio spreads there is a peak profit but that point changes dynamically with time. The point is that deciding to get out at the peak profit is a no brainer. Once it hits that point you will give money back if it goes up or down from there. The exit can and should be should be mechanical.
The probability of touching a price target is governed by our old favorite the arc sine distribution. Because of the Reflection Principle the probability of the target being touched is twice that of it being above (or below) that target at the end of a given time period.
Headed to the Sundance Film Festival is the movie King Me, a documentary on the game of Checkers and players from around the globe.
Film producer Geoff Yaw of Think Media of Mayfield Heights, Ohio has a running blog at King Me that can be found by Googleing.
President American Checker Federation
Last Friday in 1869, thousands of businessman were ruined in a Wall Street panic known as "Black Friday " after financiers Jay Gould and James Fisk attempted to corner the gold market–From my morning paper.
Stefan Jovanovich writes:
If Black Friday repeated itself, it would be with the Treasury selling 4 million ounces of gold, not buying. The "scandal" was that President Grant, contrary to the advice of Butterfield (the Larry Summers of his day) and the assorted wise heads in favor of QE, persisted in his commitment to make the Civil War greenbacks convertible to specie. Butterfield had to resign, and Henry Adams (think Paul Krugman on speed) was furious that the United States was not going to cure poverty by printing dollars. The result was an article called "The New York Gold Conspiracy", written by Adams in 1870, which remains the "everybody knows" version of history for this event.
By her appointment all I see is the creation of more government. A very bad thing.
Dear Mr. Niederhoffer,
Bob Newell, as long as I have know him, has remained neutral on politics, etc. on his webzine, the Maven till his article today.
All who are interested look at the blog King Me. A segment of this upcoming documentary on the game of Checkers will be submitted to the Sundance Film Festival.
Part of the movie centers around a very poor but top South African player of color named Lubabalo Kondlo from Port Elizabeth who struggles everyday.
The blog is well worth a look
Took my daughter to Cleveland and the Browns game last night.
I told her cell phones are an epidemic observing from my seat all the texting etc. and noticed all the fans around us covered in tattoos.
Inking is expensive. Makes me ponder if the economy is really so bad.
Fireworks show after the game were unreal and made the evening complete.
Peter Earle writes:
Actually, like the market for shoes, the skin inking enterprise is a great example of the economic possibilities of a virtually unregulated market.
Typically relegated to prisons, the backs of bars/liquor stores, and other venues which the political parasites aren't wont to enter or be concerned with, the market for tattooing has seen explosive growth over the past 15 years; I personally attribute the growth to both (a) the social acceptance, later encouragement, of women to get tattoos, at least doubling the size of the market; and (b) the growth of musical and sports "gangsterism", in which an arms race for flesh adornment has led to "sleeves" and neck/head/facial tattoos to grow in prominence and, again, broadening acceptance of the undertaking.
With that explosive demand, from a fairly small number of parlors and side-venues I note the arrival of small entrepreneurs, ranging from affordable, storefront tattoo shops in malls to artist partnerships offering extremely high level quality and service: a virtually unfettered capitalism resulting in a wide range of various (sometimes bundled) services across a gamut of specialties and levels of talent, availability and differentiation resulting in a lowering of cost and huge product diversity.
Thus has arisen the inarguable ubiquity of the illustrated populace.
Marion Dreyfus comments:
My friends and I personally find tattoos artistic, executed in the main with extraordinary skill, and yet horrendous on a human being. I would not date a man with tattoos, and I avoid females who have indulged.
One always muses: What will happen in 10 years? How hideous will you find what you have done?
I surmise the followers of this unfortunate craft will subscribe to that existential philosophy: Live fast, leave a pretty corpse.
Peter Earle replies:
But from a broader perspective– the growth of tattooing is not only, in a market or business sense, a great example of the potential of free markets, but also illustrative of the social effects of what this country is in fact evolving into economically -hampered, intervention belabored, highly-regulated and increasingly socialist.
The social consequences arising of a credit-inflated, saving-disinclined, personal responsibility-defenestrated environment is/tends to be an immense high-time preference inclination of society; people thinking of the next 10 minutes, ten weeks or four years, and less of the long term picture.
In 60 years, elderly women with sagging, blotchy lower-back tattoos will crowd shorelines, and men's biceps/forearms/backs will murkily herald rock bands, songs, products and memes long since discredited and in any case extinct.
Pitt T. Maner writes:
Temporary tattoos made with henna were seen available near Manhattan east side docks where tour boats to Statue of Liberty are located. Advertised as an approximate 2-week tattoo experience. You could get the vicarious sailor tatoos around Halloween time as a good addition to your costume. Some might be allergic to henna though.
Indian bridal henna tatoos can quite elaborate and beautiful in some cases.
But I'll pass on anything permanent.
I also thought the 3-D photo images available at the docks where they holographically put your image in a block of plastic were kinda of neat if not a bit touristy. Good for a paperweight. Sort of dates the old photo booths. Evidently you can spend more on a real portrait. What tourists are being sold and what they buy is an interesting study in itself. It has to be a highly studied field.
I couldn't resist the Mexican jumping beans at JFK. Hadn't seen them in 40 years. You end up paying about a $1 a bean if you count only the alive ones! A nice markup there.
Gordon Haave writes:
A friend of mine who had tattoos and now is getting them removed says there is big competition and the laser removal guys are quick to cut rates. Apparently GE financed the purchase of the lasers the last few years and now people have defaulted and the lasers have hit the market cheap.
Just one date point, I don't know this firsthand.
Lately been keeping my ear to the ground and have overhead workers at three businesses discussing among themselves about their hours being cut.
One place was a 7-Eleven and two restaurants.
I don't see things improving. consider me a skeptic.
Al Corwin writes:
I'm in Bremerton, WA, sixteen miles due west of Seattle. Bremerton is a Navy town, and it has always been somewhat immune from the ups and downs of the national economy. It usually does slightly better when the military is in use (like now), and slightly worse when the need for the military seems less acute. This time is different.
The town became flush in the past decade as the one-hour ferry ride to Seattle became a pleasant option to Seattle traffic. All of this was due to the boom in housing. When things started to fall apart, they fell apart more here than closer to the city because of the relative inconvenience. Despite getting an inordinately high number of stimulus projects here, the town is hurting like never before.
Fully a third of the storefronts in town are now empty. Two restaurants closed last week, one of which was a successful business for over thirty years. The only good news I see is that my friends who are contractors are getting enough work to get by now whereas a year ago they were all working on their golf game because business was non-existent.
Another friend runs a temp agency, and his business has turned up sharply over the last three months. That's usually a sign of recovery, but he says the demand shows no signs of being long-lasting, and so far, there has been very little attempt to turn temps into permanent employees.
The only new retail businesses in town are drugstores. Rite-Aid has built a new store and Walgreen has added two. I don't really understand this. It's not like we had a shortage of drugstores before, and this is only a town of forty thousand people. Something has to give.
In fact, I do notice new drugstores everywhere I go. What is up with this?
July 14, 2010 | 8 Comments
[Photo: Center, Alan Millhone as referee. Left: free style world champion Ron " Suki " King of Barbados. Right: GM Lubabalo Kondlo of Port Elizabeth, South Africa. Match of twenty games played at Medina, Ohio.]
To: Alan Millhone
I'm Luyanda Ngwenda. I studied Internal Auditing at Nelson Mandela Metropolitan University and am unemployed. I'm passionate about changing people's lives for the better hence it was easy for me to help Lubabalo because I think the game of Draughts can be applied as a metaphor for life, i.e. one good move pushes one to a win, one bad move could push one to destruction, in reality and on the Draughts board. We live in a society with plethora of underdevelopment, poverty and disease. Draughts can be used as tool to fight these ills… and of course create more world champs like Lubabalo.
Hope I answered you, Sir!
Port Elizabeth, South Africa
[Ed.'s Note: Molo Mhlekazi in Xhosa language is roughly equivalent to "Hello Sir!"]
Finished up a little job for an older widow lady. She makes a world class ham loaf. Took one again as part of my payment.
She paid the rest in cash and found she needed another fifty. She proceeded to her kitchen and opened her freezer door and extracted Mr. Grant.
That was surely cold cash she gave me!
McChrystal Relieved of Duty; Petraeus Tapped - News Item
Old soldiers never die — they just fade away.
When politics trumps winning a war only the troops in harms way suffer.
David Hillman comments:
By exhibiting extremely poor judgment in allowing those things reserved for locker room utterance to be spoken in public and on the record by both himself and his staff, he busted the chain of command. Any professional military man/woman will tell you that simply is not to be tolerated. Period. If one questions one's superior's capabilities, orders, strategies, etc., do so in private and ask for a transfer. His transgression was egregious, especially for one of his rank and experience. This sort of behavior may play well to self-entitled Gen Y'er's, but as Boomer with 34 years of service in, he should have known better. Btw, imho and in that of many ranking generals asked to comment today, David Petraeus, the 'replacement', is not a downgrade. Consider him 'the ace of trump'. Now, can we, once and for all, adhere to the Chair's well known and oft ignored wishes and refrain from the political?
Ken Drees writes:
[Did you] ever think that he used this opportunity to get out–consciously or sub-consciously? I love how people automatically assume that it was a lapse in judgement. I love how the media plays up their own –how Rolling Stone snuck into the general's camp ala' the spy capturing the marshall in stratego–
He is a general. I am sure he ruminated day and night upon his situation the way a general would. I mean this isn't Gunnie from Heartbreak Ridge after a 12 pack of Michelob shooting his mouth off about his CO. I will give the general credit for getting himself relieved of command. Who knows what timing and or circumstances were behind the scenes to influence how this went down or why. If it was subconscious–then he got what he wanted afterall.
To show how behind I am —– till tonight I had no idea our Edison light bulb will be banned by 2014.
Also did not know there was a 10M prize for the best light bulb.
LED looks the best for now at a projected 40.00 each that will last 10 years.
Wonder if the government will offer ' coupons ' as they sent out for converter TV boxes ?
It seems current light bulbs use 22 pct of current USA electric power.
Nigel Davies comments:
Since January I've been living in a modern low-energy apartment and I've been shocked as to how inexpensive the running costs are compared to the previous one. That's also without considering the 'real' cost of energy, for example the price we pay doesn't include the expense of oil related military operations.
Having said that they way they seem to be going about this just stinks, it looks like they want 'control' at any cost.
One was recently asked, how do you spot a hoodoo when you are in or dangerously close to their presence? I would say that their past record of failures is a good starting point. As is their ability to talk a much better game than they play. Also, their attempt to impress you with the trappings of success, ( a conference call with their five principals is a usual gambit). Not to be disregarded is their locus of operations, often from a ephemerally built recreational area where permanent lodgings and such things as pianos are not availalbe. The inclination to befriend you and flatter you is also a clue. But how can this be quantified, and how can we learn to avoid them? What should you do when you've met a hoodoo? I've always taken to burning my shirts, especially if they've hugged me as they ofen do. Dare I ask the question of whether there are such things as hoodoos or is it a figment of random numbers? No, that would be too mind boggling. But please help with your insights.
Alan Millhone writes:
Some years ago my late father and me were enlisted by Banque Worms to take over a failing condo project in our area.
The developer met us and after I shook his hand I could smell his pungent cologne on my hand for the rest of the day. He had a lady friend assistant who wore a see through dress with precious little underneath if the sunlight caught her profile just right. When I first met him I could see " carpetbagger " across his forehead.
He was a genuine "slicky boy" right out of South of the 38th Parallel.
People like him wear a lot of bling and cheap after shave. Usually have a woman at their side as a distraction.
They are long gone. Our crew finished the job.
Stay vigilant and wide eyed.
Pitt T. Maner II adds:
Fortunately, I associate the word "hoodoos" with the past leader of my university (UF) geology field camp, Professor of Geomorphology, Dr. Robert Lindquist, who was an expert on the formation of hoodoos in the magnificent Bryce Canyon in Utah and knew of the locations of many wonders in the West–original survey markers left by Powell, dinosaur bone and gastrolith graveyards, amazonite on Crystal Peak and ancient lahars in South Park, Co. A geologist's geologist who looked like he had stepped out of the 1800s.
As for the other definition, there was a person who once recommended Enron, Freddie and Fannie, and several other long ago bankrupt companies and who was so consistently wrong for awhile that it was almost uncanny. If one had just done the opposite. It was a good education to lose money at an early age though on hoodoo picks. Better to lose and learn using your own thought processes–at least there is a sliver of hope for improvement.
Russ Herrold writes:
I might add that to view a person's bookshelves (even ones only in public areas) or even books in the process of being read on a table, or to note the absence of such, in each case provide a window into the mind of that personis to me a 'tell'.
Alston Mabry writes:
To see something clearly, it can be helpful to study its opposite. Recent list discussion included one of my favorite anti-hoodoos, Richard Feynman– intelligence, curiosity, enthusiasm, creativity, generosity, joie de vivre.
Russ Herrold adds:
This certainly may work for when to exit or what to avoid. My brother also seemed to have a uncanny ability to leave the party, when things were getting hot… too hot… right before the cops came and arrested everyone. His friends started following him. However, the same may not be true with when to start a party. As a kid I remember people would fight for a seat next to me during a math test. If I did not like them I would pull a Goldman synthetic and write down some wrong answers, to be corrected latter in secret. It has been my experience in investing that the surest sign of a Hoodoo is willingness to copy someone elses system or trade and yet have no idea why they should expect it to work. There seems to be floating around hundreds of billions par value of formerly AAA paper that now only worth hundreds of millions that seems to prove that these Hoodoos are extremely common, if not the most common Hoodoo around.
Nick White writes:
Perhaps the most difficult aspect of detecting hoodoo-ery is to discern the difference between the genuine actions of the bona-fide dealer versus the pretense of the hoodoo (who - come to think of it– may well be bonda fide, too, but just cursed. Let's call these poor souls benign hoodoos versus their more malignant bretheren).
I think the sure tell of a malignant hoodoo is that their most effective lies will be those very closest to the truth…yet there lies their very advantage over us, and requires some street smarts to know the difference. Perhaps the foil is to know and experience for ourselves the difference between ambition and aspiration. The Stoics made this sort of distinction to help them in their quest against self-hoodooery: Ambition was vulgar, akin to avarice, full of scheming and accompanied by a very lowbrow, keeping-up-with-the-jones mentality. These sorts of feelings were to be put to death in oneself moment-by-moment through Stoic practice. Aspiration, on the other hand, was considered more noble, civic and had the connotation of dilligence, discipline and a bent toward giving a world-class performance simply for the sake of excellence as a way of life. Therefore, perhaps we might say this kind of vulgar ambition is the giveaway quality of malignant hoodoo-ery? Applying this little rule-of-thumb might constitute the foundation of an early warning system.
However, before any of us jump on the moral high horse and consider themselves "aspriational", the Stoics further stipulated that it required very great self-knowledge to even know the difference between these two values, let alone to declare oneself in one camp or the other. Even then, the Pyrrhic victory was assured– if you felt yourself to be truly humble and aspirational, you were most likely hopelessly ambitious and required greater training to cure the very need to make such statements about oneself.
Jeff Watson adds:
Nick, you made the most erudite explanation of hoodooism I've come across in a long time. One might wish to consider the partial hoodoo which affects 95% of the population. With the exception of a few good trades and the ability to be a good father, I'm a world class hoodoo, among the best. I won.t deny this because that would be a folly, and total lie as I can make money but my personal life is a train-wreck. I won't get into the Faustian aspects of all of this, but it is there. Hoodooism comes in many ways, shapes, and forms and I've seen and done them all. Hoodooism is like the old adage that history doesn't repeat itself but it always rhymes. The hoodoo that the chair describes isn't enough, the one you have to watch out for is the one that makes money on a regular basis, he's the danger.. He might steer you onto something good, but there is always a price to be paid, and the price is not always what you expect and not the currency you wish to pay..
George Parkanyi writes:
This whole notion of hoodoos frankly I find rather uncharitable, and burning one's shirt after a tainted hug smacks far more of superstition than science.
Now not hanging around negative people I understand. Some just wear you down with their negativity, and you do have to cut your losses at some point. But to classify those who have tried and failed into their own undesirable caste is unfair and a vast oversimplification. People run into difficulty for many reasons– failed relationships, health problems, sometimes just honest mistakes. My experience has been that people have far more to offer than what appears on the surface– regardless of their circumstances.
I wander past homeless people– ostensibly life's greatest "losers"– sometimes as I go to work, and when I really think about, I'm awestruck at how they have managed to survive all this long– with absolutely nothing, through harsh winter conditions. How do they do it? Clearly, they have skills that I don't. One time I gave a not only homeless but also legless man $10. He didn't ask for it. I just walked over and gave it to him. Here he was on the front lines at the very edge of humanity, representing on my behalf one of the worst possible circumstances that I could even imagine for myself and somehow I was drawn to him. When I gave him the money, he beamed at me with this smile of pure joy, looked me straight in the eye, and cried "God bless you!" To this day I will never forget that blessing, because at that moment there was a seismic shift– I actually physically felt it– in my understanding.
In the lands of the dispossessed, I don't see hoo-doos at all. I see potential teachers.
As for people who befriend you only because they want something from you, the best I think you can do is make your own decisions on to what extent and level you wish to engage. If you enjoy their company or there is something about them that you like, go with it, but don't take risks that would seriously jeapordize your business, family, and other relationships. Not everyone is genuine, yet not everyone's on the make either– and some people are absolute gems. To be completely distrustful will cut off a lot of wonderful experiences. To expect too much of people or to be overly trusting will set you up for disappointment, or worse.
It's like trading really. If you diversify your relationships you have less risk and less volatility. If you concentrate your relationships, you have more risk and more volatility, but perhaps a bigger payoff in the intensity of love and friendship. You have to figure out the right mix for you. The interesting thing about relationships is that that while you're investing in others, they're also investing in you. The more relationship value you create, the more relationship value you (and others) will also accrue. I can't quantify it, but I think there is a real multiplier at work there.
Last point. If you're not confident enough to engage or deal with a "hoo-doo" without fearing harm to yourself, then perhaps you should worry less about the "hoo-doo" and examine your own fears. What difference should it make to you if have a conversation, dinner, or even a business deal with such a person (however defined)? In what sense would that make you a lesser person or cause you harm? It may or may not, but I think its a good question to ask.
Jeff Watson comments:
George, it would behoove you to read up exactly a hoodoo is before writing such an elegant, misguided essay. The essay was great, almost fantastic, but missed the point. I can say this because I'm a hoodoo and proud to admit it. Not all hoodoos lose money in the market and in life and divorce. Some lose through gambling drugs, going for long odds, begin too easy with short odds. I lose my money by staking unreasonable ventures, loose women, and bad ventures. Not a lot of misadventures but enough to affect 11% of my bottom line. Add that to my losing trades, my 30 dependents, and I have a big nut to make every month. Nothing like the Chair, but still significant. There should be a place in the hall of fame foe us grinders who knock it out every month for years…That's gotta count for something.
Duncan Coker writes:
On the topic of hoodoos, when I am performing a task others can either help me perform better, have no impact, or lead me to perform worse. A hoodoo would would reside in that last category. I am not so concerned about their motivation or intent, just their impact. With my favorite fishing comrade, we actual raise the level of our game so to speak, so an inverse hoodoo. We share information on the flies that are working, fish caught, good spots on the rivers, ( after a small bit of subterfuge of course for good measure). We have a good rhythm of leap frogging each other up the river, alternating the good stretches, not spoiling the water ahead for the other. Plus the general level of conversation or lack of it fits well with the day allowing us to focus on the river and landscape around us. In a pinch we can count on one another. I recall one day I slipped and snapped my fishing rod while at the same time managed to lose my fly box and all flies and watched it float away into the fast current. My friend saw it all and after a few jibes, offered to share his set up, and we took turns the rest of the day. We landed my rainbows that day.
But I have fished with hoodoos as well. One guy we nicked named Trigger. He was so nervous and jerky casting and moving around the river we thought he had an itchy trigger finger and thus the name. He could destroy a beautiful fish laden stretch of river faster than anyone I have seen, with sloppy casts, poor retrieves and a general disharmony with the environment. And he liked to talk, talked way too much. So just being around the guy brought my fishing down and took away my rhythm. Plus, he had the very real affect of spooking any fish near us. They must have known he was a hoodoo as well. One day was enough with Trigger.
Nick White comments:
Actually, I wonder if the null hypothesis is that we're all natively hoodoos…with only will, practice and a life record to help us refute it?
George Parkanyi responds:
Humanity in the aggregate, and individuals all, are - maybe flawed isn't the best term - let's say limited, at any given point, by the sum total of our experiences and our genetically born underlying capabilities and pre-dispositions. Most of us I would think have far more potential than we ever actualize. As infants and children, we start out gang-busters, absorbing everything - especially information and ability most pertinent to our survival. It is primarily a world of exploration for us at that time, underwritten by the support of those that take care of us in the early years. We're all about curiosity and imagination. As our thirst for knowledge and experience leads us to new experiences, we also begin to develop routines and habits, which enhance efficiency and conserve energy, but also help us re-experience that which we have enjoyed or that have worked in our favour before. The filtering begins, and the type and nature of recurring experiences that we seek increases. Habits take form, even at a young age. The continuously developing habits, I believe, progressively and increasingly compete with our desire and ability to pursue new experiences. At certain points in life, we even choose massively pre-packaged experiential templates (e.g. marriage, career) as well, which hugely filter and channel our future experiences. Ultimately, we (not all of us, but a large portion) reach a point where there is no further desire to seek new experiences that are outside our past experiences. Our habits completely define us. As we age, we also begin to lose the resources, particularly health and energy, with which to pursue and expand our overall life experience.
Perhaps a hoo-doo is simply a person that can or will not go to the next level, and finally settles for habit being the determinant of his/her future experiences. Perhaps they give up on the pursuit, or are ultimately distracted away from seeing or imaging that next level of experience beyond the point that they have already reached (which point would be different for each person), and never even think to look toward the horizon of their life again. All I know is that habit is a very powerful force, and ultimately I think it overwhelms us.
John Holley comments:
"Amen, JT. Sorry I made you burn a shirt that time I hugged you at the Mets game, Vic!" KD
Just to show I put my actions where my mouth is, I will share with the list that I recently have read two very important books that have shaped my life thus far. Both are shared favorites, highly insightful, and forever giving and common amongst the Spec Listers:
1) Memoires of a Superfluous Man - A.J.N. (via Vic)
2) Five Lessons: The Modern Fundamentals of Golf - Ben Hogan (via my Dad, also Kevin Depew's fav golfing book)
These books are on my top ten list. If you haven't read them then do it. In fact read them over and over again.
Other than G-man's speech in Atlas, the 1 thing I hang onto that Lack shared recently in a post regarding his Father that would get you out of being a Hoodoo is appropriately going to be number twenty six.
26) “If you saw Atlas, the giant who holds the world on his shoulders, if you saw that he stood, blood running down his chest, his knees buckling, his arms trembling but still trying to hold the world aloft with the last of his strength, and the greater his effort the heavier the world bore down on his shoulders—what would you tell him to do?” " To Shrug." Shrug, bare more. Your mind can handle it.
I just read Rocky's post and his wife's comments on her van. In 1999 I completed a big roof job for a man who just retired from a large pipeline firm he owned. In 1981 he had bought new the Ford pick up in the photo. Upon completing the roof work he told me he was going to sell this truck. I asked at what price? That was a Wednesday and he said he would quote me on Friday what he wanted. It has a 300 six and is 3/4 ton automatic. I bought it for 1,100.00. It serves my needs. The other day someone asked me when I would get another truck? I replied in jest, "three more payments and it will be mine!". They gave me a dumb-struck look.
June 13, 2010 | Leave a Comment
Marion emailed me on my way home from the tournament and asked how I did.
I managed 12 points out of a possible 28. I earned every point this past week-end.
I noted all entrants had pad and paper to write down their games and to make notes. My oponents reminded me of the Market Mistress and the tricks she uses to bamboozle the unsuspecting trader in the market. I will review a few of my games to look for my mistakes and where better play might be had for my next tournamnet.
There isn't any Magic 8 Ball in Checkers or the Market. "Knowledge is Power" in anything!
I had a great time over seven 2 game rounds of 3-Move Restriction style of Checkers. 156 opening deck that is as vast and elusive as the Market.
Good luck to all traders on Monday.
On my way to the yearly checker tournament I always stop at Mehlman's Cafeteria in St. Clairsville, Ohio.
They have a tremedous selection and have two serving lines.
You stand there and can choose from an array of various foods.
Today I choose a small bowl of pickled beets and mac and cheese. Then a helping of mashed taters with brown gravy and could have had chicken gravy instead. Took a dinner roll and had a choice of butter or margarine in pats. Unsweet iced tea. They serve a world class deep dish apple dumpling and I had one today.
Today for the first time I thought of the choices while in line and what appealed to me.
The Market Trader also makes choices and buys accordingly as to appetite for various stocks.
I am at my next stop on my journey: Cabelas.
That might be another story…
June 10, 2010 | 4 Comments
Errors in statistics are usefully classified as type 1 and type 2. A type 1 is a false positive or undue credulity and a type 2 error is a false negative or false skepticism. The greater you try to reduce the level of error in one the greater the likelihood of error in the other.
Don't reject reject
no effect hypothesis true correct type 1 error
no effect hypothesis false type 2 error correct
A useful way of considering the decision making is above. Consider for example the no effect hypothesis that a pill is not healthy. if it's not healthy and you say it's healthy you make a type 1. If it's healthy and you don't say it is healthy you make a type 2.
A certain agency that regulates drugs is famous for only considering the type 1 errors, making sure with endless and ruinous double blinds that type 1 errors are minimized to the excessive making of type 2 errors and keeping off magic bullets that would extend life span and health enormously.
There are many areas where these trade-offs between errors occur. For example in spam filters. You can reject good things, that's type 1. You can accept bad things– that's type 2.
Our own field often has trade-offs like this. The hypothesis that a system or set point for a trade is random is a good null hypothesis. If you accept the system, you're just incurring churning for a worthless randomness. If you don't accept the system, and it's good, why then you've lost some good money.
The decision to expand your business or trading is another area that crops up frequently. If you expand it you might get in over the head. If you dont expand it, you might miss the gold. The movement into a new field, or the engagement of an employee or employer is another frequent trade off of type 1 and type 2, gullible reaching versus excessive caution that frequently arises.
The usual way to trade off between the two types of errors is to consider the cost of both errors, and to balance your decisions based on the relative costs. Considerations relative to randomness, and variability must also be considered. Also, the myriad psychological biases that lead us to place too much reliance on avoiding the two types of errors that the cognitives have contrived with their silly experiments on college students et al.
What other trade-offs of type 1 versus type 2 do you see that mite be of use to market people or others and what better way to consider gullibility versus skepticism do you see?
Alan Millhone writes:
This weekend I will travel to Grove City, Pa for a yearly Checker Tournament. While playing I will have choices to make. Sometimes there's only one way to move. Often times there's more than one way to move or jump. Checker players and Market players need to evaluate all moves or trades before executing. In Checkers if you touch a piece you have to move that piece– often with disastrous results. If you trade on line you need to consider your trade carefully before hitting "send". Tom said, "Move in haste— repent in leisure".
Victor Niederhoffer adds:
The trade-off in errors in games like checkers and chess would be someone offers you a seeming advantage. Your null hypothesis is that it's not worth accepting. If you take the gambit or seeming opportunity when it's really no good you're making a type 1 error.
In checkers I've found that no opportunity that looks good, no opportunity to set a trap for example, is worthwhile against a good player, as good players never make mistakes. You were too gullible. If you don't take the opportunity when it would have been good, you're making a type 2 error. You were too skeptical. I find that in checkers the type 1 errors are much more costly than the type 2 errors, but in chess I don't know enough to say. But among the good players, I think they often are too cautious or too skeptical if they wish to win a world championships. They are too likely to go for the draws. In general, I would say if you want to be the best you have to be ready to make the type 2 errors to a greater extent. But then you always risk going belly up.
The situations are not without personal applicability to myself. It's easier in squash. I played an errorless game. Never made a type 1 error of going for broke with very risky shots. Well, it wasn't that bad. i went for about 5 years without losing a game in a match or so. But it wasn't good enough to beat the infernal Sharif Khan as much as I should. I should have played a much more errorful game, being willing to accept the risky shots and confrontations and hitting it on the rise and changing my infernal errorless slice backhand to a top spin so I could belt the ball through the Khans the way the Cubans who played Jai Lai could. In other words, I didn't make as many type 2 errors as I should have.
Anatoly Veltman comments:
I remember grandpa coaching me at 5 or so: "always believe a man." If it turns out to be a lie, you'll find ways to extricate. But if you distrusted without good reason to begin with, you risk losing a friend– and that's an ultimate loss.
Jim Sogi adds:
Why do smart people make either type 1 or 2 mistakes? Presumably, and by definition, it is not because of stupidity, so some heuristic must be at play. In type 1, the fear and result is that you look and feel stupid. In type 2, there is less risk of looking and feeling stupid, but you end up being frustrated by the loss of opportunity. The joke around here is "which is worse" –you present a bad and a ridiculously bad alternative. Weighing the cost benefit is faulty because of proven heuristics are lopsided towards avoidance rather than gain. Add in marginal utility considerations and the difficulty is even harder.
Bill Egan comments:
I will add a twist to the type 1 error problem. I have seen certain extremely intelligent people simply be unable to conceive they might be wrong. This is a problem that gradually gets worse. They have been right 99% of the time because they are so smart, and as time passes, they make bigger and bigger bets because, 'hey, I've been right.' This isn't quite hubris or arrogance because they really are that good. Finally the odds catch up with them.
Roger Longman writes:
So seems to me the real challenge is figuring the cost of a type 1 or 2 decision.
In the case of the FDA, the costs of a type 2 error are dramatically higher than the cost of a type 1. Those costs aren't financial, or not primarily financial. There's the substantial humiliation cost, for example, of approving a drug that turns out to have some important side-effect (or a side-effect more important to a group of influential people than its benefit to a group of less influential people) and being dragged in front of a congressional committee (Charles Grassley of Iowa has been the grandmaster of this, but he's got plenty of competition). There's the bureaucratic cost of being passed over for a more visible job, or an interesting review opportunity, if your name is associated with a controversial decision.
All of which is to say: of course the FDA errs more on type 2's. And the growing pharmacopeia (much of which is generic and therefore low- cost) only encourages this bias towards type 2 errors, particularly in regard to follow-on drugs (i.e., new molecular entities in the same class as approved drugs). If — the FDA figures, albeit not publicly
– by instinct, as it were — there is already a good drug that helps a majority of people why take the chance that a second drug in the same class will provide more incremental benefit than incremental risk, which — as I note above — comes with disproportionate institutional costs?
There's also an inherent problem with drug development divorced from serious comparative effectiveness (the current system of purchasing drugs, based as much on rebates retained by payers as medical and economic value provided to patients and employers, actually discourages the kind of comparisons common in most sectors of the consumer economy).
Victor Niederhoffer comments:
Longman was editor of Windhover Information Ventures Biomed and is very knowledgeable about the FDA. I wish he had been at Prof Tabarrok 's talk at junta where the positive case for the FDA going out of business was limned with statistics and current studies on deaths caused by lack of approval.
Just ran into a stranger driving a delivery express van out of Kentucky. He asked openly in the service station lobby if the bridge up the road was a toll bridge and one of the attendants replied it was. He then asked if the station had an ATM? I asked him if he needed bridge toll money and he said he did.
I had him follow me to my truck and gave him two toll tickets (worth .50 each). One likely would do it but I gave him two just in case his van was 3/4 ton. Looking back I should have asked him if he was hungry and if so fed him. Here was a fellow without even the spare change to pay for bridge toll. I had never been in that situation till today.
The Market took away heavily on Friday and at the last minute gave back a small portion ( like tithing ?) to string along the fray.
At least that is how a poor small town builder sees the Market.
My best friend is Greek and has been in Greece for a month. He always brings me back some Loukoumi (a cheap dessert to offer your company). He was told that most likely he would not be able to bring any more onto the plane. Reason? Its texture resembles C4! Anyway he brought me a small bag packed in his luggage. I can taste the Rosewater as I savor a piece. He has bought at the same shop in Athens for many years. It comes loose in pieces surrounded by powered sugar and in a paper bag. I love the taste and texture.
Dylan Distasio writes:
On the other side of the aisle, they call these Turkish Delights. When I was in Istanbul many years back, the young children would peddle these to tourists. I am a fan also.
Alan, since you like Loukoumi, I would highly recommend checking out an American variation here. They are absolutely delicious. Our relatives out in the Pacific Northwest ship them out to us as a Christmas treat.
In the last week I have rented two units.
I just left my last new renter. A young couple with a little girl.
They had to make deposits on gas and electric and water. A deposit to me and I pro rated this months remaining rent.
Very rough for the average person to come up with all of the above funds to rent a place.
Having lunch as I type. Vickie served me a treat today. Pickled beets at 7.00 per quart !
Note not a good day for the Dow. Good to see oil decline further.
I hope the US Dollar gets stronger.
Scott Brooks writes:
The decade that offered home ownership for no money down and then allowed you to use your house as an ATM ends with people struggling to come up with security deposits and 1st months rent.
As to Alan's comment about the dollar appreciating, maybe I'm channeling chicken little here, but the appreciation of the dollar seems less like blue skies and more like a precursor of the sky falling.
My rationale? Simple. I am of the opinion that the only reason the dollar is appreciating is because the rest of the world is: 1. printing money faster than the US and 2. while the US has a horrible case of "financial pneumonia", the rest of the world is the early stages of "financial respiratory arrest"
The world is playing musical chairs and no one is paying attention to the fact that the chairs are disappearing and being replaced with paper machete' chairs. Sure the paper being used is the American greenback, but when you get right down to it, it's all just paper.
Nothing to see here, move along.
May 17, 2010 | 1 Comment
Euro touches four-year low against dollar, recovers. The euro fell to $1.2237 in early trade on Monday, but then recovered to trade at $1.2307. News Report.
The news says Euro at a four year low. It means little to me, but I do want a super strong dollar. Not for envious reasons, or because I want to buy foreign goods, but because a strong currency goes hand in hand with a low inflation rate, as Gustav Cassel and Harry Johnson taught.— keep looking »
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