SAD, By James Sogi

October 31, 2006 |

Big wave season is here - both in the ocean and in the markets. Time to dust off the big wave boards.

Yesterday at Mahaiula it was 15 feet and glassy with only four of us out. We had to paddle about half a mile out to sea as the waves were big. Surfing, running, biking, sit ups, push ups, weights, stretching helps get in shape. Out on the water it was cosmic. The moon was rising above the mountains in the distance, the blue water and spin drift from the big waves filled the air and the energy was big, but the water surface was smooth clam and glassy. To line up our positions to be in the right spot for the take off not too far out, but not too close in to be crushed by the waves there are a number of things to watch. I’ve been surfing 40 years and can modestly claim to have mastered the basic skills.

1. Line up the cosmic elements by lining up the moon, the tree and the two volcanoes and lava flows. This triangulates well to give a good analog location, but isn’t enough, It would be possible to digitally locate at N 19 degrees 47.496 by 156 W02.445 the theoretically historical take off spot but you still might get creamed. There are ephemeral and random factors at work that you have to be aware of in real time. Just the stats is not enough to hit the sweet spot.

2. The waves come in sets or series of 5 or more at a time with a lull in between. Just like the waves of day bars in the market in sets of five or six, and a big day up the last few months. We use the current pattern to choose the wave and where to sit. When the first wave comes, you cannot see over the top, but you can see off in the distance a group of waves coming and position accordingly. Never take the first wave, there might a bigger one right in back you can’t see and will drill you if you take the first one. This is an execution issue. The waves come in 12-20 second periods, and the set come in 15-20 minute intervals, and these facts are counted and out in the mental plan. Specs do the same.

3. We look at the shape of the wave as it wraps over the underground rocks and coral reefs and focuses its power. It varies according to the shape and size of the swell, and varies from wave to wave and varies with the tide. This helps refine the position as the waves roll through to be in just the sweet spot where one or two paddles send you off on a 20 foot drop at high speed along the face of the wave on a two hundred yard ride as the waves explodes right behind you and curls way up three times your height above your head.

4. I watch what the other surfers are doing. If the guy on the outside, who can see beyond the next waves starts scrambling frantically, you know a big one is coming and the 3 second head start may be just enough to make it over the crest before it crushes you. In the markets our list is really helpful to stay connected with other trades. Thanks again to Chair for hosting the site and the list.

5. We watch the water currents and the drift. There is a steady trade wind pattern that we watch. I always keep an eye in the water or big sharks who frequent the area. The current pulls you deeper into the line up and if not accounted for, you will end up too deep and get caught.

S.A.D. is not season affective disorder, here it stands for Surf ‘n Dine. After surfing we go three miles up the coast to the Four Seasons at Hualalai and eat at The Grille with Alan Wong chef, Yumm and sip Mangoritas with red and yellow color tomato soup with cucumbers and wasabi . Yes, its tough. If any of you come out here, Four Seasons is the best place to stay.

Gibbons Burke relates an industry story:

There is an interesting story, and perhaps a meal or two, about Gordon “Grubby” Clark, founder of the Clark Foam company in Laguna Niguel, Calif. This innovative industry pioneer abruptly quit making surfboard “blanks” - the polyurethane core of the board - which were the industry standard and the manufacture of which he dominated the world with a 90% market share:

The article includes a fax from Mr. Clark explaining in some detail his reasons for shutting the legendary firm down:

For owning and operating Clark Foam I may be looking at very large fines, civil lawsuits, and even time in prison. I will not be saying more than is in this letter so I hope you read it carefully. I do not want to be answering questions about my decisions for the next few years. Effective immediately Clark Foam is ceasing production and sales of surfboard blanks. I would like to give a lot more details but keep in mind that I may have both fines and criminal charges pending at this time or in the future. Therefore I have been advised by my attorney to say as little as possible. I do not want this document to be used as an admission of wrongdoing nor am i going to help the government prosecute me. I do, however, feel I owe everyone some sort of explanation- even if it is incomplete and not a full disclosure of my problems…

and ending with:

When Clark Foam was started it was a far different California. Businesses like Clark Foam were very welcome and considered the leading edge of innovation and technology. Somewhere along the way things have changed. The State of California and Orange County California are trying very hard to make a clean, safe, and just home for their residents. This is commendable and I totally support their goals. It is my understanding their plan is to remove selective businesses to make way for new, better jobs that will be compatible with the improved environment. They are putting an incredible amount of resources into their effort. This is a tough job and they are doing a good job of meeting their goals. The only apology I will make to customers and employees is that I should have seen this coming many years sooner and closed years ago in a slower, more predictable manner. I waited far too long, being optimistic rather than realistic. I also failed to do my homework. What will I be doing in the near future? There is a very good chance I will spend a lot of time in courtrooms over the next few years and could go to prison. I have a tremendous cleanup expense to exit my business. I have the potential for serious fines. My full time efforts will be to extract myself from the mess that I have created for myself. In closing I want to thank everyone for their wonderful support over the years. This has been a great ride with great people. I have loved this job and the people I worked with. Thanks, Gordon Clark

Echoes of Rand-ian heros Howard Roark, John Galt and Hank Reardon, no?

Prices for the remaining unsold Clark blanks took off after this event. Has the surfboard industry recovered from the blow yet?

James Sogi says not to worry:

Talking to my shaper, there are plenty of blanks now…from Mexico. All good quality, no problemo. Gee I wonder who is making them? The market always finds a way. Always one step ahead of government. Talk about government getting into bed how about Daylight saving time as the ultimate commie plot to extract more work out of the proletariat.

An offsite discussion of option trading led to this insightful post from a frequent contributor.





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