Monday, April 30, 2007

Classical Music

I hooked up the speakers on my new Vista computer and am playing Mozart. He's my favorite classical composer by far. A distant second is Beethoven. The modernist atonal stuff - ugh!

Monday Review

Krypto Fund +4.8% ytd;
Alpha Fund +21.3% ytd;
Commodities +25% ytd.

Took some small wounds on recent commodity moves. And some of those "marker" positions are bleeding, too. Glad I didn't load up on anything. Commodities are pretty volatile & move contrary to news often. One has to be careful there. Year high in commodities was +35%. I still think I'm right, but am not doing any adding. My commodity book is now 1.5x capital measured on total contract value of the futures positions. Not excessive.

The WSJ story this AM was troubling regarding these "total return swaps" => looks like the regulators are asleep again. Obviously these are frauds on the margin lending rules.

Still long & strong at +150% in Alpha Fund stocks: energy, deep water drillers, India, miners, select tech (AAPL, GOOG, CSCO, ORCL, ADBE), some solar (Si's FSLR, JASO, TSL, SPWR), and some biotech (NVAX, BCRX, BIOM, BTRX, CRXL, PTN), takeover plays (HD, DOW), and AMSC & EDU. Energy & deep water drillers are 44%, India is 25%, miners are 14%, and the techs are 10%. The rest are small.

Today's monthly core PCE number is important -> we need a downtick for yoy.
USDA Crop Progress report is important, too. Need slow corn planting.

PS: The core PCE year over year was 2.1%, a very good number, down from 2.4% last month. :-) Disinflation rules!

PPS: Looks like a beefer bear raid starting around 2PM. I could wonder why, but I suppose expecting rationality is foolish with respect to beefers. The Rut is bearing the brunt of the raid. They hit oil & oil stocks around the same time.

Sunday, April 29, 2007

I Hate Cellphones!

Cellphones are a pestilence on modern life. They are a scourge on QUIETLY enjoying life. They are the bane of civility. As an instrument of bad behavior, they excel. Here are some examples.

Walking through the grocery store today, buying some fruit & a roast, some women is blabbing endlessly up & down the aisles. How often is a serious meeting interrupted by some nincompoop's cell phone going off? And how often is an otherwise enjoyable dinner out disturbed by some jerk or jerkette at a nearby table prattling away? And how many near-accidents occur because some dopey woman in an SUV is gossiping instead of driving?

Why do men wear them around like a symbol of their manhood? Tool-hood is more like it. A sign of importance - hardly, they are a sign you're on call by your masters: a badge of serfdom.

There is only one way to use a cell phone: turn it OFF! Carry it only for emergencies.

[OK, I admit one COULD carry one for business IFF expecting or needing to make an IMPORTANT call. ]

PS: [for fun] You do know that cellphones have a transponder in them? And that "they" can track you? How do you really know that it doesn't send a little "beep" out every few minutes EVEN when off? We saw the latest James Bond movie and Bond used the bad guy's cell phone to track him. Hmmmmm. I'm not going to carry a transponder on me. No way. ;-)

The Life of George Washington by John Marshall

I finished reading this first hand account written circa 1805 by the famous Chief Justice of the US Supreme Court, who both knew George Washington personally and had access to his private papers, having permission of his estate's executor to use them for this book. The book is fascinating. The language level is elevated and some archaic usages are footnoted by Liberty Fund who republished it in 2000.

The last third covers the first years of the United States under its new constitution. When George Washington took office as President, he was the sole officer of the United States and had to create the government from nothing. I think understanding this period helps one gain much insight to the nature of the republic and political conflicts that have persisted down to now.

For example, page 337 has an illuminating sentence relating to raising revenue: "... and of devising means which should produce revenue in a manner least burdensome to the people ..."

Page 352 contains an interesting idea that was considered, among others: "... a tax on ... lawyers, ... " Definitely a good one that didn't get through. ;-)

George Washington definitely believed he had the power and authority to ascertain and act on the unconstitutionality of laws passed by Congress. Several examples are given. This contrasts to many modern Presidents [such as W.] who actually sign bills they consider unconstitutional.

Thomas Jefferson & his early party comes across rather poorly. They tried to get the US involved in France's war in Europe. They refused to fund a Navy that could protect Americans from kidnapping. And they seem infatuated with the French revolution even AFTER it devolved into a murderous mob and later dictatorship. Biographies of Jefferson seem to neglect that period for him. And his party tried to smear Washington with some forges letters, too. Some things never change. Obviously Jefferson was a great President but not the perfect man as so often made out today.

"The Life of George Washington" by John Marshall [Liberty Fund edition] is well worth reading - I highly recommend it.

Banks Steal Widows' Social Security

Snidely Whiplash is at it again [cf. Dudley Doright cartoon of the 1960s on Rocky & Bullwinkle Show].

Saturday's Wall Street Journal had numerous examples how the banks, in VIOLATION of existing Federal law, take Social Security money from accounts of widows & elderly poor to pay creditors, including themselves. And they charge outrageous fees for doing it. The banks say they can't be bothered to check when they take the money. What self-interested garbage! They don't seem to have trouble charging big fees; or calculating complex interest; or creating long, complex "privacy" policies. Or in fact doing anything that makes them money. But obeying a law to protect elderly from destitution - they can't be bothered.

And where are the protectors of the people in DC? As usual, they don't really do anything to help people. They just want money from their rich supporters & lobbyists.

Is there any wonder I'm cynical about the motives of politicians?

Friday, April 27, 2007


My impression is that Ms. Market is tiring of her current flame & will be rotating soon. Mr. Dow Stock or Stan Poor to be thrown aside as Ms. Market lends her charms to Mr. Nazz or Mr. Rut? Maybe Ms. Market wants to get dirty - are the Four Letter stocks to get the next wave vs. the three letter ones I favor?

The charts suggest that. The Dow & S&P 500 look "extended" [ ugh, I dislike that word ], and the Nazz & rut look like fresh breakouts are setting up. The SOX keeps going up out of a long base.

I figure the energies, miners & Dow+S&P will rest awhile as the Nazz and Rut get action. The beefers need a payday on July 1 and that's how I think they'll try to get one.

I'm not selling my faves as I think they go much higher later. I have some tech for IT trades, but want to stay out of the short term trading game. I'm going to Vegas mid May & don't want to get too involved in the four letter games coming.

You guys & gals out there might get some good action IIFF I'm right.

PS: the core PCE inflation index was 2.2% year over year for Q1 - too high. But we already knew that Jan & Feb & March was too high based on monthly yoy upticks then. The downtick that counts was for April. Besides, the Q1 07 number was the same as the Q4 06 number. So this bears watching, but is not really "news". No action imho.

Whither Went Volatility?

Easy. The beefers ate it. ;-)

Trillions of $$$ in computer-driven trading funds designed to extract money from moves in stock prices usually are a smoothing force for the common price moves of stocks. If some buyer want stocks & bids them up, the computers move to short it instantly, reducing the price move. Then in millions of small trades, they cover. Ditto on the reverse. Voila, volatility is reduced. Until an event causes a singularity and a large re-pricing move. Then the computers exacerbate volatility.

The tendency of this huge computer trading money machine is to drive volatility down. So forget about trying to divine the "meaning" of low volatility. Computer trading programs have erased the value of many technical indicators, unless very, very extreme.

[whither, hither, thither are archaic correlative adverbs used to indicate "to a place"; similarly, hence, thence and whence indicate "from a place". Languages like Latin (& Russian as I remember a little) have terms & grammar like that to indicate motion. English has ejected these over time. But medieval English had them and writers of novels set in that period use them. I heard a lot of those words listening to "The White Company" by Arthur Conan Doyle and learned how to use them. A Fred Astaire movie in the 1930's had a funny scene with Eric Blore on their usage. So I think I'll try then out from time to time as this is an erudite blog site. ;-) ]

Loony Left Leahy

Sen. Leahy from Vermont is one of the most dangerous knaves in Congress. I see he's now a friend of the terrorist, wanting to give his liberal judge friends the power to release them onto us. I guess he just wants more 9/11 style attacks. Maybe he wants more crises to grab more power. [see Reuters today, "Senators vow to restore rights to detainees" ]

Next we'll see that a judge's permission is needed by US military to fight terrorists. I think he just hates the US and wants Americans to submit to world government. He clearly wants to tie the hands of the US government to fight terrorists. Despicable.

Thursday, April 26, 2007

Bear Hunt

A acquaintance of mine hunts bears in Maine. He can recognize their signs - tracks, scat, marks, etc. [btw, there are a lot of bears & they are expanding their range - some have been sighted in the northern part of my town here in eastern MA.]

Ms. Market seems to be hunting bears, too. Not aggressively yet, just grinding them down slowly. The S&P 500 recent upper trend line was hit yesterday, but I suppose the old all time high at 1527.46 beckons. What we have to wonder is whether it's Capt. Ahab beckoning us on to chase the White Whale to our doom [or alternatively the Sirens beckoning us onto the rocks], OR will that be a base/consolidation level for further gains.

I'm sure the beefers will sell aggressively there and we'll hear lots of "double top" screeching. At least I hope we do. The Rut looks like a C&H bullish continuation pattern. Ditto the Nazz composite which broke up yesterday. The SOX put in a second day close over its breakout. The Dow is very strong & could be extended here; but on the weekly chart it had a huge multi-year base . The Dow 100 year chart shows that a breakout out of a huge multi-year base can go very, very far [cf. 1913, 1949 and 1982].

Until we get a change in the fundamentals, the path of least resistance is up. Buy dips. Hold until relieved. Nothing has changed.

Male - Female Differences

Not those! ;-)

I mean in senses and instinctive skills. Remember, human beings evolved over two million years as hunter-gatherers. And from observations of primitive peoples, the men did most of the hunting and the women did most of the gathering.

I've seem scientific studies that men have a superior sense of direction. I suppose that might have evolved so they wouldn't get lost while hunting for hours. [ Hmmm, and we know men don't like to ask for directions - can't admit failure of primitive skills? ;-) ]

I've also seen scientific studies that women have a better sense of smell, and taste, I suppose. Since they gathered food & prepared the food, that ability would lead to less poisoning from spoiled food, mold toxins, etc., leading to higher survival rates.

From personal observation, I think men have hear better and have better night vision. [The hearing applies to younger men now mostly as many older men have poor hearing from war and operating heavy machinery.] The hunting again, perhaps?

If anyone has other insight on this matter, I'd appreciate a comment.

V-Tech Killer Sought Fame

I was traveling when the news came out that the killer spent the two hours between his first murders & the massacre by preparing photos & a video to send to NBC.

So he committed the mass murder to obtain notoriety in death. And the media has given it to him. Sickening.

The FBI & police are now turning over every rock looking for clues to his behavior. A little late. And the press stories about that search spreads his name further. Why didn't they spend some time & effort trying to find him - a killer - after the first murder? Such as an all points bulletin & looking in the likely places, du'h ... on campus. I guess they don't bother looking for ordinary killers any more.

A proper societal response would be to do as much as possible to erase the killer's name & existence from the world. Feed his body to the vultures. No grave marker. People should shun anyone propagating his existence, especially press parasites. Any government investigations should be private & results kept on a no name basis, at least publicly. This response might actually prevent copy-cat massacres.

Wednesday, April 25, 2007

Grinding Higher

Ms. Market is grinding it out, upwards. Apocalyptic perma-bears must be getting frustrated. How is the economy supposed to collapse when the unemployment rate is 4.6%? With long term interest rates around 4.5-5%?

How is the US stock market supposed to collapse even if the US is growing slowly when 50% of S&P revenues come from overseas? Oh well. I think they are in denial and are just wrong.

I see the principal risk as being a recession in China AFTER the 2008 Olympics. I don't really know what's happening there, but IIFFF they are going to pull back, that would be a logical time. Hence I still think we will have a 20% up year with a new all-time high on the S&P 500.

150% long & strong.

PS: Did anyone notice the $SOX broke up out of a long base yesterday? Let's see if it can hold a second day (meaning the break was due to real buyers) or if it fails (meaning virtual buyers drove it over the break point).

PPS: Yesterday's corn & soybean buys worked out. Spring weather looks wetter & it's late in many areas to switch crops from corn to soybeans (have to order seed, fertilizer, etc.). I'll monitor & add if a good entry appears.

Tuesday, April 24, 2007

Diet Working

Hey, my diet is working. Even with my backsliding on the exercise for the past month, I've lost about 5 pounds :-)

I just switch foods to tasty. lower calorie alternatives. And eat as much organic as possible. No sugar or sugar-loaded foods. I'll write more about it later.

I did miss the blog. I had so many thoughts with no place to write them. So I jotted them down in a note & hope to post them later.

PS: I bought some Dec corn & Nov soybeans this AM - not a lot.

PPS: In Ohio, I did eat two pizzas from the Best Pizza Shop East of the Mississippi - double pepperoni, onion, yellow pepper, black olives & mushrooms. Mmmm. :-)

P^3S: By the way, my definite impression was fewer cars & trucks on the Interstates between Massachusetts & central Ohio.

P^4S: I tried to install an update to Microsoft Vista that I have on a new computer. It had a fatal error and gave me some 8 byte error message. Sheesh, their own update bombed. What jerks!


I arrived last evening - lots of miles later. I drove a total of 1,500 miles out to Ohio & back.

It's a radio wasteland over the Alleghanies. I'm sure glad I had a course on tape - it was one of the "Great Courses" -> "Foundations of Western Civilization", very good. I'll write more about it later.

The last few hours I listened to my Judy Garland and Dean Martin CDs. Hmmm. I think there is no female singer better than Judy Garland, except Julie Andrews, after 1954.

Ms. Market seems to be performing well for the bulls ;-)

"Hold until relieved."
"Nothing has changed."

Tuesday, April 17, 2007

Ohio Trip, etc.

I'll be driving to Ohio tomorrow AM early to visit Mom, and expect to return on Monday. So my next post will likely be Tuesday AM. I'll be eating pizza at the greatest pizza shop east of the Mississippi operated by a high school classmate. Spikie will come with me, so she doesn't drive Mrs. B crazy acting like Stalin bossing all the other dogs around.

Ms. Market did well today, fending off the vile advances of the beefer bears. She closed where she needed to close to set up another bull move. Good news is good - forget that perma-bear crap. Disinflation is a fine environment for a solid bull market.

Good luck.

Good CPI Numbers, etc.

We got some good CPI numbers, a downtick on core year-over-year core CPI. Whew! Monthly core CPI was 0.1%, very good. And year-over-year core CPI was 2.5% vs. 2.7% last month.

Perma-bears are in trouble.

PS: I flipped half my cocoa in this rip this AM around 1980. I still have the other half, expecting prices over 2000.

PPS: Getting some snow now :-((

PPPS: The Alpha Fund is about 150% long & staying that long or longer until something changes.

PPPPS: It's wierd how the bears use anything to sell in a bull market. They're in denial, I guess.

P^5S: I spilled some ice cream on my sweatshort last night & Sky is in my lap, cleaning it. It was no-sugar ice cream, by the way. [ Do you see that exponent on the "P" in the PS? Very advanced, hehe ;-) We baby boomers learned something in school. ]

P^6S: Looks like the real buyers scooped up some cheap stock the virtual sellers dumped & now the bears are covering. I think it's some kind of knee jerk reaction to sell or sell short any pop on good news, but they've been getting punished for that for almost 9 months now. A close here sets up the next leg up.

Big Day Ahead

The CPI number this morning is very important in my thinking. We need a downtick in core inflation. I'll update later in the PS's.

The S&P needs a second close over the prior recent high of 1461.57 to confirm this move. The Rut made a new high, too. Needs second day also. Beefers are probably piling into it to gin up some management fees for Q2. XLE up again. At some point I expect a sharp pullback there, but "the trend is your friend".

More rain & cold here - 34F this AM, heavy rain. We haven't had a single warm day yet this spring. :-(

Sky keep growing. Krypto really likes him as a friend & playmate. He likes to wake me up in the AM by jumping up & licking my face. :-)

I've been "backsliding" on my workouts [to borrow the term ascribed to Daniel Drew in the controversial book by Buck about that early Wall Street speculator]. I think the stress of my kitchen "purgatory" and the taxes got me off it. I've got to re-focus on getting my workouts in.

USDA crop progress report last evening showed corn & spring wheat planting behind 2006 and well behind the 17 year average. Peak planting time window is around April 25 in the main corn belt. Mechanization can get a lot of corn in quickly, so I'll be checking the forecasts closely. There is clearly a developing planting delay play; those can increase odds for a hot summer play IF they occur. Cotton planting is behind, too.

USDA crop condition report showed first effects of freeze damage of last week for winter wheat. Good/excellent dropped from 64% to 55% and Poor/very poor increased from 10% to 17%. Wheat is a resilient plant so we have to keep an eye on this. Some dryness in Ukraine/Russia and Australia is a concern, too.

Monday, April 16, 2007

Monday Musings

I finished our taxes & wrote out the check to "United States Treasury" - ugh, it was the largest check I've ever written in my entire life. :-(( If the money was being used for something useful, like a new aircraft carrier or tanks or ammo for troops, I'd feel better. But it's probably going to crop subsidies for rich farmers, or to pay off some Congressman's supporters with pork. Grrrr.

I rebalanced the Krypto Fund a little, selling some US stocks & buying some real estate. I also added new money (an SEP-IRA contribution) to my TIPs position & Pacific index ETF (the tax benefit from the SEP-IRA; I invest that money - not spending it). That got me back into balance. :-)

Wolfowitz is obviously corrupt; get him out of there. If R's don't stand up on these "personal behavior" issues, they should apologize to Bill Clinton.

I guess the rich are backing Hillary bigtime - she has the most money raised.

No problem with flooding here - naturally my bunker is well-positioned on the side of a hill with good drainage and clear fields of fire ;-)

India was strong overnight. CSCO news Friday was good. I have several Internet-related tech in the Alpha Fund [GOOG, CSCO], and of course AAPL, ORCL, ADBE (will add to position soon). AAPL is a big position. I'm holding all these for longer term.

US stock index charts look good. I suspect many hedgies are underinvested.

PS: OK, I sent my "vote" to McCain. He's the only candidate willing to win the war. The rest want to run & let the bad guys hit us again. Hmm, and it looks like most "rich" aren't backing him. Maybe he's got some populist in him? I hope so. I don't like him on some issues, but the most important issue is winning the war, so I sent my "vote" to him.

PPS: Bought some DOW. I figure that sooner or later it gets bought out. The ascending triangle chart is interesting, too. I'll add at the 50 DMA or if it closes two days over 47.3.

PPPS: A couple days ago a reader posted some solar plays. These actually have numbers now. I bought starter positions in each at the time as they are volatile. I'll add over time & watch them. The stocks were FSLR, JASO, SPWR and TSL. If you bought off his post you've done well.

Friday, April 13, 2007


The PPI number will be important today, but Tuesday's CPI number is more important. I thought yesterday's unemployment claims were a little high. If that persists a few weeks we might see more softness that will keep the Fed in its cage.

There has been some modest liquidation in some commodities recently: corn, soybeans, cocoa, cattle (ugh! on that one). Some justified, some not vs. fundamentals. I'm not sure what it means ... yet ... if anything.

India was strong overnight, up 2% on the BSE Sensex.

Energy stocks have a tiger in their tank lately. XLE is at all-time highs. As these stocks correct violently when the beefers sell/rotate, I am contemplating a XLE short hedge sometime. I am holding my energy stocks long-term, so would use the hedge instead of selling. No decision on when or where. Just thinking.

Often when I start thinking how much money I am making in stocks, that signals a top. I've been fighting those thoughts, but that does creep in once in a while. I am building a mental wall to keep those dangerous thoughts out. I just thought I would mention it. I don't think it's a "little birdie signal" yet.

Sure looks like gasoline will go to all-time highs this summer. I'll be surprised if it doesn't.

PS: Good core PPI number. Now we need next week's core CPI to follow.

What's Going On?

More looting. Today's WSJ has an article on how private equity & hedgies are sucking money out of deals before even taking them public to prove their value. They get investment banks to lend the company money to pay themselves a fat dividend. They're just hogs at the trough.

Tax complexity. I guess if I knew any pure math topology, I'd be able to describe the US tax forms in terms of hypersurfaces, connections & other concepts. But I don't. Doing the forms by hand, I'm always amazed how the parts of one form connect to others. And how easy it is to make a mistake & have to do some of them over. That just happened. :-(((

South Park. We watched the South Park global warming show last night - hilarious. So true. What a good TV show!

Solar System Warming. I guess man is polluting the whole solar system somehow. Mars, Jupiter, Neptune, Pluto and Triton (a moon of Neptune) and some other moons of Jupiter & Saturn are warming, too. See I have other sources for this, too. The reach of man's destructiveness is amazing! ;-)

Arrogance. World Bank CEO Paul Wolfowitz promotes a babe he was bopping; gets caught. This is really disgusting and happens all the time in DC & probably in other power centers. Where is the morality? I'm no blue nose, but I really don't like that behavior.

Thursday, April 12, 2007

Arggggggggggggh! More Snow!

This really sucks. We are supposed to get snow today, maybe a few inches plus sleet depending on the breaks. :-((

The dandelions are having a hard time. The crocuses are very late. The deer are running out of food. The chipmunks came out of hibernation for this? And we're supposed to believe that "consensus" climate model forecast for 100 years. They can't get 100 days close! What a crock!!! Gee, do you wonder why I think they just make that stuff up to get grants?

Yesterday's FOMC minutes had nothing new, if one was paying attention. S&P 500 cash support looks like the 50 DMA and the rough up trend line around 1428; below that 1410. So far, yesterday looks like a normal reaction [a Jesse Livermore term]. Imho, it's very important to try to distinguish a normal reaction from a real change in character.

An Elliot Wave analysis of the S&P looks like the correction was a 5 wave move, but some wavelets were just a couple days long. The up move since has formed 3 waves up; not clear yet if wave 3 is done, but it could be. The up move went too far to be an A-B-C correction of the down move. I think the PPI and CPI numbers will govern the market over the next ten days. and maybe set the character for the next few months. I expect an up move to the recent highs, maybe breaking them, but the news will determine that.

Seasonal strength will end in a couple weeks. But one wonders if last year's May swoon already happened; being brought forward by anxious beefers.

It's probably a trader's market for awhile - lots of chop & beefer ping-pong. Real buyers lurk lower & LBO/private equity providing stock specific floors that will help prop up the indices.

I still think the leaders this year will be energy, miners, some Internet-related tech & emerging markets like India. That's where the Alpha Fund has its bets.

PS: before one comments that it's not "fair" to criticise the global warming propaganda crowd for this weather, one should note they said the warm January was due to ... human-caused global warming. Maybe this snow & cold spring is due to human-caused global cooling? After all, they blame mankind for everything.

PPS: A female turkey is eating seeds on the ground under one of my bird feeders. Truly a "big bird" :-) [ In case you didn't know, a female turkey is mostly brown to be camouflaged in the nest. Most female birds have sedate plumage for similar reasons. ]

PPPS: massive sleet storm here now. And I'm doing my taxes :-(( I'm glad Sky the puppy is so much fun, or it would be really depressing.

PPPPS: Sky must think I'm a big dog like Auntie Krypto - he just grabbed my cheek to play like he does Krypto. He's in my lap helping with Part III my AMT form [ lolol] - good thing he's so smart. :-)

Wednesday, April 11, 2007

What's Up Wednesday?

"South Park" TV show is hilariously moronic & fun. A "must Tivo". Thanks, Mern.

Got a new "Vista" computer (Dell) - so far, it's OK. The big screen (22") is interesting - at highest resolution, it's still readable at 4 feet when I swing my chair. I wonder if I can get rid of one or more of the three quad monitor setups I have now over time? Have to experiment.

AA had good earnings. I don't like that company - no position.

XLE in blue sky territory. XLE has broken up out of the ascending triangle. The weekly chart shows an uptrend channel. But I would NOT add to positions here. Those stocks correct violently. I manage my positions on energy & materials stocks using "buy dips, sell rips" tactics.

After viewing many charts over a few years, I think high volume is primarily a turning point indicator, and means little for trend confirmation. That's what Jesse Livermore thought, too. Stocks can move up in blue sky territory on light volume & it's still real buyers. Ditto for indices and ETFs.

FOMC minutes today at 2PM EDT. Those are important, as is the PPI on Friday.

PS: I checked the 3-2-1 crack spread & it's enormous, now at 24, vs. 11-13 base level. With the hole dug for gasoline inventories & demand increasing soon, I have a hard time seeing how they can catch up. I suspect the formula rules are creating havoc, and they make importing harder.

Tuesday, April 10, 2007

What is "Rich" ?

A reader asked me to define "rich". Well, truly "rich" people can live a comfortable upper middle class lifestyle off their investment incomes, no job necessary. There are levels of "rich", but that's the minimum requirement. If one has to work to have such a lifestyle, one is not rich.

Barron's sometimes has humorous articles about the amount of wealth necessary to be "rich"

The lowest level is about $3.5 million, aka "beer & pretzels" rich. $3 million at a safe 5% spending rate means $150,000/yr with no work and owning a $500,000 home in a respectable area. No work necessary. That's enough for an upper middle class lifestyle in most areas of the US. And if you don't "need" a job, then you can choose to live in any low cost, pleasant area in the US.

I think the next level is "wine & cheese" rich. I don't remember the exact wealth necessary there, but I suppose it's around $7 million. On & on. [Champagne & caviar? I don't remember.] I wish I had saved that article. I'll look for it again.

By the way, even a guy making $1 million a year is NOT rich IF that's his first or second or even fourth year doing it (remember the taxes?). Wealth is necessary to be rich, income alone is NOT a sufficient condition.

PS: that's "net" investments. You have to exclude all liabilities such as home mortgage and the costs of sending any children to college. And if your investments are all in retirement funds, you can't be "rich" until you are 59 1/2 & can draw on them, OR have sufficient investments outside of retirement funds.

PPS: from a comment, to clarify the definition: By the way, not "having to work" means not having to trade or "having to work" aggressively managing one's money to generate the sufficient income. I figure a passive "Krypto Fund" style of investing can make 8-10% per year on average. So drawing 5% for current spending leaves the rest to cover inflation & downturns.

Commodities Research Sources

I was asked about sources of information about "farming" by a reader, which I interpret as a question about information for grains & livestock commodities. [Beware, I am NOT trying to encourage commodity trading - see my earlier post.] Since the super book I read in the early 1980s is out of print & I can't find it, since the late 1990s I use various Internet sources and keep a file of useful facts for reference when I need something [ e.g., the canonical hog-to-barley ratio ;-) ]

I subscribe to for current and historical fundamental research. I already mentioned I use for charts & spreads. My online broker, XpressTrade, gives me interesting research from ADM and others for free. I subscribe to DJ Commodities and DJ Energy news services. The useful service, Newswatch, consolidates these and many other news services into one multi-window screen and has historical search capabilities. The yearbooks & services of Commodity Research Bureau help figuring out how high a commodity might go with historical analogs (btw, they own

Having read the commodity news more years, I keep paper (!) files of printed stories of interest. Having lost my book, I search the Internet when I want an update about something, such as the hog-corn ratio or the aforementioned hog-barley ratio. Then I print out the best sources & file them away in paper, saving me future searches. There are lots of "canonical" facts & relationships you need to keep in mind to understand the fundamental trends in grains & livestock & softs. For example, what are the economics of substitution between corn & wheat for feeding hogs (aka swine)? In that case, I did some online research, found data & articles from agriculture departments of universities, printed, read & filed them and created a spreadsheet model that I actually used again a few weeks ago in evaluating a trade.

All this takes time, patience & an enjoyment for detective work and thinking about the facts and relationships. [ Hehe, I love watching Hercule Poirot shows on TV & NetFlix: my "little greys cells" enjoy this work. ;-) ]

You also need a weather service. offers various good paid services with maps & historical data such as 90-day accumulated rainfall in Lubbock, Texas [ ;-) a key cotton area ] or you can start for free at and related government sites. Snoop around there. Also check for drought information.

Of course, you need to know where the soybeans or cotton is grown to evaluate the effect of temperature and rain. Check out for a good summary & map of corn growing areas in the US. You can insert wheat, soybeans, flaxseed, barley, oats, and rye, too, for similar information. Print & file it.

So it's a long process of learning. [Hey, remember to control position size to keep your risk under control - otherwise you'll be sorry & be squashed like a cockroach by the beefers.]

PS: trying some June cattle here. Tight mental stop. Chart & fundie trade.

Monday, April 9, 2007

Monday Morning Rambles

Corn popped last night [hehe ;-) ] likely led by wheat on worries the cold & snow will hurt the crop. and worries the cold & wet weather will delay planting the huge corn crop. It's only April 9 and with mechanization, I think we've gone too far, too soon. December corn is at $4.00 major resistance. I'm selling my corn position here and will look to re-mount on a correction. The weather varies a lot & my forecasts suggest better weather later in April. I still think the crop will have more trouble eventually, but a temporary weather swing might get me a good re-mount.

India was strong overnight. S&P futures are holding Friday's gains and are facing resistance in the 1460-1461 gap. The chart shows a bullish C&H and an ascending triangle. Holding all stock longs. Lots of buyout rumors. I just heard another on huge Dow Chemical on Bubblevision. That would rate a "golly gee whiz" [that's more than a "wowza"] ;-) Too bad that's not in the Sky Fund :-( Shoulda got it at the 50 DMA. Oh well.

Gasoline demand is strong & supplies are down. So we are in a "supply rationing" phase. That's bullish for refiners such as VLO and integrated like MRO and XOM. Gasoline demand is up and stockpiles are below 2006 and the 15 year average. That means imports are needed and those might be hard to bring in with the rules & springtime increase in demand in Europe.

Copper warehouse stockpiles continue to drop as China restocks and the US economy is not as weak as bears "hope". If US housing gets a footing this spring, copper will move up a lot imho. I have the stocks - PCU, FCX, and diversified miners BHP, RIO and RTP - not the commodity.

PS: I might buy some June lean hogs today - a chart that looks like a bullish continuation pattern with some fundie backup (lower weights due to feed costs); also might start an XHB play. Mern mentioned a positive stochastics divergence (it's there) & I had been thinking the homies might get some traction this spring (a six-month trade). Also might add to my July cocoa long on this pullback as the bullish fundies are still there.

PPS: I did everything I said I "might" do except the hog play, as that market hasn't opened yet. I like the lean hogs EITHER on a break-out up OR a dip.

PPPS: I bought some hogs (June). I took another look at the chart & thought the bottom of the pattern was here. A close under 75 & I'm gone.

PPPPS: Quiet day. The real buyers lurk lower, waiting for the bears to sell them stock cheaply. Lots of Fed big mouths this week probably will bring some sell-offs. The next CPI number is very important - we need a down tick to move up, imho.

Only the Rich Vote First

In this degenerate presidential primary system of 2008, only the rich get to vote in the first round, viz. via campaign contributions. The massive front loaded primary system means that only candidates who can raise $50-100 million in advance of ANY votes will be able to compete in buying television & radio ad time. After the first few weeks, so many delegates will have been chosen that a high quality, but unknown, candidate will have a huge disadvantage.

In the older system, a good candidate with a small amount of money could compete in Iowa or New Hampshire with volunteers and lots of face time with voters. So voters would have a chance to recognize their qualities. A good showing there would lead to money to compete in the bigger states. Today, the degenerate system means it's simply a TV propaganda race. And the rich get to screen the candidates for us. No surprise, I don't trust their judgment.

In 1980, the old system gave us Ronald Reagan instead of big money raiser John Connelly. What will happen in 2008? The primary system favors propaganda machines. Can the people see through the lies? We'll see.

[yes, my use of "rich" to connote anyone giving $2,300 is a bit off, but you get the point. And yes, I sent in my $2,300 vote a few days ago - more later where. ;-) ]

Sunday, April 8, 2007

Big Sky Update

Sky the Kelpie puppy is now 16+ lbs. and strong enough to play "Godzilla v. Mothra" with 40 lbs. Krypto in our house. But the "Runaway Sheep" game is still the favorite outside.

Sky had his first "perfect" day yesterday :-)

I guess the excitement of that accomplishment was too much, since he's flunked today already :-(

Spikie (aka "Stalin", Boss of all Dogs) had to give him a chomp today for endless teasing. Oh well, he's got to learn dog etiquette somehow.

Climbing out of Purgatory

I refer to my recent post [March 30] on homeowner purgatory / Tartarus, where homeowners receive endless torments when having home improvements done. My torment was one of worst, replacing the kitchen countertop with granite. Arghhh, such pain & woe!!!!!!!

Yesterday morning Aeneas arrived in the guise of my friendly local plumber. Heroically fighting the demons, he broke my chains & reattached the kitchen sink & dishwasher. Ahhhhh. Relief, I finally had a working kitchen again.

I celebrated by having a onion, pepper & cheese omelet this morning. Mmmmmmmm. [The eggs are from happy, organic, free range chickens :-) ]. Next week - Spam!!!

Saturday, April 7, 2007


Specialized magazines are still one of the best sources for useful information and news on topics one finds interesting. Every month or so you are mailed a magazine with articles & ads on the topic YOU select. This contrasts to the Internet, where one either has to do a search and depend on Google or Yahoo or whatever to find information, or be deluged with spam. Plus, one can comfortably read the magazine on Saturday morning with coffee.

So this morning I picked up a few magazines from my pile - I subscribe to about 30.
"Backwoods Home Magazine" had an interesting articles on the history of crops and on protecting one's home from wildfires. [ ]
"Vietnam" magazine had an article with data on how the military greatly underestimated US casualties in the battle of Khe Sanh while overestimating NVA casualties, so as to project more success than reality. And an article on how the war in Vietnam can be seen as a strategic success and would have been an even greater one had not Congress defunded providing fuel & ammunition for the government of South Vietnam. Hmmm, sounds like deja vu. [ see ]
"Physics Today" had a fascinating article on how time-reversed microwaves can be used to focus a beam tighter than the diffraction limit. This research might be ultra-useful for wireless communication in a cluttered environment. [see ]

There is no way the Internet today can give me the same level of interesting material in one hour on my couch with a cup of coffee at hand.

Friday, April 6, 2007

Friday Holiday Ramblings & Update

Very bullish employment numbers this morning, the S&P futures are trading up about 5 pts as of 8:45AM EDT.

Jobs were up and prior revisions were up. Construction was up, reversing the weather drop last month. Unemployment was down. By the way, the demographic trend with the baby boomers retiring and the baby boomlet having mostly entered workforce means there are just fewer new job seekers. Hence job growth has to remain slow.

T-Notes are selling off to about 4.75%, still very low historically.

So the perma-bears are in trouble, as the cascading disasters they predict just aren't happening. They aren't even getting started. Time will tell. My primary fear is that inflation will NOT downtick soon. If it keeps upticking, I think fears of a Fed rate RISE will start to cause stocks to sell off. But that is data-dependent.

The Emperor – Return of the Jedi
“Everything is proceeding as I have foreseen.”

Hannibal Hayes – The A Team
“I just love it when a plan comes together”

Krypto Fund is up 3.17% YTD.
Alpha Fund is up 14.1% YTD.
Commodity Acct. is up 30% YTD.

[Btw, the amount of $ in each drops considerably down the list to manage my risk.]

Thursday, April 5, 2007

Market Ramblings, etc.

Major averages held the gains, closing for a second day over the key 50 DMA level. Volume declined. Real buyers seem to be lurking lower to scoop up stock on dips. Trader "flipper" stock [aka from the virtual buyers] was bought yesterday. Nearby resistance is the gap around 1445-50 (there is one on futures) and then the recent high at 1461, basis S&P 500 cash.

Corn rallied as the large increase in acreage seemed more unlikely to get planted due to weather & operational problems. Copper keeps moving up - not a sign of economic weakness. Gold & silver broke out up [I fouled that recent trade up :-( ]. Cocoa moved up nicely :-)

Alpha Fund holding BTU [big coal] made a big move on volume, closing over a recent downtrend line. VLO was strong, too, breaking up on higher volume out of a small consolidation pattern. [It's an Alpha Fund large holding] If gasoline stockpiles in storage don't start moving up strongly, prices will be very high all summer & could explode on hurricane problems. Looks like VLO to challenge its all time high around 70; its chart shows a double bottom on the weekly chart. VLO is trading at an idiotic PE of 8x.

PS: 2:54 PM EDT - Erin's segment on Bubblevision on Saharan dust affecting Atlantic ocean temperatutures, and hence hurricanes was really interesting. I've got to monitor that. It made lots of sense. No global warming computer model crap - real data and measurements. [I made this as a comment, but decided to put it into my post as a "PS" - it might be really important.

Horsepower - bah!

Today's WSJ has an article on Americans' love of horsepower. Bah, how misguided! I love ARMOR! Hehe, to paraphrase Archimedes, all you really need is gearing to move anything. Horsepower just lets you go fast faster - it gives you acceleration. But to have armor, you need gearing.

I'm a proud member of the Military Vehicle Preservation Association and my restoration hobby is a World War II era M16 Half-track made by White Motors in 1943. It's got all-around armor and has a "curb" weight fully loaded of 10 tons. The tracks let me go anywhere and the armor protects against small arms fire and shrapnel. You can see various models of the half-track in various World War II movies such as Kelly's Heroes.

My half-track has its original huge Continental "in-line" six cylinder engine with ... 135 horsepower. But the gearing in its transmission and transfer case and the tracks lets it go anywhere - straight up high angle slopes and on almost any terrain. Top speed is ... 35 mph. Lol, all it has to do is keep up with the tanks.

I've almost got it fully restored except for the final paint job. I need to adjust one more brake. Lol, at least it has brakes now - driving a 10 ton vehicle with no brakes other than a hand brake requires great care. I've put it in several Memorial Day parades in my area. The old WW II veterans and today's kids love it.

Armor & gearing beats horsepower anyday in my book!!!

Wednesday, April 4, 2007

Market Ramblings

I bought some corn - December 2007 - small position - one contract as a marker. Btw, that's what I mean by a "marker" position. It forces me to pay attention & let's me participate on a big move if one suddenly occurs (such as is possible in coffee). I don't expect that in corn, but I need a motivation to check the weather maps every day. And spring weather might be cold & wet to delay plantings. So a La Nina hot & dry summer "could" create a big problem for the corn crop, as much will be planted on marginal land.

S&P 500 cash shows a cup & handle bullish continuation pattern. Ditto the Nazz composite, Russell 2000 (aka "Rut") and the Dow Industrials; all had higher volume yesterday, a good sign.
I'm planning to "buy dips, sell rips" in index calls for trades, and find "month trades" in individual stocks, at least until the news flow changes.

PS: The Alpha Fund is about 150% long.

PPS: I spent some time on weather maps & forecasts this AM and I will try to add to that corn marker on a dip or otherwise. I think the farmers might have trouble getting all those acres planted [btw, planting in the south & border states are pretty far along vs. last year, though]. And the 90 day forecasts show hot & dry in much of the corn belt.

21st Century Totalitarianism

The merger of environmental fascism with national socialist health control occurring in front of us now will lead to a new type of totalitarianism - no name yet - so I'll just call it "21st Century Totalitarianism" for now.

Monday's horrible US Supreme Court decision laid the basis for the complete control of human activity under the guise of "climate change" as now even water vapor and every element or compound used in any way by humans can be regulated by the EPA. The EU did this a while ago. The bureaucracy can creepily start growing its regulatory tentacles on this front.

The movements toward national health programs or their fascist corporate equivalents are also leading to control of human choice in order to "save money" or "for the children" or "for your own good". "Reason" magazine in this month's issue (May 2007) has a fine article titled, "An Epidemic of Meddling - the totalitarian implications of public health". The simple logic is that since "they" are paying for your care, "they" have the right to tell you how to live. Corporations do this now. Some governments do, too. We hear proposals for this in the US. If this was Jerry Falwell telling us how to live, most people would rebel. When it's some bespectacled doctor with an M. D. , many people bend over.

As these movements merge and intertwine in the governmental bureaucracy, they will be able to control every aspect of human life. Nothing in either ideology provides for any respect for the choice of the individual person. You are treated as a statistic, a number, just a member of the group with no individual rights. Pure totalitarianism. I fear it's coming. The "Bunker" is looking good.

Tuesday, April 3, 2007

Path of Least Resistance

Lots of bad news hit yesterday: alt-A problems, Poole's big mouth, ISM prices paid number, etc. But the major indices closed UP. A market that goes up on bad news indicates the path of least resistance is up.

PS: 10:53 AM EST - I am selling those S&P calls I recently bought on the dip. I want to be 200% net long on the dips, not the rips. Also, since I had April's, the time decay is pretty strong now. I'll look to remount later in June calls. Still long & strong, though.

John Paul Stevens, Socialist Tool

John Paul Stevens has struck again, delivering the opinion for a 5-4 Supreme Court decision that the EPA can regulate carbon dioxide as a "pollutant", which is supremely laughable since carbon dioxide is essential to all plant life and is exhaled by all mammals. I guess he thinks life is pollution of the "pure" Earth. Maybe the Moon is his ideal - a dead rock. Recent discovery that the Martian polar caps are disappearing is ignored - I guess those Martians have invisible SUVs.

John Paul Stevens also wrote that despicable Kelso decision that decreed that all land is held at the behest of our lords in government and if we don't use it to their liking, they can take it and give it to more favorable serfs.

He's a walking example of the need for term or age limits at the Supreme Court, or periodic ratification elections. If they want to rule by decree, they should at least win an election. Even super thug Chavez did, before he began seizing property.

Like Kelso, this decison ranks in the class of Dred Scott, a disaster of court legislating from the bench.

Monday, April 2, 2007

Corn Liquidations

Corn is locked limit down for the second day - this will be a first IF it stayed locked to the close. The beefers had a huge net long position & their soybean net long isn't saving them. The index funds had a huge long in corn, too. I think the margin calls are causing some spillover selling in cocoa. It was overbought & the beefers have a big net long there, too, BUT there is a real crop problem in Ivory Coast due to the drought. The chart has an uptrend & we are nearling support. I'll look to re-buy cocoa around 1800-1850 to rebuild my long. I will average in as I am concerned about beefer liquidations.

PS: December corn has been off limit down for awhile now and soybeans are up now, too. And May corn just traded off limit down, too. After today the grains will be a weather market.

US Stocks are Cheap

The First Data LBO is another data point confirming that US stocks are cheap. FDC had a PE of 21x on 2007 estimates (19x on 2008 estimates) even with choppy, low growth of earnings. FDC does have good cash flow and is in a business that's not too risky in a downturn. FDC earnings grew in the 2000-2001 recession. KKR is paying $34/share, or a PE of 30x on 2008 numbers. I'll write more about valuations of growth later. I think the excessive funds in trading oriented hedge funds has led to substantial undervaluation of US stocks, particularly "three letter stocks" hehe. Over this year, barring unforeseen events, I think the market will grind out a 20% gain as these values are slowly realized.

Over the past two weeks I put more money in big cap US stocks in a separate fund managed primarily by Mrs. Bunkerman. I need a name for that fund, but for now I guess I'll watch it as part of the Krypto Fund. Maybe the "Sky Fund" would fit. [hehehe.] He's going to be our biggest dog [big caps - big dog, hehe] & the "sky" sort of fits Mrs. Bunkerman's interests.

South Park - Hilarious

I finally watched the TV show, "South Park" on the suggestion of a reader. I almost had a heart attack laughing, that show was so funny. The "potty humor" warning he gave me was sure true. The show has all sorts of scatological jokes (butt-ological, too, that's not a word, but you get the point). And the script did have depth overall as a medium for the humor. Last night's show thesis was that Earth was created as a "reality" TV show for higher beings in the Universe. The show is really worth watching & I have a season pass on Tivo now.

Reading Books

When I worked in "The Beast" on "The Street" I had time to read when I was commuting on the plane (weekends) & train (midweek). Being "semi-retired" now, I finally have some time to read books again. So I thought I'd write about a few from time to time.

I recently finished "The (Mis)behavior of Markets" by Mandlebrot, the famous mathematician. [ lol, I had been trying to finish it for about two years. ] While somewhat interesting in it's examples, I thought the book dragged on & on. Maybe if one is going to try to model markets or develop systematic, rules-based trades, the book might provide some starting background. But basically the main point is that market return distributions are not governed by stationary Normal distributions over time and undue reliance on such will cause you to lose money. Mandlebrot doesn't expressly say it, but "news" matters and many of those non-Normal deviations are due to news events.

Mandlebrot spends a lot of time criticizing the Black-Scholes options model in a manner suggesting his criticisms are new, but Fischer Black himself taught us those limitations over 30 years ago in his class at MIT's Sloan School. I was there and have always remembered them.

Well, the book is worth reading if you have a quantitative side to learn some more depth on the types of distributions that market returns have; otherwise, you might skip.

Sunday, April 1, 2007

Dog Games

More anthropomorphizing ... six syllables, hehe ... see, this blog is erudite as well as loquacious ;-)

Dogs are very smart. [OK, I'll stipulate that cats are smart, too, hehe]. My dogs have games they play outside. Before we got Ava & Sky, Krypto & Spikie used to play "Lion vs. Wildebeest", where Spikie was the Lion trying to catch Krypto the Wildebeest. Or "Cheetah vs. Gazelle" where Krypto the Cheetah tried to catch Spikie the Gazelle [this is a speedier game]. During the last few days, Krypto has taught Sky to play, "Runaway Sheep", where Krypto is the runaway sheep and Sky has to herd her back to the "mob". Even Ava has gotten into the fun, taking Sky the puppy on "Snipe Hunts" to the abandoned fox den colony on the hillside. Sky plays "Space Mountain" in our family room, zooming around & up & over the couches & chairs. It's a lot of fun watching them play. :-)