Wednesday, April 30, 2008

A News Hat Trick

Today we get the ADP jobs number, the advance GDP for Q1 and the Fed meeting.

I'll just wait to see what the data are and then think and react. A flat GDP with the Fed going on hold one way or another should bring strength to the dollar and weakness to commodities including oil. So then the beefers will rotate other stocks. Some already have. I heard Gartman called the end to the commodity boom and says buy tech. I've already done that.

C is selling more common, purportedly to the Singapore Investment Fund. It's interesting if they can sell strict common at these levels, well off the lows. I guess they are taking advantage of the rally and getting the decks cleared for their big 'Investor Day' on May 9.

My 'opinion' is that a firm dollar brings huge money to US stocks to position for the economic rebound that I think will occur in late Q2 or Q3. But any reader knows I'm an optimist.

No Word of the Day until I return to the bunker.

I saw cabbage at Wal-Mart this morning for 64 cents a pound. so with those ingredients I posted yesterday, one can make a fine Mulligan Stew for a low cost. That's good food that will feed and energize a fireman all day.

PS: the site is having trouble, so my post was delayed. ADP came in at +10,000 jobs, ok.

PPS: GDP +0.6% a good number. Uh ... that question comes to mind again ;-)

Tuesday, April 29, 2008

Good Food ... Cheap

I got the Internet working here ... finally. The AT&T tech support for this DSL line were actually very good ... no wait, either.

And I went to the supermarket. This is a regular, regional supermarket with services. They bag the groceries and put them in the trunk of the car. No warehouse store. No Wal-Mart. This is in a small town in SE Ohio - no sun or surf.

And what did I find ?

80% ground beef - $2.99/lb.
1 lb hot dogs (10) for $1.68
1 dozen Grade A, large eggs $1.65
8 oz. cream cheese $1.88
10 lb. potatoes for $2.99

I'll check the pizza prices later. But there is a huge amount of calories of good food, cheap if one is willing to do a bit of work preparing it.

I just heard some fool on Babblevision saying the Bear Strearn counterparty rescue was a huge mistake. What a dope ... academic idiot !

PS: One could pay more for the items I listed ... more expensive hot dogs, burger, potatoes, etc. but then, the pain is self-inflicted.

Monday, April 28, 2008

Monday Morning Ramblings

Spring is in full force here. Perchance Spring has arrived for the markets ? There is plenty to worry about and we can expect Babblevision and Blabberg to spend countless hours telling us why the world will soon end.

The S&P 500 chart shows a clear bottom pattern in force now with the recent consolidation over the slight downtrend line. On a larger scale, the pattern is both a "W" double bottom and the recent downleg now has become a bullish cup & handle. Fundamentals will rule, however. So this week's GDP and jobs numbers are important, as is the Fed meeting.

WB management obviously needs a major shakeup - I've written to the lead independent director "requesting" the CEO be fired, among others involved in these recent scandals. I'm keeping my shares, but am not happy. The bank has a great franchise and should be a long term winner with good management.

I am doing nothing, have already positioned the Alpha Fund for a bull move up. By the way, on Friday, the Alpha Fund was up 2.4% year to date, which might be the first positive number all year. The Krypto Fund is also positive for year at +1.7%, hence is kicking the butt of most hedge funds as well as pure US, undiversified index funds. It's a long way to year end - constant vigilance is the watch word.

This afternoon I travel to small town, southeast Ohio for a three day trip. If I can get the Internet working in Mom's house with a new modem I bought, I'll post tomorrow. If I can't, silence will prevail.

Word of the Day

"Neologism" - noun [$10]
Neologism means 1. a new word or expression; 2. the coining or use of new words.
Sentence: One of the pillars of strength of American English is its flexibilty in the creation of neologisms to infuse new technology into everyday life. For example, one's "cell" is now the cell phone of a person or the cell phone number, which usage is derived from the highly technical "cell" methodology with which a network tracks a mobile phone. Interestingly, since many people now carry those devices everywhere and use them incessantly, perhaps the term "cell" is even more appropriate as such persons' freedom seems contrained by that contant connection to others.

Saturday, April 26, 2008

Food is Cheap

This whining about the price of food is getting ridiculous. Persons using a bit of shopping and cooking can eat for almost free.

I just bought a large Perdue roasting chicken for $0.99 per pound - not on sale! The chicken is huge ... 7.825 lb for a total price of $7.75. And Mrs. B bought a large amount of "not perfect" Italian peppers for $1.09 - there looks like 8-9 in this package. The roasted chicken with the sliced and roasted peppers and some boiled turnips will feed Mrs. B and me for at least four evening meals. I'm not sure what the turnips cost, but they are cheap. I'd guess our cost per meal is no more than $1.50 per person per meal, probably less.

Food is cheap if one thinks and works slicing & cooking a bit.

Friday, April 25, 2008


The heat wave broke here and cool temperatures are returning. That's good as the Spring blossoms can survive a lot longer in moderately cool temperatures. The magnolia tree is covered with big purple & white blooms and the daffodills are in full glory. I have about 200 daffodills scattered in bunchs.

Perchance has Spring arrived for stocks, too ? The past two weeks have seen a congeries of accumulation days with solid increases in the major averages on good volume. Steady, grinding rallies with minor dips interspersed are also better for long term gains, too, as real buyers get stock at good prices. Rips up sponsored by beefer momentum traders aka virtual buyers are weak and can be reversed easily. Late yesterday saw some beefer ping pong as they hit the days highs prices. But this morning futures are up solidly.

Rotation from commodity plays seems underway as the dollar has firmed. As sketched in past posts, I see this coming Fed meeting as providing more dollar suppport to buttress the support they gave in the last meeting. All this market needs to begin a huge move up is a sign that home mortage defaults has peaked and that home prices are firming. I think that will occur this Spring.

Hence I am long 150% on margin in the Alpha Fund.

Word of the Day

"Divagate" - verb, intrasitive [$10] and "divagation" - noun.
Divagate means 1. to wander, stray; 2. to digress in speech.
Sentence: Modern political debates can be quite annoying as the politicians always divagate from the questions from the panel of correspondents or voters.

Here is a long quote from the fine book, "The Capitive Mind" by Czeslaw Milosz published in 1953 (the quote is from page three) where I first saw the word, "divagation". C. Milosz was awarded the Nobel Prize in literature in 1980. The book is primarily concerned with the immediate postwar period in Eastern and Central Europe. I've written numerous blogs on this period as I've tried very much to increase my understanding of this crucial, yet understudied, period of the 20th century.

"It was only toward the middle of the twentieth century that the inhabitants of many Euproean countries came, in general unpleasantly, to the realization that their fate could be influenced directly by intricate and abstruse books of philosophy. Their bread, their work, their private lives began to depend on this or that decision in disputes on principles to which, until then, they had never paid any attention. In their eyes, the philosophers had always been a sort of dreamer whose divagations had no effect on realilty. The average human being, even if he had once been exposed to it, wrote philosophy off as utterly impractical and useless. Therefore the great intellectual work of the Marxists could easily pass as just one more variation on a sterile pastime. Only a few individuals understood the causes and probable consequences of this general indifference."

Thursday, April 24, 2008

Zzzzzz ...

Yesterday was a hot day here in Massachusetts ... I hope it moderates as the spring blossoms last a lot longer with moderate, cool temperatures.

Mr. Market was taking a well-needed nap yesterday. Some call it base-building, some call it consolidation, but what that means is that stock is being slowly accumulated on dips by real buyers from traders flippimg shares or from rotation. In other words, stock moves from weak to strong hands. After the S&P broke the slight downtrend line, consolidation is important. This sets up the market for a grinding move up as semi-perma-bears slowly capitulate and recognize their errors in thinking armagedon is coming.

I am doing nothing, except moving books to my new library in the renovated second floor of my barn/garage. I had a huge pile in the "Great Room" in the bunker here - it's sort of reminiscent of the armory in the great hall in the Tower of London. So I need to get the books to the new library so I can appreciate my sword & shell collection (and those aren't seashells !). Also that lets me re-sort the books that I expect to read & use soon, vs. long term storage for irregular access.

AAPL had fine numbers with conservative guidance, as expected. Those Mac sales are the key ... over time, I expect them to get 25% of the PC market since Windows sucks, especially Vista, which is total crap. Since Mac share is now at about 7%, that means years of strong growth. I'll re-buy that bit I flipped on a serious dip.

If CVX goes to 100, I'll let take long term sugar on shares I've held over a year, too. "Buy dips, sell rips" is the applicable investing rule for resource stocks. If you use time diversification and manage your position size, you can get long term gains on the large sales profits and good entries on the major dips. I've done that for several years on those stocks.

Next week, I expect the Fed to cut 25 bps and signal a pause. I think the dollar will then rally significantly and start a rotation to US stocks. The possibility does exist the Fed will not cut at all in the next meeting. That's OK with me. The 25 bps means little and 2.25% is low enough for the overnight rate. Enduring focus by them on other liquidity measures is more important.

A dollar rally might put an intermediate term lid on oil prices as speculators rotate out. That would be a plus.

Word of the Day

"Caco-" - a combining form [$100]
Caco- is a combining form meaning "bad", occurring in loan words from Greek (cacoemon); on this model, used in the formation of compound words.
Examples: The common example is cacophony or cacophonous. Others words including "caco-" are cacodemon, cacodyl, cacoepy, cacoethes, cacogenics, cacography, cacology, and caconym.

"Cacoepy" - noun [$1000] rare (stress on the 'coe syllable)
Cacoepy means bad or erroneous pronunciation; opposed to orthoepy. Hence, cacoepistic is the related adjective.
Sentence: George W. Bush suffers from terminal cacoepy when saying the word, "nuclear", which he always pronounces wrongly as "nu cu lar" instead of "nu cle ar" with a long "e".

Wednesday, April 23, 2008

A Win

Hillary crushes Obama aka "Barry" in Pennsylvania primary, winning by 10 pts. Yet wierd delegate allocation rules of the Democrats give her only about 7 extra delegates out of over 150. I wonder if she is really being unfairly deprived of the nomination by these party rules. What is clear is that those "progressive" allocation rules are really defective. They deprive voters of clear winners, and smear the results into an amorphous mess.

Hillary is winning decisively in those key states that Democrats must win in November, viz. Ohio, Pennsylvania, California, New Jersey and New York. Hillary dominates crucial voter groups that Democrats must have decisive majorities to win. Yet she is behind in delegates. Obama wins more states, yet most of those states normally go for Republicans in the general election. Strange.

Today's online WSJ has a fine article by Dorothy Rabinowitz about the press protection team around Obama. Why is the part of the press protecting him ? Why do they gripe when he gets asks tough questions and is pressed when he evades them ? Gosh, those Democrats sound like ... Republicans griping about the press.

That article also clearly shows that Obama really is being deceptive and evasive about his statments and those of his wife and pastor. So what do we conclude ? Obama really believes the ideas behind most or all those controversial statements - those were not mistakes ... except in being shown to the public. He wants to hide them, to obfuscate them. At this point, I have to think he is really a knave hiding behind a speech.


Yesterday was a nothing day.

Word of the Day

"Lied" - noun [$10], plural "Lieder"
Lied means a type of German song, especially of the Romantic period, usually for solo voice with piano accompaniment. [German]
Sentence: The German lieder of Shubert are quite enjoyable songs even if one understands no German. Two famous lieder are "Erlkonig" and "Gretchen am Spinnrade" which are based on poems of Goethe.

"Erlking" - noun [$10]. This is English for the German word, "Erlkonig", 'alderking' which is a mistranslation of the Danish 'ellerkonge' meaning 'king of the elves'.
Erlking means 1. a spirit or personified natural power that works mischief, especially to children; 2. a bearded giant or goblin who lures little children to the land of death.
Sentence: Is Obama the Erlking of 2008 for naive Democratic voters ?

PS: The lieder performed by famous baritone Dietrich Fischer-Dieskau with Gerald Moore on piano are available on modern CDs. For some lieder requiring a woman's voice, those of Elisabeth Schwarzkopf singing with Gerald Moore on piano are wondeful, too.

Tuesday, April 22, 2008

Dip Buyers

Yesterday the dip buyers showed up and caused a reversal of early losses to close near even. I've written joculary that, "real buyers do it on dips". I'm distinguishing the real buyers who plan to hold a stock for months or years from the traders, who are "virtual" buyers or sellers and who buy & sell in minutes, hours, days or a few weeks. They can push a stock up a lot as momentum traders tend to act in groups using the same buy/sell signals, but over time they'll sell just as fast so overall cause little permanent change in price levels.

IBD has gotten quite bullish, writing this morning about strong performance in "leading" stocks and many bullish breakouts from solid bases on good volume. They can identify "hot" stocks and even some long term winners, so I read - or at least skim - it daily. Today's "Big Picture" mentioned a number of agricultural stocks.

Yesterday I sold a bit of AAPL in the Alpha Fund. The shares I sold had a 100% long term profit. Taking into account the recent big 40 point rally, I just had too much, so took that long term "sugar" off the table. Position management is important and I monitor them quite often.

C declared its dividend at the same rate as the last quarter. Does anyone else think that Oppenheimer analyst is getting a bit shrill as the stock is going up while she shrieks and keeps reiterating bearish comments ? Perhaps being once right, she just can't turn around and change her mind. Maybe she reads her own press too much. The Greeks called it, "hubris", and their gods punished it.

By the way, I'd like to see Hillary kick Obama's butt by 10 points today in Pennsylvania.

Words of the Day

Today I have three "fu" words ... no, not that one ... sheesh, get your mind out of the gutter. This is an elevating blog !;-)

"Fugacious" - adjective [$10] literary
Fugacious means fleeting, evanescent, hard to capture or keep.
Sentence: Hillary is discovering that broad voter support can be quite fugacious when a superficially attractive alternative candidate appears.

"Fulgent" - adjective [$10] poetic. From the Latin fulgere - shine
Fulgent means shining, bright.
Sentence: Gold American Eagle coins are wonderfully fulgent with lady Liberty on their obverse.

"Fuliginous" - adjective [$10] literary. From Latin fuligo - soot
Fuliginous means sooty, dusky.
Sentence: The fuliginous "song of the chimney sweeps" performed and led by Dick Van Dyke in that great movie, "Mary Poppins" is one of many songs in that movie.

Notice that the latter two words seems quite similar, but have nearly opposite meanings and derive from different Latin roots. So one really must look up words in a dictionary to avoid incorrect inference of meanings.

Monday, April 21, 2008

Monday Morning Ramblings

Bank of England announces program similar to the Fed's asset swap program.
BAC reported to realize some value its large China Construction Bank investment.
RBS announces large rights offering. Why didn't US banks do these instead of selling shares at low prices to favored large institutions ?
Saudi Arabia announced it is putting exapnsion plans on hold. Naturally. They have no more to pump or fields to expand. Prior talk was just bluster.

Why do TV and other "news" outlets create surveys which they then report as "news" ? I suppose they are just lazy and cheap. The Wall Street Journal has really declined in value to me. I still read it, but I notice few and fewer stories that contain hard facts. I plan to try the Financial Times soon.

I drove to & back from Connecticut over the weekend. The roads seemed quite crowded. I suppose people will drive as much as possible ... as much as they can afford, that is. Diesel fuel costs about $4.50 per gallon, much more than gasoline. I'm not complaining or whining, but merely observing that the $100 fill-up for large vehicles has arrived.

Spring weather is now very pleasant here and the blosssoms are really beautiful. As long as the heat holds off, the blossoms can last.

I expect to do nothing this week. I might add to my TLT short if that rallies a bit.

PS: BAC reports a profit. No dividend cut.

Word of the Day

"Snide" - adjective [? ... perhaps $1]
Snide means derogatory in a malicious, superior way.
Sentence: Persons in a clique often can be overheard making snide comments about those not in the clique. That's part of what having a "clique" means.

"Snarky" - adjective [$100 !!!]
Snarky means 1. testy, irritable; 2. (Urban Dictionary) tending to make snide remarks. The word is onomatopoetic from "snide remark".
Sentence: A person overworked might be snarky to others, while being quite pleasant under normal conditions.

"Snark" - noun [$10]
Snark means a fabulous animal, or a mysterious, imaginary animal. The term was coined in 1876 by Lewis Carrol in his poem, "The Hunting of the Snark."
Sentence: The unicorn might be deemed a romantic snark of medieval writings.

PS: "Snorky" was Al Capone's preferred nickname meaning a snappy dresser in 1920s slang.

Friday, April 18, 2008


An alternate title was my old favorite, "I've Heard That Song Before", but since C hasn't reported as I write this, I didn't want to anger the trading gods.

GOOG crushes estimates and the stock was up 75 pts. in afterhours trading. So the bears were wrong and ... Bunkerman was right ... again. Hehe :-)

I owned a lot of GOOG in my Alpha Fund, having added a good bit down around 440. So I flipped some at 505 and a bit more at 525 afterhours. I plan to sell a bit more this mornig to get my position size down to an amount I can hold comfortably for a couple years, viz., about 10% of the Alpha Fund assets at 150% margin..

My thinking is that GOOG goes to 1000 in next year. Besides its inherent growth and quality of earnings, all types of Internet businesses benefit from high oil prices as searching online saves consumers from searching in malls, hence gasoline savings will continue a shift in shopping preferences to online. Also, some time soon GOOG should start making money from all its experimental ventures. I think the GOOG guys are smart and aren't wasting money.

Yesterday I started a short position in TLT, which is the ETF for long term US Treasury bonds. I should have started that early this week when its weak chart was mentioned by a commentor, "frosty". But I was distracted by my taxes. US Treasury bonds are grossly overpriced in my thinking on fundamental grounds. And the daily chart for TLT looks like a downtrend has begun. I figure that with core long term inflation at about 2%, then the 30 year US Treasury bond should be at least 5%, vs. its current yield of about 4.5%. An increase in yield from 4.5% to 5% will cause the bond prices to fall about 10%. So I sold short some TLT and will short more on a good entry. I won't make my 30% target total annual return on this trade, but by this fall might have a good profit for a short holding period.

Word of the Day

"Dialectic" - noun [$10]
Dialectic means 1. logic; 2. discussion and reasoning by dialogue as a method of intellectual investigation: the Socratic technique; 3. the logic of fallacy; 4. (plural) any systematic reasoning, exposition, or argument that juxtaposes opposed or contradictory ideas and usually seeks to resolve the conflict; 6. the dialectic tension or opposition beteen two interacting forces or elements.
Sentence: Bunkerman plans to seek new investment ideas through the overarching dialectic of the conflict of high energy and metal prices with high demand from growth in emerging economies. Solutions derived from more efficient uses, substitute products, alternative processes or altered behavior should create new companies or businesses that will make highly profitable long term investments.

Thursday, April 17, 2008

Hmmmm ...

IBM crushes estimates and guides up.
World PC demand grows 12% in Q1.
Ebay beats estimates.
S&P 500 made large gains on higher volume.
JPMorgan says credit crisis almost over.
Mark Mobius ditto.

But bears are out there, waiting for an opening to attack. So buy only on dips.

Alpha Fund is about 150% long; Krypto Fund has stocks overweight, bonds underweight, real estate & gold at standard levels.

I have serious seller's remorse on rail BNI. On MLK day turmoil I took a loss on that holding to reinforce my banks. So far, that is a wrong move. Time will tell, but I think I made an error that day.

Words of the Day

"Apposite" - adjective [$10]
Apposite means highly pertinent or appropriate.
Sentence: As persons in positions with considerable insight into credit market conditions, statements of JPM, Mobius, and the CEOs of Lehman and Goldman that credit turmoil is almost over seem highly apposite for cautious investors.

"Interlunation" - noun [$100]; and "Interlunary" - adjective [$100]
Interlunation means the interlunary period.
Interlunary means pertaining to the Moon's monthly period of invisibility between the old moon and the new moon.
Sentence: (A) Earnings season marks the end of the market's interlunation as investors get hard data points and outlooks from corporations so they can access future prospects. (B) [from Shelly's "Defense of Poetry" ] "Poetry ... arrests the vanishing apparitions which haunt the interlunations of life ..."

"Hierophant" - noun [$10]
Hierophant means 1. [Greek Antiquity] an initiating or presiding priest; an official interpreter of sacred mysteries; 2. an interpreter of sacred mysteries or any esoteric principle.
Sentence: (A) Babblevsion displays many market hierophants daily, but most are charlatans and oddly, they rarely check the track record beyond a cursory look. (B) [again from Shelley's "Defense of Poetry"] "Poets are the hierophants of an unapprehended inspiration ..."

Both the aforementioned quotes from Shelley's "Defense of Poetry" were taken from the book, "Truth and Beauty" by S. Chandrasekhar, who was a Nobel laureate astrophysicist.

Wednesday, April 16, 2008

Plain Thinking

Much of the modern press blabbing obscures the plain meaning of facts. Here are two examples.

First, the Merrill Lynch story in this morning's WSJ is fascinating, providing many details on how the firm accelerated its purchases of CDOs as that market deteriorated. But it didn't say why.

Here's the "why" -> greed. The Merrill Lynch personnel from the people in the trading departments to the top executives like Stan O'Neil simply wanted to loot the firm for their bonus pools. They wanted to hold on until they could ring the register and take a big pile of cash home again. So they had the firm buy unmarketable CDOs classes of their own underwritings.

Ms. Market didn't cooperate for 2007, though, and they got caught in their own avalanche.

Second, the recent controvery about Obama has obscured simple facts. He's now trying to show he's a common man. [As is Hillary, but that's for another post.] Obama went to a private high school. Period. It doesn't matter if it was on a scholarship. And later to Columbia University and then Harvard Law School. Those facts provide a "prima facia" case for his being an elistist, barring actual behavior to the contrary.

And the statements about arugula as in indicator of inflation, and his disparaging remarks about small town people eliminate that possibility of sustained, counterexample behavior. He's an elitist, period, with no understanding of the lives of the common man or woman.

Logic, the plain meaning of words, and real facts let one understand events. Modern press mostly provides blather & babble.


Intel had a good earnings report, proving the world economy still has positive momentum. The JPM earnings will be important as will the CPI data today. I bought another slug of GE September 30 calls on Tuesday.

Words of the Day

"Spoliation" - noun [$10]
Spoliation means 1. the act of plundering; 2. the act of injuring beyond reclaim.
Sentence: The excessive greed - and stupidity - of Merril Lynch executives induced their spoliation of its cumulative earnings and profits from many prior years.

"Cupidity" - noun [$10]
Cupidity means excessive desire, esp. for wealth; avarice.
Sentence: The untrammeled cupidity of Merrill Lynch executives and traders for their annual bonus created the breeding pond for the huge losses now being reported.

["Untrammeled" means unhindered as a "trammel" is a restriction on free movement in this usage.]

Tuesday, April 15, 2008

What's New Under the Sun ?

1. Russian oil production growth stops.
2. Industrial Eaton reports good earnings.
3. Home foreclosures up.
4. Stock buybacks result in buy high, sell low for banks.
5. BS made a profit in Q1.
6. Big deepwater oil find off Brazil.

None of this is "really" new, but shows how much perception is diverging from reality. And how little most people really think or understand dynamic trends.

1. Old oil fields are declining and thus making any further increase in the annual oil output worldwide almost impossible. Notice I said "annual output" - that's the flow from the "tank", not the capacity of the tank. People seem to be unable to comprehend a flow problem and confuse it with a capacity problem. Lack of further annual output growth mean that prices have to rise to a level to ration new demand , i. e., eliminate any increase in total demand. I think current prices are high enough, given time for adjustment.

2. This fact means the real economy is fine worldwide. Eaton is a big exporter, too.

3. Of course home foreclosures are up - foreclosures are the end of the flow - that word again - starting with subprime & Alt-A loans to speculators. They default quickly since they never really wanted the home in the first place. The loan eventually goes into foreclosure and the home gets sold. As my thinking is that defaults peak this spring, foreclosures must rise through summer. That the dynamics of the flow.

4. Nothing new here. This is the "dirty, little secret" of stock buybacks. Stock buybacks merely aid those wanting to sell a stock, not an investor. Hence stock buybacks are "anti-investor". Management buys back stock when times are good at high prices, then re-sell it when they need more capital . Smart, eh ? NOT! Management should pay down debt instead of buying back stock, and maintain stable dividend levels through downturns.

5. Bear, Stearns was not insolvent, having made a profit in Q1 as just reported. BS died of its own past sins, as the Street decided not to do business swith it anymore. And clearly JPM got a great deal if it can retain the good people. Even if not, the acquisition well under book means a good deal for JPM.

6. Where else can big oil finds be made ? Huge finds have already been made in the Gulf of Mexico. I own RIG and DO for this reason. And CVX was the firm that has lots of those deep water leases and made the finds, also with DVN to a lesser extent. These new finds will take years to produce significantly and the costs are large. Don't expect relief in oil prices from them. These will just limit further price increases in the future.

Yesterday I was disapointed by WB. I think management did a "kitchen sink" quarter and has lowballed projections. And they cut the dividend to force the large Golden West former shareholders to bear the pain as that was where the projected losses were to occur. Clearly management needs some changes. I an holding and bought some more for a trade related to my tax issues. I'll sell my early purchases in 30 days for a short term loss to offset a bit of my large gold & silver profits [28% federal plus 12% state tax] and thus save a lot of money on taxes. Then my long term WB holdings will have low basis and when I eventually sell, I'll have a low tax, long-term gains.

I also sold 1/2 of my DVN since that stock no longer looks cheap and seems a bit extended/parabolic on a weekly chart.

Word of the Day

[hold the flack - I sort of knew the meaning of these, but looked them up to be sure of the exact meaning]

"Phlegmatic" - adjective [$10] pronounced fleg' matik
Phlegmatic means stolidly calm; unexcitable, unemotional
Sentence: Imagine a phlegmatic Bunkerman sitting in front of his crappy Vista PC listening to Blabberg while the panic mongers screech, as he thinks about the "real" news and what the future economic trajectory is most likely to be. Well, that's the ideal.

"Stolid" - adjective [$10]
Stolid means 1. lacking or concealing emotion or animation; 2. not easily excited or moved.
Sentence: Investing the bulk of one's assets using the Krypto Fund strategy permits one to maintain a stolid, thoughtful frame of mind during times of economic stress.

Monday, April 14, 2008

Monday Blues

I finished my taxes yesterday. I had done the numbers a week ago, but filling out the forms is really tedious. I suppose I'm not being original in saying that all Congressmen should be horsewhipped every April 15 for creating this monstrosity. There really is no reason why the tax code is not a simple, cash-basis, revenue collection system. The complexity comes from all the accrual accounting and obscure asset and revenue classes, each with their own forms nd worksheets. Arghhhhhh !

Then the States just have to be different, and can't just collect a percentage of the Federal amount. Arghhhhhhhh^2 !

The result: a 30 page federal return plus more for stock trades on Sch D-1, and a 21 page Massachusetts return, including attachments.

Then I had to adjust my spreadsheet to compute the estimated taxes for 2008. Ugh !

At least it's all over but the mailing (of course via certifed, return receipt requested mail).


I'll be watching and reading the Wachovia news this morning. I have quite a bit of that stock & early reports say they moved up their earnings announcement to this morning and are raising capital via a stock sale. I'll comment more on it later after the actual facts come out.

The GE drop Friday on that crappy earnings report seems overdone, but I'll be patient in adding to my position in September 30 call options. This option play is a trade.

Barron's Intermediate grade bond index fell more last week - another 13 bps. It's still too high at 8.21%, but the trend is good.

The monetary base dropped a bit - it's now up only 1.4% year over year. These new Fed policies might be affecting this, so I'll withhold bashing the Fed. I really do want to see the monetary base and M1 increase a lot more. Both have too little growth, despite the uninformed statements of the inflation-mongers on "printing money".


I guess I'm not surprised Obama knows nothing of the common man, but this quote from him in Iowa sure is telling [from today's online WSJ]: "Sen. Obama has encountered other problems in trying to connect with rural whites. At a campaign stop in Adel, Iowa, he drew cringes when he asked a crowd of farmers: 'Anybody gone into a Whole Foods lately and seen what they charge for arugula?' The upscale, organics supermarket chain doesn't have a single store in Iowa."

Sheesh. What the bleep is arugula, anyway ? The press sure is protecting this guy. If a Republican had said that, it would be front page news and talk for a few weeks. I now think he can't stand up for an entire campaign. Big John McCain is looking better & better.

Words of the Day

Today's are a couple of "moi" words. The French word, "moi" means "me" but today's words are just English words beginning with "moi" and aren't related to the French word "moi".

"Moiety" - noun [$10]
Moiety means 1. a portion or prt or share; 2. a half; 3. either of two basic units of cultural anthropology that make up a tribe of unilateral descent.
Sentence: [from Gen. Sherman's Memoirs, pg 530 re his tactics in the advance to Atlanta] "... that with the one moiety of our army [entrenched] we could hold in check the corresponding wing of the enemy and with the other sweep in flank ..."

"Moil" - noun and verb [$10] archaic
Moil means (verb, intransitive) 1. to toil, slave; drudge; 2. to churn about; (noun) 1. drudgery; toil; 2. turmoil, confusino.
Sentence: (from Goethe, Faust Part I, Great Book vol. 45, pg. 37 said by Margareta/Gretchen)
"Then there were chores or marketing to do,
And the same old thing the whole year through.
With such a moil,
One's spirits are not always of the best;
And yet with our toil
Makes food taste sweeter, so that we are blessed
And grateful for our rest."

Friday, April 11, 2008

GEe, it's Friday !

I'll update this post after the GE earnings come out at 6:30 AM ET. [ **see update below .. ugh ! **] As a diversified multinational industrial company with large businesses in infrastructure and substantial overseas and export components, I expect a good quarter and outlook. The CEO, Jeff Immelt, seems to be doing a fine job and bought outright about $5 million in stock in March. He was quite bullish at a conference in March, too. GE is a large holding in my Alpha Fund and I have a fine profit already.

Stocks rose on higher volume Thursday ... a good recovery after Wednesday's slide. The endless streams of opinion we hear on Babblevision and Blabberg really should be cut back and substituted with facts. But I did hear early this AM on Blabberg that Bill Gross of PIMCO has shifted his bond asset allocation greatly in favor of mortgage securities and has much less cash and Treasuries.

Spring is finally here. This winter was too long and harsh. Where is global warming ?

The rise in world rice prices is interesting. I never traded rice when I was a commodity speculator so don't know much about the fundamentals. But maybe this ditty applies, "how ya gonna keep 'em down on the farm when they've seen Beijing? " That is adaped from the WW I Irving Berlin song about US farmboys having served in France and seen Paris [sung as "Pa-reee"]. As events proved, they did start to prefer city life and opportunities. I'd guess a farmer spending days in rice paddies might think a job in the city is a better life. And so farm labor and actual farm land in those areas of the world where rice is manually cultivated might be suffering a steady decline. This is just a guess. I'll try to read more about this interesting development and write in the future.

PS: GE missed earnings estimates and lowered guidance, due to the large financial sector exposure. Phooey ! Oh well, I thought they had done a better job controlling that - sounds like they got hit in mid-late March. Not selling. I like it LT. I sold 1/3 over 37 on the recent poparoo. My position now is well-sized, not adding. Bears will certainly press again now. More slogging ahead ... ugh ... this is tiring.

PPS: China takeover rumors for CCJ, a long-term Alpha Fund holding. CCJ is the world's largets uranium mine.

P^3S: Revision - if they knock GE down enough, I will re-buy that 1/3 this morning.

P^4S: Btw, this is why one always waits for good dips to buy. And expects beefers to attack hard again, as I did write recently. There is usually an ebb & flow to news that causes volatilty. However, metaphorically this GE news is a surprise pothole under the car. We must watch the road ahead, not the part under the car or the rear view mirror except as it affects the future.

Word of the Day

"Indulciate" - verb, transitive [$1000] rare. Pronounced with a soft "c" as in "dulcify". A variant spelling/pronouciation is "indulcate" with a hard "c" as in "inculcate". I originally saw this interesting word in a letter from George Washington to a niece quoted in the fine book, "All Cloudless Glory", vol. 2.
Indulciate or indulcate means to sweeten in the sense of make agreeable, less painful. This word has a softer meaning than "inculcate" which means to teach or impress upon by emphasis or frequent repetition, but a stronger meaning than merely "suggest".
Sentence: A. [this is George Washinton's usage to his teenaged niece] "... I nevertheless will endeavor to indulcate upon your mind the delicacy and changes of that period [i. e., young womanhood] to which you have arrived under peculiar circumstances [i. e., no living parents]."
He chose that word to be gentle and fatherly to his niece, yet wanted to elevate his concern beyond making a suggestion or passing thought.
B. [original usage of 1628 from OED] "A friendly warre [war] doth indulciate the insuing cloze [peace]." This should ring true, as harsh and brutal war tactics make friendship after the peace quite rare.
C. [new] I won't try to indulciate for readers the GE earnings report aka "put lipstick on a pig".

Thursday, April 10, 2008

Waiting ...

Some interesting items were in this morning's news.

1. The Red Chinese yuan ticked under 7 per $, the first time in many years.
2. The WSJ had an article about container shortages in much of the US as export growth requires large changes in how those big steel boxes are managed in the US.
3. Copper hit $4/oz.
4. Oil demand in the world markets is high, which makes the US pay more for its imports. US consumption is falling slowly as consumers adjust behavior.
5. Costco shows excellent store sales.

None of these facts are consistent with recessions - but they do imply some structural changes in the US to a more balanced economy, viz. balanced between domestic demand and exports. This is good for the US long term. Other nations in the world must adjust conversely, viz, rely less on US demand and more on internal and regional consumer demand.

I made my SEP-IRA contributions to clean up the 2007 amounts and the initial 1/2 for 2008. I really can't complete those until my taxes are almost done so I know reliably how much self-employment income my businesses generate. The majority of the money went to US stocks via the Vanguard Total Stock Market Fund. Some will go into a new brokerage account at Vanguard I'll open within the SEP-IRA plan. I'm doing this to be able to buy gold & silver on the stock market via the GLD and SLV ETFs without taxes. Doing that in my regular brokerage accounts would subject me to the higher 28% taxes on those asset classes even for long term gains. Another reason for doing this is I really don't want to buy so much physical gold & silver again. I want more flexibility. So I will limit my physical gold & silver holdings to core, "survival" amounts.

One can manage taxes quite well with parallel fund investments in IRA-type accounts and regular accounts, while keeping asset classes in balance. I'll write more about this later.

For now I am waiting and looking for a few good stocks to add to my Alpha Fund, which is about 150% long.

PS: DuPont (DD) guides Q1 EPS up. WMT raises Q1 guidance substamtially.
PPS: I gave Mrs. B some gold money to put into her Sky Fund ... she bought some US stocks with it near the close yesterday.

Words of the Day

"Abstentious" - adjective [$10] - this is an "aeiou" word with all five vowels in order.
Abstentious means a person or body who tends toward abstention in acts or habit.
Sentence: Congress seems now to have morphed into an abstentious institution for any decisions other than funding earmarks, aka bribes. The latest efforts by Speaker Pelosi to violate agreements to hold votes on free trade treaties evinces her inherent dishonesty.

"Abstemious" - adjective [$10] - this is also an "aeiou" word.
Abstemious means (of a person, habit, etc.) moderate, not self-indulgent, esp. in eating and drinking.
Sentence: Some persons are unable to lead abstemious lives as they simply must completely abstain and avoid any alcohol as they are unable to control their actions after even small amounts. Self-help organizations can help them be abstentious towards alcohol.

Wednesday, April 9, 2008

A Whatnot Wednesday

"Whatnot" - noun [$10]
Whatnot means 1. a small, trivial, unspecified object; (alt.) an indefinite or trivial thing; 2. a set of light, open shelves for ornaments.
Sentence: Today's blog post is analogous to a collection of verbal whatnots on an Internet whatnot. :-)

First, the market. Stock prices are holding up although considerable bad news appeared. But the "bad news" is all concurrent, coincident bad news and is "priced in" ... or "overpriced in". In other words, the bad news is not "news". Beefers continue to rotate ... aka play ping pong ... among stock groups. They love the miners & energies now. Fins are weak on low volume.

Be patient, buy on good dips only. Earnings season might bring some good buys ... and will bring lots of news.


This blog now seems to be an authoritative, or at least popular, site for words. I did a search for "quodliteral" on Google and the #1 site that came up was ... this blog ! Mirabile Dictu !

I did that search in my quest for a defintion of "quodliteral", which was part of my post of Monday. Quodliteral is not in any dictionary of mine, including the Unabridged Oxford English Dictionary plus supplements, nor in the online site. The Google search brought up only sites where the its vowel sequence was noted. And my Latin idiom dictionary did not contain "quodliteral" either.

Similarly, "duoliteral" was not included in any dictionary of mine, but it was listed on site in their unabridged dioctionary.

"Duoliteral" - adjective [$100]
Duoliteral means consisting of two letters only.
Sentence: The standard postal abbreviations for the States of the US are now duoliteral and upper case, as prior longer, mixed case abbreviations are now obsolete. For example, Massachusetts is MA, not Mass.

During my searches, I found another word with all the standard vowels in reverse order, viz., quodlibetal.

"Quodlibetal" - adjective [$1000] rare [this word is in the OED]
Quodlibetal is a variant of quodlibetical, meaning of the nature, connected or concerned with, a quodlibet (s)

uh ... so you're thinking: "Ok Bunkerman, what's a quodlibet ?"

"Quodlibet" - noun [$10]
Quodlibet means 1a. a theological or philosophical issue presented for formal argument or disputation: hence a scholatic debate, thesis or exercise on a question of this kind (chiefly in University use, esp. philosophy, "to do quodlibets"; 2. (musical) a fanciful combination of several airs; a fantasia, medley.
Sentence: From Erasmus, "Praise of Folly", poking fun at pompous theologians by referencing the Apostles as being "... intellectually quite incapable of grasping a single quodlibet of Scotus."

You are thinking ... "Ok Bunkerman, who is Scotus ?"

From a Google search -
"Blessed John Duns Scotus (1265/66 – 8th November 1308), besides being known as the «Subtle Doctor», is also referred to as the «Marian Doctor». It was he who presented a systematic theology of the Marian privilege of the Immaculate Conception, which the Catholic Church officially proclaimed as a Dogma of Faith in the Apostolic Constitution Ineffabilis Deus of Pope Pius IX (8th December 1854), of which we are this year celebrating the 150th anniversary."

Now, let's see if we can educe a defintion of "quodliteral".

First, it is possible that quodliteral was simply a misspelling of quodlibetal years ago when the an early list of these reverse vowel order words was copied. The Internet and print media contain lots of errors carried on for years by people who do not check original sources.

But let's try anyway. The Latin components of "duoliteral" loosely mean two letters. The Latin component of "quodliteral" loosely mean which letter(s). An Latin-based idiom does not have to be a perfectly literal translation of the Latin.

Here are some "quod" words and phrases that might help when conjoined with the definition of duoliteral and those Latin words.

"Quod vide" is a Latin idiom meaning "which see" in formal writing, often abbreviated "q.v."

"QED" is an abbreviation for "quod erat demonstrandum" which means "which was to be shown or demonstrated".

"QEF" is an abbreviation for "quod erat faciendum" which means "which was to be done".

Therefore, using inductive reasoning, I hereby propose both a definition for "quodliteral" and a modern usage.

"Quodliteral" - adjective [$$$ ???]
Quodliteral means consisting only of letters. [This is my proposed definition ! No other source !]
Sentence: Many modern web site or computer login names are workably quodliteral, but quodliteral passwords can be cracked much more easily than ones including numbers, too.

Golly, such an erudite blog !

Tuesday, April 8, 2008


A tougher market and economy tends to weed out the weak companies and stocks. Poor management and poor strategies can be hidden in strong markets in a strong economy, but when both struggle, the weak pay for their errors.

AA reported earnings yesterday, missing on EPS but beating on revenues. High prices for alumina and aluminum were offset by higher energy price, so management said. Anyone following that stock for a few years knows they serially miss earnings estimates. Management is just poor. Hence no surprise here that AA missed ... again.

AMD to cut 10% of its workforce. This weak and overleveraged company just can't compete with the much stronger INTC.

Greenspan [ aka "Elmer" ] says that house prices might stabilize this year. Gosh, does it take a genius to see that ? And he gets paid for that ? Anyone observing the speed with which buyers scooping up foreclosed properties in many areas can see that prices are clearing. Well, maybe Elmer reads this blog. That's ok, it's free to all. If he can scam that hedge fund to pay him for repeating what he reads here, fine. [joke]

My "opinion" is that the beefer shorts, who have taken short interest to new records again, will find some bad news in the early earnings reports to attack again. So wait for dips to buy good stocks for a long term hold. When the dust clears, they will find themselves greatly overextended and risking serial underperformance, hence beefer oblivion. So the ensuing rally will create a grinding move higher for many months.

This is just my outlook ... "real" facts can change it at anytime.

Words of the Day

"Parecious" - adjective [$100] Botanical
[this is an "aeiou" sequential vowel word - see yesterday's post]
Parecious is a variant of paroicous, meaning (of certain mosses) having the male and female reproductive organs beside or near each other.
Sentence: I really can't come up with a natural usage for "parecious", but in humor, I suppose that the Clintons haven't achieved a parecious joint physical state for decades, due to Bill's adultery or Hillary's ... uh ... that's enough fun.

"Parol" - adjective and noun [$10] a Law term pronounced pa rol' with a long "o" or par' el, first syllable as in the golf term - par.
Parol means (adjective) 1. given orally; 2. (of a document) not given under seal; (noun) an oral declaration.
Sentence: When questioned, Hillary prefers parol answers without oaths so she can lie without risk of perjury.

"Prevaricate" - verb, intransitive [$10] (I knew this one, but it fits for today)
Prevaricate means 1. to speak or act evasively or misleadingly; 2. quibble, equivocate.
Sentence: Both Clintons prevaricate with such skill that any parol response must be transcribed and then subject to exegesis to understand the meaning and possibilities of their statements.

Monday, April 7, 2008

Interesting Words, Etc.

When I ennobled "facetious" as a $10 word, I got some flack, but a friend of mine pointed out that "facetious" has a special property that very few English words have. "Facetious" contains all five vowels of common English - a, e, i, o and u - in the alphabetical order. He also wrote that at least four other words have that property: abstemious, abstentious, adventitious and parecious. I have a good idea about the meaning of "abstentious", but all clearly are $10 words, except "parecious" which is a $100 word at least.

He also wrote at least six English words have all the common vowels in reverse alphabetical order: duoliteral, quodliteral, subcontinental, uncomplimentary, unoriental and unnoticeably. I know the meanings of the last four of those, but for the first two I'll have to check the dictionaries to be certain.

Hmmm ... some of these would be good selections for this week's "Words of the Day".


The big rally last week held. Futures are up this morning as were Asian markets and European markets in early trading.

WaMu got a $5 billion capital infusion. Mining stocks are strong.

Barron's intermediate grade bond index fell by 7 bps to 8.35%, a good sign if it continues. FNMA 30-year fixed rate conventional loan rates fell 21 bps on the week to 5.67%; Freddie Mac's comparable rate fell 18 bps to 5.35%. All this is good news.

For all the screeching, I think the jobs picture is muddled. ADP provides hard numbers. I read that the US jobs number is compiled from forms filled out by human resources departments. So one must ponder why there are inconsistent readings. Or are the diferences statistical measuring errors for changes in very large numbers ? Time will tell.

Holding all stocks and looking for a few more. Alpha Fund is 150% long.

Words of the Day

"Adventitious" - adjective [$10]
Adventitious means 1. acquired by accident, not inherent. 2 (biol.) appearing in an unusual place or in an irregular manner.
Sentence: (A) If it survives for 500 years, the Giant Sequoia tree in Bunkerman's front yard might be seen in the future as an adventitious specimen of Massachusetts arboreal diversity.

"Misprision" - noun [$10] pronounced mis prizh' en, all short vowels.
Misprision is a term of law meaning 1. maladministration of public office; 2. neglect in preventing or reporting a crime.
Sentence: [from Shakespeare's sonnet #87, lines 11-12]
"So thy great gift, upon misprision growing,
Comes home again, on better judgement making."

Another usage comes to mind for misprision, viz. describing the pardons of Bill Clinton in the final days of his presidency.

Friday, April 4, 2008


Another Friday commences after a long week of market swings. Not much has been given up from the big rip up this week, which is interesting as two days of relatively "bad" news brought no intense selling. Since the US jobs number is so often revised substantially, it's hard to conceive that it will be definitive - weakness is expected. As posted in yesterday's comments, the job data is quite erratic as different signs from ADP, Challenger-Grey and the unemployment claims obviates one from educing a defintive trend from the data.

I'm sticking with my "touch & go" economic trajectory ... Battleship Ben is on my side, firing salvos at the bears. About 15 years ago I saw Air Force planes practicing the "touch & go" at the Air Force base in Anchorage, Alaska, in winter. The actual moment of the "touch" is quite exciting. So it is for the economy, too.

Blabberg had that old fool, Soros, on this morning. Ugh ! You can be sure I'll never kiss the butt of some rich, powerful guy just because he once was, or is, rich & successful, no matter what endeavor brought forth his wealth. The words must make sense. So I turned Blabberg off and switched to Babblevision. Perchance I should just hit "mute" ?

I'd be looking hard for a few more good stocks, but my time is taken up with doing my taxes ... ugh ! I do the forms myself using spreadsheets that I've created over the years. Mostly the time is used in making sure that I miss nothing. I use Quicken, so actually getting the annual expenses and income data is rather easy. Still, I file several Schedule C's, am subject to AMT and need many other schedules and worksheets to do the forms correctly and minimize my tax. I slowly plod over the preparation for days :-((

Words of the Day - a trio for comparison

"Converse" - adjective and noun [$ ?]
Converse means (adjective) opposite, contrary, reversed; (noun) 1. a statement formed by another by the transposition of certain words; 2. something that is opposite or contrary.
Sentence: The extreme converse opinion of Bunkerman's "tough & go" economic trajectory is Soros' nouveau Great Depression outlook. Time will tell which, if either, is correct.

"Obverse" - noun and adjective [$10]
Obverse means (noun) 1. the more conspicuous of two possible alternatives, cases or sides: the obverse of this issue; 2. the side of a coin, medal or badge that bears to principal stamp or design: the George Washington silouette is on the obverse of a quarter; (adjective) serving as a counterpoint; 2. facing or turned toward the observer (the obverse side of a statue).
Sentence: (noun) The obverse of the 1 ounce gold American Eagle coin is a classic Lady Liberty holding a torch and olive branch. The reverse contains the two eagles, one flying and the other in the nest.

"Contrapuntal" - adjective (Musical) [$10]
Contrapuntal means of or in counterpoint.
Sentence: Babblevision's standard presentation of an issue with an advocate and then a contrapuntal opponent is so stale and time-wasting; Bunkerman derogates those debates as the "dueling politicians", or "dueling analysts", or "dueling money managers", as approproate.

Thursday, April 3, 2008

Tidbits on a Thrusday

RIM, maker of the BlackBerry, beats estimates for its EPS and revenues and guided earnings and revenues for Q1 up, too. Hmmm ... revenues were up 102% year over year. Uh, that familiar question come to mind.

The ADP and Challenger-Grey jobs numbers were OK, consistent with a mid-cycle slowdown. Today's unemployment claims number will be interesting, too. Anything close to 350,000 is fine. Recent increases were due to the strikes in the auto industry, so we need to pay attention to the details here.

Soros says this is the worst since Great Depression. Sheesh ... is he senile or delusional or just stupid and ignorant ? I know he's a serial America hater. Or maybe he just likes the headlines from the press that he gets from these silly pronouncements that he's made for years. I guess he was on another planet in 1973-5 and 1979-1981. By any objective standard, economic conditions were much worse then than now. What an old fool !

Alitalia might go bankrupt ... uh oh ... I've got business class tickets for Rome for a May vacation for Mrs. B and me. I see Luftansa might take them over. Or Air France. I think I'll be OK as someone will take over those operations and my tickets.

More beefer ping-pong occuring. This AM in Europe, miners are up, fins are down. Yesterday's US markets were mostly beefer ping-pong, too. As I said yesterday in the comments, real buyers show up on dips. So when a move shows buying at higher prices, that's usually beefers trying to get on a momentum trade, even for a few days. We know they are a non-thinking, emotional lot, hence my animal metaphors. Most beefers can't think more than a few days ahead, let alone buy some stocks based on where the prices will be in a year. All they want to do is rip off some gains and collect their fee at the end of the quarter or month.

So don't get "buck fever" and buy on rips up. Wait. Be patient. The beefers will "rotate" soon and sell you some shares at a low price for a long term hold.

Word of the Day

"Epigone" - noun [$10]; also the adjectives, epigonic and epigonous. The "o" is pronounced long, as in "bone".
Epigone means an imitative follower especially an inferior imitation of a creative thinker or artist.
Sentence: Of the 7,000 hedge funds, perhaps 50 managers are truly worth the management fees paid. The remainder are mere epigones. Most hedge funds are provide worthless value for their investors compared to the Krypto Fund style. Their epigonic managers simply sell hope for the rich, and provide good country club chatter on the gold courses.

Wednesday, April 2, 2008

Is That All There Is ?

Spending some time yesterday evening and this morning thinking about the "Why ?" of the huge rally, the refrain of a melancholy, yet popular song of the late 1960s came to mind: "Is That All There Is ?" sung by Peggy Lee, which was a hit in 1969 when I was a youthful high school student.

UBS reports a big writedown, fires its chairman, announces a large rights issue, ... and the stock pops up. The rights issue was underwritten with big current holders indicating they will buy.

LEH sells $4B preferred stock with a huge book of potential buyers unfullfilled.

The US manufacturing ISM rises to a bit over 48 - indicating no followthru to the slowdown - hence no increased economic deceleration. And the absolute number was just a smidge on the contraction side.

Blog readers know that the Fed is actually increasing the monetary base now.

So if one was a beefer bear, seeing an infinite amount of money ready to buy bank and bank stocks at book value, one might ask, "Is that all there is to a crisis ?

Ditto a fearful bull loaded with cash on the sidelines, who must also ask, "Is that all there is to a correction ?"

And on first day of the quarter, as asset allocation manager must think, "Is that all there is a slowdown ?

So the bears started to cover, the timid bulls started buying, and the asset allocators hit the "rebalance" button. The stock market closed at the highs quite strongly, Treasury bond prcies fell considerably as did gold prices.

Here's the refrain of the song:
"Is that all there is, is that all there is ?
If that's all there is my friends, then let's keep dancing.
Let's break out the booze and have a ball.
If that's all there is. "

PS: I remember hearing it on the radio in the basement of my parents's home, as I was doing a chemistry experiment with my home chemistry lab. Memory is so fascinating ... it's odd how almost 40 years later I still have an eidetic memory of that event, as if I was watching it. [For "eidetic", see March 17 "Word of the Day"].

PPS: I sold those LEH calls for a fine one day profit. I had planned to hold them until next quarter's earnings report by LEH, but my polydaemonist fears of the trading gods induce me to accept my quickie gain & sell ... pigs get slaughtered. [See March 10 blog "word of the day" for "polydaemonism"].

Word of the Day

"Idiographic" - adjective [$100] from Greek "idios" meaning personal.
Idiographic is a term from psychology meaning pertaining to or involving the study or explanation of individual cases or events.
Sentence: Today's idiographic blog about the causes of the rally adduced probable human reactions to the news of yesterday.
Compare to "nomothetic" which was the word of the day for March 25, 2008.

Tuesday, April 1, 2008

Spring is Here

I saw a few blossomed crocuses that are always the first sign of Spring here. Finally. They are a few weeks late as the overnight cold temperatures here were consistently about 20F for all March. Good news indeed, a change of weather will be quite welcome as the winter was very long and very cold this year.

A change in the markets would be welcome, too.

Here are the year to date results for my funds:

Krypto Fund: -3.03% ytd, a bit better than the results as of February 29, and hugely superior to the stock markets as a whole. This is the benefit of the massive asset class diversification investment policy of the Krypto Fund and the active rebalancing used. The prior large gold & silver holdings were sold near the highs in March as directed by the re-balancing policy. So this performance is really remarkable and proves the entire strategic investment policy of this fund works under times of great stress.

Alpha Fund: -14.4% ytd, again a bit better than the results as of February 29. This fund is very aggresive and now is 150% long after the partial sales of BAC, JPM and GE on rips. I had doubled down on those in a washout and so got a much lower average price. Hence my current holdings are properly sized to long-term investment and show nice profits. Big losses still extant are in C and WB and a small loss in GOOG.

I started making a few trades in the Alpha Fund after about a year's cessation to get myself over the psychology of wanting action. I'm using options to preserve capital and keep the activities from affecting my stock positions. Don't do this unless you understand options, including the approximate "delta" of the position and how the delta and the option value will change with the underlying stock price. I normally use in-the-money calls with a few months to go to expiration. I size the position based on the total value of the stock optioned, not the actual cash value of the options purchased. This keeps me from buying and risking too much money on these very risky securities. I've been trading options for over 25 years and understand the risks quite well.

So I averaged into a few LEH July calls yesterday. I think the bears are wrong and way too short this fine company. LEH sold $3 billion in a convertible preferred after the close and the issue was greatly oversubscribed. So this should settle the matter of the survival of LEH. I bought the calls when LEH stock was about 90% of book value. In my experience this is a very low price for a quality firm like LEH. Obviously this is a risky speculation. Now the waiting.

Word of the Day

"Chignon" - noun [$10] pronounced shen - yen' with both e's short as "set"
Chignon means a roll or knot of hair worn at the back of the head or nape of the neck.
Sentence: The mask of Sargon the Great of Akkadia [c. 2300 BC] shows that he worn his hair with a chignon.

"Anchorite" - noun [$10]
Anchorite means 1. a hermit; a religious recluse; 2. a person of secluded habits.
Sentence: There is no doubt that Bunkerman is a 21st century anchorite living in his well-defended and well-stocked survival abode. [joke]
Compare to "Coenobite" [US "cenobite"], being a member of a monastic community.