Hylomorphism

Listening to my course on CDs, "Great Ideas in Philosophy" published and sold by The Teaching Company [see http://www.teach12.com/ ], I learned an interesting concept and word: the noun, hylomorphism, and its related adjective, hylomorphic. In simple terms, hylomorphism is a theory that all physical objects are composed of matter and form. Aristotle developed this theory in his book De Anima and a few other books. I'm not going into his usage as that involves concepts of the body and soul.

Let's see how modern elementary particles fit this theory .. and stock prices !

Many have mass, or more precisely, rest mass. And they have other fundamental quantum numbers such as spin and charge. An electron has a rest mass and spin 1/2. A W and Z particle has rest mass and spin 1. A photon has no rest mass and spin 1. A quark has rest mass, spin 1/2 and charge -1/3 or +2/3. And some particles have "colors" and "flavors". A graviton (not discovered directly yet) has no rest mass and spin 2.

I suppose we could generalize "matter" to be "energy" as the special theory of relativity does by making energy the fourth component of a fundamental four dimensional vector with the three directions of momentum as the other three dimensions. But there really is a fundamental difference between rest mass and energy - that's why it's called, "rest mass".

So hylomorphism might partly right and partly wrong, or needs generalization. Not all fundamental particles have rest mass. But all fundamental particles have some fundamental properties one could characterize as "form", such as spin. I think latter day philosophers might have expected classical hylomorphism to fail on the other leg, namely that some physical objects would not have "form", but all would have "matter".

Hmmm ... can one call light a "physical object" ? Or a graviton ? We can observe light and feel gravity. But are we simply using the photon or graviton to sense a physical object that does have matter? I have to think more about that concept.

Hmmm ... what is a "stock price" ? It's the price of exchange of shares. So a "stock price" has no matter, but has form, like a photon. A stock price has two numbers, the price and the number of shares, and a time - when the transaction occurred. So it's three dimensional. The prices, share #s and times can be ordered but are not unique. At a single time, several exchanges can occur at different prices or the same price. This is analogous to a boson with integral spin - they can be stacked on top of each other while fermions with half integral spin cannot occupy the same "space". Interesting ... I'll think more about this.

Stocks:
Nothing is new. Wait for a confirmation day, or just buy dips of good stocks.

PS: I just realized my "beefer" theory of the stock market is a teleological theory - one that focusses on the purpose or design behind the actions :-)) I guess it sounds more intellectual now ;-)

PPS: I suppose if one includes the security identification number ["CUSIP" in the US], there are three numbers and a time - a four vector - asscociated with a stock price.

Whither Now ?

Hither, thither, whither, hence, thence, whence, - all are useful words now neglected as the literacy level of the US continues its decline from TV and video game induced zombie-ism.

Not here !

Whither combines the concept of "where" with the motion of going. Thus, "whither will stock prices trade now ?"

Tuesday was Day 1 of a rally attempt. IBD seems to have missed that, as they cited low volume, but a higher volume day is not required for a "Day 1". They missed the beginning of a great rally last summer for a few weeks, too. So now a confirmation 1% rise in a major index with higher volume day on Day 4 or later is needed. Friday is options expiration day and will be Day 4. Let's watch.

The PPI and CPI data will be important. Low numbers in the "comfort zone" will help give the Fed room to cut if needed.

PS: PPI number was fine - the month over month core was zero.

PPS: GE guides 2007 revenues up.

P^3S: Good retail sales numbers - uh ... I guess the consumer is normal.

P^4S: I am very pleased that Bernanke in his speech is really emphasizing the importance of the Fed's DUAL mandate: maximize employment and price stability. Too many eisegetes ignore the former requirement.

P^5S: I just bought a new top line iMac. Doing my bit to support the economy :-)

What's New ?

Nothing.

Japan growth was OK.

More "subprime" panic mongering.

There was some panic selling in former high fliers yesterday as all the beefers try to bail at the same time to save their years. Sigh ...

I might re-buy EDU if it goes lower. I sold it in October when I had a LT gain as I was lightening up. I really like that stock long term. I'll put a bid around its 200 DMA in the mid-50s. I'm in no hurry.

Be patient. Buy dips of good stocks and groups. Take your time in building a position.

I take Sky & Krypto to sheep herding today midday.

PS: WMT good earnings and revs up 8.8% year over year. Uh ... where is the pain in lower income brackets ? NFIB says no small business credit crunch. Sigh ....

Monday in the Bunker

Not much is going on.

Yesterday was Veterans Day. I sent some large donations to the USO, Operation Home Front and the "Fisher House" in Dayton, Ohio. Those are fine organizations that do a lot for servicemen and their families.

Asia was down big, but futures are up and Europe is up in early trading.

Barron's reported some large bearish sentiment numbers plus increased short interest. With so much money in beefer trading funds and no uptick rule, I think the shorts can have their evil way with Ms. Market at will. I noticed in the summer how large short interest eventually overwhelmed the markets. I think that might have happened again in early October. With trillions are their disposal, I suppose this is no surprise. We'll have to live with the increased volatility, unfortunately, since the SEC is in the pockets of the Street and the beefers.

What to do? Be even more patient in buying long term positions. I think we can expect beefer rotations and bear raids to create great buy points. So one should spread out buys even more and really wait for a bear raid to load up.

Dubai makes a huge aircraft purchase. Hmmm no slowdown there.

That big oil find in Brazil in the deep water shows that one should stick to deep water drillers for oil service buys. Long term, that's where the oil is and they have the expertise to get it out. I have RIG, DO, GSF and NE; RIG and GSF are merging soon, by the way.

These oil finds might replace lost production from declining fields over the years - they do take many years to get to production.

For US oil companies with serious deep water efforts in the Gulf of Mexico, I have CVX and DVN. Both have made large finds and have many leases.

The super SIV seems to have legs and is going forward. I would like to buy more C if I can get a good price. Plus, I want more BAC, WB and JPM. But I'm not hurry and will not buy unless I get a really good price as I already have a lot. Calling my original plans for these 100%, I recently doubled my plans to go to 200% and now have about 150%. So I have a good bit more that I want to buy.

Vista Sucks !!!

Look, if you have any choice, don't buy a computer with Vista. It totally sucks !

I get endless updates. The computer does those "waiting" signs [the little circle spinning] for long period when I'm trying to do something.

It crashes a lot.

Shutting down or restarts can take many minutes - even an hour.

You have to run a virus checker and firewall anyway - so you get those headaches, too.

Of course Dell loads all sorts of crap onto the computer and some doesn't work.

The Windows Photo Gallery is OK, but one has to search to find where it puts the photos when I download them from my camera.

I'm never going to buy a Windows computer again.

It's 2007 - PCs have been around for 25 years. One should just be able to turn it on and have it work, like a car. Why do we have to be a techie or know a lot to use them? That's crap.

I'm going to buy a new Mac - the biggest and best - and if I like it buy a couple more.

I'll keep the Vista as a reminder of why I shift to Macs.

I think Mac will eventually get 25% of the PC market. [Btw, I am long AAPL.]

The iPhone and iPods work great with the Macs.

Why would anyone own a Windows computer unless one was require to because of work ?

Back

I got back to the Bunker safely. I see more shelling in the markets. Sigh ....

Bought more WB, C, JPM. These are long term investments.

In the Belly of the Beast

I'm feeling a bit vulnerable here in the belly of the Beast aka Manhattan - no defenses or personal protection devices except my boxing and self-defense skills. I expected to see droves of zombies walking around with vacant stares wearing scars of subprime defaults and other doom and gloom. Instead, the streets are crammed with shoppers - many from overseas, yes. And the New York Athletic Club where I stay is still having many parties and events.

Gosh, maybe the world is not ending.

The Apple store on Fifth Avenue was packed at 3:30 PM - long, but organized checkout lines. Those stores are so well run - plenty of people around to ask for help and they are very knowledgeable.

I heard on Babblevision - golly that is so depressing nowadays with their endless fear and crisis mongering - that Moody's was downgrading some SIVs. That's all they said. So reading the WSJ this morning I spied a vital fact. "Moody's said it wasn't taking the ratings actions because of quality of the assets themselves. Instead, Moody's said the SIVs problems stemmed from the drop in the market value of the assets the SIVs own as investors shun those investments amid the credit crunch."

So the underlying assets are not showing sufficient defaults to impair expectations of full and timely recovery of interest and principal even under today's known stressed environment. That just sums up the situation - it's fear, not reality, causing the considerable drop in "market value" of these highly rated securities. Paraphrasing Clara Peller of "Where's the Beef" fame,

Where are the defaults?

I've worked with Moody's, S&P and Fitch in the past and I have a lot of respect for their intellectual and analytic abilities. They are not perfect and make errors. But AAA securities have defaulted in the past, viz, I remember Texaco defaulting due to the Pennzoil judgement. Nowadays, everyone is bemoaning that securities originally rated BBB- will default. Sheesh, statistically quite a few of those are EXPECTED to default over their lifetime.

So if unexpected waves of defaults were showing up in the trustee reports of structured securities - they are highlighted in those, by the way - it would be known and quickly reflected in ratings IF they were beyond the expected stressed levels for the ratings. That is particularly true now when so much attention is focused on these.

I heard this AM that Costco same stores sales were up 9%. Where's the consumer stress?

Where's the recession?

Phooey! This is Rich Man's Panic, round 3 or 4 - I'm losing count. This is getting boring.