TGIF and Hmmmm ....

Strange news coming out ...

FT: "Japan’s industrial output bounced back 5.2 per cent in April compared with the previous month, a stronger rise than analysts expected "

And "India’s economy grew a better-than-expected 5.8 per cent in the first three months of 2009 "

Copper prices are rising decisively over $2.00/lb.

I suppose the doomsters can find something bad in that data. But in my humble opinion, up is up. Why overthink this ? Last fall was a panic caused by beefer Viking raiders, everyone got scared and stopped buying or ordering everything, so the economy fell off the cliff. But that can only last so long. Eventually people start living again.

It's like 1974 when the Arab oil embargo hit. Panic ... gas lines ... stocks fall 50% ... economy nosedives and bounces along the bottom for six months ... then life continues ... stocks rise 100% over the next year. Very long term, some troubling things exist that might hurt GROWTH later, but until the economy gets back to where it was, that resistance won't be felt.

Obama Fund is well positioned IF this scenario plays out. I chose many stocks in sectors that performed excellently after the 1974 air-pocket. Time will tell.

Scotch Whisky

Scotch drinkers: check out this site - http://www.royalmilewhiskies.com/default.asp

And here's a fine glass to best enjoy your fine Scotch whisky: http://www.royalmilewhiskies.com/product.asp?pf_id=0100000001790

I drink my finest Scotch whiskies in a glass like this. I prefer the finest Scotches with just a small ice cube, which I let partly melt as I smell the aromas and enjoy the visual pleasures of the fine Scotch adhering to the glass as I tip and lightly swirl and sniff it. Then I sip it ... the partly melted ice puts it at the perfect temperature, about 50F and the bit of water releases the flavor and gives the Scotch better mouth-feel as the alcohol burn is reduced just enough.

I've visited the Royal Mile Whiskies store in Edinburgh. It's just a little shop, but has super selections and the staff was really helpful. I bought six bottles [each costing over $400]and had them shipped directly to home. This works OK if you limit it to four or six bottles, as they said they've never had a problem with customs.

[By the way, there is a store in London, too. I walked past it on my visit there on the way to the British Museum.]

So what if you want a good Scotch here in the US, without buying it from Scotland? Here are my tested recommendations.

Finest: Johnny Walker Blue Label. About $200 per bottle or so, depending where you buy it. This is a blend of superb single malts and has the mouth-feel and richness of a fine cognac.

Medium: Glenlivet French Oak Finish. About $40 per bottle, depending on the store and exchange rate. It's a single malt with a better, richer taste that the usual Glenlivit which is quite good.

Modest: Teacher's Highland Cream. I think one can get a 1.5 liter bottler for about $25 or so from memory. This Scotch whisky has the flavors of the fine Cardhu malts used in Johnny Walker whiskies, but is much cheaper. Best value.

By the way, just so you don't appear as a heathen or Philistine, it's spelled Scotch whisky, but conversely it's Irish whiskey. Only scotch is properly deemed a "whisky" - all the rest are "whiskey". We do have to let the Scottish people and their spirits have that respect- they invented it and we are grateful to them for that. Bourbon is an American originated whiskey made with over 50% corn. And Rye is originally a term used for whiskey made with over 50% rye grain, but is also slang for the many "American" blended whiskies like Seagram's, etc.

Word of the Day

"Liminal" - adjective [$10]
Liminal means 1.a. of or relating to a transitional or initial stage; 1.b. marginal, insignificant; 2. occupying a position on or on both sides of, a boundary or threshold.
Sentence: Quite a lot of recent economic data has liminal qualities portending new cycle of economic growth is commencing. It's not certain, but when is anything certain about economies or stocks ?

Le Mot du Jour

"Canard" - noun, masculine
Canard means 1. (Culinary) duck, (oiseau, male) drake; 2. (journal) paper, *rag; 3. (= fausse note) faire un ~ to hit a false note; 4. (terme d'affection) mon (petit) ~ my pet. Several idioms such as "Il fait un froid du canard" meaning "It's freezing cold.", but more literally, "It's cold as a duck":
La Phrase: Il fait un froid du canard aujourd'hui- 50F. Qu'est-ce qui s'est passé à réchauffement de la planète ?
Sentence: It's freezing cold today - 50F. What happened to global warming?

More consolidation

The bears and dip buyers are still playing a hard game of piing pong. That's good for traders, but investors hate being bounced around. Watching the pros play is better. I am still waiting for better time or price to add to Obama Fund. Perhaps I have some (temporary ?) immunity now for buck fever.

Doing nothing.

Timmy's bad asset purchase plan is collapsing. What a surprise! It was too complex by far. It they want to buy, just start bidding.

Word of the Day

"Bastinado" - verb and noun [$10]; a Mencken word
Bastinado means (noun) punishment by beating with a stick the soles of the feet; (verb, transitive) punish a person in this way (-oes, -oes). [from Spanish bastonada from bastón - baton].
Sentence: Comrade Obama's method of restructuring a company seems to be to bastinado the bondholders to extract money for his labor union pals. Hmmm ... extracting wealth from the bourgeoisie for the proletariat ? Where and under what system was that a standard operating procedure ? The Soviet Union.

Le Mot Du Jour

"Avoir du mal" - an expression of the common verb, "avoir", which is conjugated in it.
Avoir du mal means to have difficulty with or (+ à faire ) to have trouble doing something.
La Phrase: [from Le Monde] La Chine a du mal à côntroler son allié nord-coréen. Hmmm. Veut-il le côntroler vraiment?
Sentence: China has trouble controlling its ally North Korea. Hmmmm. Does it truly want to control it?

Rally & Consolidate

The S&P 500 chart shows a consolidation pattern in the range of last fall's long, ragged trading range. Its 200 day moving average (DMA) is falling slowly to the level of the rising 50 DMA. The consolidation pattern is centered between the two moving average curves. So it's a battle of time and price.


Yesterday shorts seems willing to press futures lower before the opening, but buyers stepped in early and then when the big uptick in consumer confidence hit the newswires, the market popped up strongly and continued strongly all day long, closing near the highs. Most of that was probably shorts covering, but some must have been buyers.

Obama Fund is long enough, but would go longer at a good time or price, viz a bear raid knocking the prices to the 50 DMA.

Word of the Day

"Tosh" - noun [$10]; a Mencken word
Tosh means 1. rubbish, nonsense; 2. (slang) a casual form of address, especially to unknown persons. Mencken usage: " ... who writes such thumping tosh ..."
Sentence: Perhaps I should start calling CNBC the Tosh Network, of Toshvision. I watched a segment last Friday on short selling, which was such butt-kissing, one sided pro-short selling tosh.

Le Mot du Jour

"Pleuvoir" - verb
Pleuvoir means to rain.
La Phrase: Il pleut ici maintenant.
Sentence: It's raining here now.

Back in the Saddle

I see the pop up in stocks last Monday got hammered down. The S&P 500 chart now look like it wants to make an intermediate term A-B-C correction pattern bottoming around the 50 DMA at 850, maybe in a week ot two. Fine. I'll wait until that point or time to add to the longs in Obama Fund to get it to 150% long from the current level of about 125% long.

Fido Fund is still at 100% long. I'm noodling over adding there.

Music

From comments here and conversations with some readers, I think that the "Good Music Theorem" needs some examples. I'm preparing a top 20 list of my favorite songs, and am even making them into a playlist on my Mac. For today, I'll provide two.

First is "Will You Still Be Mine?", a super song performed in 1941 by Connie Haines singing with the Tommy Dorsey band. The writers were professional songwriters Matt Dennis and Tom Adair. I think the lyrics are some of the best ever done. Here is a link on YouTube -> http://www.youtube.com/watch?v=t1mBU-GpFGE

Second is a favorite from the Depression years. "Happy Days Are Here Again" was a huge hit and become the campaign song of FDR's 1932 campaign for President. The song is the unofficial theme song for the Democratic party now. The lyrics are fun and the music is bouncy. Here is a YouTube production using a recording of Ben Levin and his orchestra -> http://www.youtube.com/watch?v=gqsT4xnKZPg This song and video are awarded the honor of being the official song and music video of the Obama Fund. If you watch to the end, you'll see Barry with a fine s***-eating grin. Such a fine vulgar Americanism, that word, s***-eating. I'm sure it makes pompous grammarians and anglomaniacs cringe.

Words

I'm now reading "The American Language" by H. L. Mencken, in which he lays out the development and opposition to the creation of a true American language, as distinguished from English. For now, American creation of compound words and expressions is one element of its divergence from standard English. I completed a pushy survey over the weekend for the Commerce department for my businesses. It asked the language in which I did business. "American" was not one of the choices, so I checked "Other". Yes, I am contumacious.

Word of the Day

"Carboy" - noun [$10]; a Mencken word
Carboy means a large globular bottle usually protected by a frame, for containing especially liquids.
Sentence: Perhaps GM bondholders should order a carboy of vodka to drown their sorrows as Comrade Obama guts their rights and steals their value in his piratical "reorganization" of that firm with his union gang buddies.

Le Mot du Jour

"Étonnant, e" - adjective
Étonnant means surprisingly, amazing, astonishing.
La Phrase: Il sera étonnant si quelqu'un prêterait au GM à l'avenir.
Sentence: It will be astonishing if anyone lends to GM in the future.

Distrust Authority

I just finished a superb book - a collection of writings of H. L. Mencken titled, "The Impossible H. L. Mencken" edited by Marion Elizabeth Rodgers. This is without doubt one of the best books I've read in years, combining insight, humor and lots of $10 words. Here's the last selection which view coincides with my own.

*** excerpt begins ***

Quod est veritas? I know the answer no more than Pilate did. But this, at least, I have observed in forty-five years: that there are men who search for it, whatever it is, wherever it may lie, patiently, honestly, with due humility, and that there are other men who battle endlessly to put it down, even though they don't know what it is. To the first class belong the scientists, the experimenters, the men of curiosity. To the second belong the politicians, bishops, professors, mullahs, tin-pot messiahs, frauds and exploiters of all sorts --- in brief, the men of authority.

My inclination, I suspect, makes me lean heavily in favor of the former. I am, as the phrase is, prejudiced in their favor. They fall, now and then, into grievous errors, but in their fall there is still something creditable, something that takes away all shame. What fetches them is the common weakness of humanity, imperfectly made by a God whose humor has been greatly underestimated. They have, at least, the virtue of fairness. And that of courage. Unhorsed, they pick themselves up and try again. They do not call for the police.

In the other camp I find no such virtues. All I find there is a vast enmity to the free functioning of the spirit of man. There may be, for all I know, some truth there, but it is truth made into whips, rolled into bitter pills. It is truth that has somehow lost all dignity, all beauty, all eloquence and charm. More often, it is not truth at all, but simply folly bedizened*. Whatever it is, it is guarded by the common enemies of mankind: theologians, lawyers, policemen, men armed with books, guns, clubs, goads, ropes.

I find myself out of sympathy with such men, I shall keep challenging them until the last galoot's** ashore.

*** end of excerpt ***

That was written September 7, 1925 and published in The Baltimore Evening Sun. And it is without doubt as applicable today as then.

Word of the Day

"Bedizen" - verb, transitive [$10] poetic, a Mencken word.
Bedizen means to deck out gaudily. From be + obsolete 'dizen' meaning 'deck out'.
Sentence: see * above.

Bonus word

"Galoot" - noun, colloquial [$10] a Mencken word
Galoot means a person, especially a strange or clumsy one. [19th century nautical slang]
Sentence: see ** above.

Stock by Stock

After pondering how to start trading Obama Fund positions a bit more actively, I've decided to now shift to stock by stock tactics. The Fund has about 50 stocks in small positions with different sizes ranging from about 5% to 1%. I made the first few moves on macro reasoning, buying or adding to 10 and 20 at a time. Now I think I need to shift tactics.

I looked over all 50 charts yesterday and really liked what I saw: good patterns and many reasonable pullbacks to support. One needs to add at support, not extension, since when the beefers and traders bail out - usually all at once - the pain can be intense. Why have a large position on such risky, exposed ground ?

The review also showed that I missed some good buys in March, particularly in some restaurant stocks. Darn ...

An erudite commentor suggested a tech stock for Fido Fund: RIMM. That is intriguing as that firm "owns" the corporate portable communication market. I don't have one, being a convinced Luddite except for my youth movement to carry an iPhone. But lots of people love their Blackberry. Thinking ...

This means I have to work harder ... ugh.

Also, I am still contemplating buying some natural gas in my newly re-charged commodities account. I'm looking over contract specifications and thinking. The forward curve is quite steep in the fall. Huge amounts - near record - are in storage. Industrial demand is needed, but when will it pick up ? And I mean pick up, not just stop going down. Still thinking ...

I will be traveling to my hometown in Ohio all next week. That means no new posts unless I can convince Mrs. B to make an appearance as a guest blogger. She might want to write about the dogs, or ...

Word of the Day

"Invidious" - adjective [$10]; this is a word one hears often but might not know the precise meaning.
Invidious means (of an action, conduct, attitude) likely to excite resentment or indignation against a person responsible, especially by real or seeming injustice.
Sentence: Slashing the dealer networks might be a good, but invidious business move for Chrysler and GM as thousands of significant local businesses will be hurt across the country.

Le Mot du Jour

"Tabler" - verb, transitive indirect; regular -er conjugation; takes preposition "sur"
Tabler sur means to count on, to bank on.
La Phrase: (copied from Le Figaro) Le gouvernement table désormais sur un repli de 3% pour l'année 2009.
Sentence: The government [France] from now on counts on a pullback of 3% for the year 2009 [in the economy].

Shopping Trip

The double voodoo spell I cast last week is working, producing a reasonable pullback from the extended stock prices of last week. The S&P 500 has a broad base of support in the 850-870 area so buyers on the sidelines might step up their IF news does not turn to the worse. If one glosses over the Obama V move down & up in a few weeks around March 1, the market is really in a huge, long term base since last fall. Small stocks & banks have led. Why ?

That's easy. Those companies were being priced for BK. We now now most of those BKs will not occur as the junk bond market is open again. Companies with cash flow can refinance.

Bears are being bolder now, making strident calls for more doom. Some of these calls are quite stupid. Roubini writes that the Chinese yuan will become a "reserve" currency sooner than expected. I guess he doesn't read this blog. I destroyed that prospect a couple weeks ago in my series on "World Reserve Currency".

I will spend some time today going over charts and news on my Obama Fund stocks. I plan to slowly add to some of those positions to raise the fund's leverage back to 150% long. My thinking is that by mid-summer, the recession will be obviously ending and investors will start pricing in much better 2010 earnings prospects. I might cull some non-performers, too.

No rush, though. This pullback might run a few more days. Option expiration is Friday and the traders like to play games then.

Word of the Day

"Salubrious" - adjective [$10]
Salubrious means favorable to or promoting health or well-being.
Sentence: Like a couple glasses of red wine for the adult physiology, intermittent modest pullbacks are quite salubrious for a bull market. And again similarly, both excessive wine consumption and large pullbacks are bad.

Le Mot du Jour

"Voilà" - an exclamation; and its complement, "Voici"
Voilà means this/that/those/there/here is/are. Voici means expressly this/these/here is/are. As you can see, one uses voici when one expressly wants to indicate something nearby or close in some way. Voilà can be used for both if no distinction is needed.
La Phrase: Voilà le repli des valeurs que j'attendais.
Sentence: This is the pullback of stock prices that I was waiting for.