Change In The White House? Maybe Not

I have to admit that I am one of those voters who welcomes the idea of "change" or a new face with the likelihood of a woman or African-American entering the White House. However, listening to these two candidates, Senators Barack Obama and Hillary Clinton, sometimes reminds me of how silly and unprepared they can be for their debates.

Mr. Obama rarely comes off as if he fully knows the subject matter and tries very hard to convince the voters that he does. Mrs. Clinton, in one debate, opened with, "I am against illegal guns", as if the other candidates are not, sometimes gives me the impression that she feels entitled to be President because of what her husband has done for the country years ago.

I haven't posted on this blog for sometime and with the election upon us, there is much to talk about..so I hope to come back here soon and often..

If Barry Bonds Cheated, Then He Is A True American!

Sometimes when you step away from posting, like anything else (fitness training), it is hard - very hard - to get back to it. Well, posting is different, because it should not require much effort depending the nature of your blog etc.

I thought that I would start posting again, but as usual, things come up and before too long weeks go by without posting.

I am always finding humor in Americans, especially the blatant double-standard attitude we have towards things. Now most white Americans - and they won't admit to it - simply have a "problem" with minorities "coming to our country...and taking everything over..." It does not matter that minorities are fueling the economy, and they are usually on the receiving end of a poor business deal.

The one double-standard that is near-humorous to me is the complaints that there would be no controversy, no problem with Barry Bonds breaking Hank Aaron's home run record, if he did not use steroids, although he was never convicted of any performance enhancing drugs.

I read the book, Game Of Shadows, and came away from it with the conclusion that Mr. Bonds is an intelligent, arrogant, insecure person. I think that there is more than enough evidence to support the claim that he used steroids.

Personally, I think he used performance enchancing drugs.

But what I find interesting is that many Americans - mostly white - will go through their days, their lives cheating and committing some of the most unethical acts in their place of work and in public, and simply do not see those acts as wrong. Many non-minorities are destined to get career enhancements which allow them to skate up the corporate ladder, cheating and getting rid of their "competitors" in whatever way necessary. And yet, these are the same degenerates who have this problem with Barry Bonds.

If we say that the standard is no cheating, and that Bonds should not get the title or that there should be this asterisk next to his name, then would the same principle apply to you?

I suspect that there is more underneath this frustration many non-minorities are having, because he succeeded with cheating and his success has become a public event; and, moreover, he succeeded in a sport, where people of his color were denied access for years.

Americans cheat all day and every day.

Barry Bonds is American, and found a way to cheat. He probably would have had the same success - maybe - without performance enhancing drugs, but the point is that Americans who have a problem with Bonds' success in this context, ought to re-evaluate their morals and ethics.

If you say that he does not deserve to win the home run title, because "he cheated", then ask yourself this question: if everything you did unethically was layed out before the public, and any successes you achieved as a result of your acts, were still enjoyed, would you be willing to make full restitution?

I doubt it.

Looking For My "Cosmological Constant"

When Einstein created his theory of relativity, which led to his theory of gravity, he had no idea (initially) that this theory would create a scenario whereby the universe would collapse. Therefore, to avoid this scenario, Einstein came up with the "cosmological constant" a sort of anti-gravity thing. He even said it was an awful attempt to keep the universe static etc.

Sometimes our creative genius leads us down roads or into areas that we do not envision, where there is not much we can do. Over the past 6-7 months, I have learned quit a bit about what life's experiences can do to you and how our normal biochemical processes can change in a matter of moments and then, you are left with a theory or odds. But in your case, there is no "cosmological constant" - there is no equalizer. This is one of those universal realities I am facing mid-way through 2007.

I am posting on another blog, Human Rescue, but decided to pick up on this one until things get going again on Human Rescue. That is a joint venture, which is basically the origins of a book we are working on. So I am looking forward to resuming that project, along with BlueShift.

It has been 7 months since I posted on BlueShift, my personal blog.

And yet, this post alone, will mark a journey of sorts perhaps a new beginning of something, as it relates to me. For so much has happened; is happening, that it will take several posts to cover them, to recall them.

Some things have not changed. I am still unchanged about my views on American society and the sheer lunatic behavior. Indeed, there has been much evidence to support my conviction here.

My wife is flying out of town next week. With the new terrorists threats, we are naturally concerned.

An Idiot's Limit Order

I have a mini-library.

Many of the books in that library deal with portfolio theory and economics etc.

One book, a relatively new one, is written by Charles D. Ellis. It's called Winning The Loser's Game.

One thing that Ellis argues is that the individual investor will always struggle for profit, because commissions alone, place them in a hole. In short, before one can realize a profit on a trade, they must make up the commission - the commission to get in and commission to get out of a position.

The thing that I encounter daily with meeting or talking to individual investors is not so much the refusal to learn about basic trading, but the lunacy involved in their reasoning behind their trades. I talked to one guy who put in a limit order to buy a stock ABOVE the current market price!!! Gee, I wonder if he thought he was a big time trader. Who wants to buy a stock ABOVE the current market price? An idiot, that's who.

But then I remember reading something Ellis wrote in his book. He suggested that well over half of the trading in the market is done by institutions, so the likelihood of the idiot buying or selling to a big institutional trader is very high. And guess what? If the idiot is loaded, then the big traders will be waiting. And that is one reason why WallStreet hands out generous bonuses every year.

I would recommend that the idiots merely save their trading, put it on pause for a few years and simply write a check to WallStreet at the end of the year; put it in a gift box with a nice red bow and send it off to New York!

One thing I do know; everyone did not get 16% on their money last year.

Moody Women & Yield Inversions

I am really looking forward to another (much needed) holiday, although I do not believe our country has fully arrived at a point where we can understand what MLK was trying to communicate. But then again, MLK was lightyears ahead of most people.

Today, the wife is cranky (non-PMS) and this may be a sign for me to get lost. I have plans to go to the gym and may head to the bookstore later. Yesterday she said that I always warn her about my mood changes etc. and that she appreciates it. Whatever.

Late last night I completed an investment article for an international publication on fatherhood. I was surprised that I was able to write it without many revisions. The wife helped edit the article which is always better than doing it yourself.

The 16% that the Dow gave last year is like what the casino gives. But you must remember that the house has the edge, and unless you know what you are doing, the house will take it all back. The bottomline is that investors should rebalance.

The bond market is telling us that things are going to be a little different in 2007. You can see this just by looking at the 2 year Treasury versus the 10 year and 30 year. The inversion has been around for several months and cannot be ignored. Yield inversions, if you recall, tend to precede recessions. And from what I have been reading the evidence pointing towards a downturn in mid to late 2007 is compelling.

Fools Chasing Returns

I wrote a comment in a financial forum the other day about the perils of chasing last year's returns (or top performing asset class). A few days later, I had a conversation with a gentleman about how well the equity markets performed in 2006 and his reply was, "I guess I better reallocate my portfolio to indexes...aye?"

Then, today there was an article in a local paper that pointed out how profitable New Jersey casinos were last year and I thought, gee, the transfer of wealth continues; if it aint happening in the stock market, then it sure will happen in the casino!

Winning With The Dow & Avoiding Morons

Imagine this: 16% on your money. That's right! 16%.

The market gave some of us a nice Christmas gift.

That is the return you could have enjoyed if you own the stocks - or better yet, bought an ETF! - that are in the Dow Jones Index. For the year (2006), the "Dow" as we like to call it, turned in a handsome return of 16%.

To be sure, if you own stocks in general, you probably could not have lost, unless you were a fool and traded in and out of stocks at precisely the wrong time, thereby creating commissions and buying high, and then selling low. (typically, day trading is a loser's game)

I have met a ton of losers this year. Take for example, the guy who was getting over 5% on his cash who decided that it was better to sell out of that and buy Ford which has a dividend yield of oh, 0.00% the last time I checked. Because he is not paying me for advice, I was not going to save him 500bps (5.00%). In the end, by next year, he will be behind inflation. Moron.

Then there was the amateurish degenerate who popped up on a finance forum trying to impress everyone claiming that he makes hundreds of dollars a week simply "buying low" and "selling high" and that this simple strategy has worked "everytime". I told him that if his strategy worked everytime then he ought to be running money for Goldman Sachs and Jay-Z and typing his comments from his yacht. My point was that he was lying and that buying low and selling high is a moot point. The challenge is finding the exit, which can be different for everyone depending on your objective among other things.

I am not going to torture myself with recalling all of the jackasses that I have encountered over the past year who have made "the big mistake" as it relates to investment decisions, but alas, their names are legion. Moreover, I am sure that wherever I end up New Year's Eve, I will meet someone who, once they learn what I do, will ask the inevitable stupid cocktail question, "what do you think about the Market?" What I think doesn't matter, because if I gave them sound advice they would not take it; if I told them what I thought, they would argue or merely want to give their opinion. But more to the point, my advice is not free, so whether I am sipping a martini or cognac, no piece of trash with a paltry $100k sitting in a money market account is going to pluck my brain for free advice just because we are wearing tuxedos!

The scoreboard reads: 16% - 0% guess what side most investors are on?