Tuesday, April 25, 2017

Sports Uber Alles

There is no bigger example of how sports rules American life than the NFL draft going on this week in Philadelphia.
For several weeks, traffic has been diverted around the site near the iconic Art Museum, and it will be diverted for several more weeks while they set-up and clean-up the massive structures that are being erected to commemorate the religion that is professional football.

So, what's going on?  Well - a professional football league (the National Football League) is drawing names in a progressive order, to declare which college players will be eligible to play for them in the upcoming season.  Sounds important, right?  Oh - no?  Well, it's pretty important, if you stop to look at what's going on in the city.

Streets around the Art Museum have been blocked off for a couple of weeks, and more are being blocked every day.  We didn't do this much when the Pope came here.  These are young adults playing football, fer-Christ-sakes. Supposedly, the largest stage ever built in North America is being built for ... what?  22-year-old's running up to hear their name called to become part of the National Football League.  That sounds important, right?

Meanwhile, other 22-year-old's are graduating with high honors at colleges across America, and they are fortunate to have a cake and a dinner with their family.  I know, some of them are getting expensive cars and gifts ... from their families ... but there is no national league of (oh, I don't know) accountants or scientists giving them a big stage to come up and get a hug from the head of the Big Accountants of America or the National Scientific American Association (assuming either of those exist) upon their successful graduation with something close to a 4.0 grade-point-average.

Well, wait ... these kids on Thursday ... what? Ran really fast and jumped higher than their fellow student --- um, student athletes -- so it's only fitting that we shut-down an entire city for a month to reward them with a hug from the head of their employer and a two-hour stint on national television.

That seems fair, right?

After all, who will contribute more to society?  A guy who spends four years running an oblong object up and down a grass field for our entertainment or an honor student who discovers a cure for some disease or declaring some new scientific principle?  It's a no-brainer, right?

Yes, the term no-brainer is a particular problem with me, but I digress.

The glorification of sports in society is the problem.  It is fed by the saturation of media and their obsession with people who can jump high or run fast over those who can think or react.  It's not that it isn't important, it's that it isn't that important - or as important as we make it.  
Think about it -  three days, and countless hours of network television time over a professional sports league picking players to work for them.

Get a grip, America.

Saturday, April 22, 2017

The Big Week Ahead

There is a big week ahead in your portfolio-thingy.  Over in France, they are having an election on Sunday.  Yes, Sunday.  The French are goofy.  I suppose they expect everyone to vote, or something? One wonders what would have happened if we had a full turnout last November, instead of electing someone with 49% of the vote with barely 60% turnout.  But, I digress.

Our stock market will react - however it will - to the results on Sunday night.  Sadly, there is nothing you or I can do about it, so we are forced to grimace and bear it.  But, these are the facts:
  • Like the Brexit vote several months ago, the markets may tank, and you will have an opportunity to jump in and buy quality stocks at a discount. Or ...
  • Like last November, the market will react positively, and you will have an opportunity to hold onto whatever you own and watch it increase in value over ... nothing, really.  That's the beauty of the stock market.
Meanwhile, many big companies are reporting earnings on Tuesday.  Among them, Caterpillar, DuPont, CocaCola, Eli Lilly, McDonald's, 3M, and Chipotle.  They are all big market movers, and one suspects that any or all of them will have the power to move the general market one way or another.
McDonald's has had a big run.  Whether or not you support their ideals, the stock is up about 20% year-to-date, so it doesn't matter if you do not care for burgers and fries, because somebody does.  It's difficult to bet against this behemoth, and I'd say that you shouldn't either.

Coca-Cola has been floundering, and they are struggling to re-discover themselves in the face of increased taxes on sugary soft drinks and the backlash on that.  I'd guess that they will have found a way around that, and the stock will continue its upward trend.

Chipotle has been struggling to find its footing after their health scares almost two years ago.  The public's memory is short, and this quarter should be the one that says whether or not they have forgotten.  As for me, I've never eaten at one, so I don't know what you expect.

On Wednesday, Twitter reports.  Stockholders are anxious, and waiting for management to figure out a way to monetize something that almost everybody uses but does not pay for. Something tells me that our long, free ride is coming to an end.  They have to find some way to monetize the content, and it's a matter of time before it starts costing us money to stay in.

On Thursday, Southwest Airlines reports.  They might have something to say about the debacle at United, but there is probably enough positive stuff to talk about without talking about that nonsense.  More importantly, Under Armor, Amazon, Microsoft, Domino's, and Google (Alphabet) report.  Hey - can somebody get together and separate this stuff into different days? My attention span is suffering.

Amazon is a giant force in retail, but I think they might miss earnings. It's about time, don't you think?  This may present a buying opportunity for those of you who are looking for one.
As much as I love Baltimore-based Under Armor and its products, the stock is over-valued, and I think there may still be a better opportunity to own it.  Listen to what they say, because I think it may be a soft quarter and push the stock price back closer to the low-teens where it will be buyable.
Domino's is technology disguised as pizza.  Yeah, they sell pizza, but its an emoji away from your home. other firms are struggling to catch up.  I'd guess that their market dominance will continue for a while.  It's just pizza, but there is little competition.  Your local shop cannot keep up.

On Friday, General Motors reports.  This is the first of the big auto-makers.  Ford's earnings will come on the following Friday.  The best guess is that the auto stocks have about ten percent left to drop, which is odd, since Ford already trades at an obscenely low multiple.  Go figure.  It just proves that it doesn't mean that making a great product translates into stock appreciation.
Exxon-Mobil and Chevron also report on Friday.  Oil is in trouble, in spite of President Trump [cough] and his pro-drill stance.  It's still a supply and demand market, and oil prices may remain low until the summer.  You can buy these, but make sure to pick your spots.

Overall, this is a big week coming up.  If you have money put aside, several big names might go on sale either because of the French election or some misstep on earnings or ... some big brokerage house wanting to drive the price down by reading something into the earnings report.  It's up to you.

As for me, I'm sticking with the buy-buy-buy mantra.  It all evens-out in the end.  If you stick with good companies, your patience will be rewarded.

Tuesday, April 18, 2017

So, What Now?

OK, so I'm no Warren Buffett.  I'm not even Jimmy Buffett, but I do like Chinese buffets - so, I have that going for me - which is nice.  However, I do keep up with things, and I have opinions, which is why I do this.  But I digress.

It's earnings season - again. Seems like it comes around every three months - because it does.  It's junk food for market geeks like me, and I enjoy hearing the reports, especially when they don't involve stocks that I own or markets that I follow.  So, what's going on?

Today, Goldman Sachs (a.k.a. Golden Slacks or ticker symbol GS) reported a less than stellar quarter, and predictably the stock got hammered, to the tune of a 4.7% loss. Since the Dow Jones is a weighted average, their loss was the market's loss, and the DJ Index took a 113-point hit.  The pessimist could look at it as a clobbering.  The optimist can look at it as a buying opportunity.  I say, wait three days and allow the big institutions to sell-out of the stock before you jump in, if you're inclined to jump in.  As for me, I'm inclined to stay on the sidelines, because the banks are going to struggle, and the banks like GS who depend on market conditions to thrive will struggle even more.  Keep your money in your pocket.  Why?

Because Trump hasn't gotten anything done that he promised.  The bank stocks jumped after November 8, 2016 in the anticipation of some reform or other that he had promised.  Meanwhile, all we have so far are a lot of Executive Orders, and no real laws or changes in the tax code, which is what the banks were counting on.  And, the Federal Reserve has merely promised two or three more rate hikes, but until we see it, we have yet to believe it.

Visa (V) reports on April 19, and Bank of America (BAC) reported so-so earnings last week. MasterCard (MA) reports on the 26th - so watch the skies.

If a bank that collects 22% interest and pays out 1% can't make money, what hope is there?  Exactly.  These next two weeks will tell us a lot about what the economy will give investors over the rest of the year.  The meager quarter of a percent interest hikes that will (or may) come will do something, but I wonder if the excitement over "the bank stocks" has played itself out?

I suspect that the rest of the banks' earnings for this quarter will be less than stellar, and it appears that "the market" is looking for any excuse to drive it down.  Perhaps the best strategy at this stage is to keep money on the sidelines, and wait for what I anticipate, which is a big correction - a.k.a. DUMP to the downside, which should provide long-term investors with that great buying opportunity.  You can switch-on the big time machine and go back to November 2016 to grab some of these great companies that will be on sale.

Retail?  No.  There is a paradigm shift going on that is driving big retail either (a) out the door or (b) scrambling to try to figure out how to compete with Amazon and other online retailers who are kicking their butts now. Walmart might be able to beat them, but only by sheer size, and the idea that consumers want to touch stuff and get it at a lower price. The Home Depot is another good choice, since they sell things that Amazon cannot, which is where the safety is. CarMax, McDonald's, and stand-alone stores that can't touch Amazon's giant market share.  Make your own choices.

Technology?  Maybe.  You have to pick your spots.  Facebook appears to be fully valued, and even with their competitive edge on Snapchat and Twitter, they are trading so far above their fair value that they are "priced for perfection," which is difficult to execute.  Be careful. And at that, are they even "Technology," or are they just media plays?  To me, technology is Micron (MU) Intel (INTC) and Nvidia (NVDA) which is where the money is - microchips and the stuff that runs them.  Amazon? It's retail, and you may think it's expensive until it continues to go up, in which case you'd wish you bought it a year ago. Such is life.

Utilities? Maybe.  Rising interest rates will put pressure on utility stocks, whose saving grace is their dividend yield.  Once rates rise to the 2% range, utilities will be seen as too risky when investors can get a guaranteed 2% without breathing hard.

Gold?  It goes up and down (no kidding) but inevitably, rises with the threat of inflation.  As I have said here, the president's "Hire American, Buy American" theme will drive prices up, and those who support this mantra will be forced to pay for it.  The safe haven is gold, and maybe Municipal Bonds. Those areas of the investing spectrum appreciate when there is spending on infrastructure and inflation.  Those things, you can depend on - it says here.

Everywhere else?  It's a gamble, and you don't like to gamble, do you?  OK if you do - here are a few that I have found ON MY OWN - so, as they say, buyer beware.  Go get 'em:

Rocket Fuel (symbol FUEL) They provide data to marketers to anticipate where users are going to shop.  It's called "predictive marketing," and they just entered into a partnership with IBM to provide information to their users.  They are already working with BirdsEye, Bridgestone, Toshiba, and Buick.  It's invasive, but it's the future.

Sirius Satellite Radio (symbol SIRI) If you know anyone who has a new car, they have Sirius XM satellite radio.  The stock rose 20% when they announced the renewal of Howard Stern's contract, but there is so much more to it than that. Net income has risen 20% over the past year, and the stock has more room to run from here, as users realize the value of the services Sirius offers.

Del Taco Restaurants (symbol TACO) The second-largest Mexican restaurant chain in the United States has been under pressure lately, as a few independent law firms have accused management of inflating earnings.  That's usually bad news, but the stock has rebounded from it, which tells me that the claims are specious.  Do your own research, but for me, I continue to hold this stock.  They have announced expansion plans into Georgia, and it's a matter of time before the company gets out of the Southwest and becomes as common a name as Taco Bell. I remember when Best Buy was a limited retailer, too.

Two pure Speculative Stocks:  Limelight Networks (LLNW) and Highpower International (HPJ):
Limelight provides cloud services and content delivery services to companies worldwide. It is looking to report its first break-even quarter on April 24.  If that happens, and they have something positive to say about their future, it's the place you want to be.
Highpower is a Chinese company that manufactures batteries.  The stock is up over 100% since February, and they just signed an agreement with DJI, which manufactures drones.  So, I suspect something other than pure battery power is going on here.  If you're like me, every f**king thing you own runs on batteries, and companies that make the things should be able to make money. Go figure.

Anyway - be fruitful and multiply.  Do your homework.

Friday, April 14, 2017

Where We Wind Up

I don't have enough time or space to opine on why we are who we are or why we are born where we are.  Let's just accept that as a quirk of fate and move on.  After all, who among us knows why we were born of our parents and why we were not born somewhere or someplace else?  How did I wind up here and not in Botswana or Japan?  Why am I a caucasian American and not a slave in 1820s America? If you have a clue, let me know.  There is a comments section at the bottom.

For now though, let's say that none of us knows why we are here or what we are supposed to be doing. That's fair enough, eh?  If this is too deep for you, then just move on to the next Dilbert cartoon in your feed and allow me to work on this by myself.

Many of us work long and hard trying to figure out where we are going in "the next life," without trying to figure out why we are in this life.  I guess we accept it as a matter of fact and move on.  Well, I for one cannot do that.  I ask questions and for the most part, I get no answers.

Where are the answers? I don't know, and none of us know.  All I'm doing here is trying to get you to ask the questions.  The answers are mostly opinions, or acceptance of some reality that you have bought into.  Why am I here? Because I am.  That's not an answer.  If like me, you cannot accept "because it's there" as an answer, you are left with the larger question.  I don't have the space here to expound on it.

"Why am I here?" is the biggest question we can ask.  I don't know why I came across this.  It's probably along the same lines as the "Big Bang Theory" folks who envision the Universe being created some sort of instantaneous event. OK then, who created the creation? How did the creator become the creator?  These are the kinds of things that keep me awake at night.

We are consumed with "Who Made That?" because we can develop an idea about who invented the electric guitar, the telephone, or the microwave oven.  Those are all people who were already here.  OK then, how did we get here, and what force created us and WHO CREATED THAT FORCE?

I'm going to sleep now. Talk amongst yourselves.

Wednesday, April 12, 2017

The Mighty Thor

He is strong.  Stronger than you or I.  Certainly stronger than I.

He has battled gingivitis, which prompted all of his teeth (save one lower) to be removed, and restrict him to a life of canned food.
He battled high cholesterol, which caused him to have pancreatitis, which put him in the hospital for three days.  After which, he struggled to eat for two weeks, forcing me to find something that he could stomach until he returned to his version of normal.

The ultrasounds that were done during his illness told us that he had smaller than normal kidneys, and the prognosis was negative.  Cats like him didn't survive much past the age of seven.  So, we knew - for whatever good that did us.  Good for him, I guess.

The deterioration was slow.  The numbers decreased as he started eating special kidney diet food and I gave him IV fluids.  Inevitably, the disease would catch up with him, and by his mortality he would succumb.  It was so slow that I didn't realize it myself until a couple of weeks ago, when he stopped eating the special kidney food.  I blamed myself for not being more devoted to giving him his IV fluids, but I wondered if that was the cause or merely my guilt? He's my boy.

And then, he started vomiting.  Last week.  Vomiting up ... nothing ... just a white bubbly fluid.  The kind of thing that makes one realize, "Wait ... what?"

A quick call to the vet, and Thor was on the table.  His weight had dropped a pound (something else I had noticed) and his bloodwork numbers were off the charts - in a bad way.  What was within Stage 3 of kidney failure was now well outside of Stage 4 in less than eight months.  And yes, there are only four stages.  The kind of numbers that, if you had a lottery ticket, would make you a millionaire for life.  Only this lottery, you don't want to win.

I got the call on Tuesday.  The call I suspected but didn't want.  That Thor's behavior was excusable due to his extreme sickness.  His smaller-than-normal kidneys were failing, and it was just a matter of time (a short time) before he had to give-in to an illness that affects 4 out of 5 cats.  There are some extreme measures that could be taken, but none that could extend his life beyond the next 4 to 6 months. The end is inevitable.

Which leads me to think:  Couldn't a big pharmaceutical company like Eli Lilly, Merck, or Pfizer come up with a cure for a disease that affect 4 out of 5 cats?  It seems like a BAZILLION dollar idea, right?  I suppose not.  At least not in time for my Thor. But I digress.

Here we have my Thor, lying on the carpet in his version of agony, with me scrambling to find something for him to eat.  The verdict that came was Meow Mix which, while not on his diet, I figured was within tolerance of a cat about to become ashes.  After all, he has less than a month, so why not make it as happy as possible?  Take the kids to McDonald's.

As it is, he is sitting in the living room (you call that living?) apart from me, while he usually sits with me, wherever I am.  It's a "cat thing" that they don't seem to want to disappoint us by being  less than their best around us.  It translates to us, as I do not want to be less than myself among you.  Thor and I are kindred spirits.  I am struggling to live without him. Nuts, right?

He is on a path.  It's a short path, and I do not know how long it is - but I will live it with him - because he as lived so much with me.  He has been my best friend through some of my worst days.  His nose has been at my front door every day.  His body has lied next to mine every night, and he will be next to me on the day when I finally have to say 'goodbye' to my friend and companion.

Your Next Move

Thursday marks the unofficial (official?) beginning of "Earnings Season."  My second favorite other than the start of baseball season.  Only in this case, you have to be wary of where your money is.  With baseball season, all you have to worry about is where your car is parked.

The banks will lead off.  Among others, JP Morgan and Citibank.  The biggies.  During the last big rally - after Trump was elected (you remember) - the banks led the way because investors thought that they would be the force once his administration got healthcare reform and lowered corporate income taxes - and the Fed raised interest rates.  Well ...

We see how that has gone.  Trump is nearly into his first 100 days and ... nothing. has. happened.  Oh,  unless you count launching missiles at North Korea.  Now, you have something.

Once the banks start reporting, it's either "run for the hills" or "hold the line," since bank stocks control a large portion of the S&P 500 - which is probably where most of your retirement fund is invested.

You will know by noontime on Thursday.  Know now that the "Trump Market" is over.  He couldn't get health care reform passed, and that means that tax reform is on delay, too.  That's something that he failed to tell us during his campaign.

He was only interested in winning. He wasn't interested in telling us the truth.  For instance...

Gold prices would continue to go up as inflation risk increased and Trump himself said that the dollar was overvalued. You could read it here, if you scroll back.

Since he couldn't get anywhere with his domestic agenda, he has leaned on having meetings with corporate executives at the White House.  What that proves, I have no idea - other than making Americans think that his agenda has more to do with making America great than it does with making him and his ancestors wealthy.

Launching rockets against Libya has more to do with his decreasing public opinion ratings than actually supporting an agenda other than making himself popular.  That's the kind of thing that presidents do when they have no other recourse.

So --- bottom line --- watch the bank earnings this week. If they don't keep up with expectations (which is the viewpoint here) then you need to find alternative investments.  May I suggest....

Municipal bonds.
High-yield corporate bonds.
Emerging market funds.
Gold and precious metals.

That's it.

Tuesday, March 28, 2017

Mining the Depths

Ryan Howard is still out of work.  If President Trump (just threw up in my mouth) wants to create jobs, why can't he make a new baseball team for Ryan to join?  He has quietly settled into obscurity.

In other news, President Trump (drying out now) has signed another one of his quaint Executive Orders that loosens the restrictions on coal that President Obama instituted.  He (that will not be named) claims that it will "save jobs." That's always his excuse for junk like this -  saving jobs.  Meanwhile, we are not in rampant unemployment, and the jobs he is "saving" are low-income, black lung sorts of things that somehow he supports.
I fail to see how being a Republican makes one opposed to clean energy and preserving our home for the millions of children they are producing.  "Dying industries will come roaring back to life," he says.  How does he explain why they are "dying industries?"  Sometimes, it's best to let dying things die - like he wants to do to The Affordable Care Act.

I suppose it's OK to let some dying things die, but not OK for others?  Perhaps Donald can get Howard a job in one of his resurrected coal mines? 

Hey - it's honest work - even though it eventually kills our planet.  But, that's a problem for a different generation.

Whenever our government runs out of ways to tax us, they turn to previously shunned ideas.  Casino gambling, legalized marijuana, dirty energy, lotteries - find one.  Fifty years ago, nobody wanted to support it. Now that we have eliminated even higher taxes ...

SIDE NOTE:  New Jersey officially has the highest property taxes and auto insurance in the nation. Is it no wonder I want to get out of here as soon as possible?  Are you listening, Maryland and Alabama?

But I digress.  His Trumpness says we need jobs.  That's his Mantra for any stupid idea he comes up with -- "Save American Jobs." It's the same Mantra that local governments come up with when they pass legislation that they would have opposed before they ran out of ways to come up with money.

The answer is never "let's find a new path" or "can we cut something."  Invariably, they regress to some previously horrible idea that they can lean on to either (a) curry favor with an out-of-favor voting bloc or (b) appease a small but vocal group of voters.
Hey - who doesn't like to throw money at lotteries or keep Uncle Bobby alive in the coal mine for another ten years?  It doesn't matter, because they won't be alive to see the end anyway.  It's all about their term of office and what bullshit they leave their successors trying to fix.  Then, it becomes their fault.

Meanwhile, the Earth spins (however wobbly) on its axis, and they deny that people have not affected the climate or the fact (FACT) that the Earth is warming and places that were once Glacier National Park are now becoming something besides a Glacier at a National Park.  But, that's just science, and we have to say that it's not really like that because there is politics involved.

The same politics that created controversy over out health care (HEALTH CARE) and makes people believe that the two-party system is to blame for their lot in life.  In fact, it's the politics that is the problem.  Should our health be a political issue?  (I'll answer that) No.

The reality (if I can reduce it to that) is that our health care and our ecological future have become subjects of political struggle.  Sadly.  We deserve better from our elected representatives.

Perhaps it's our fault for electing them - or their fault for forgetting that they are our representatives?

There is still time to decide.

Thursday, March 2, 2017


For the record (if there is one) I don't have a lot of money.  What I do have is working as hard as possible so that I can have money later. That's called "putting your money to work for you."  Besides paying bills and doing what I refer to as "living," I invest as much as I can, to the extent of what I call "Saving Myself Broke." I don't take vacations or buy a lot of extravagant things.  The most expensive thing I do is buy prescription food for Thor.  He seems to appreciate it.

Anyway ... Our stock market made a major thrust forward yesterday, and it seemed that the time was ripe to sell a stock that I had held for a while but seemed stalled in its own growth - Activision/Blizzard ATVI.  I profited from the sale, and like all my sales, I immediately began to think, "What's next?"  Even at my advanced age, I'm still in growth-stock mode.

I figure on living at least another 30 years, and if you think about how much the landscape has changed in the last 30 years, there is no reason to be in bonds (boring) or cash (no interest) so my focus is still on growth stocks, and nothing is growing faster than any Internet-based business (Amazon, Facebook, Netflix & Google) or companies that provide services for them or the companies that make the chips that power the stuff.

One such company came public today - commonly known as Snapchat - the parent company SNAP began trading today.  Coincidentally, I had some cash on hand. Normally, I don't invest in things like this.  However, I channeled my inner George Costanza and decided to go with "The Opposite," and take a shot.

The problem came with the offering and how I was to go about getting any. From all accounts, the offering was twelve-times over-subscribed, which meant that the shares that were offered had 12 times as many buyers as they had shares available.  I had heard that only institutional (Mutual Funds and banks) buyers would have a shot at it.  Nevertheless, I proceeded.  Analysts on CNBC said that the stock would begin trading about 2 hours after the opening bell, and that the range would be between $23.50 and $24.00 a share - well above the IPO pricing of $17.

It's common for IPOs to begin trading above their offering price.  Once the institutional buyers get their $17 shares, they need to go back to the market to fill the rest of their orders.  That drives up the price to what I am, which is a "retail investor."  I am the smallest of the small, so I thought that my chances to get in were slim and none.  Nevertheless ... I placed an order in my IRA for 100 shares at $24.  For IPOs, one has to make a "Limit Order," specifying a price.

Going by what CNBC had said, I placed my order at $24.  I felt like I had purchased a lottery ticket - and felt like I had the same chance as winning.  After all, what shot does a small-timer like me have to get in on the biggest IPO since Alibaba went public in 2014? A good chance, as it turns out.  I got my shares about a half hour after the order.  It was a big rush, and since I don't have sex, I can say that the feeling was better than sex.  At the end of the day, the stock finished the day at $24.48, which is a small victory for small investors.  It held onto its initial offering price.

Now, onto the risk. It trades at 35-times sales (almost twice what Facebook did in its IPO) which is expensive, and to say the company hasn't made any money yet is an understatement.  When Facebook went public, it was a more mature company.  The hope here is that the money that SNAP raised from their IPO will be put toward building a user base and making it into what they say it is - a "Camera Company."  Time will tell, of course.

Most analysts have placed "Sell" ratings on SNAP and assigned price targets between $10 and $17.  There's no revenue growth, users are declining, and it's an overpriced stock.  Fuck them, I say.  They probably said the same things about Facebook and I know they said the same things about Netflix. I don't know what the future holds for SNAP.

If I did, I wouldn't be working for a living.  What I can say is that nobody ever succeeded without taking a chance.  This seems to be the ultimate chance.  The question I asked myself was, "If you could risk $2,400 and potentially make twice that, or lose it all, what would you do?"

The answer I gave myself was, "I'd risk it."  I felt like the confluence of available cash and the prospect of investing in a true growth company don't come along often, and I needed to take this chance. Either it works out, and my retirement is easier or - it doesn't work out and my retirement is as difficult as I envision it to be.

Either way, I win.

Friday, February 24, 2017

Stock Market [A]musings

As I get closer to retirement, I'm re-focusing on investing and paying closer attention to where my money is going.  I suppose it's the equivalent of last-minute Christmas shopping.  Looking at the calendar and realizing I have two weeks to make something out of myself.  In this case, it's more like 3 to 5 years - but still.

We are at the tail-end of earnings season. Granted, it's not as exciting as the start of baseball season, but for geeks like me, it's pretty close.  Brick-and-mortal retail is getting slaughtered.  JC Penny is closing stores, reporting horrible same-store sales, and their stock has been falling like a lead balloon. Even when I was a youngster, the stores were kind of crappy.  I remember, in the 1990s they changed their focus to attire, and put lots of clothing on sale.  I had a store credit card, and I ran it up bigly buying pants, shirts, and all the stuff that young men makes them think they are well-dressed.  You see where that got me - and where it got them.  They are still struggling, although now it's against the likes of Amazon. They are closing stores and laying-off workers.  That was a surprise to many who thought they had turned a corner.  Me - I'm still struggling, but it's against the likes of better men. Alas.

This coming week, there are some interesting earnings reports coming:
ETSY reports on the 28th.  If the "Stay at Home Economy" is in full flight, they should be doing well.  Granted, the web site is difficult to navigate, and if you don't know exactly what you are looking for, browsing is exhausting. STAY (Extended Stay) also reports.  They are the opposite of the stay-at-home gang.  Let's see how many travelers are willing to venture out of their house and have someplace to stay that is like home.  I'm guessing not many.

Best Buy (BBY) reports on March 1.  My guess is that the Stay-at-Homers will give BBY shareholders something to crow about.  They sell all the junk that make staying at home exciting and fulfilling.  If BBY isn't making money at it, nobody can.  I can't imagine going to Amazon to buy a television that I haven't seen in person.

Also, on the 1st, Lowe's (LOW) reports.  On the heels of The Home Depot's bust-out quarter, let's see how their closest competitor fares.  There is a Lowe's within 2 miles of every Home Depot, so their report may help us figure out which of the two consumers prefer. My thoughts are with HD.

On March 2, Budweiser (BUD) reports. I think their beer is horrible, but their marketing is second to none.  It's probably all about bar sales and sporting events. It's cheap to make and expensive to buy, and any industry that relies on drunks to spend money has my vote. Witness STZ (Contellation Brands). Boston Beer's (SAM) bad quarter might be a harbinger for BUD. They are polar opposites in the beer world, but still selling to similar markets.

Kroger (KR) and Costco (COST) might buck the trend of retail/supermarkets having a horrible time on March 2.  They are bigger than the average bear, and the market bears might have an issue with their quarters.  Don't bet against them.  My bet would be on Costco.

A tiny company I'm interested in is BREW (Craft Brew Alliance) reporting on the 27th.  They are part of the stay-at-home gang, although in a do-it-yourself manner.  The stock trades at 340-times earnings, so anything other than a perfect quarter may present a buying opportunity for adventurous investors.

So, as they say, "Keep your eye on the sky," and watch out for bears.  They are big and scary, but once you get past the growl and fur, it's all downhill.
Keep your eye on the ball and keep investing.

Tuesday, February 7, 2017

On the Record

Between watching a marathon of "The Mary Tyler Moore Show" and talking to a friend about old vinyl albums - the thoughts occurred to me about what it was like buying records in the 1970s versus what it's like now.  Suffice it to say, it's one Hell of a lot different now. Let's travel back to the early-to-mid 1970s.  Places like EJ Korvette's, Record Museum, and Franklin Music sold vinyl albums (we called them records) and 45's.

We used to subscribe to magazines like Creem and Circus to get updates on new albums and concert tours.  In other news, we used to stand in line for concert tickets at 9:00am on Saturday mornings - for "Dance Concerts" - shows where you didn't get an assigned seat. $5.50 for a show.  It was first-come, first-served, and it was the kind of nonsense that led to The Who stampede in Cincinnati that eventually brought an end to "Dance Concerts," but I digress.

It was exciting to find a new record, sit in the Korvette's parking lot and open it - read the lyrics before you heard the record - and go through it, song by song, and turn the record over (by hand) and hear new music that wasn't on the Internet, YouTube, Twitter, or some other media site besides the speakers we had in our bedrooms. It was a huge thrill to find a new 45 that had a "picture sleeve," or a new "double-album" (two records) or one that opened so that we could see photos or had a sleeve that contained lyrics.

I sat outside the Korvette's store staring at Yes' "Fragile" album.  The artwork of Roger Dean was nothing I had seen before. He went on to become an album-cover legend. We'll never see that kind again. Our magazines would tell us when records were being released, and we would pester local record stores until they finally got the damned thing in stock.  The magazines were a month old, and the releases were often older, but not always so.

One such incident was particularly interesting. In April of 1972, John Lennon released a single titled "Woman is the Nigger of the World."  We knew it before the record stores knew.  It was on the heels of "Happy Xmas" (of which I have the green vinyl single) and we were excited to hear what was new from John.  I called record stores asking, by title, if they had the song. Frustrated and probably figuring it was some sort of crank call, I was hung-up on more times than I got an answer.  A few days later I had the record.

In September, Yes released "Close to the Edge."  I knew it, but my local Franklin Music store did not. I showed up on the release date, and asked for it.  The clerk had to go into the box that the albums came in and cut it open for me. Quite the precocious 15-year-old was I.

We would go to EJ Korvette's to buy records.  Every week, they would run an ad with a label that was on sale. It was special when Atlantic would go on sale - since that was Led Zeppelin and Yes; or Warner Brothers, since that was Black Sabbath, Deep Purple, and Zappa.  We used to beg (literally) for $4 so we could buy an album that was on sale for $3.43 (plus tax) and we'd go to the sale rack and pick out something - "Led Zeppelin IV" Black Sabbath "Volume IV" or "Chicago III" - whatever Roman numeral we could find - for cheap.  If we had a couple of bucks in our pocket, we could find a few 69-cent singles to take home, too.

Nowadays, it isn't so.  Mostly, I hear about new music by accident.  Either some YouTube video or something I stumbled across on satellite radio.  Either way, it's not as exciting as waiting for a magazine, listening to the radio, and running to the record store to find something that made us feel like Christopher Columbus.  Discovering new music was a high.

You kids have it too easy.

Thursday, February 2, 2017

Thinking About Stuff

Today is Groundhog Day. I don't know where it came from - and I don't care. Embracing this stupid tradition only makes us look like a bunch of superstitious boobs.  I'm sorry if I'm not "down with it," or whatever the kids say nowadays.  I have no time or energy to devote to superstition or stupid traditions.  The idea that a rodent (or anything, for that matter) seeing his shadow or not determines the weather for the next month and a half is as ridiculous an idea as has been devised. The problem is that, sometimes we get so engrained in something stupid that it's impossible to let it go.

 BeyoncĂ© has more black people in her than President Trump has in his Cabinet. His Supreme Court nominee is yet another middle-aged white man.  Our government is full of them.  It's no wonder that we can't accomplish anything for the lower class and minorities - we have none of them in government or anyone who understands what it's like to live from paycheck-to-paycheck, pay bills, or struggle to get along.

The only stress in their lives is whether or not they are going to be re-elected.  Stress for real people is what happens to them if they don't have a job next month.  We don't have book deals, lecture money, or trust funds to draw upon.  It's the grand disconnect that separates us from ... them.

 It's Super Bowl weekend. Or, as marketing would have us believe - The Big Game weekend.  They can't say Super Bowl if they're selling us something.  The grand hypocracy is that the only time they can use the term "Super Bowl" is if they have paid for it.  Otherwise, they have to say The Big Game, as if we don't know that they mean Super Bowl.  It's like when people say "frigging" instead of "fucking," or "the n-word" instead of "nigger."  We all know what it means, and we say it to ourselves in our heads.  Only in the grand hypocracy of thought does it make a difference to those on the other side.  Get a grip, folks.

 I've been writing about our stock market lately.  It's a hobby - an interest - and I'm somewhat invested.  I'm hearing about "Trump Stocks" and stocks that are "Not Trump Stocks," as though our President dictates what companies earn and how they do business.  That's what he has set out to do in his first month, but I suspect that at some point, companies will say, "Fuck you," and continue to do business as they have.  After all, it's all dependent upon his wall and his proposed corporate tax cuts.  Those haven't happened yet, and I'd suspect that it's as much talk as anything.  If you listen to him, you can hear the non-specific terms that he speaks in.  He's big on telling us how great he wants things to be, but low on specifics as to how he will do it.  It remains to be seen what the Republicans will do with our health care.

They have been given the ball, and now it's time to run with it.  My guess is that it's going to be a touchback. The market is up a great deal since the election.  If Donald cannot come through on his promises and live up to his rhetoric, it will all come crashing down around us, and his supporters will have to bear the burden of his efforts. It's a gamble.  The stock market is a futures market - it's only as good as what is coming.  If what is coming doesn't come, well ... you know the answer.  Americans are putting their faith in a man who has declared bankruptcy a few times, built casinos that went out of business, bought the Trump Plaza Hotel for $400 million and had it repossessed, bought a $29 million yacht that was repossessed, started Trump Airlines and never made a profit, and has been married a few times with children all over the joint.

Godspeed, America.

Wednesday, January 25, 2017

Dow 20k

For investors and people who love numbers, today was a big day.  The Dow Jones Industrial Average crossed over the 20,000 mark.  Is it a big deal? Well, yes and no.  What it should do is make people pay attention to the power of compounding and how investing in stocks is the best way to build wealth over their lifetime.

For some perspective, the Dow reached 10,000 in October of 2009. So, in roughly 17 years your money has doubled. That is just the average.  If you are a good stock-picker, your investment in The Home Depot would have gained about 400%, and your investment in Goldman-Sachs would have gained roughly 300%.  And, let's not mention Amazon, Google, Facebook, and Netflix.  They are not members of the Dow 30, but have gained roughly that amount in the same time period.  What I'm telling you is:  Get your money out of your cell phone bill, cable company, or your ridiculous car payment and build your future.  That's free advice.

When I was 25, the best thing I could think of was US Savings Bonds, which could be bought independently or though a payroll savings plan.  We tried to convince our employer to hook us up, but to no avail.  At the time, they were paying roughly 8% interest, which seemed like a big deal.  By contrast, savings bonds today are paying less than the rate of inflation.

In my 30s, buying a stock or mutual fund meant getting on the phone, speaking to a person, and spending about 15 minutes requesting to buy a hundred shares of Ford Motor Company.  Those days, happily, are gone.

Nowadays, apps like Acorns or Stash can enable you to invest as little as five dollars in Exchange Traded Funds (ETF) which are "market baskets" of stocks in similar sectors.  All it requires is a checking account and an app on your cell phone. Clickety-click - you've just bought a half share of the S&P 500, a Municipal Bond ETF, or another sector of your liking.  The sign-up and purchase takes less time than it takes to put gasoline in your car.  Ask me how.  I'm happy to help.

So, yes; Dow 20,000 is just a number, but it should provide you with some perspective.  It's a big number, and it's a number that should make you think about a few things:
A). How easy it is to invest in stocks today
B). How much more important investing is than buying something that will be obsolete or useless in a year
3). Get to work and realize that you are going to live to be a ripe, old age and you won't have anyone to depend on other than yourself for your financial well-being.

That's my free advice for today. I wish someone had told me that when I was 25.  But, would I have listened? 

Saturday, January 21, 2017

The Lady Doth Protest Too Much, Methinks

In cities across America, millions (?) of people gathered to protest the election of Donald Trump as President of the United States. I suppose the center of the movement was women's rights and the idea that a mysoginist is now our President.  The movement is honorable, but leaves me with feelings that are probably going to make you hate me. So be it.

The protest marches were organized in cities.  In those cities, support for Hillary Clinton was big.  Basically, they brought together a bunch of like-minded voters to say, "We don't like this" to something that has already happened.  It's easy to organize people in areas where they have a common goal.  I get the feeling that they didn't think it was possible for Trump to be elected, so their anger is retroactive, when it should have been proactive.  The pre-election rallies were coronations of a sort, and few believed that America would vote for Donald Trump.

Well - it happened, and now we are supposed to say, "I hate you," but we already knew that.  So, we go out and march, and he is supposed to think that this movement somehow makes him doubt what he already believed:  That he was elected by a landslide.  It was not a landslide, and we know that.  In fact, the popular vote went for Hillary, but that popular vote was in places like the ones in which the marchers were organized.  If we could see marches in rural, southern towns or places where the maps were colored red, then I would tell you that there is a real movement going on here.  What we have is the literal example of preaching to the choir.

Donald Trump will ignore this, as he does everything that opposes him.  We have elected a mysoginistic egotist, and it will take more than a million people in blue states to make him change his mind over what he said that got him elected.  After all, it's what he said that got him elected.  Isn't that the point?

So, go ahead and march.  It's your Constitutional right.  You can be angry and feel displaced, but you let it happen.  You thought Hillary was a shoo-in, and you took it for granted.  Now that you know that middle America agrees with Donald's racist, jingoistic, and capitalist viewpoint, you are forced to deal with it.  That's difficult, I know.  You will spend a lot of time and energy being angry and defiant, marching, and organizing rallies for your cause.  That's nice, but the cause was lost in November.

Perhaps that is a defeatist attitude, or perhaps it is realism.  The next 4 years will decide that.  My guess is that Trump's policies will go forward (as it were) as he proclaimed and your protests will go unheeded.  You will lose most of what the last eight years gave you.

My guess is that Trump didn't watch the news, just as many of you didn't watch his inauguration.  You have to realize with whom you are dealing.
He is not your average bear.  Godspeed.

Wednesday, January 18, 2017

I See Things

"You can observe a lot just by watching."  - Yogi Berra

I've always said that the Business section is the most interesting section of the newspaper.  Following the stock market gives one an insight into what Americans are thinking, doing, and spending their money on.  Lately, the trends have been interesting.

About a year ago, the casual dining industry began to struggle.  Stalwarts like McDonald's, Wendy's, Starbucks, Brinker, and YUM Brands struggled to draw customers to their restaurants.  Something was influencing people to stay at home and prepare food rather than spend money for the dining-out experience.  Generally, dining out is coupled with some other entertainment, be it a movie, show, or something to draw people out of their home and stop for food on the way out or the way home.  That ain't happening.

Tonight, Netflix reported a stellar quarter, beating estimates on subscriber growth and their own high-quality content.  Some of it is international expansion, but you can't deny that the "Netflix and Chill" economy is in high gear.  We have plush home theater systems, in-home WiFi, and options for food delivery that take business away from movie theaters and restaurants.  There are at least a half dozen small companies that will deliver fresh ingredients to your door so that you can prepare meals in your home that cost less than dining out.  Couple that with the Netflix experience, and you have the "Dinner and a Movie" date at home instead of on the town.

Amazon and Ebay have teamed-up to bring the death blow to brick-and-mortar retail as companies like Target, Macy's, JC Penny's, Kohls, K-Mart, Sears - you name one - have struggled and are closing stores in the face of the ease and luxury of point-and-click shopping online.  Target's earnings were bolstered by online shopping which, ironically, is killing their stores.  You can't impulse-buy online.  You get what you want, and go.  Shoppers just want to get what they want and move along.  Combined with the Amazon Prime experience, and a shopper need only wait a couple of days to receive their goods.  Apparently, that takes the place of going out and buying something and bringing it home yourself.  I didn't see that coming.

We have bought luxurious homes with low-interest mortgages, and even though gasoline is near record lows, we are not encouraged to socialize.  That's evident when you walk around and see people with their head buried in a cell phone.  We are evolving away from being social animals seeking out human company to a species that huddles in our cave with as little human interaction as possible.  I suspect that most of us would work from home if it was permissible or possible.  It's difficult to make eye contact with people.  Either they are buried in their device, or they are wearing ear buds that signal "don't bug me" to those of us who are too shy to interrupt whatever media they are enjoying.

Suffice it to say, it's a New World.  Coupled with the incoming President Trump (there, I said it) and we are at the threshold of a new paradigm - is that the right word - where our thousand-channel TV, cell phone, and WiFi Internet gives us all the life experience we seek.  In fact, one could have everything we shop for at our local grocery store delivered to their home, and never have to visit the store at all.

I have soap and razor blades delivered every month because I cannot get either of those products in my local store, either because of taste or price.  If it wasn't for the fact that I live less than a quarter mile from the grocery store, I'd be taking advantage of every home delivery option available to me.  After all, why would I want to cruise around a store, stand in line, and put up with hordes of shoppers when I can click a mouse and have boxes left on my doorstep by the friendly brown UPS guys?

Why?  Because shopping is fun. Or, it can be fun.  Or, it should be fun.  Convenience has removed the fun of shopping.  The retail experience has never been better.  There's self check-out, online coupons, and a store on every corner.  So, what keeps people at home?  That's the $64,000 question, and I suspect that the CEO's of Macy's, Kohl's, Target, et al are holding special board meetings trying to figure it out.  They can institute online shopping, but they still struggle to compete with Amazon, which has become the first stop for shoppers.

Meanwhile, stores are closing and more are being built.  I struggle to figure that out, and I can only sumize that those decisions were made a couple of years ago, before the symptoms of brick-and-mortar disease showed up.

The world is changing, and as the saying goes:  Kill or be killed.  The Internet is killing and the stores are being killed.

Wednesday, January 11, 2017

The Dumbing-Down of America

It has happened slowly, as complex things do.  Erosion occurs so slowly that we hardly notice.  One day, the stream is knee-deep, and before we know it, the stream is up to our neck.  The Grand Canyon was formed similarly.  What we are going through now is the geologic equivalent of stream erosion, and we now find ourselves at the bottom of the canyon.

In the 1970s, when I was in high school, I heard my fellow students proclaim, "Why should I pay attention to algebra? We'll never use it in real life!"  Seemingly, they would never use high-powered math in their lifetimes.  Suffice it to say that most of them cannot calculate a 20% tip at a restaurant without a phone app.  Little did I know that they were not paying attention in English class either.  This is supported by reading their Facebook posts where their, they're, and there are the same word; and you're is replaced by your because those are the same, also.

If I decide to correct their atrocious grammar and usage, I am labeled a Grammar Nazi and my criticism is dismissed with the phrase, "You know what I mean." If that holds, then one could say that 5 plus 5 equals 12 because, well ... you know what I mean.
The same is true of cell phone texts where punctuation is dismissed, spelling is excused, and "auto-correct" is blamed for every mistake made.  Sometimes it is the carpenter, and not the tools.

Music has gotten dumber.  In 1989, Milli Vanilli lip-synced a performance on MTV.  It was discovered, and their career was terminated because it was such an egregious act that the community could not tolerate it.  On New Year's Eve, Mariah Carey was blatantly lip-syncing at TImes Square, and the whole event was laughed-off as a "technical malfunction," and one would presume that she will continue to demand hundreds of dollars for her performances in the future.  Rob Pilatus is laughing in his grave.

Television is dumber, too.  Situation comedies, variety shows, and dramas have been replaced by so-called "Reality Television," which is neither reality nor television.  It is scripted and set-up to enhance the experience - hence "Pawn Stars," "Storage Wars," and several shows whose names begin with "American."  It is reality disguised as documentary, placed on television.  The reality is in your mind.

The idea here is that everything is being presented as entertainment, and the entertainment is designed to appeal to the lowest common denominator.  WalMart shoppers are criticized as being the low-life's of society, but in fact they are the target demographic, because the people who want your vote recognize the majority.

Vote? Did he say vote?  Yes - and here's the object.  The election of Donald J. Trump as President has completed the cycle of dumbing down America.  It took many years, and it occurred gradually (as erosion does) but it happened.  One of our parties (typically the Republicans) found someone who could appeal to the lowest common denominator of society, and as such, get a majority of the electoral votes and thereby elected President.  His supporters are the least educated, lowest income, and furthest from the high-end of society.  If that sounds bigoted, then go ahead and prove me wrong.

He Tweets from his bully pulpit, proclaiming his ideas (whether true or false) as documents of his administration, and persuades big corporations to alter their business plan to succumb to his wishes. We have gone from a President whose eloquence is historic to a President whose chief method of communication is 140 characters with multiple exclamation points.  His press conference today was a display of ignorance against the media.  He proclaims something "fake news" and we are supposed to accept that.  Sadly, we are in for 4 years of his proclamations of his truth and his "I'm rubber, you're glue" method of arguing anything that is presented to him as contrary to his opinion.  He is conducting his Presidency as he has conducted his television show:  As an entertainment medium.

Slowly and gradually, entertainment has eroded. The erosion of entertainment has finally led to the acceptance of one of the contributors of the erosion as a leader of the nation.  We have elected a President who was once a part of the problem.

As a side note, let's rail against those who say that celebrities should not have a public forum to express their opinions.  Well - you elected a celebrity who once had a forum and is now in charge of the forum - so, go ahead and tell them that they cannot have an opinion.  It's a two-way street.

America has been dumbed-down to its last vestige.  It literally cannot go below this, which is ironically the highest office in the nation.
Congratulations citizens, you have achieved the perfect irony: You elected the chief idiot to lead us.

Godspeed, America.

Thursday, January 5, 2017

Trump Is vs. what Trump Does

Much has been said about the Trump Administration, and what he will do when he takes office on January 20, 2017.  In fact, even more has been made about his "first 100 days" in office, and the effect of that on our stock market and the habits of companies that operate in the United States.

He Tweets a lot of stuff - and I guess that's his right as a citizen - but I also guess that it's our right as a citizen to have a President-Elect who speaks rather than Tweets, but that probably labels me a Luddite, or something.  I like to be spoken-to.

Lately, our Tweeter In Chief has been griping against Ford, Carrier, and Toyota about building manufacturing plants in Mexico vs. building them in the United States.  Conventional logic would argue that he prefers American jobs over runaway inflatiion. (See my previous post) Once you have accepted that idea, any investment you can make is minuscule in comparison.  If you accept the idea that American jobs is greater than consumer prices, you have accepted an idea that I cannot accept, and most Americans cannot accept, either. So, let's talk about it.

We have a lot of choices. The idea that Trump has closed-off one avenue by his bullying tweets doesn't mean that the whole market is closed-off. We are in a whole new world.