Stedman on Thompson

This is from a story by Ralph Stedman on Hunter Thompson . . . . . LOL

In 1974 we went to Zaire to cover the "Rumble in the Jungle" between George Foreman and Muhammad Ali for Rolling Stone magazine. Rolling Stone publisher Jan Wenner called it "the biggest, fucked-up journalistic adventure in the history of journalism". Hunter never delivered the story and the art director didn't like my drawings. Hunter sold our fight tickets to buy drugs or something, and told me: "If you think I've come all this way to watch two niggers beat the shit out of each other, you've got another think coming." This wasn't a racist remark. It was gonzo. He said it to be provocative. Then he snuck off to the pool with the whisky and a big bag of grass.

Technical Analysis as a tool

News last week that Smith Barney closed its entire technical analysis department provided some good fodder for discussions about the value of technical analysis. After all, if TA is such a worthwhile way of predicting the movement of stocks, why would Smith Barney dump it just to save a few nickels?
I seriously doubt that there is now no one at Smith Barney using technical analysis. I suspect that the move has more to do with eliminating redundancy than it does with concluding that it isn't a worthwhile pursuit. Even the most fundamentally inclined stock-picker tends to use rudimentary forms of TA even if its just to manage positions. Technical analysis is so integral to the stock-picking decision, it probably doesn't make sense to separate it into a different department.
Stock-pickers, fund managers and analysts use an amalgamation of methods to arrive at their decisions, and many probably prefer to do their own technical work. Many folks, including me, believe that technical analysis is more an art than a science. There is a lot of subjectivity in its use, and it is not the sort of thing you can easily delegate to someone else.
An important thing to remember about TA is that it doesn't have to be a good predictive tool for it to have value. One of the key benefits of using TA is that it provides a very logical framework in which to implement a money management system. TA is essential if you desire to cut losses quickly and let winners run. Without it you end up acting in an arbitrary manner.
The value of technical analysis as a money management tool is seldom acknowledged by market commentators. A basic understanding of TA principles and how they relate to money management can enhance your investment results nicely.

Hunter Thompson's Passing

Woody Creek's most famous crazed citizen has passed. He is credited creating "gonzo journalism" a style of writing in which the writer makes himself an essential compnent of the story. Fear and Lothing in Las Vegas is a classic . . . the movie didn't do it justice although Johnny Depp and Benecio del Toro were fantastic.
My favorite story is related by my friend Penny Colburn who dated Bill Noonan, one of Hunter's best friends back in the 60's. Hunter Thompason ran for Pitkin County Sheriff in 1968 and created quite a stir with wild promises and recieved some serious threats during the campaign (he lost). Bill Noonan ran for Country Coroner during the same campaign.
I wondered why would Bill run for Coroner? This was my first lesson in civics . . . . The Coroner is the only official who can arrest the Sheriff. This is true everywhere and there you have it.

US Income Distribution

According to most recent government statistics, the population of the United States is 295,494,880. But according to another report, the number of Americans earning income is 203,400,000. I'm not sure if this is a number that represents individual tax returns or a factor imputed from some other source but for sake of argument, let's assume it's based on individual tax returns. Once again, using the same data, the report shows that the percentage of Americans earning more than $50,000 (and I'm assuming this is adjusted gross income) is 19%. Those earning more than $90,000 or more is 5.5%.

Export/Import Distortion Data predicts . .

From ContraryInvestor.com I found the following interesting information . . .

One of the largest factors opening up a record trade chasm in November was a very sharp drop in US exports. Real goods exports dropped 4%. That's one of the four top monthly percentage drops in exports in the last eight years. And what we are experiencing is a plainly noticeable dichotomy in the year over year rate of change between import and export growth. History tells us that these rate of change numbers move in relative directional similarity. They are reflective of the rhythm of the global economy. For now, we're deviating from that historical experience. If history is to hold true, either the rate of change in US export growth should be picking up quite smartly ahead, or the rate of change in import growth is about to fall meaningfully. If we don't see this type of reconciliation ahead, it will be a direct sign that global trade and capital flow imbalances of the moment are moving to a new and higher level of "distortion".What the chart above may also be telling us, despite headline commentary to the contrary, is that the foreign economies are slowing meaningfully. And resultantly, despite a much lower dollar, their demand for US exports is waning. You may know that 2004 experienced the largest one year inflow to foreign focused equity mutual funds in US history. Given the track record of the public in terms of piling into an asset class "at the top", it's a warning sign regarding the foreign equity markets and economies near term.

Calif State Pension Benefits

In a very good letter to the editor this morning, Jim Bock writes . . . "The reason state, county, local and school governments are struggling to come up with funds to pay their share of worker pension costs has nothing to do with the actual pension benefits. Instead, it has everything to do with the fact that through the years when that stock market flourished, the employing agencies were not required to make their full contributions to CaPERS. Rather than saving those funds in case the stockmarket caused a problem, they felt it was prudent to spend that money elsewhere.
Had the agencies been more responsible and planned for what was inevitable, they would not be complaining about having to pay the costs associated with retirements. They caused the problems now the uneducated governor is trying his best to saddle the blame on the employees who have actually paid more into their retirement over the last 20 years than the agencies who are now complaining about being broke.
This is what happens when elected people are not money-conscious and spend money that they should be saving."

my opinion is that all retirement systems should switch to defined contribution plans and move away from defined benefit plans

Dead on Parole

I get so many great pieces just from the Sac Bee Op-Ed page . . . . here's one from today's . . . . I've taken the liberty to edit out a few sentences which aren't pertinent.

Twenty-five days after prison inmate Daniel Provencio was declared brain dead, the California Department of Corrections finally ended round-the-clock guarding and released the body to his family. That's the good news. But it occurred only after a bizarre precedent: The department got the Board of Prison Terms to parole the dead man. Normally, when a prisoner dies in Department of Corrections custody, the body goes first to the county coroner, then to the family.

In this case, however, public confusion over whether brain dead means "dead" or "in a coma" led to extremely odd conduct. Brain dead means dead - the complete, permanent, irreversible cessation of brain activity. The Department of Corrections did the family and the public a disservice in letting that confusion drag on far too long.

Members of Provencio's family told the media that doctors declared him brain dead the morning of Jan. 20. Yet the Department of Corrections continued to treat Provencio as alive when he was dead, shackling him by the ankles to his hospital bed and guarding him around the clock. The director of corrections finally ordered the shackles removed Feb. 4. But department spokesmen continued to describe Provencio as in such a "critical medical state" that they were having a difficult time finding a nursing home for him, as if Provencio were still alive. One spokesman said, "We've had no takers." That's not surprising. Not many nursing homes take dead people as patients.

We haven't seen the end of this bizarre saga.

Steve Goodman "lives"

I notice that the Grammy for "Spoken Word Album for Children" went to THE TRAIN THEY CALL NEW ORLEANS by Tom Chapin, which was written 30 years ago by Steve Goodman. Goodman was one of the best songwriters ever and we lost him 10 years ago to cancer and he's still missed.

Rare Wisconsin Quarter discovered

The numismatic world is all abuze about the latest US Mint error, the Wisconsin Commerative Quarter minted in 2004 bears the image of a cow, a wheel of cheese and a half-husked ear of corn. There is something peculiar about the cheese head coins . . . there are variations in the placement of leaves surrounding the coin's ear of corn. Collectors have identified two varieties. There is a an offer by several Arizona dealers for as much as $1499 for a perfect specimen.

from Pete MacEntergart at the 10 Spot on Sir Paul

"The FCC received two complaints about Paul McCartney's halftime performance, both saying they were "bored." That compares to more than 500,000 complaints last year over Janet Jackson's exposed breast. Analysts say the pair complaining about Sir Paul were likely just smartmouth kids." PE at the 10 Spot

I thought it was interesting that he sang the lyric in GET BACK "sweet Loretta modern, thought she was a woman but she was another man" . . . . no one seemed to notice.

Thoughts from the backlines

One of my oldest friends just emailed me. he's on a rant now . . . .

CK - I'm onto another subject, stop voice mail it takes too long to listen to rhetoric that doesn't pertain to a subject at hand.  This stuff about recording for quality control is the most stupid thing I've ever heard.  If quality were recognized by a said company they wouldn't have voice mail in the first place.  

On a communication roll, stop with web sites that require a log-on to contact a company!  What an incredible waste of time.  We are going backwards rather than forward.  Technology is slower than what we had forty years ago.  Even an operator on the phone coupled with information is light years behind what we had forty plus years ago.

I can't take it anymore! BP

(I won't reveal his name as he's just too powerful in State government to be exposed but to say the least . . . . he has Arnold's ear.)

Strange Market Activity in Delta and Ebay

Something interesting occurred about a week ago.  In a single day, Delta airlines posted a record lost of $5.2 billion dollars, which amounted to $47 per share, for the last quarter of 2004.  That was a record loss for the airlines.   What happened to the stock?  It lost 9.8% of its share value to close at $5.37, it fell further to bottom out at $4.41.  And as of today, it’s gained back much of that loss to close at $5.67. 

Now, to give you some contrast.   On the same day that Delta announced record losses, another company announced record profits.  That company grew its profits about 44% from the previous quarter.  However, it did one thing wrong – it missed the analyst’s expectations by 1 cent – the first time it had ever done that.  What happened?  The stock plunged 20% during the next 24 hrs losing $19.72 and it’s gone even lower since that time to close today at 78.80 a 26% shallacking.  The stock with record earnings was Ebay. Be careful out there.

California Can't Account for Federal Funds at Dept of Health

Over the last 3 years, the state Department of Health Services has received about $100 million in federal funds to fight bioterrism and officials can't seem to account for it. On a scale from 1 - 10, California received a mediocre 5 for its readiness in a report last month by the nonpartisan Trust for America's Health. Only five states scored worse. Where has the money gone? DHS officials can't seem to say. In June, the Rand Corporation issued a harsh critique of whether California could respond to a bio-attack.

This report came from the Sacramento Bee.

Housing Bubble or Not

Today I noted with great interest that CALPERS has decided that it's time to "cash in on real estate profits". They are liquidating 207 industrial buildings, 97 shopping centers and 22 office properties. We're talking some massive selling. The other side of the coin is that all of the property is being gobbled up by investors dying to get into real estate. Now this doesn't having anything to do with housing but it is an interesting occurrence.

Hispanic

I read in an op-ed piece by Peter Schrag that "The term hispanic", as the essayist Richard Rodriques points out, is rarely used anywhere other than this country. It was invented as an official category by the Nixon administration.

I didn't know that !