Hi Maurice,
Sunday mornings are usually good for me. I rise at 6:00am, run the SSS program, flip on the tunes, flip off the Starbuck bottle cap, open balcony doors, and head for my Barron’s printed the night before. I used to adore reading how the beauty of the world will be no more due to our collective sins, knowing that the shareholders are getting rich and Barron’s is trying to preach during a bull run. Now I enjoy reading how the world will not go to the dogs (Barron’s economic section), knowing that even Barron’s is frightened of what they have been warning about all these years. Wife only rises at around lunchtime.
Ruben Gonzalez new album (featuring guests Ibrahim Ferrer, Richard Egues and Cheikh Lo and Cachaito, all from Havana) is now spinning in the music box. The world is beautiful.
We usually lunch with the in-laws living across the street, enjoying my privileges given to the only son-in-law, followed by walks, nap, on-line computer games and whatever else comes to mind.
Sundays are precious to me and I have my quality minutes with all my toys and joys.
Your latest post is much more thought out, coherent and organized than your earlier post; at least it seems so to me. When I first saw your name on the reply list this morning, I thought “oh, good, Sunday BBQ time”, but was terribly disappointed after reading your post. It is obvious to me that you are intelligent, educated, experienced and honest (i.e. not steak material) and so, a discussion is warranted, as opposed to committing yet another Hannibal ritual.
<<Anyone who thinks 3G is a loser …>>
No, I do not think 3G is a loser. I think I will be a buyer of the gadget after 2-3 generations (6-9 months) improvements have been made after system rollout. I now use a Motorola GSM tri-band phone, and am contactable while walking around California malls, Hawaiian beaches, Philippine country roads, and Chinese village fields. I am one with the world everywhere except (you guessed it) while visiting Korea and Japan. Those folks up north puzzle me. Either they will learn or I will.
I hold a bunch of CHL (unfortunately, but I use the same justification everyone uses: I bought it low, sold some and am holding on for the long term), and bought a nominal annual report subscription lot of CHU, NTT, VOD. I was an early believer of AIT (Airtouch)’s international presence when many doubted their US viability, and tripled my money before VOD took them out. I will be a buyer of infrastructure service providers and may even re-establish a position in the system providers (ERICY). I worked as a consultant to help ERICY establish seven of their China manufacturing joint ventures and forgot how much I made off the 5-year (’91-96) relationship and stock investment.
My issue is one of timing. It is simply too soon to buy and too late to short, unless the market make drastic but temporarily over reacting moves in either direction.
Law Of Exploration “Fools rush in where fools have been before.”
The dark basement still has whispering voices within. I toss in a few grenades (buy orders) every so often, and have them blow up in my face. It is OK. My armour vehicles, close air support helicopter gun ships are arrayed around the perimeter looking for the opportune moment, the moment of maximum pain from the suppressive fire that the market can bring to bear. We may have to wait a while, pending new data.
Pournelle's Law Of Costs And Schedules “Everything costs more and takes longer.”
This thread can be a platform for analyzing the new data.
At this moment, capacity is in temporary surplus, both in service and hardware manufacturing. Revenue projections are scaled back. Debt level is high. Investors are reluctant, and will soon run for the hills, which, by my observation they have not started to do. Many are still hoping that the maestro, Mr W and technology can save the year. They should not keep hoping and they cannot save the year.
Katz's Law “Men and women will act rationally when all other possibilities have been exhausted.”
Not all investors realize that the maestro and technology are the causes of the problem. Broader market valuation is in down trend, and will continue down for a while.
Merkin's Maxim “When in doubt, predict that the present trend will continue.”
I believe most folks have under estimated the severity of what awaits us all, as historically abnormal high returns within a short span should logically be followed by equally recording making savaging. It is possible, and that possibility scares me.
Perkin's Postulate “The bigger they are, the harder they hit.”
The time to buy therefore is not now. There is no hurry to place bets, until some of the roulette wheels stop turning. My purchasing power needs to be preserved. Purchasing power for daily necessities and for investments.
Ducharme's Precept “Opportunity always knocks at the least opportune moment.”
My issue is also more particularly with the maestro. He was not brilliant, but people treated him as so. He is filled with vanity, incoherence, and is now possibly senile. He is failing to understand. He needs to step down. He sought popularity, away from Volcker’s shadow.
Gerrold's Law “A little ignorance can go a long way.”
Lyall's Addendum “... in the direction of maximum harm.”
And the broad US population liked what the maestro did with that magical elixir of ever-copious flooding liquidity of money, conveniently channeled by the advent of new technologies, occurring at the speed of thought.
Menchen's Observation #1 “A idealist is one who, on noticing that roses smell better than a cabbage, concludes that it will also make better soup.”
Menchen's Observation #2 “Democracy is the theory that the common people know what they want and deserve to get it good and hard.”
Money and technology, per se, are not bad. When the maestro ditched the money dike, waste occurred. I agree with your
<<The fact that people put a high value on something with no value doesn't mean there was any value actually there. Investing in Santa Claus doesn't create an actual Santa Claus so when the tree has no presents under it and the value suddenly goes 'poof', nothing has been lost to the world.>>
The magnitude of that waste is not yet apparent, even as the US equity market just blew off 4 trillion US Dollars worth of pesos. The time to run is when things are still not apparent. When it is still not apparent that the three-legged stool is missing one or two or even three legs (natural demand, confidence, or good money).
Lyall's Fundamental Observation “The most important leg of a three-legged stool is the one that's missing.”
<<It wasn't inadvertent that I stepped into your club house; it was more of a direct challenge. So I'm not surprised to see typical primate territorialism. With the soft interface of cyberspace, I expect I'll survive.>>
You do not need the soft interface of cyber space for protection. We of this club house are not raving loonies taking joy from attacking indiscriminately and we actually do welcome as much differing input as people are willing to provide.
The Arithmetic Of Cooperation “When you are adding up committees there is a useful rule of thumb: that talents make a difference, …”
We only attack when we are away from this thread. A good rampage through the stock specific threads serves several purposes, among them, exercise, scalping, vent, and (we actually believe in our collective purpose) public service.
The Arithmetic Of Cooperation continued “… and follies make a sum.”
And besides, we are not into collecting enemies.
Jone's Motto “Friends come and go but enemies accumulate.”
Moving on to your other points,
<<So at market highs and market lows, bulls and bears are always in happy harmony.>>
Yes, but one or the other sleeps better, and thus the other or one is less happy.
<<So, for example, on Friday, when the Nasdaq hit a new low, most people think there was a big sell-off. Actually, there was a big buy-up as hordes of people bought the information revolution at what they think are bargain-basement prices.>>
By that logic, I am happily waiting for the biggest buy-up that is still awaiting us, when Nasdaq and DJIA, and S&P500 hit my target points.
<<Bulls and bears were happily stampeding together>>
Not all bulls saw it quite that way.
<<I know the USA population has an attention span of part of a second and they don't have moving picture on TV now, just sound bites and one second clips of movement…>>
Yup. Agree.
<<… but it is only just March.>>
Yup, and that is precisely what concerns me.
<<Alan will continue to cut interest rates and when people realize the sky isn't falling, the share prices will start rising.>>
The sky will not be falling at that psychological moment, it will be completely dark, all around us, and many will never be able to buy ever again, leaving the pickings to the few who are able.
<<My point was that Alan will keep cutting ..>>
I agree that he will, because there is preciously little else he can do, just like Mr. Hayami.
<<…even in the face of rising share prices>>
do not have to worry about that event yet.
<<He'll cut as long as recession fears predominate.>>
Not fears of recession, but the actualization of recession, for the first time in a long time, of historic proportions, at least the fear of a historically proportioned recession.
<<But I suspect they are like a swan = making haste under the water while appearing unflustered on the surface.>>
Agree with you that they are worried, and more so than at any other time since 1929, and may be for a good reason. I will simply watch through my sniper rifle scope.
Berra's Law “You can observe a lot just by watching.”
<<We'll need to check the graph at the END of 2001, not in March, to see which way the markets went.>>
My point exactly, but not up close and personal, only through that sniper scope.
<<That will involve breathing through your nose for another 9 months. Actually, holding breath is approved too [that's my method until my theory takes hold and the markets stop the precipitous decline of the past few weeks].>>
What happens to you if you cannot come up for air after nine months, or 18 months? If no life style change required, then you are finely positioned, else you are risking unnecessarily, certainly not justified by the possible upside.
<<The world is awash with oil …>>
No disagreement. Price will go down due to historically proportioned recession unless we end up in stagflation courtesy of the maestro’s rate cuts and Wall Street’s success in raising liquidity level once more.
<<Done [though not the mortgage part - margin is enough fun]. Also, I'm old enough and cynical enough and cautious enough not to bet on what a herd of maniacs will do in the short run. So they could well sell the markets off to ugly lows before the inevitable realization that as in all of human history, overall, people prefer things to get better and work to achieve that. Which means markets come right again and people get back to work. Also, I am betting on the wireless world and cyberspace rather than the Dow, which I use as an indicator of overall well-being for the public at large. So this bull at this moment owns only his two sacred cows, QUALCOMM and Globalstar [which currently has mad cow disease, but a cure is being worked on].>>
I am not yet old enough to not want to try and side step the bad part. I am an optimist in every sense and in the sense that I can succeed in doing so.
<<It is NOT wise to be sold out involuntarily at the bottom of a market, which is what can happen with excessive margin, which I happen to have right now [thanks to my mad cow]. >>
Maurice, this is not the bottom.
<<I suppose we have to wait until the end of the year to find out who the predators are this year. Maybe it will be like the famous nature film of two bull seals fighting on the beach for supremacy and suddenly a killer whale lunged up the beach out of the surf and grabbed the seal which thought he'd won because the other one started running for it. Two seconds later the tough seal was being eaten like a chicken nugget.>>
It is possible that all participants will be mauled, whether long or short. It is not possible to be badly mauled when one simply and cautiously watching through the sniper scope. Waiting and running are perfectly acceptable stratagems.
<<It would be nice to be able to check the label on our backs to see if we are a weak seal, a tough seal, a killer whale or a chicken nugget.>>
I am pretending to be chicken nugget. In my on-line Unreal Tournament Game (first person 3D shooter game), pressing the “F” key and pretend to be a pile of dead meat is at times quite successful, especially when the more active warriors are gibletizing each other, to pressed for time to lob a grenade at every seeming inorganic pile of nuggets. I watch, as some lone warrior runs past, rise, follow, aim, and then click on my left mouse button, soon to be bathed in the blood of another.
<<The other picture I'm reminded of is the bullfighter who was gored up the bum and carried along on the horn of the bull which he'd stabbed with a sword and which had picadore prods hanging off his bloody back. It's a harsh world out in the jungle or the bull-ring.>>
Agreed. Never play leapfrog with a unicorn.
<<The world has looked beautiful to me for most of 50 years. There are now 6 billion people alive, all wanting their lives to be better, which is the nature of being alive. There used to be a few hundred inventors and a billion people [ca 1900]. Now there are millions and each invention can be cloned at near-zero cost for the benefit of everyone. Invention is piling on invention and fewer and fewer people are toiling in poverty in rural labour. The economic powerhouse of the world is vast and growing rapidly.>>
I agree and therefore will buy into the dream again.
<<What would make me panic? Something going wrong such as George Bush deciding to snort some cocaine, have a couple of drinks for courage then taking on China with Condoleezza Rice ranting about evil commies abusing human rights. That would make me come over all faint. An incoming comet would cause me to panic. A killer whale sneaking up behind me would make me panic. I like panic. It's a very adaptive ability we have which evolved over millions of years. I like to keep my panic skills and paranoia highly-tuned.>>
But a swarm of journalists saying 3G is no good, CDMA is hopeless and GPRS is great makes me feel predatory rather than panicked. Especially when they panicking about the sky falling at the same time, when all I can see is clear blue.>>
On QCOM, no feel, except market gravity will bring it down, in valuation and hardware price point, with the benefit going to CHL and CHU and VOD.
On US-China-Taiwan, nothing much will happen, except providing buy points.
Chugs much, Jay
Some quotes I did not get to use, as wife got up and wants to be fed.
Avery's Observation “It does not matter if you fall down as long as you pick up something from the floor while you get up.”
Colson's Law “When you got them by the balls, their hearts and minds will follow.”
Gerrold's Laws Of Infernal Dynamics
“(a) An object in motion will be heading in the wrong direction and (b) An object at rest will be in the wrong place”
Jone's Principle “Needs is a function of what other people have.”
In America, it is not how much an item costs that matters, it's how much you save.
Lyall's Conjecture
If a computer cable has one end, then it has another.
Hoover's Lament
Blessed are the young, for they shall inherit the national debt.
Grossman's Misquote
Complex problems have simple, easy to understand wrong answers. |
