Wednesday, October 16, 2013

Coming Up Empty

Too windy and cold to work in the yard or golf. Too lazy to do the items that remain on my to-do list. So, I spent a lot of time looking out the window. My view was an angry lake, but one of whitecaps basked in sunlight. Really beautiful with not a boat in sight. But lots of birds despite weather that humans dislike. Gulls were active and a couple of cormorants went fishing.

The entire time I watched, the two cormorants dived and came up empty. I was amazed how long they stayed down before resurfacing. Time and again, a deep dive and no fish. I hope their luck improved as they moved on down the shoreline. The behavior of those two cormorants reminded me of our government bodies, the Executive, the House, and the Senate.

All three bodies keep diving for fish, but come up empty. They take turns looking like ineffective fools. The birds dive in ernest and will catch a meal as they are focused on what is important. Our legislators and leaders are focused on diving, not what is important, eating. The process, image, and power take precedence over fish. Cormorants are smarter than Congress. Democrats and Republicans should now be called cormorons.

Lets hope the cormorons make some pretend progress today and eventually some real progress in straightening out the country's fiscal mess.

Tuesday, October 8, 2013

Greece Never Looked So Good

Think back to the Greek bailout discussions. The EU, central bankers, IMF, labor unions and bondholders all with a stake in attempting to look like they could solve a thorny problem. All that brainpower and their best plan was not to shut down Greece's monuments and trample on the people. It turns out that the Acropolis was shut down for about three days by a couple of hundred rouge union workers in protest, but the government sent in the troops to open it up for the people and the tourists. What a novel concept, keep open the venues that generate fees and taxes, if run privately, especially since it was already determined that the vacationing federal workers would receive all back pay. Greeks are better thinkers than American politicians. Sad.

I also do not recall the EU leaders intentionally talking down the markets. Our near socialist friends seemed to understand that depressed markets result in reduced economic activity and taxes. Again, the continental socialists have a better grasp of economics than our government leaders. Sad.

Finally, everybody connected to the European debt crisis was willing to negotiate, some more than others. Additionally, all of the parties didn't constantly say that they would not negotiate or deviate from their position. At least not publicly, daily. Sad.

To recap, the Greeks are better than American leaders at one, caring about their constituents; two, economics; and three,the art of negotiation. Sad again.

Thursday, October 3, 2013

Nature's Way

Things come and go. If they occur at the right time, for the right reason, there isn't a problem. Gazing out the window, thousands of gulls are still sitting in the lake, but soon they will move on. The pelicans arrived a few days ago and some have already headed South. Some migrating geese are joining the local guys and too will head off. This phenomenon occurs in humans also.

A division president of Jones Lang LaSalle quit to become CEO of HCP healthcare. JLL is a $4B marketcap company and HCP is an $18B outfit. CEO is better than division president. She was already a HCP board member so her decision was not made in a vacuum. Why wouldn't a manager take a more important position with a larger company, likely for more money? It's the natural thing to do.

Unfortunately, Wall Street also reacts naturally which means stupidly. Today they've taken about $4.00 off JLL's price presumably because of the executive departure. That 4% hit is about 3% more than the market's "government shutdown " impact. While headline panic seems to be the market's natural course, the reaction of a rational investor should be to buy and obtain a 3% headstart. I've been doing so today.

I can't think of another animal analogy, but another favorite of mine, Valmont Industries, has been taken out and paddled lately. It's gone from $130ish to $150ish and now back to $130ish. Ouch. Not for any good reasons that I can determine. So more cash goes from the sidelines into VMI and I hope it will help me go South this Winter.
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