Mariage and Gas?

I watch the relationship between oil and natural gas.  It has traditionally replicated a marriage:  some ups and some downs but pretty much in touch with one another .  That just isn't the case today: it's a divorce.

On a BTU comparison, natural gas has never looked better as an alternative energy.  Yet, the price continues to collapse.  Why?  simply supply.

The divorce rate is somewhere between 50 and 55% for first time marriages and much higher for  multiple times around. Pessimism is deserved.  But does that keep somebody from getting married again?  Of course not. That's why the divorce rate is significantly higher for subsequent marriages.

And, investing in natural gas just may be the same.  It's one failed investment opportunity after another.

Too many crabs. Too many crabs. Too many crabs.  I'll stay on the sidelines.

Past Themes and Today's Performance

The Dow and S&P 500 rose about .51 and .61 respectively.  Our account rose .67 resulting in us outperforming both, 4 out of 5 days.  This trend will not continue. I sold about 1/3 of our position in oil resulting in a 13% profit.

Next week is anyone’s guess as is any other week.  Gold is clearly over-bought.  Our two diversified commodity holdings will suffer as gold is sold off.  If there is a correction, I will add to both positions. Our two week results in these positions is 5.19 and 7.37.  Both positions are very small and the returns insignificant relative to our portfolio.

Your account manager was Salieri, knowing that at his best, he could not equal the big boys. The noise around me all week was just too much and I couldn’t pull the trigger.  The crabs are still pulling me down.

Amadeus or Salieri?

The headboard awaits the purchase of fabric and installation.  In the interim, it sits in the living room, subject to review by friends, family and a few of my wife's clients.  It is amazing what they see:  some are overwhelmed by its size;  others appreciate the fine hand rubbed oil finish; while others see mortise and tenon joints with 1/64th of an inch gaps.  Their observations reflect whether they are big picture or detail oriented personalities.  I thought I would enjoy discussing the construction but analyzing how our guests visualize quality, promptly replaced any opportunity for bragging.

The equity markets turned in a rather unusual September, outperforming any other September in some 70 years.  Yet, observers on the cable programs and the web saw weakness.  Few spoke up during September or better yet August, to recommend risk.  Now, in the first week of October, the opinions range across the entire bell curve of human nature.

What do the observation of the headboard and the equity market have in common?  

A few of us will be Salieri, worrying about the details and conflicts, the timbre and rhythm, knowing that our headboards are the best they can be, and that at our best, there will be imperfect mortise joints, losses on good stocks and a few gains here and there.  

We will be, unfortunately,  paralyzed by mediocrity.

But if you are willing to risk the criticism of the masses, the crying of the dumb dumbs and the crabs in the bottom of the pot, maybe, just maybe, you can reach for excellence.

The moldings on the headboard are perfect.  Seriously perfect.  The Pytagorean Theorem tells me the diagonal is spot on.

The homework and diligence is beginning to produce decent investment results.  The balance between conserving cash (or notes) and scoring (pun intended) profits is euphoric.  

Reaching out and touching Amadeus, if every so slightly, is the prize.

Another Contrarian Point of View

Is it just me or is there a new trend toward "truthiness"?  Here is another op ed piece dispelling conventional wisdom.  It's well worth the read.

http://finance.yahoo.com/career-work/article/110775/time-to-stop-worshiping-small-businesses;_ylt=AhTimDExEUDetEMvOu01IJy7YWsA;_ylu=X3oDMTFmNGc0bjh2BHBvcwMzBHNlYwNleHBlcnRPcGluaW9uRHluYW1pYwRzbGsDbGV0c3N0b3B3b3Jz

Good Economic News

This is the most under read, least publicized good news story I've run across.  A "must read" for those os us who still believe intellect is more important than ideology.

http://seekingalpha.com/article/225164-the-budget-deficit-is-falling

I Just look Old

One thing most of us have in common is furniture.  And, for most of us, it's old.  It's from family members who are now collecting pensions;  it's from college and we've kept it around for memories of good times that we couldn't remember anyway, and; we mistakenly believe every piece was a Chippendale or Tiffany or of such great value it will propel us through our last years.

Nonsense. It's old crappy furniture. Get rid of it!

Two months ago I carefully placed my original iphone in the glove compartment and gently closed the door.  Unfortunately, the glass shattered.  I was not happy primarily because I'm cheap.  I researched replacing the glass and it simply wasn't worth it.  So, I did what I thought I would never do:  I taped it together.

Ever seen the old guy sitting in a diner with his glasses taped together and said "damn that just looks awful, I'll never do that"?  Well, I did it to an iphone.

My "daughter" and her friend-boy returned from a short vacation last night.  They were over at the house and we were discussing new eye glasses.  They were very sweet in convincing me that I needed to shed the old style glasses and get something more modern.  They basically called me "old furniture" and suggested I discard my taste in eye glasses!

In two weeks or so I'll be wearing some "Tom Ford" look a-likes for reading.  I'm still going to look well over 70, at least until they sponsor a face lift, hair replacement and new dentures.  But, I'll have those glasses!

I managed to find my all time favorite glasses.  I had them hidden for about ten years.  Very cool looking rimless.  Very classy. Matches all the wrinkles around my eyes. Covers the drooping eyelids.

Off to the repair store.  I'll teach those kids a lesson!  New lenses, some restorative work and I'll have them back in service.

So, I didn't throw out all of the old-I kept just one.  They'll make a nice contrast to the new ones.

There are some things worth keeping no matter how old they get:  ME!

Happy Birthday Mr. Investing Woodworker!

Rules, Regulations and Am I in Big Trouble! (again)

Several years ago I attended a family dinner with my in laws and their relatives.  We were in a lovely restaurant in a warm foreign country and I was on my very best behavior.  The check was about to arrive when I motioned to the waiter to give it to me.  My wife's cousins were given the check and my father-in-law gave me a lesson.

You see, in this Korean family, there are "regulations".  I almost violated one of those regulations by intercepting the dinner check.  Apparently, the custom is for the children of the person celebrating a special birthday, to pay.  This made no sense.  Their children are both working but hardly have the sort of discretionary money to just throw around.  Besides, even if they did, why shouldn't they spend it on a nice Chanel hand bag?

Last week we were in New York City to celebrate a wedding with the same family.  Sure enough, I discovered more new "regulations".  This time, I was kibitzing with a young person when my wife demanded I return to her. OBG, I had violated a regulation that I didn't even know existed!  Hell hath no fury like a .... Well you know what happened.

So, since I yearn to be accepted into my wife's family,  it is about time I codify mine.  First, for the investor:  Reg 1:  never act on a tip; Reg 2: Homework; Reg 3: There is no one single best approach to success; Reg 4:  Don't fight the Fed; Reg 5: sell your losers.

Well, I have at least 25 more  investing "regulations" that I self impose on myself every day.  But, this is not the place to bore you.

In the shop, "regulation" number one is always Safety.  Reg 2: measure twice, do it again and then cut once.

But here is my point:  regulations have to make sense.

They just can't be traditional and passed from generation to generation to be followed blindly-with one exception:  Thou Shalt Always Listen to She Who Must Be Obeyed, even when she is falling over drunk, screaming insults at cabbies and leaving DNA at the curb.

Of course, I wouldn't have the courage to write this unless I was sure nobody was reading it!  Hello, don't dare forward this to you know who!!!

Mr. K-thanks for a great time in NY!