“ ... Summer Roller Coaster” (Investment Newsletter response)

Newsletter text (NL): Summer is a time when many Americans seek out amusement parks for the thrills of riding a rollercoaster. The climbs and drops at high speed deliver an exciting mix of fear and exhilaration. But knowing the extent of the highs and lows, and when it is going to be over, play a crucial role in the fun of riding a metal roller coaster.  Riding a market roller coaster offers no such assurances and is no fun at all ... "

Response to NL (R2NL): however, we do know the highest the market has ever been and that the lowest it can go is to Zero.  That's a paltry 12,000-point range and barely worth the trouble if you are really lookin' for a good time!  (And, don't cha know, we are all lookin' for a good time oncet in a whale.)    

With only 400 to 520-point drops and falls in the current market, I am really not feeling the gut-wrenching excitement, the blood pressure-elevating fear, the terminal projectile vomiting that I really need to get out of playing the market for hard core fun.  Therefore, I would like you to get ready to talk with us about liquidating all of our investments in stocks, funds, Credit Default Swaps, junk bonds and related low-adrenaline pumping stuff and start thinking about moving it all to Commodities. 

I would like to focus on liquid natural gas, copper, aluminum, gold and silver for starters, then using my profits, move into the majorly volatile (e.g., gasoline) ones later.  I am planning on a "buy the market and sell the news" strategy, combined with "buy low and sell high" and other pearls of wisdom I have learned from a pamphlet I got in the mail back in 1984 called "The Burning Match."  

From what I have read, and incorporated into what I call my personal CMS (Commodities Management Strategy) it sounds like I would be in favor of the safest procedure, i.e., taking actual possession of each and every commodity I buy.  I hear people have done that with soy beans and I don't think doing it with LNG would be that much harder ... and I have held a couple of Kruger Rands before which wasn't hard at all (hid 'em in the toilet tank and nobody ever tumbled to where they were).  By taking possession, I don't have to worry about some doofus semi-pro in Conehatta, Mississippi, (locally referred to as Cone-Heads), messing around and losing my gold, silver and liquefied natural gas, etc.  I will have it all right here and can touch it and feel it and show it off to my neighbors.

So, as usual, I have learned a great deal from your investment newsletter and look forward to reading many more.  Thanks so much.

Your loyal investment customer,
Doc

What's Most Important?

When all is said and done: relief is better than happiness.

History, Why Does it Make a Difference?

I have never understood why the media is so anxious to release intelligence-sensitive data, i.e., most recently, the location of US Navy SEAL bases (after bin Laden killing), including where they are trained, work and try to live ordinary lives.  Having blabbed it all over the front pages and television news, like thoughtless children, now there is fear for the safety of the SEAL personnel and their families in the U.S. because of these revelations.  No kidding.  What did they think was going to happen when they put that data in the open source arena?

Perhaps if we posted the names, addresses, phone numbers, maps with directions to the reporter's homes and families these news hounds would understand why the Chairman of the Joint Chiefs suggested we should all move on to other topics.

Reporters operate as if they ignore history, then it's permissible to repeat it.  I.e., ignore the WWII warning that "Loose lips sink ships." 

Contradiction: Process vs. Result

"Why is it that so many folks drive so fast to get to work, then spend the rest of the day grousing about how much they hate their job?"

Mandatory Health Insurance

A PRECEDENT FOR MANDATORY HEALTH INSURANCE

This legislation seems to be an in-place example of (and template for) a governmental entity requiring its citizens to purchase insurance coverage, or pay a penalty.  How is it different from the suggested Federal mandate that healthcare insurance be required on a national basis?  Insurance is insurance.  Mandatory is mandatory.  Penalties are penalties.   Or isn't it?   I am not taking a position pro- or con- the current healthcare reforms.  I am just noting that the government has required people to purchase items and attached penalties to their refusing to do so.  And that the requirements have not, so far, led us down some slippery slope as others have predicted.

Here is a segment of Virginia requirements:
Commonwealth of Virginia Manadatory Motor Vehicle Insurance
http://www.dmv.state.va.us/webdoc/citizen/vehicles/insurance.asp

"Virginia has a financial responsibility law, Motor Vehicle Code 46.2-706(*), that requires all Virginia registered motor vehicle owners to have motor vehicle liability insurance or enough money to pay for any losses that may result from an automobile accident."
------------------------------------------------
(*) Ref: http://leg1.state.va.us/cgi-bin/legp504.exe?000+cod+46.2-706.1
"§ 46.2-706.1. Insurance and surety companies to furnish certain insurance information.
Any liability insurance information relating to individually identified vehicles or persons, received from such companies under this section, shall be considered privileged information and not subject to the Virginia Freedom of Information Act (§ 2.2-3700 et seq.).   Such information shall be used in conjunction with information supplied under § 46.2-706 to verify insurance for motor vehicles certified by their owners to be insured."

"Insurance companies licensed to do business in Virginia shall provide to the Department monthly electronic updates of insured information and vehicle descriptions required by the Commissioner when they:
   (i) cancel liability insurance for vehicles registered in Virginia,
  (ii) add liability insurance for vehicles registered in Virginia, or
 (iii) provide liability insurance for vehicles registered in Virginia newly satisfying financial responsibility requirements.
(1993, c. 949; 1996, cc. 474, 489; 2009, c. 419.)"
------------------------------------------------

Uninsured Motor Vehicle Fee
http://www.dmv.state.va.us/webdoc/citizen/vehicles/uninsured_fee.asp

"The Virginia Uninsured Motor Vehicle (UMV) fee allows a motor vehicle owner to register an uninsured motor vehicle. At the time of registration, the motor vehicle owner must certify whether the vehicle is insured or uninsured.  If the vehicle is uninsured, the motor vehicle owner is required to pay to VA DMV a $500 uninsured motor vehicle fee in addition to normal registration fees. Payment of the $500 fee does not provide the motorist with any insurance coverage. If involved in an accident, the uninsured motorist remains personally liable. This fee is valid for twelve months but may be prorated for a shorter amount of time."

Penalty for Falsification of Insurance Coverage
"Motor vehicle owners who falsely certify that they have insurance and are found by VA DMV to be uninsured face stiff penalties. In addition to facing suspension of all driver and registration privileges, compliance includes payment of a $500 statutory fee, a $145 reinstatement fee and filing proof of insurance for three years. During the three-year period, insurance companies cooperate with DMV by providing notification if a policy is canceled. This requirement to maintain proof of insurance enables DMV to ensure that these motor vehicle owners maintain liability insurance on their registered vehicles."


Added info: Ref: FORBES Magazine, March 14, 2011, page 89, "Healthcare - Looking Ahead," OBAMACARE LIVES?
Congress passed the reform bill  and "... determined that the insurance market would collaps if Congress forced insurers to cover everybody without requiring everybody to buy insurance." 
["Insurer UnitedHealth Group reported last month that its first-quarter profits this year had exceeded those of the same period the previous year (2010) by 13 percent."  Ref: bshelly@kcstar.com, column for May 18, 2011, reprinted in the Virginian Pilot Online.]  UHC apparently hasn't collapsed yet.


Forbes article goes on to say: "Critics of ObamaCare ... including federal judges in FL and Virginia ... say ... for the first time Congress has ordered citizens to buy something instead of telling them what they can't do."  That may be true for US Congress, but it is incorrect in Virginia (you would think the VA judge would know) where the legislators have not only told residents what they have to buy, but also what they cannot do (i.e., drive without some sort of coverage or pony up funds for an escrow account if they are uninsured).

You say Hanlon, I say Heinlein

Hanlon's Razor 

(possibly a corruption of "Heinlein's Razor") 

defined as variations on:

"Never attribute to malice that which can be 

adequately explained by stupidity,

but don't rule out malice."

----------- ALSO  -----------

 There is always one more imbecile than you counted on
and 
Artificial intelligence is no match for natural stupidity.

Why Pro Sports Have Not Embraced Reptile Mascots

In the third and final (for the moment) exploration into alternative Professional Team Naming Systems, I have discovered an here-to-fore unexplored solution: use reptile names.  These animals possess all of the innate characteristics of pro-sports team members: they are cold-blooded, dangerous, will kill you if given the chance, and are self-centered and single-minded in their approach to surviving by winning.  How much more could life imitate professional sports?

I believe these would be the best names for the various teams:

Atlanta Alligators

Baltimore Boa Constrictors

Boston Bushmasters

Charlotte Camans

Chicago Bullfrogs

Cincinnati Centipedes

Dallas Dimondbacks

Denver Pythons

Detroit Dragons

Houston House Geckos

Indianapolis Iguanas

Jacksonville Jackarundies

Kansas City Cobras

Los Angeles Lizards

Memphis Morays

Miami Mambas

Minnesota Mosquitos

New York Jewel Wasps (Jets)

New York Gila Monsters (Giants)

Oakland Snapping Turtles

Orlando Stingrays

Pittsburgh Pit Vipers

Portland Platypuses

San Francisco Garden Snakes

Seattle Salamanders

St. Louis Sidewinders

Tampa Bay Tiger Snakes

Washington Watersnakes

Suggested match-ups could include (with descriptions):

Dallas Dimondbacks vs. New York Jewel Wasps: 

           “Winner and loser both sparkle in this face-off!”

Baltimore Boa Constrictors vs. Denver Pythons: 

           “Boas Put The Squeeze on the Pythons!”

Headlines might read:

Memphis Morays vs. Miami Mambas: 

           “Morays Electric as they Dance the Mamba all over Miami”

San Francisco Garden Snakes vs. Pittsburgh Pit Vipers: 

           “SF Blooms Early, then Falls into the Pit”

Summary of Pro Sports Team Alternative Naming System

Whatever naming system is used, there is one thing we should all remember: “It’s just a game.”   

The Roman Gladiators went into the Coliseum with the lions to save their own lives, not to make a statement (other than “I would like to come out of this alive!”)  The pro athletes go onto the field and do it for the money.  Not to “make a statement” about whatever your personal heritage happens to be.  Don’t take it personally, whatever your ethnic background.  Take a tip from the reactions of the fish and insects and reptiles who were interviewed extensively: they just didn’t care whether the teams used them as mascots or not.  They just swam or jumped or crawled away and went about their business, leaving me with their non-verbal assessment of my research: a little white trail in the water, a couple of small brown marbles on the ground or a string of little black droppings marking their trail back to their hole under the kitchen sink.  

 NOTE: I actually think I did hear one interviewee say something like: 

           “Sticks and stones will break my bones … ” … but now I’m really not sure.