[Posted 7:00 AM ET]
In the Months Ahead…
Iran…February 20…hardliners take full control of parliament.
Russia…March 14…Vladimir Putin receives a Saddam-like
percentage of the popular vote in elections here.
Taiwan…March 20…referendum on handling China’s missile
threat as well as presidential election that will influence
independence movement.
Afghanistan…June 30…projected date for elections despite huge
holes in security, nonetheless insisted on by Hamid Karzai.
Iraq…July 1…sovereignty handed over to people, direct
elections to follow in 6-12 months.
U.S. …November 2…presidential election with huge
ramifications for international relations and world stock markets.
European Union…October-December…decision on whether to
proceed with Turkey’s application for E.U. membership.
Explosive.
These are just a few of the events that could roil markets, let
alone impact the people in these nations as well as their
neighbors for generations to come.
For example…
Iraq: The Bush administration has thus far received most of what
it hoped for from its invitation to Kofi Annan and the U.N. to get
involved in the transfer of power to the Iraqi people. Annan and
his hand-picked representative now agree with the White House
that while sovereignty should be handed over to the Iraqis on
July 1st, there is no way the security situation across the country
could allow for direct elections before year end.
So now Paul Bremer and his boss need to decide what to do with
the existing Iraqi Governing Council (IGC), currently made up
mostly of exiles. Clearly, it will be expanded though the latest
reports are that the initial U.S. plan for 18 regional caucuses is
out. The key is getting true representation for all Iraqi people,
particularly those who survived Saddam’s regime, onto the IGC
in numbers proportionate to the weight of the ethnic groups and
in a manner that the various factions view as being fair.
Before Annan’s announced support of the U.S., the Shiites and
Kurds were calling for only partial elections that excluded the
Sunni triangle as the two appear to be forming a coalition of their
own, though Grand Ayatollah al-Sistani has thus far remained
largely moderate in his approach.
But remember, at the end of the day the new IGC has to approve
the continued presence of U.S. forces. Boy, wouldn’t that be an
unpleasant surprise, and the upset of the century, if they said
“See ya!” We’d all like to think the chances of this happening
are nil…but it’s up to Sistani in the end.
Iran: Friday’s parliamentary election was a sham and reformers
are unhappy with President Khatami for endorsing the vote. So
much for his own ‘reform’ label, though he was a bust long
before this. Of perhaps even more import are some things
slightly below the fold, including the clerics move to shut down
two leading opposition newspapers and, even more troubling, the
Guardian Council’s rush to close all cultural and arts centers, to
the point where a billboard of David Beckham hawking motor oil
was torn down. [South China Morning Post / Agence France-
Presse] Couple the preceding with the new evidence that Iran
has more sophisticated bomb-making equipment than the West
thought it had and you can see events spiraling out of control a
bit. But for now, watch the students and pray for the best. Also
remember that as Iran descends further into hell, nonetheless the
vast majority of the people do not hate the U.S. and they merely
seek the best the West has to offer. It’s a minority dragging them
down and this is one battle where Good must triumph over Evil
…soon.
Russia: What a disturbing week here. The Kremlin announced it
will override U.S. objections and ship nuclear fuel to a Russian-
built reactor in Iran, while President Putin, dressed in military
garb, looked like Papa Joe II as he oversaw large-scale military
exercises.
On the latter, Russia certainly wasn’t doing anything out of the
ordinary for a major military power (though this was the first
time Russia could afford to operate on such a scale for decades),
but even in its two big missile test failures there was cause for
concern. First, the Russian media, now totally controlled by the
Kremlin, didn’t mention the errors (Putin did however allude to
them in a speech) and, second, the main point of the maneuvers
was to counteract what Russia sees as a growing threat from the
West; the encroachment of NATO and the possible eventual
deployment (on a permanent basis) of U.S. forces in Poland (at
the government’s invitation), thus in essence on Russia’s border
since Belarus and Ukraine are de-facto Russian states, especially
the former.
Even in the collapse of the roof at a water park that killed at least
40 I saw something bigger than the initial human tragedy.
According to the London Times, Russia now has 35,000
skinheads operating throughout the country, beating and killing
immigrants (or Dark Russians) and Jews. But here’s the payoff;
in the aftermath of the park tragedy, skinheads went through the
area afterwards and beat people senseless, for what reason I have
no conceivable idea. There can be little doubt, now, that Russia
is plunging back into its dark past and we ignore this at our own
peril.
European Union: The decision on whether or not to proceed with
Turkey’s entry talks has the potential to be a headline dominating
event even here in the U.S. It certainly already is in parts of
Europe as anti-Turk forces in Germany, France, Austria and the
Netherlands lead the charge to prevent Turkey’s admission
(which wouldn’t formally occur for years). An E.U. commission
will offer up its recommendation in October and the E.U. as a
whole is to decide in December, if they stick to the current
timetable. It is a volatile topic in Germany, for one, with
German conservatives (Christian Democrats), traditionally pro-
American, being hostile to Turkey while Chancellor Schroeder is
supportive. Many in Germany are worried that in light of current
demographic trends Turkey would be the biggest country in the
E.U. by 2014, surpassing them. Overall, many in the union also
simply don’t want to take on the poverty of Turkey when the
club is largely a prosperous one.
Of course Washington sits back, as does your editor, voicing the
opinion that this is a tremendous opportunity to showcase the
only democracy among the Muslim nations of the Middle East
and Turkey’s government has been doing all the right things in
reforming its process to meet E.U. requirements.
Wall Street
Generally, the equity markets continue to slough off any attempt
to take stocks down (with Nasdaq being a minimal exception)
thanks to increased merger activity (witness the bids for Disney
and AT&T Wireless), the best IPO action since 2000, still
historically low interest rates, and word that industrial production
was up a strong 0.8% in January. Taking a longer view, you
could easily add that while new home construction fell in
January (as builders froze to death), with overall homeownership
at its highest level ever, 68.6%, and with housing values
continuing to rise in most parts of the country, people certainly
have a right to feel a little better about their own finances,
including their stock portfolios, at least this is what the Bush
administration hopes.
However, those of us looking to the future and playing the “What
if?” game focus in on the fact that when you combine the
projected federal budget deficit for ’04 and add in the current
account deficit (the broadest measure of trade), you get a figure
over $1 trillion, or approaching 10% of GDP this year; by far the
highest such reading since the government first began calculating
the current account data back in 1960.
True, regarding the current account, the most recent numbers
showed that $75 billion in foreign investment flowed into U.S.
stocks and bonds, when $45-$50 billion is needed each month to
technically finance the debt, so what’s to worry? At any moment
this could easily reverse and for an extended period, and as I’ve
warned ad nauseum were this to occur interest rates would then
soar, the housing market would shut down, the wealth effect
would dry up, stocks would tumble and we’d all still be
responsible for meeting the debt service at both the federal and
personal level.
But finishing on some positives, capital spending continues to
rebound these days and should handily exceed the 10% rate in
2004, perhaps best exemplified by Applied Materials’ earnings
report, AMAT being a producer of production equipment for the
semiconductor industry, with orders up 32% from the prior
quarter, far better than estimates. And Wal-Mart’s CEO
expressed optimism on the economy “and continuing strength
(in) the housing market” as well as consumer spending. Plus I
would look overseas and take heart in Japan’s economy, now
growing at a 7% annual rate, the fastest clip in 13 years thanks
largely to exports to China. There…that’s your fair and balanced
appraisal. I write, you decide. [Copyright: Fox News]
Street Bytes
–On the week the broad averages slipped some, with Nasdaq’s
less than 1% decline (to 2037) marking 5 straight weeks of
losses, though two of these were of the 0.1% variety. The Dow
and S&P 500 fell only a fraction each to 10619 and 1144,
respectively.
–U.S. Treasury Yields
6-mo. 1.00% 2-yr. 1.71% 10-yr. 4.10% 30-yr. 4.95%
Interest rates have been meandering around the 4.00-4.10 percent
level for some time now and even Friday’s consumer price report
for January that showed a rise of 0.5% couldn’t knock the bond
market for a loop, while Friday’s terror alert in Japan helped with
a flight to quality into the dollar.
But many of us continue to be amused by the true picture of
inflation versus what the government tells us – as in the ‘core
rate,’ ex-food and energy, both of which we consume in copious
amounts at last check, up only 0.2%. Have you checked your
utility bill, for example, and did you know that thanks to soaring
demand in China the price of rolled steel is up 66% since June?!
Goodness gracious.
–Energy: El Paso became the latest to cut its estimate of proven
reserves, but despite an earlier warning it would do so the final
figure of 41% was staggering. [The stock fell 18% the day of the
release.] You’ll recall how Shell previously slashed its own
estimate by 20% and now the SEC is looking into the whole
process at this company. Taken together, though, it obviously
helps the case of us energy bulls, longer-term. Sure, oil and gas
can fluctuate wildly, month to month and year to year, but if the
world economy grows at any kind of respectable clip the
headlines will increasingly contain the word “shortage.” The
news from Shell and El Paso also has to portend more drilling
activity at some point, warming the cockles of those of us with
investments in this hard-working group. [FYI…I have avoided
the assorted energy ‘dry holes’ of the past year in my own
portfolio, but I attribute this more to luck than skill.]
Meanwhile, back to the here and now, OPEC is showing no signs
as yet of cutting its production despite its prior announcement
that it would do so. It next meets on March 31, April 1st being
the deadline for cartel members to fall into line with their
assigned quotas. If crude prices remain at existing levels,
however, there is always a chance OPEC could rescind its earlier
order and formally maintain production as is.
–Cingular won the bid for AT&T Wireless, beating out
Vodafone by paying $41 billion. As many have said, this is the
merger of two lousy companies and without being an analyst of
the sector it sure looks to me like Cingular overpaid. And isn’t it
amazing how all of us put up with wireless service in general
that, how shall I put this, totally sucks! Some future, eh? Plus,
as we all know the next time we have a regional / national
emergency, such as 9/11, the system will fail us with tragic
consequences.
But I loved the following quote from the New York Times’
Floyd Norris:
“As it nears its fourth birthday, the short, unhappy life of AT&T
Wireless as a stock owned by the public is coming to an end. It
will be remembered as an emblem of the way Wall Street fads
can come and go, enriching investment bankers while damaging
investors who follow those fads.”
And way back on 4/29/00 in this very space I wrote of how
AT&T employees were taking out second mortgages to buy
shares in the spin-off. I then added, “What the hell are you guys
doing? I can virtually guarantee that not one of these folks had a
financial advisor. No one worth their license would possibly
recommend that course of action.”
Not too shabby, if I may say so myself. Anyone buying and
holding at the offering, 4/00, lost 50%, even after the recent
sharp run-up in AWE shares.
–Enron CEO Jeffrey Skilling finally got to try on some
handcuffs and found his freedom of movement a bit restricted.
It’s not easy to wave to the crowd, for example. Now we await
his trial on 42 counts for securities fraud and insider trading.
–The Disney board rejected Comcast’s initial bid, backing
Chairman Michael Eisner, but this is far from over.
–Foreign investment in U.S. commercial real estate was up 59%
last year. These guys always buy at the top.
–Last week I wrote of home prices in Los Angeles County
increasing 26.6% year over year and placed this in my “Inflation
Update.” Of course this is the kind of inflation any homeowner
loves, but try cashing out and finding something reasonable
elsewhere. This week the L.A. Times reported that homes in
Ventura Country rose 26.8% and taken as a whole, six Southern
California counties saw an average increase of 21%. Slap on a
home equity loan and when the market rolls over….
–Following is a different view on ‘outsourcing’ from George
Will.
[In defense of the policy, Will writes] “(John) Kerry says
offshoring is done by ‘Benedict Arnold CEOs.’ But if he wants
to improve the health of U.S. airlines, and the security of the jobs
and pensions of most airline employees, should he not applaud
Delta for saving $25 million a year by sending some reservation
services to India?
“Does Kerry really want to restrain the rise of health care costs?
Does he oppose having X-rays analyzed in India at a fraction of
the U.S. cost?” [Washington Post]
–For the past two weeks I blasted the sugar lobby in America
and the incredibly harmful trade deal just signed with Australia.
Then on Tuesday the Wall Street Journal editorial page weighed
in, excerpts below.
“But here’s the catch. U.S. Trade Representative Robert
Zoellick browbeat the Aussies into accepting an exemption for
sugar imports as the price of a deal. This is a terrible precedent
for future trade-opening negotiations, and it may even jeopardize
the ratification of this one. It is also one more sign that the Bush
Administration is giving up on its ambitions to liberalize world
agricultural trade…
“More likely, other U.S. farm lobbies will press for their own
exemptions. And if foreign countries have to accept the sugar
exemption, they will demand that some of their own markets get
shielded as well. Thailand is in line to become another bilateral
U.S. trade partner, and it will want sugar included. If it isn’t,
then the Thais will want their pork and rice markets put off limits
to U.S. exports…
“But then Mr. Zoellick would have been better to wait until after
the election to complete this accord. The Doha Round of trade
talks collapsed in Cancun last year over agricultural tariffs and
subsidies. The U.S. hopes to revive those talks, but the Australia
deal will only cheer the protectionists. If the Bush
Administration won’t face down the sugar lobby even for a free-
trade friend like Australia, then what chance does the rest of the
world have?”
–In light of the above, I also don’t want to hear another word
about who is protecting the “special interests” during the current
presidential campaign. Both parties are guilty. Always have
been, always will.
–5 specialist firms at the New York Stock Exchange will pay
$240 million to settle charges their traders took advantage of
you, Joe Sixpack and Mary Merlot.
–Halliburton is withholding $140 million in sub-contractor
billings for its Kellogg Brown & Loot subsidiary.
–Hummer sales were down 33% in January, the 5th straight
month of declines. Some of us rejoice at news like this. Beer
break…
–The SEC is looking to hire 160 investigators for the sole
purpose of picking apart the hedge fund industry. Another move
to celebrate.
–There’s a lot not to like about Italy’s bureaucracy and chaotic
politics, but when it comes to the Parmalat scandal they have it
right. 15 are now in jail. Ask questions later.
–Finally, I have to comment on PIMCO Funds and the
revelation it had its own problems on the market timing front.
To say I was disappointed would be an understatement. I have
been very upfront with you, for example, on my own experience
in this area, including my note of 9/27/03 that when I had the
chance with PIMCO, over 5 years ago, I booted Dennis Tito of
Wilshire Associates and Russian space flight fame because his
own timing in our funds was egregious. Because of folks like
him, I then implemented (acting with counsel) the ‘6 roundtrips’
provision that some of you have read is in the current prospectus.
I was especially disappointed to see the Canary Capital Partners
association with PIMCO. For crying out loud, these are the very
dirtballs I was railing about just a few weeks ago in touting a
brilliant expose by Marcia Vickers of BusinessWeek on the
whole Canary / Leonard Stern clan. In some respects I feel kind
of foolish now.
But while I don’t know all the facts of the current case, I do
know that when it comes to Bill Gross and his team they are men
and women of integrity. Tough to stomach if you are a rival,
for sure, but that is to the benefit of PIMCO shareholders.
I was going to go on in even more detail myself today but having
been on the road much of this week I just got around to reading
PIMCO’s reply on ‘pimcofunds.com’. I agree with the following
snippet from a letter by Bill Gross and CEO Bill Thompson to
“clients and friends of PIMCO.”
“Yes, unfortunately, Stern / Canary became an investor in our
funds both with and without our knowledge. The investments we
knew about, clearly acknowledged as ‘timer’ money, were made
under an arrangement that did not violate the shareholder
protection of our prospectuses, and which had monitoring
provisions to prevent excessive trading. It apparently worked.
To our knowledge, this Canary trading was infrequent, did not
come close to violating the prospectuses and harmed no
shareholders in the fund. In perfect hindsight, we wish we had
never attracted the name Canary / Stern among our many
thousands of loyal fund shareholders. But we can’t change that
and if any investor in our funds was disadvantaged by this
arrangement, then we want to give assurance we will make it up
– in full…
“We are not perfect and we are not above the law, but throughout
my 30+ years at PIMCO, and for the past 10 for which Bill
Thompson has been CEO, we have endeavored to build a
franchise that we, our fellow professionals and associates, our
family and friends, and you our clients can be proud to be a part
of. That attitude will continue to dominate our future behavior.”
Speaking for myself, again, I am proud of my own association
with PIMCO and to this day have many friends there. All I know
is I personally will continue to trust PIMCO with some of my
own investment dollars. That’s the best input I can give at this
time.
More International Affairs
Israel: As George Melloan wrote in the Wall Street Journal,
when will the West, collectively, demand that Yassir Arafat go?
Well, it hasn’t happened for decades so why expect it today? But
every now and then we go through a period where the Palestinian
people finally show faint signs of using their brains, amidst hints
they could take care of the problem themselves. This week
Palestinian Prime Minister Qureia threatened to resign over
Arafat’s looting of the PLO treasury but Qureia still hasn’t
marshaled the forces to finish off the thieving terrorist.
Meanwhile, an Israeli parliamentary committee approved $20
million for new settlements in Gaza and the West Bank,
following Prime Minister Sharon’s earlier calls to abandon some.
Which is why I’m really weary of both sides here, and the Bush
administration is too weak to do anything about it…because it’s
presidential election time, you know.
India / Pakistan: The first round of talks went relatively smoothly
and a new 6-month timetable for discussions, including on the
fate of Kashmir, will now take place. Separately, Pakistan’s
President Musharraf won’t allow international inspectors into the
country’s nuclear facilities.
Indonesia: 58% say life was better under Suharto.
[BusinessWeek] And as I wrote last week, 75% hate the U.S.
So call this a giant step backwards. It also wouldn’t be a stretch
to say you are seeing similar trends in many Latin American
countries these days.
Japan: Tokyo miffed Washington, big time, by signing a deal
with Tehran to develop an oil field in Iran, not exactly making it
easier for the West to crack down on the mullahs nuclear
ambitions. But as I’ve discussed for years now, this is the kind
of thing that can happen when you have powerful economies,
such as those of Japan and China, scrambling for oil that they
can’t supply themselves. It will lead to a world war at some
point.
Norway: Our good friends released the founder of the terrorist
group Ansar al-Islam over a dispute on the evidence.
Disappointing, but as we’ve seen in our own country, the judicial
system in a democracy is not without its problems. Only this
particular move could have deadly consequences.
Canada: I have to admit I haven’t had the chance to follow the
situation here that closely but new Prime Minister Paul Martin
has a major scandal on his hands as a rapidly deepening probe
looks into the disbursement of $76 million from 1997-2001 while
Martin was finance minister for the Liberal Party. Support for
the Liberals has fallen to 35% as a result and it could eventually
bring down the government especially if, as my friend Harry K.
prays, the television klieg lights are turned on in Watergate type
fashion.
Haiti: If you are a U.S. citizen and reading this while in your
hotel room in Port-au-Prince, what the heck are you doing? Get
out of town while you still can! If you’re Haitian, make sure
your inner tube doesn’t have a leak before putting it in the water.
Random Musings
–I said just last week that head to head polls at this stage of the
political process are meaningless, but obviously the latest USA
Today / CNN / Gallup survey showing both John Kerry and John
Edwards beating President Bush by 10 or more points can’t be
totally ignored. And lame columns such as that of conservative
Peggy Noonan don’t help the Republican cause.
“(The) President is himself feeling feisty and peppy, up for
battle,” with Noonan lamenting that no one feels compelled to
mention Saddam’s past history with WMDs, “which the dictator
had used before in Iran and on the Iraqi Kurds.” [Washington
Post]
If I hear this last bit one more time I’ll scream. No s—,
Sherlock, but some of us prefer to deal in the here and now, or as
Scott P. (Republican) wrote in from Florida, with the amazing
“hubris” of this administration.
The problem is it’s almost too late to admit any mistakes were
made, even as it’s abundantly clear Vice President Cheney and
his group relied on the word of defectors and exiles that flat-out
lied to promote their own agendas.
But lest some of you feel I’ve abandoned our president since last
May, I need to repeat that as of today I do not believe President
Bush knowingly lied to us, but others lied to him. At the same
time, some conservatives, such as the Journal’s Daniel
Henninger, continue to act as if only Democrats question the
administration’s veracity. Wrong.
–Commentator Robert Novak’s take on the $318 billion highway
transportation bill passed by the Senate, assuming the House then
passes a similar measure. Bush will finally issue his first veto,
knowing it will then be overridden. Nonetheless, the White
House will paint this as Bush being tough on the soaring deficit.
–You don’t have to agree with the content, but you have to admit
the Moveon.org television commercial with the lie detector
superimposed over President Bush’s words is incredibly
effective.
–The Wall Street Journal reports the U.S. can’t find Saddam’s
financial assets outside Iraq, funds that were earmarked for
reconstruction. If you have any of these please turn them over
before I see a commercial on this fact as well.
–I did not comment on President Bush and his National Guard
service last week because I frankly don’t think it’s an issue.
Period.
–I never listen to Rush Limbaugh unless I’m traveling around
somewhere, but on Tuesday I had a long drive from Daytona to
Marco Island and caught him. All I can say is; I hope most of
you take some of what he throws out with a grain of salt. For
example I heard this.
“Democrats cannot be trusted with our military…and they are
bringing the one guy forward (Kerry) who was a hero in Vietnam
…Kerry would take us to the U.N.”
For starters, my fellow Republicans, you have to be intellectually
honest. We are now 3+ years into the Bush presidency, it’s no
longer the Clinton administration, and it’s George Bush’s
military that is spread so thin we would lose thousands on the
Korean Peninsula before we could muster a counterattack should
Kim Jong-il ever decide to cross the line. And why the hell are
so many National Guard troops in Iraq if we can supposedly
meet our other commitments around the world? And why did
Secretary of Defense Rumsfeld then suddenly agree the U.S.
needs 30,000 more active duty forces? As for the U.N., what did
the Bush administration just do with Kofi Annan and Iraq? On
this last point, it was the right move.
[Radio rebuttals…just another free feature of StocksandNews.]
–This week we had two more examples of why we need capital
punishment in this country. In New York City, two 16-year-olds
called a Chinese food eatery for a delivery. When 18-year-old
Huang Chen arrived they beat and stabbed him to death (as he
pleaded with them to take his $49 and spare his life) and then
dumped the body a few miles away. Then you had the fellow in
Detroit who killed two police officers after a routine traffic stop.
In both instances, there is no doubt whatsoever who committed
the crimes. Why anyone would then not want to put them to
death I’ll never know.
–What the heck is going on in San Francisco and why do
authorities allow Mayor Newsom to get away with it? It’s a
national tragedy that this freakin’ issue has the potential to
dominate our political debate this fall when it should rank about
#20 on the scale of importance.
–Can’t say I saw any gay marriages at Daytona last Sunday,
that’s for sure. And President Bush’s appearance was the
ultimate example of the power of the office. It’s also said that he
received 70% of the white male vote in the South in 2000,
though I imagine that percentage has come down some like other
numbers have. Nonetheless, the cheers you heard on television
were authentic and sincere.
But I want to address another issue concerning the whole
Daytona experience. I walked into the track without getting
searched, even though both jacket pockets were bulging
(binoculars and a camera) and there were no metal detectors
where I was, unlike what you may have heard. You didn’t have
to take out the president to create a huge incident, in other
words.
Also, I commented in my 2/17 edition of “Bar Chat” (yeah, I
have to admit I have something to do with this one also) as to
how much I enjoyed the crowd and how well-behaved everyone
was. Then I read an account of Bush’s trip in the mainstream
press and boy was I steamed.
Mike Allen and Liz Clarke wrote in the Washington Post that the
president “courted a rugged crowd” and that “Beer is sold in
towering 16-ounce cans known as ‘tall boys,’” with “buckets of
fried chicken welcome in the stands.”
What was this all supposed to mean? We’re not good enough for
you? What did you mean by “rugged”? As I wrote elsewhere, I
didn’t see one bad incident in my two days at the track. Of
course I’ve always said I’d rather have a beer and a barbecue
sandwich with the common folk, rather than the effete snobs that
people the Washington – New York corridor.
–Guess who I met this week while he was walking his dog?
Former Senator George McGovern. My parents said they knew
where he had just moved in on Marco Island, but word had it he
wasn’t familiar with the town’s leash law. So we drove by to
check out the house and lo and behold, there he was with his
dog, sans leash. I rolled down the window and said, “Senator
McGovern? Brian Trumbore, long-time fan.” [Well, what
would you have said?] He walked over, guardedly at first, shook
my hand, said hello to Mom and Dad and then we exchanged
remarks on the just completed Wisconsin primary. I didn’t say
anything about him winning only one state in ’72.
–So this is a special week for me and the crew. The first “Week
in Review” for StocksandNews was 2/20/99, five years and
nearly 7,000 pages (including other columns I’m responsible for)
ago, though I started this particular piece with PIMCO Funds on
11/2/97. In all these years I have missed one WIR (though I’m
threatening to take another week off late this summer).
I guess you could say I’m officially a survivor at this point, and
I’m proud of the fact that for the last five tumultuous years there
has been no better wrap-up of world events and the financial
markets than this column. Anywhere in the world. Period. I
sometimes muse that aside from a little church on a Micronesian
island (Yap), maybe what I leave this world with, through the
power of the Internet, is a history that some professor 200 years
from now will stumble upon and say, “Damn, this guy was pretty
good” and then share it with his students.
Most of you realize this is a 7-day a week job, including
extensive work for my other bits. Frankly, all I do is read and
write, write and read. But while many of my friends said I was
crazy to leave so much money on the table at PIMCO (and I
was!), what this site has afforded me is the opportunity to travel
the world, all of which I’d like to think makes me a better writer,
while supplying you with unique insight.
I started StocksandNews in the naïve days of the Internet boom,
thinking that it would evolve into the kind of source that those
busy with other responsibilities would gravitate to as I supplied
them with everything they would need to be up on current
events, while perhaps dispensing a word or two of wisdom on the
financial markets. George Will once quoted James Madison
thusly.
“A well-instructed people alone…can be permanently a free
people.”
In some small way I’d like to think I’m doing my part to fulfill
Madison’s promise.
I also hope that if I leave you with nothing else but my “24-hour
rule” you will have benefited. Yes, it certainly has held me in
good stead and I have a terrific former boss, Jack L., to thank for
it. Jack was the man who gave me my big shot at PIMCO (then
Thomson Funds) in 1990. We had worked together before and at
the time I was struggling, having just fired myself for trading my
own account. To this day my friends at PIMCO and I always
comment on how we in turn adopted the 24-hour rule in dealing
with our own subordinates in later years.
But I thought I’d answer a question I know many of you have
been curious about.
Am I making money? Hell no! So how can I continue to do
this? My own investment portfolio, that’s how. I made money
2000-2002, and every other year since 1990. Not necessarily big
home runs, but a lot of singles and doubles.
Finally, a note of thanks to our own Dr. Bortrum and my brother,
the latter for Lamb in Command, and, operationally, there simply
is no site without the help of the following over the years:
Tony P., Joe G., Mark W., Sal R. and Rod N, all at CSI
MultiMedia.
So thanks for inviting me onto your screen. I’m going to do the
best I can for as long as I can…that’s my promise…and as long
as I own it, it’s also going to be FREE, so tell a friend!
—
–Thank God, pitchers and catchers reported this week. It’s time
for spring training, an annual rite where everyone’s favorite team
is still in first place.
–What NASCAR likes to say about its fans is that we’re the type
who take off our caps for the national anthem and actually sing
the words. But there is also nothing better than hearing the song
“God bless the U.S.A.” at a place like Daytona. Lee Greenwood
did his usual great job with this his signature tune, but about two
hours earlier the 82nd Airborne chorus also performed it. I was
out by the refreshment stands, chatting with some of the folks,
when the soldiers began. We grew silent…then, when it was
over, we dabbed our eyes.
—
God bless the men and women of our armed forces.
God bless the U.S.A.
—
Gold closed at $398…collapsed Friday with the soaring dollar.
Oil, $35.60
Returns for the week 2/16-2/20
Dow Jones -0.1% [10619]
S&P 500 -0.1% [1144]
S&P MidCap -1.0%
Russell 2000 -0.9%
Nasdaq -0.8% [2037]
Returns for the period 1/1/04-2/20/04
Dow Jones +1.6%
S&P 500 +2.9%
S&P MidCap +3.6%
Russell 2000 +4.1%
Nasdaq +1.7%
Bulls 59.2
Bears 17.3 [Lowest since mid-July. One of these days it will
matter.]
Have a great week, and a hearty thank you for your support over
the years.
Brian Trumbore
