Although it sounds more like something Yogi Bera might have said and he was a renowned socialist, allegedly, the sign hanging in Albert Einstein’s office at Princeton read, “"Not everything that counts can be counted, and not everything that can be counted counts." This kind of thinking moves Einstein from obvious “smart guy” to genuine “wise guy” in my book; and I like wise guys.
We could all benefit from some wisdom right now. Maybe, if accounting was not all that mattered, BP would ask Shell and Exxon for their help in the Gulf of Mexico. Maybe, it should have occurred to their competitor’s CEOs to stop laughing long enough to pony up some expertise and brain power to help. Maybe rather than the Attorney General launching civil and criminal probes saying things like “we will not rest until justice is done,” they should concentrate on getting the oil leak plugged. Corporate and government, we need leaders that lead.
I became acquainted with a prior unknown to me giant last year. I think he and Teddy Roosevelt would have hit it off. Pres. Roosevelt liked “soft speaking and big sticks” this wise guy liked “hatchets in cul-de-sacs”.
“No, I won’t sign his book.” Lee Kuan Yew…2009
Last year, I had the opportunity to spend a couple of work days with Kwa Kim Lee in Singapore. Kim is the Sr. Partner (and a brilliant lawyer) at Lee & Lee in Singapore. She is also a favored niece of Lee Kuan Yew, who is widely regarded as Singapore’s patriarch founder. He has also been an advisor to the last six (or more) US Presidents. While I was in Singapore a couple of Kim’s law partners asked if I had read any of Mr Lee’s books. I had not but, being a weasel I asked if Kim could get her uncle to sign one for me. I tried every angle I could think of and I finally made an offer to give money to the charity of his choice any time I visited Singapore. (We are setting up a business in Singapore, I wasn’t scamming him). Alas, he would not autograph the book but his niece did instead and she wrote a very nice note. I was lucky and I considered it an honor to have negotiated with such a man.
He has said some good stuff over the years like: “Everyone is entitled to all the rights and freedoms set forth …, without distinction of any kind” BUT he also said,… “if you are a troublemaker…it’s our job to … destroy you. Put it this way. As long as he stands for – a thoroughly destructive force – we will knock him. Everybody knows that in my bag I have a hatchet, and a very sharp one. You take me on, I take my hatchet, we meet in the cul-de-sac.” I like the feeling that if you poke this guy you will get more than a speech blown back at you.
Now on to psychology, my fetching wife’s field of expertise...I have been waiting for the risk to get priced into the market. We are getting closer. It doth appear that the markets are getting themselves rather bearish. The American Association of Individual Investors, which I have had great respect for since I first started joined them in 1982, publishes a weekly bullish and bearish survey of its 170,000 members.
In the light of the masses are asses, I like to take the bulls and subtract the bears and when it gets really negative I feel the market then offers some safety to enter. The bulls this week were a meager 29.8% and the bears were 50.9%. This is a good sign not a buy signal but a good sign.
As well the option premiums that you must pay to insure your portfolio of stocks have also gone into hyperdrive and disaster is now priced into the options markets.
So, risk has been priced up and the markets took a nice dive of more than 10%. No need to go hog wild but I think it is time to put the buy hat on. Start small again and use stops beneath. Still have a mess in Europe, massive deficits everywhere, but corporations have lots of cash, multiples are reasonable and the bad news is priced in.
Not sure you can really top the bad news and negativity of a meltdown in the Euro, Greece, Spain and Portugal’s debt imploding, potentially losing the EUR as a currency, blowing a hole in the earth’s crust and filling the Gulf of Mexico with oil and… and the US economy is hanging in there and theDJIA seems to be holding 10,000, for now.
Use tight stops and don’t bet the farm (sorry, ranch, dad).
Well bought is half sold.
Good Luck!
Leon
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