Monday, November 26, 2007

Home builder stocks

Well, I'm seriously licking my wounds on my homebuilder stock picks. Only once have I ever averaged down - and just increased my ultimate losses. However, I'm considering it for this group. The prices have continued to drop; adding to the position won't be that expensive....

Daniel T. Carroll

Daniel T. Carroll died last week.

Mr. Carroll was on the board of American Woodmark while I was there (and I believe continued to serve up until he passed away). He had served as the President of Booz Allen Hamilton for a while, and was the consumate director.

In a way he was before his time. He served on a number of boards, and understood - and insisted on - prompt and accurate board reports, straightforward management presentations, and expected management to do its homework. He also expected directors to do theirs, and always studied his materials before any meeting.

He was a tough audit committee director.

RIP Mr. Carroll.

Sunday, November 11, 2007

Buying jewelry

We bought some jewelry - and had a big time doing it.



We were in NY and in our hotel (the Essex - see related post) was a tiny jewelry store. There were some simply spectacular pieces for sale and we stepped in, greated by Daniel Safdie. Pam spotted a ring, and I spotted a Girard Perregaux watch.



Then the fun began. It turns out that the art and antique store, also in the hotel and the jewelry store are under common ownership and management. Daniel's brother Ron runs the art store - R. N. Joseph Fine Arts. Daniel coaxed us down the hall to the larger store. It was quickly obvious that Daniel is the straight man, and brother Ron is the entertainment and sales closer.



So we found ourselves joking - and a little negotiating - with two Jewish guys in yarmulkes with country music in the background (a curious coincidence for us Tennesseans).



We bought the watch and ring and Pam picked up a few Jay Strongwater pieces to go along.



I think we got good deals on the jewelry, but we definitely had fun with the Safdies. The store is full of beautiful pieces of art, jewelry, chandiliers and other stuff too numerous to mention.



If you are in Manhatten pop in for a little fun. Bring you platinum card.

Presidential race continued

Fox Sunday News is doing a good job covering the election cycle with appearances by candidates. Bill Richardson did a decent job today defending his get out of Iraq in one year or less policy - even thought the "surge" seems to be getting some traction.

I thought Fred Thompson last week did a very solid job of taking and defending positions.

While it seems to be done to four - Guiliani and Romney - Clinton and Obama - I'm not so sure yet. Huckeby is winning support, and Edwards may surprise in Iowa....we'll see.

Personally, I still like John Mccain who I think is extremely qualified, and I don't know that it is all bad to have a President with a bit of a temper....but Thompson was impressive on the talk show circuit. He doesn't come across as having a big energy level - but I'm not hiring a fitness instructor.

Wednesday, November 07, 2007

General Motors $39 Billion Loss

GM reported a stunning $39 billion loss yesterday - which they attributed to SFAS 109 accounting requirements.

I would add FIN 48 to that list of causal reasons.

FIN 48, promulgated by the Mandarins at the FAS and the SEC, requires companies to describe in the footnotes to the financial statements any risky tax deductions they have claimed. In other words, companies are now signaling to the IRS exactly which items they should come audit. So, the intersection of SFAS 109 - which requires tests that future earnings are sufficient to allow deduction of prior year losses - plus FIN 48 - telegraphing risky positions, puts companies, and more particularly their boards of directors, in the position of taking a more conservative tax posture.

The real question is where else this will lead. My supposition is that companies broadly will be reporting higher tax rates - e.g. - lower earnings and earnings per share. I have my doubts that Wall St. financial analysts have adequately reflected higher taxes in their estimates.

Thursday, November 01, 2007

Econorama continued

Fed cut again. Market rallied on the 31st but dived on the first.

I've been reading widespread criticism of Bernanke; general comments are that inflation is growing and the Fed should be holding at a minimum if not actually raising interest rates.

What is missing is any comment on government fiscal policy. Administrations used to draw equal criticism to Fed Governors. Now however, it seems that only the Fed Chairman is in the hot seat, and Presidents, Secretaries of The Treasury, etc. skate.

Perhaps we've abandoned hope that elected folks can exercise any discipline, and concluded that only appointed officials have any possibility of acting in the national interest.....

A chink in the armor?

The Democratic candidates for President are frothing at the opportunity to take a few votes from Hillary....her skillful evasion of a couple of Tim Russert questions has provided an opening to tag her with her husband's famed Slick Willie rep.

Overall, however, I didn't think she hurt her chances, and I think Obama, Edwards, Dodd, Biden et al stand little chance. Indeed, overall I think it is her game to lose...

The Swizzle Inn

Thoughts while eating nachos at the Swizzle Inn on Bermuda: what ever happened to Natalie Merchant and 10,000 Maniacs?