Good Stock Advice

Sorry, been away a bit the last week. I decided to take up another subscription to Motley Fool's Hidden Gems (amazing publication), and found what I think is perfect advice in the introduction to the newest edition:

Here's a story about the worst investing decision I ever made. It doesn't involve a company that went bankrupt or a dot-com implosion or anything of the sort. No, this story involves a house.

In 1992, I had just graduated from American University and I wanted to buy a house. A friend and I started looking, and we found a place on Logan Circle in northwest Washington, D.C. It was a 1920s Victorian row house, and it was beautiful. Exposed brick, 12-foot ceilings, 4,500 square feet, including a basement apartment that we could rent out to help cover our mortgage.

The price? $230,000. That sound you hear is the collective groan of everyone who knows a blessed thing about D.C. real estate. These days Logan Circle is one of the most prestigious neighborhoods in the city.

But that was 1992. We elected not to buy that house -- not because of the crime or the wino our agent had to rouse from the stoop or the women of the night openly plying their trade. The asking price of the house fully accounted for these elements. No, we elected not to buy the house because we were idiots.

In the 16 intervening years, Washington real estate has done nothing but go up, and no place more so than Logan Circle, where a 700-square-foot efficiency now costs $400,000. Houses like "ours" routinely sell for $4 million and up. Yep.

Those kinds of gains were available to the people who had a little foresight (and luck) and -- here's the real lesson -- were willing to buy when no one else was. That's just as true in the stock market as it is in real estate.

I've been investing for a long time -- since I had a few dollars to rub together. I've seen markets of all sorts and of all kinds of irrationality. I've never seen anything quite like what's going on now. The markets are crazy. Quite simply, they are seized by fear. Heaven help companies in the commodities, financial, real estate, or oil businesses, or ones in emerging markets. Today, the market is making no distinction between good and bad companies. Witness what happened to poor Chipotle (NYSE: CMG-B) on Sept. 12 -- the shares dropped 19% in a single day. It's madness.

Make no mistake -- there are some enormous risks. In the past month alone, we've seen the nationalization of Fannie Mae and Freddie Mac and the take-under of Lehman Brothers, three pillars of the global financial market.

Should you panic? Heck no! Did you already forget my house story? Sure, I lost out when I didn't buy a house at the absolute low of the market. But the players in my tale of woe who really lost are the sellers. They held the deed to a house that would have made them extremely wealthy, and they sold it in despair. It's now, when the market is in despair, that you have the best opportunity to make great decisions, the ones that will make you wealthy down the road.

A New Game

So, according to the lady in the video, Alaska has a special role to play in the much-heralded End Times, in part, because it is shaped like a "crown." Now, getting Alaska to look like a crown takes a bit of work, but if you rotate it a bit clockwise and knock off that long peninsula, you can see the resemblance.

So, that got me to thinkin'. What do other states' shapes tell us about their roles in the End Times? If Alaska is the crown, then is Louisiana a foot? The foot stomping on the Evil Serpent Beast rising from the Gulf of Mexico?

I'm open to all your suggestions. Creativity is appreciated.

And, please, none of the easy guesses about Florida...

Looks like a similar one is going up in Poznan, Poland:

Cool

I'm sorry, but buildings like this make me giddy.

http://curbed.com/archives/2008/09/15/jenga_herzog_de_meurons_56_leonard_revealed.php?o=10

Apostasy!

So, Chris Buckley, like Kathleen Parker and George Will (and the rest of the "Georgetown wine-sipping punditocracy" who don't tow the party line) gets kicked to the curb. Better not say anything unhelpful to the Movement at this point, it seems:

http://www.thedailybeast.com/blogs-and-stories/2008-10-14/sorry-dad-i-was-fired

The American Lifestlye is Not Negotiable

Does anyone remember this dictum of the early George W. Bush years? One aspect of the general American criticism of Bush that surprises me is how his policies seem to take us by surpise. They shouldn't. Go back and watch the Cheney - Lieberman and Bush - Gore debates from 2000. How we got to where we are today becomes much clearer. If we're honest, we would recognize that America was not so much deceived by Bush as much as Bush effectively held up for us Americans an enormous mirror, and we don't like what we see. The American lifestyle is (irrationally) defended because it is difficult for us to see a unified alternative to our fractionalized society. James Madison and other "founding fathers" built America by utilizing a fundamental disunity to create and encourage a union of disunion. The American dream is a beautiful thing, but a disturbing aspect of its nature is that its fullest realization is not a united society but millions of satiated individuals that have little to do with one another. The American dream isn't to make America better, but to have a bigger house in a bigger yard with a bigger television. It's hard to compromise on this dream if a picture of broader social unity is extremely difficult for Americans to imagine. It also creates a hostile environment for broader social goods. It renders our lifestyles "not negotiable."

Coming to Europe, one realizes that a greater harmony can be achieved by surrendering the American dream for what Dostoyevski termed in Crime and Punishment as one's square meter of space. Having less at home frees the individual to have more elsewhere, to reclaim nature and other aspects of communal health. I perceive this in small ways, such as using stones to build roads in city centers instead of asphalt and reserving areas of cities for footgoers only, and in big ways, such as widespread use of renewable energy and connecting cities, towns and villages through efficient public transportation.

But who is going to call the American dream into question? Compounding our own image problem, it is also what America is most admired for in the world at large. Perhaps if America loses its image as an economic leader in the world as well as a political one, it will offer us an opportunity to rethink our image and goals as a society.

Who's in control of McCain's campaign?

The shameful Sarah Palin loves this kind of press, I'm sure. Even if it's negative in the moment, it's helping to build the narrative that she, and she alone, was willing to give voice to "conservative" values in the election. That she was wrongly persecuted for this. And that she should be the standard-bearer for the GOP in years to come.

http://www.politico.com/news/stories/1008/14555.html

Oklahoma: McCain 63, Obama 32

At least somebody's feeling the love.

http://www.pollster.com/blogs/ok_mccain_66_obama_29_tvpoll10_1.php

STOCKS SURGE!!!

I find all this hyperbole irritating. So what? Stocks surge on Monday because governments announce a concerted action plan. Well, what if we get wind next week that the plan may not work rapidly enough, or another industry giant releases a horrible earnings report, or on and on and on.

Let's just behave prudently, and stop pretending that the vicissitudes of the DOW or the S&P can tell us much about the underlying health of our economy.

http://www.spiegel.de/international/europe/0,1518,583739,00.html

Blacks Pols in New Hampshire?

So, blacks are getting elected even in cities and states where there aren't many of us. This doesn't surprise me too much. I'm from southern West Virginia, and I've thought on and off about returning to get engaged in local politics there. Yes, there is definitely racism in much of rural America (I don't know what the demographics are like in the New Hampshire district discussed in the article). But what I've always found interesting is that rural racism--the most ignorant sort--is usually the easiest to overcome. These usually aren't evil people, just people with not much external exposure or education. They're often quick to recognize their own ignorance when confronted with it.

The most difficult racism to overcome is "educated" racism--that of the lower-middle/middle class, who have a philosophy of racism based on what they consider reasoned, commensensical observations. So, seeing black representation in places like Iowa, New Hampshire, Minnesota--even rural West Virginia or Kentucky--would not be that surprising.

I will be shocked, however, the day I see black representation of, say, the white suburbs of Cleveland or Atlanta.

http://www.nytimes.com/2008/10/14/us/politics/14race.html?_r=1&hp&oref=slogin

Whew!

http://voices.washingtonpost.com/thefix/2008/10/obama_the_100_million_man.html?hpid=topnews

Chomsky (almost) on fire

An interesting interview with Noam Chomsky from Der Spiegel here in Germany. I can't say I agree with everything (for example, I actually do believe there are fundamental differences between the parties, and they're not just based on personality and rhetoric), but I think this observation is right on:

Chomsky: The times are too difficult and the crisis too severe to indulge in schadenfreude. Looking at it in perspective, the fact that there would be a financial crisis was perfectly predictable, its general nature, if not its magnitude. Markets are always inefficient.

SPIEGEL: What exactly did you anticipate?

Chomsky: In the financial industry, as in other industries, there are risks that are left out of the calculation. If you sell me a car, we have perhaps made a good bargain for ourselves. But there are effects of this transaction on others, which we do not take into account. There is more pollution, the price of gas goes up, there is more congestion. Those are the external costs of our transaction. In the case of financial institutions, they are huge.

SPIEGEL: But isn't it the task of a bank to take risks?

Chomsky: Yes, but if it is well managed, like Goldman Sachs, it will cover its own risks and absorb its own losses. But no financial institution can manage systemic risks. Risk is therefore underpriced, and there will be more risk taken than would be prudent for the economy. With government deregulation and the triumph of financial liberalization, the dangers of systemic risks, the possibility of a financial tsunami, sharply increased.

SPIEGEL: But is it correct to only put the blame on Wall Street? Doesn't Main Street, the American middle class, also live on borrowed money which may or may not be paid back?

Chomsky: The debt burden of private households is enormous. But I would not hold the individual responsible. This consumerism is based on the fact that we are a society dominated by business interests. There is massive propaganda for everyone to consume. Consumption is good for profits and consumption is good for the political establishment.

SPIEGEL: How does it benefit politicians when the populace drives a lot, eats a lot and goes shopping a lot?

Chomsky: Consumption distracts people. You cannot control your own population by force, but it can be distracted by consumption. The business press has been quite explicit about this goal.

http://www.spiegel.de/international/world/0,1518,583454,00.html

Ford is $1.99/share

Hmmmm....

You've Come a Long Way

Mountain Mama

http://www.culture11.com/article/32728

This article about the inherent unfairness in labeling West Virginians racist has been getting a lot of play. As a black West Virginian myself (apparently one of the few), I see a heck of a lot this guy gets wrong or just overlooks.

This is just a bookmark for those of you who want to read the article. I've got to get some sleep, but will go into it a bit tomorrow.

The New Face of Christianity

Pentacostalism/Non-Denominationalism/Christianism represents one of the greatest threats to American democracy. I've been saying this for years, as someone who grew up in the tradition and knows what its adherents believe and hope. But for some reason, many of my friends on the left have never seemed to take the threat seriously. "Oh, they're just some nutjobs," was always the refrain I heard back in 2002 and 2004 when it seemed the the GOP was really seeking to make them a core constituency. I think that for many progressives, this world is too far removed to seem real.

Well, it's time to start paying attention. No, Sarah Palin likely won't become V.P. in 2009 (let's work our butts off to ensure there aren't any surprises). But the mere fact that someone like this is even at the top of a national ticket should scare the bejeebus out of all of us.

When I was young, being Pentacostal/Non-Denomonational was rare. I was the only child in my Catholic elementary school who had "received the Holy Ghost"--the Pentacostal right of passage (chronologically, if not theologically, analogous to the Catholic Confirmation) in which you are blessed with the ability to speak in tongues. This usually involved making up lots of words with "S" and "E" (and the more middle-Easterny sounding, like "shodialam sadelo sheekay," the better). I would lay hands on classmates, Pass Out in the Spirit at gospel campmeetings, pray for hours on end for revelation about where in the Atlantic Ocean, exactly, Hell could be found.

In the 1980s and 90s, it was difficult to find a thriving Pentacostal/Non-Denominational church in most of the U.S. So, like countless other families, we would hit the interstates. A six hour drive to Columbus, Ohio. A 14 hour drive to Orlando, Florida. A 5 hour drive to North Carolina. A typical question at most of the services we attended was always, "How long did you drive to get here?" The more harrowing the number the better, as it showed just how hungry you were for the "Anointing."

As a measure of the incredible strides this genus of Evangelicalism has made in the last decade--I grew up going to the churches of then largely unknown pastors who have since become major national players: Rod Parsley, T.D. Jakes, Benny Hinn, John Hagee, Creflo Dollar.

This is a major movement, one that has now become mainstream. I really believed this stuff. And so do the people caught up in it now. So does Sarah Palin.

Please take a look at this video. And start taking this seriously:

http://www.thedailybeast.com/blogs-and-stories/2008-10-09/new-footage-from-inside-palins-church/

U.S.A.! U.S.A.!

In listening to the Right Wing noise machine constantly belting, "U.S.A., U.S.A.!" at Palin-McCain rallies, I can't help but think the "anger" many of them feel is not really about Obama's unrepentant terrorist pals. Sure, that provides nice cover, but I think their true anger comes from finally having to face this stark reality:

http://www.newsweek.com/id/163449/page/3

A new discipline would benefit America in a more general sense, too. Ever since the collapse of the Soviet Union, the United States has operated in the world with no constraints or checks on its power. This has not been good for its foreign policy. It has made Washington arrogant, lazy and careless. Its decision making has resembled General Motors' business strategy in the 1970s and 1980s, a process driven largely by a vast array of internal factors but little sense of urgency or awareness of outside pressures. We didn't have to make strategic choices; we could have it all. We could make blunders, anger the world, rupture alliances, waste resources, wage war incompetently—it didn't matter. We had more than enough room for error—lots of error.

But it's a different world out there. If Iraq cast a shadow on U.S. political and military credibility, this financial crisis has eroded America's economic and financial power. In the short run, there has been a flight to safety—toward dollars and T-bills—but in the long run, countries are likely to seek greater independence from an unstable superpower. The United States will now have to work to attract capital to its shores, and manage its fiscal house better. We will have to persuade countries to join in our foreign endeavors. We will have to make strategic choices. We cannot deploy missile interceptors along Russia's borders, draw Georgia and Ukraine into NATO, and still expect Russian cooperation on Iran's nuclear program. We cannot noisily denounce Chinese and Arab foreign investments in America one day and then hope that they will keep buying $4 billion worth of T-bills another day. We cannot keep preaching to the world about democracy and capitalism while our own house is so wildly out of order.