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Commentary for week ending 11/06/2021

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Well, Congress has finally passed the “hard” infrastructure bill – something that they could have passed many months ago, if not for the progressives insistence on coupling the bill to the “soft” infrastructure bill.  It defies my imagination as to why they couldn’t come to the quite logical decision that something is better than nothing.  I guess that is why I will never be a politician.  To me, even if I was a member of the progressives, I would have voted for the first bill, and then break up the bigger “soft” bill into component pieces that would be easier to swallow.  I am sure that are some parts of the large bill that would find support among Republicans and more moderate Democrats.  Again, something is better than nothing! read more

Commentary for week ending 10/23/2021

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My commentary for this week will be relatively brief.  But I need to say something about Facebook (FB).  There have been a lot of comparisons to FB to being the “big tobacco” stock of 2021 because of the threat of legal actions.  Personally, I think that is fallacious as FB is a vital part of small business and I doubt that any legislation will stop it from collecting ad dollars.  I regard any weakness as a buying opportunity – not a reason to sell.  But let’s suppose that FB is like Altria ( née Phillip Morris).   Many years ago I bought 1,000 shares of Phillip Morris at about $18/share.  That 18,000 dollar investment netted me thousands of dollars thru growth, dividends and spin-offs.  Of course FB doesn’t pay a dividend but it makes it up in growth.  My point here is that hated stocks which fulfill a want like tobacco in the case of Altria or advertising in the case of FB, they often overcome adversity, thrive and grow.  read more

Commentary for week ending 10/16/2021

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There are five essential principles of management. These include planning, organizing, directing, controlling, and leading.  Why did I start with these sentences?  Because I believe that this administration (and frankly, most of the previous ones) do not follow these basic principles.  They all seem to be good at directing and controlling but are sadly lacking in skill with the other principles.  A current example is the Biden administration’s energy policy.  Some of his first acts were to cancel the Keystone pipeline and to ban new drilling on federal lands.  But there was no coherent plan on ramping up clean energy policies while basically “keeping the lights on” with fossil fuels.  The administration is now reacting to high energy prices by recognizing that fracking may not be as bad as it seemed and asking the Saudis to increase production!  Jeez!  How about having a plan first instead of being reactive rather than proactive?  Here is a simple analogy (but I think illustrative) example from my prior life as a manager:  a direct report (read: a resource like energy) is being transferred to a new manager but they still have projects to complete under my responsibilities (read: “administration”).  Did I transfer the person and hope for the best on their projects for me?  No, I worked out a plan with the new manager to gradually shift the person’s responsibilities to the new manager while completing the projects for me (read: organizing and leading).  I think that if the current administration had followed these basic principles, we would be in better shape today with our energy situation. read more

Commentary for week ending 10/02/2021

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News from the “puzzle palace” (otherwise known as Washington, DC):

  • Senator Elizabeth Warren calls the Chairman of the Federal Reserve “dangerous”.  Really?  Jay Powell may be too dovish for my tastes, but he is a fine man and I would hardly call him “dangerous”.  Senator Warren should apologize for her level of invective.
  • Congress is still struggling to pass the infrastructure bill.  As I previously stated, we need to improve our roads, bridges, airports, broadband, etc.  But the 3.5 trillion dollar Democrat “wish list” is a bridge too far.  
  • The administration wants banks to report transaction information on any account with more $600 to the IRS.  This is completely absurd and is an an unfair burden on small banks and businesses.  More importantly, the effect on tax compliance seems questionable.  I was talking to a friend in the IT department of a major bank and he was happy about this one.  Why?  Because it means virtual permanent employment for him as he would need to design, code, and debug thousands of lines of code to support this stupid requirement!  Here is more information:  ABA Letter to Senate Finance and House Ways and Means Committees: Views on Tax Information Reporting Proposal | American Bankers Association
  • Congress wants to virtually close IRA investing to high earners (glad I already built mine).  See this:  Why Is Everyone Talking About the Mega Backdoor Roth IRA? | The Motley Fool
  • The talks on the debt limit are patently ridiculous, since we those funds have already been appropriated and spent.  It is similar to an individual buying goods and services on their credit card and then refusing to pay.  If there is a “debt limit”, it should be done before the money is spent, not after!  Seems obvious, doesn’t it?  But not in the “puzzle palace” (oh, sorry, Washington, DC!).

On the market in general, I think we are in for some more trouble.  Limited supply of both goods (particularly chips) and service (i.e. workers) are putting us on the road to more inflation.   Anyone who has taken a beginning economics class will recognize a supply/demand curve imbalance that will only reach equilibrium with price increases.   read more

Commentary for week ending 09/11/2021

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Looking at the title of this commentary, I have to make some comments on the 20 year anniversary of that terrible day in history.  On that day in 2001, I was in San Francisco as a “way station” on my way to Hawaii for a vacation. Needless to say, the Hawaiian portion of my vacation was cancelled. I wasn’t able to return home until the following Sunday. The world was with us on that day and afterward, it is a tragedy that unity was squandered.  And I am sure that you have probably had your fill of documentaries on the subject, but I recommend that you watch “Rise and Fall : The World Trade Center” on the History Channel. It has some interesting facts on how the towers were built as well as their tragic fall.  Fortunately, I didn’t lose any friends or family on 9/11, although several of my friends worked in NYC and they suffered PTSD from the trauma of that day. And several years prior to 2001, I commuted to Wall Street thru the WTC at about the same time that the planes hit and thought – wow I could have been there – fate works in strange ways, doesn’t it?  Finally, did you know that the pilots assigned to bring down United 93 were on a suicide mission?  There wasn’t time to arm the plane!  They were going to ram the aircraft.  Again, fate intervened.   read more

Regrets, I’ve had a few But then again, too few to mention

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The above quote from the “ole Blue Eyes” song sums up my thoughts on the Miley Growth Fund and the Miley Income Fund.  On the Growth Fund, I have regretted recommending BABA and VIPS – the performance of the fund would have been a lot better without them.  But as I mentioned, I think that the Chinese government will eventually come to its senses (and the stocks are improving a bit today).  It also illustrates the fact that diversification lessens the impact of bad choices like BABA and VIPS.  As for the other stocks in the growth fund, notice that my confidence in NFLX has been rewarded – the stock is rebounding today.  I may make some adjustments to the fund in January on the fund’s year anniversary, but for now stay the course with all of the stocks in the fund. read more

Commentary for week ending 08/21/2021

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I assume that most of you have seen the terrible events occurring in Afghanistan.  It is an example of gross mismanagement that one hopes will not recur.  As for the effect on the business world – probably not that much.  But I am concerned about the Chinese getting a further lock on “rare earths” needed for batteries and electronics.  Let us hope that the US finds more sources. read more