Commentary for week ending 10/16/2021

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.


Now, to the growth fund.  I don’t really have anything new to add, except that I would recommend trimming some of the high fliers like FTNT, EPAM, and NVDA.  I would not sell everything, just “play with house’s money”.  As for the losers like BABA and VIPS- all I can say is I hope you sold some when they were at their highs.  I don’t see them coming back soon but as I said before, I think that they may come back when/if the Chinese government recognizes that unless they want to return to the truly bad old days of the 1960’s, they will need to lighten their stranglehold on these businesses.   As for new growth opportunities, I would suggest you look at Lam Research (LRCX) and KLA Corp (KLAC).  Check them out. 


As for the income fund, I they are still long term holds, although I would recommend lightening up on Jefferies (JEF) since it is up significantly and its yield doesn’t meet my goal of 3%.  Again, don’t sell all, like Cramer says, take a little “schnitzel”.   As for the underperformers, stay the course for now, although I may make some adjustments in January.


Well, I suppose that is all for now.  Oh, before I go, here is an anecdote on movies (and on the movie going public):  I saw “No Time to Die” yesterday.  The theater was relatively crowded even for a matinee (I guess the Steelers playing at night at something to do with that).  But I have to mention that rudeness and inexplicable actions by moviegoers are still prevalent. I knew I was in trouble when the couple next to me laughed uproariously at a moronic Johnny Knoxville preview – they talked during the movie. And a woman close by brought two children under 10 to a Bond movie! What?  Anyway, there were empty seats a few rows down so I moved.   As for the movie itself, I it was pretty good (although overlong), so I would recommend it.  And as for the financial implications of movies, I would suggest considering AMC or Cinemark Holdings (CNK), since it does appear that the reports of the death of theaters are greatly exaggerated!


Now, I’m ready to go (forgive my digressions)! 


Yours, Dan




Leave a Comment