Saturday, August 24, 2002

8/24/02 Quotes For Saturday

In memory of Peter Martin, Senior Business Editor Financial Times: Lessons from the dotcom bubble-
"much internet technology does not work...most new business models do not work...nothing destroys
value like underpriced capital...financing start-ups in the public markets is a terrible idea...the web era has just begun...
there is at least as much interesting innovation ahead as that which lies behind."

Winston Churchill: "You may take the most gallant sailor, the most intrepid airman, or the most audacious
soldier, put them at a table together- what do you get? The sum total of their fears."

Kofi Annan, secretary-general of the United Nations: "Attempts to promote human development and reverse
environmental degradation have not, in general, been effective over the last decade."

Bob Semple, Deutsche Bank, "we have to concede that recent economic and corporate developments have been more
disappointing than we anticipated, with little prospect for improvement over the next month...at best, we believe
equities are likely to consolidate rather than make further progress in the short term."

Friday, August 23, 2002

8/23/02 Posting #2 Republicans and Democrats

In one of my blogs last month I mentioned that the White House budget office predicted a $444 billion budget surplus between 2002 and 2011. I provided commentary on this estimate. Now we have another voice from the peanut gallery, the Senate Budget Committee, who yesterday predicted a $475 billion budget deficit for the same period. They predicted deficits would continue thru 2008. They must believe George W. will be elected for a second term! The White House predicts a surplus in 2005. They must believe George W. will get elected for a second term!

For my money I want to see the revised numbers. Don't cheat me. I want revised monthly budget deficit numbers. The government revises most numbers. Let's set up a new committee just for revising government numbers. That would help the employment numbers.
8/23/02 The Nation's Secret Intelligence Court

The court said the F.B.I. and the Justice Department had made "erroneous statements" in eavesdropping applications about "the separation of the overlapping intelligence and criminal investigators and the unauthorized sharing of FISA information with F.B.I. criminal investigators and assistant U.S. attorneys."

It was also mentioned that an "alarming number of instances" of misleading justifications for electronic surveillance and wiretaps occurred during the Clinton administration. As citizens we each "own" a piece of the federal debt and we are each asked to work 4 1/2 months each year for free so that the monies earned during that time can go to pay taxes. It's fair to say the citizens own this country and not the federal beaurocracies. Isn't it time federal employees recognize who pays their salaries and that they should be held to a high standard of ethics- just like at Enron, Global Crossing, WorldCom and the like?

The people responsible for "erroneous statements" in these 75 cases cited by the Secret Intelligence Court should be prosecuted to the fullest extent.

Thursday, August 22, 2002

8/22/02 Government Statistics

Once again the government has provided "moving target" numbers. This time it was the labor department, and they have just revised preliminary estimates for the latest weekly jobless claims and raised the number to 391,000. These are weekly not quarterly numbers. How difficult can it be to get a weekly number correct? GE is a massive company and gets daily numbers. I ran a company with a 1000 employees, not massive, and got daily numbers.

Unemployment statistics are vital numbers. They have a bearing on many aspects of our way of life. The U.S. citizens are up in arms about Enron and Global Crossing and Worldcom and rightly so. Providing accurate and timely government statistics should be treated with at least the same seriousness. Should it come out that the statistics are being "manipulated", then proper actions should be taken and that too should be front page news.

Revising weekly numbers is akin to 3 card monte.

Wednesday, August 21, 2002

8/21/02 Management Lessons

Lesson Number One
>
> A crow was sitting in a tree, doing nothing all day. A small
rabbit saw
the > crow, and asked him, "Can I also sit like you and do nothing all
day
long?"

> The crow answered: "Sure, why not." So, the rabbit sat on the
ground
below
> the crow, and rested. All of a sudden, a fox appeared, jumped on
the
rabbit > and ate it.
>
> Management Lesson? To be sitting and doing nothing, you must be
sitting
> very, very high up.
>
> Lesson Number Two
>
> A turkey was chatting with a bull. "I would love to be able to get
to
the
> top of that tree," sighed the turkey, "but I haven't got the
energy."
"Well, > why don't you nibble on some of my droppings?" replied the
bull.
"They're > packed with nutrients." The turkey pecked at a lump of dung
and
found that > it actually gave him enough strength to reach the lowest
branch
of the tree.

> The next day, after eating some more dung, he reached the second
branch.
> Finally after a fourth night, there he was proudly
> perched at the top of the tree. Soon he was spotted by a farmer,
who
shot > the turkey out of the tree.
>
> Management Lesson? BullShit might get you to the top, but it won't
keep
you > there.
>
> Lesson Number Three
>
> A little bird was flying south for the winter. It was so cold the
bird

froze > and fell to the ground in a large field. While it was lying
there, a
cow > came by and dropped some dung on it. As the frozen bird lay there
in
the > pile of cow dung, it began to realize how warm it was. The dung
was
actually > thawing him out! He lay there all warm and happy, and soon
began
to sing for > joy. A passing cat heard the bird singing and came to
investigate.

Following > the sound, the cat discovered the bird under the pile of
cow
dung, promptly > dug him out and ate him.

>
> Management Lesson?
>
> 1) Not everyone who shits on you is your enemy.
> 2) Not everyone who gets you out of shit is your friend.
> 3) And when you're in deep shit, it's best to keep your mouth
shut!

Tuesday, August 20, 2002

8/20/02 The Trade Deficit

For the second month in a row our monthly trade deficit exceeded 37 billion dollars. On an annualized basis this approaches 450 billion dollars. With the budget deficit projected at 165 billion dollars this makes a total budget deficit exceeding 600 billion dollars. Such large deficits undermine the stability of the economy, the stability of the dollar and our independence. This course must be reversed before we hit a stonewall and crash out of control.


Monday, August 19, 2002

8/19/02 Posting #2 V Shaped

The Dow is now approaching 9000 and the Nasdaq 1400. At the same time the Index of Leading Economic Indicators came in at the lowest point since last September. The stock market reflects future profits and, in my view, the economic environment does not appear
poised to get rosy. Those buying on dips will regret their purchases. The recent bounce will not be V shaped as it was in December 1974. Even then, there was another significant buying opportunity in 1982.

In the past two years we have witnessed several dead cat bounces, and from declining price levels. Look at the charts. They tell me to body surf on a warm beach. I won't forget my sunscreen. For buyers of stocks maybe you can find some "price screen".
8/19/02 Continuous Replenishment

Sam Walton in 1987: "The way we do things is way too complicated. You (P&G) should automatically send me Pampers, and I should send you a check once a month. We ought to get rid of all the negotiation and invoicing." Sam Walton was ahead of his time, and one could argue that he made WalMart into the most successful business in the U.S. if not the world.
Invest in and with winners. Stay with the winners. Warren Buffet buys winning companies and lets the managements stay on and run the operations. You can do the same with your investments. It means buying a piece of the business. Keep it simple.
8/19/02 Continuous Replenishment

Sam Walton in 1987: "The way we do things is way too complicated. You (P&G) should automatically send me Pampers, and I should send you a check once a month. We ought to get rid of all the negotiation and invoicing." Sam Walton was ahead of his time, and one could argue that he made WalMart into the most successful business in the U.S. if not the world.
Invest in and with winners. Stay with the winners. Warren Buffet buys winning companies and lets the managements stay on and run the operations. You can do the same with your investments. It means buying a piece of the business. Keep it simple.

Sunday, August 18, 2002

8/18/02 Certain Givens

Our population is aging, and along with that trend, healthcare will continue to become a larger portion of our GDP.
Too many people are out of work. There aren't enough good jobs for educated Americans.
Too many Americans work in low-paying service jobs.
Taxes are too high at all levels of gov't.
Congress spends too much money. For Congress economic stimulus means overspending. We have a coin operated gov't.
Tough decisions require a willingness to be vilified.
There is too much inner turmoil in families.
The U.S. consumer has good reasons not to be confident at this time.
Our forefathers never envisioned regulations strangling every day life.
Too many cooks spoil the broth, and gov't bloat is akin to botulism.
Random acts of kindness make the world a better place.