The Color and Pageantry

Certainly, as ABC's Keith Jackson so eloquently put forth, the color and pageantry of NCAA College Football is a significant part of what makes this sport the nations greatest drama.

In that regard, a central part among the historical annuals of the game is the famed English Bulldog mascot, UGA, of the University of Georgia. Unfortunately, just as we are about to embark on what could be a very special season for Georgia, UGA VI died over the weekend of heart failure. UGA VI was the son of UGA V, seen below protecting the turf versus an Auburn Tiger.
UGA VI will be buried in the southwest corner of Sanford Stadium with his predecessors later this week. I know all college football fans have always appreciated these traditions and join the Dawgs in thoughts mourning the passing of UGA VI.

Expensive Lunch

For the last several years, legendary investor Warren Buffett has auctioned off a lunch with him with the proceeds going to benefit the Glide Foundation, a charitable organization from San Francisco. The lunches are held at Smith and Wollensky in Manhattan.

The first auction, won by an anonymous bidder, generated $25,000. Among the announced winners over the years is David Einhorn, founder of hedge fund Greenlight Capital, who paid $250,100 in 2003.

This years winner, Zhao Danyang of Purehart China Growth Investment Fund, paid a startling $2.1 million to break bread with Buffett, more than tripling the previous winning level. For that kind of coin, maybe Buffett will bring along his philanthropic pal Bill Gates.

Command and Control

As the financial markets continue to be under pressure, it may be time to reflect back at the economic progress we have made since the terrorists attacks of 9-11. We are now on offense and we are in control.

Factoring in other contributing factors, including several natural disasters and a major cleaning out of the excesses with respect to the housing bubble, this free market capitalistic economy has shown resiliency and is acting in normal fashion.

Off to Happy Hour! Go Go Gomez and Cody Willard have FOX's Happy Hour on the road this afternoon down at Wall & Broad. Wish I could be there.

A Passenger in Time with The FIXX

A very cool band from back in the day is Cy Curnin and The FIXX. I last saw these guys in 1990 and the show was just tremendous.

I have waited a long time to see them again. Tonight, they hit Velvet Sessions at The Hard Rock Orlando. Count me in! I'll speak with other names.

Time To Dump Dodd

Among many who need to resign from public office is Christopher Dood, D:CT, who is Charmian of the Senate Banking Committee and until recently a vice presidential candidate for Senator Barack Obama on the Democratic side.

The complete arrogance of this lightweight is astonishing and his recent actions at best border on unethical.

Dodd currently sponsors a bill with Richard Shelby, R:AL, designed to provide several options of relief for homeowners who face foreclosure and/or problems satisfying their mortgage requirements. I am opposed to such legislation and am hopeful that if it arrives on the desk of the President, it will be vetoed. However, as admirable as these intentions are, Dodd's involvement is extremely troubling given recent revelations about his activities.

Forget that Dodd had no earthly idea this housing crisis was coming, he reportedly participated in it by receiving a loan with preferred loans status from Countrywide Home Loans (CFC:NYSE), the poster child of non conforming loans who has been destroyed on Wall Street and is currently under litigation. For those who do not follow the goings on on Wall Street, a significant capital investor of Countrywide is Bank of America (BAC:NYSE). Please see the June 13, 2008 story on this in The Wall Street Journal at: http://online.wsj.com/public/article_print/SB121332396326070639.html

This revelation should knock him out right there, but there is more. Since many of the members of congress are not qualified to write complex bills which carry significant impact on financial markets, they get assistance from market players. Assisting Senator Dodd and Senator Shelby with the construction of this bailout reportedly is, you guessed it, Bank of America, along with UBS.

This should be cause for concern for all of us taxpayers, since we will foot the bill through our taxes to support those who incorrectly forecasted their mortgage obligations. The monetary discounts that Countrywide shaved off for their "friends" were not available to the rest of us. Given the participation of Dodd and Bank of America in this "special treatment", it seems obvious this should be grounds for Dodd and Bank of America to have zero involvement in crafting this type of massive financial legislation at a minimum.

Drops of Oil

The investing environment is really choppy out there right now as we await news from The Federal Reserve. I do think inflationary pressures are increasing, particularly in the global economy and I would like to see the dollar gain strength. I think the FED stands still today, but floats rhetoric signaling potential rate hikes later in the year, post election (winner is?) and with the housing inventories having more time to subside.

A big impact on the items the FED is considering is the costs of oil and commodities in general. The rise in pricing in theses areas is a tax on the consumer, and coupled with discretionary income taking a beating due to the housing crisis, the economy is retracting.

But will oil unwind and relax the consumers monthly outlays at the gas pump? Money poured into the dot.com areas only to be crushed and then, after 9-11, investment capital went diving into tangible assets (real estate) and then when that blew up, commodities.

Speculators are not a central issue with oil but the do play a role. Alan Reynolds, senior fellow with The Cato Institute, notes, "Speculation that oil prices will rise rather than fall has dropped drastically since we crossed $100 mark. The "net long" position on the New York Mercantile Exchange fell from 113,307 contracts on March 11 to 25,246 by June 10 -so nearly as many traders are now shorting oil as are going long". Oh my!

If money is not going there anymore, where is that investment capital going? In the last six weeks, I have noticed coal stocks ascending nicely, an indication of institutional investment or accumulation.

Please see a chart for James River Coal Company (JRCC:NASDAQ) below:

Coal is ultimately the main energy competitor to oil and in this political environment it is wise to investigate investment opportunities. JRCC has doubled since May, and following the money is change you can count on!

Strong Government Hand

In a recent interview with The Wall Street Journal, Senator Barack Obama outlined some of his economic policies. According to the WSJ, he focused in on two areas; competition from economically emerging countries like India and China and the the US having a "winner take all" economy where economic gains are skewed to the wealthy. I am about to have a Glenn Beck moment and grab the duct tape.

"Globalization and technology and automation all weaken the position of workers," he said, and a strong government hand is needed to assure that wealth is distributed more equitably.

The man has spoken, and it is quite clear about the direction he wants to take America. For those of us who subscribe to The Kudlow Creed, where free market capitalism is the best path to prosperity, Obama's economic plans would cripple America.

No question, workers positions can be weakened, or eliminated, due to innovation and technology. This is a good thing. Used a pay phone lately? Didn't think so.

Tops on the list of what this economy does not need is government reaching their hand into the marketplace in an effort to "redistribute wealth". We are actually not communists.

"The explorers of the modern era are entrepreneurs. Men with vision; with the courage to take risks, and faith enough to brave the unknown"---Ronald Reagan, May 31, 1998.

Visionaries who take these risks should be the ones rewarded, and they should not be required to distribute their success with others. With Obama's plan, economic incentives to chase dreams will be thwarted.

There is a current correlation going on today with respect to oil as oil companies make expenditures on research and development in an effort search for alternatives, expand drilling capacity and identify new reserves. But, a recent move in congress right out of Obama's playbook might crush the economic incentive on these companies to continue to strive for more efficient energy options.

Think of Obama's strong government hand as you take a listen to Maixne Waters D:CA. Are you trying to kid me?



Unfortunately, this comedy act is serious and must be denied, unless you find Hugo Chavez's Venezuala appealing. Several members of our congressional representation and a host of Hollywood idiots indeed do. I do not. Quoting CNBC's Larry Kudlow once again, "Either you believe in markets or you believe in government." I'll go with free market capitialism thank you very much.

A Deadly Decision

In a landmark decision, the Supreme Court ruled that habeas corpus protections apply to detainees held at Guantanamo Bay, and this decision in my mind describes a lack of understanding of the unusual characteristics of the global war on terror we are engaged in across the globe.

Although many folks are clamoring for the immediate closure of the facility at Guantanamo Bay, claiming abuse and mistreatment of prisoners, I have been and remain quite comfortable with it in full operation. Chief Justice Roberts, Justice Scalia, Justice Alito and Justice Thomas apparently are as well.

Justice Clarence Thomas with Dr. Tom Osborne at Nebraska spring game in April 2008

Evidence of mistreatment of prisoners, outside of a disgraceful incident in which guilty parties were swiftly disciplined, is scarce. The prisoners potentially being mistreated are not members of a national army (although Iran is working hard at it), they are made up of mostly Islamic terrorists that spend every hour of every day plotting our demise.

Justice Anthony Kennedy, writing for the majority said, "We hold these petitioners do have the habeas corpus privilege". If the goings on at my local courthouse are any barometer to what we can look forward to, this will be nothing short of a disaster, and perhaps a deadly one.

Particularly troubling is the negative effect on the global war on terror that may be an unintended consequence of the majority as it comes to evidence against the detainees becoming public and therefore putting our troops potentially at a potentially deadly disadvantage.

Dissenting Judge Antonin Scalia has it dead on as he wrote "The game of bait-and-switch that (today’s) opinion plays upon the Nation’s Commander in Chief will make the war harder on us. It will almost certainly cause more Americans to be killed." Justice Scalia concluded by saying "The Nation will live to regret what the Court has done today. I dissent."

While the Democrats along with the terrorists rejoice, I think we could solve the issue by taking out terrorists on the battlefield while we are crushing them rather than rounding them up as prisoners. Mission Accomplished! Again.

NBC News Facing Challenges

The surprising and sudden death of NBC's Tim Russert is very sad indeed. By all accounts, Russert was a towering figure in the political machine but more importantly, a fair and kind gentleman who had great appreciation for his friends and family.



For his family at NBC News, the death of Russert is particularly challenging. Of late, NBC News has been moving into an area where political commentary and "news" were one in the same, and the bias toward the left is overwhelming. Keith Olbermann, a left leaning political commentator who hammers conservatives nightly in a disrespectful way on his program, sits in anchoring primary election coverage with Russert and Chris Matthews. There is a place for folks like Olbermann, but it is not when "political news" is taking place unless the debate is balanced. For example, FOX does not include Bill O'Reilly in their primary election coverage. Who, what, where and when.

Russert appreciated politics and respected differing opinions. He would not be leading the way in this convergence and reportedly objected to it. Outside of Meet The Press, ratings indicate few viewers are watching these NBC political folks anyhow. Although CNBC excels, with Russert gone, expect the viewership to continue to fade for NBC News and MSNBC.

The unfortunate irony of Russert, who wrote a best selling book about his father, checking out on Fathers Day weekend, is just wrong. Without Russert, we were Meet The Depressed this morning. I did tilt a cold brew in Russert's honor. He will be missed.

Seminoles Omaha Bound!

In what perhaps is the best baseball bunch Mike Martin has put on the field in moons, the Florida State Seminoles are heading to the College World Series in beautiful downtown Omaha, Nebraska.

There are some great stories on the Seminoles 2008 squad, including fellow Orlando Boone product Stuart Tapley, who also was the winning pitcher in the Little League World Series for Apopka several years ago.

But the main reason FSU is in Omaha is on the back of the College Baseball National Player of the Year, Buster Posey. Posey, a first team All American and ACC Player of the Year as a junior, leads the nation in 3 offensive categories, including batting average and posts a stellar .981 fielding percentage on the defensive side. Posey is also a finalist for and likely winner of several other awards, inclusive of the Johnny Bench Award, Golden Spikes Ward and Dick Howser Trophy.
As great as that is, Posey was also named the Academic All American of the Year by ESPN the magazine, in conjunction with CoSIDA. Posey is pursuing a degree in finance (imagine that) and has a cumulative average of over 3.8. "It's gratifying," said Posey on receiving this award. "I've put in a lot of effort off the field with school and hopefully it can be a good example for younger kids out there that you can accomplish both school and athletics. It definitely takes discipline, but doing well in school is something I take pride in."

Longtime FSU Coach Mike Martin weighed in on Posey saying "The young man does his job in the classroom, and certainly he has does his job on the field. He is just a great leader." Before working on Wall Street, Buster can do some time with the San Francisco Giants, who recently drafted him fifth in the MLB draft.

Not surprisingly, I have not read anything in "The Orlando Sentinel" regarding the outstanding accomplishments of Posey. And since you didn't either, you can learn about him here.

Many thanks and congratulations to Buster Posey on his outstanding season. And conrats to Mike Martin and the Seminoles! The time may be right. Go 'Noles

Message of the Markets

One of the old rules of investing is to not fight the tape, and obviously, the uptrend from the March bottom has been broken. It can argued that on May 19, the indices put in a double top, which is a very bearish signal. In reviewing the NASDAQ chart below, we can see the piercing of the 200 day moving average, again very bearish.

Is there another shoe to drop in the financials, perhaps rumored Lehman Brothers (LEH:NYSE)? I think another Bear Stearns is unlikely but some are in real trouble. The noise being thrown out by folks, including rhetoric by many company executives who are somehow not being prosecuted, gives us nothing to work from. I would not commit any funds to the financials for the near future.

Protecting capital is paramount, but I do have a sense that the market may snap back here and you may not want to be on the sideline. Oil catapolts up seemingly daily, commodities continue to move higher, the Iranian issues are escalating, flooding in the midwest likely will move food prices higher than they are already going and we seem ready to elect a neophyte Marxist President. All this adds up to a geopolitical disaster to dance with the economic fallout from subprime. Ouch!

It can't be that bad. This is the United States of America!! The dollar looks primed to move higher while gold seems toppy. Oil reminds me of folks chasing money similar to the dot.com days and the 2005 housing market.

At any rate, this is defensive time but out of these times comes innovation and opportunity.

The time is now to be ready to make your next moves.

The Contrarian Factor

In August of 1979, Business Week had a cover story titled "The Death Of Equities". This, of course, immediately preceded the economic policies of the Reagan Revolution which served as catalyst to begin the longest bull market run in history. This is the all time classic example of contrarian thinking. When the mainstream media is confident enough to throw it on the cover, you better be heading the other direction as the party is likely over. You don't want to be skinny dipping when the tide goes out.


Potentially, we may have found ourselves revisiting history and it may be time to apply the contrary opinion technique once again. Recently, The Economist posted on the cover a barrel of oil, and it quickly reminded me about the Newsweek story. The explosion, no pun intended, of oil pricing at the end of last week was based on nothing in the way of fundamental changes and looks like a parabolic top to me, perhaps led by some serious short covering. Maybe I need to re-read "How To Make Money In Stocks" by William O'Neil again, but I would be playing this oil with extreme caution.

Reagan Policies Under Attack

Four years ago today our 40th President, Ronald Reagan, passed away, and as we remember him today, unfortunately many of his central ideas are under attack from both sides of the isle.


Although Barack Obama has Reaganesque qualities with regard to giving a speech and energizing a political base, the similarities abruptly end there. We can begin with taxation.

When the government takes away the incentives to work and save (the raising of taxes), the economy goes flat—millions are thrown out of work and government revenues plunge. ---Ronald Reagan, February 4, 1985

When you tax something you get less of it, and in the process, governmental tax revenue decreases rapidly. Famed economist, and former Reagan staff economist Art Laffer, illustrated it beautifully in his Laffer Curve, shown below:

The supply side economic policies of Ronald Reagan were right on target and continue to be effective today as reducing the tax burden on working Americans fuels prosperity. Don't let the political rhetoric fool you. In the world we live in today, where inflationary risks abound, raising taxes would be a real bear in more ways than one.

Want Change? Drill Now!

Famed Texas oil man T. Boone Pickens discusses the oil industry and the runaway price per barrel with Fox Business Chief Neil Cavuto.



Someone alert the stupid police in Washington we got a problem. Since members of the US Congress appear willing to do absolutely nothing about this issue, what can we do other than grabbing our pitch forks? How about turning to a guy who continues to exhibit leadership, Newt Gingrich. Under his wonderful platform, American Solutions, he has introduced a new program.



I am all for it! Although T Boone forgot more when it comes to oil than I'll ever know, I continue to think oil is a bubble. Even so, our dependency on evil dictators is not only bad economics, but leaves us with an unnecessary vulnerability in the global war on terror. Remember that little skirmish?

Check out the program at the following url:
http://www.americansolutions.com/

Message of the Markets: Noise

The confirmed rally is staggering right now in what may be an effort to shake out some investors. The DOW is the most damaged chart of the indices but refuses to cave in even with bad news screaming everywhere. I have not bailed as of yet. Today, the GM shareholders meeting ruled the day, but yesterday it was rumors that another shoe was set to drop on the financial front, more specifically Lehman Brothers (LEH:NYSE).

This would be troublesome as it would signal that the money center banks still have not got a handle on losses triggered by the subprime lending debacle. Financials continue to be crushed, with Lehman showing the way. But, is it just noise?

Noise is a major factor in market action, and rhetoric tossed out by guest analyst can leave your head spinning.

For example, I fondly remember analyst Jerry Favors back in the day calling for an intermediate top in the March 20-23 range which could be significant. He was often on target, but I think he was tossing darts at some zodiac board. I recognize there are theories based on dates people subscribe to, but I found it more entertaining than substantive. Jerry, unfortunately, passed away in 2006.

Everyone seemed to be bullish during the dot.com boom, except, of course, Bill Fleckenstien, who as Gary Kaultbaum said, has been bearish since Noah's Arc. Analysts showed up daily, singing the praises of the bull as everyday folks were hanging in getting crushed.

Perhaps the top perma-bull of the day was Joe Battapaglia, formerly of Gruntal and now with Stifel Nicolaus. In all the interviews I saw, I recall him staying bullish on each leg the NASDAQ took down. Now, Battapaglia, frequently a guest on Kudlow & Company on CNBC, is leading the bearish parade. I find it hard to place any weight on his comments, but he probably knows something I don't. I just nestle up with IBD.

The market will give you the message you are looking for. Certainly, there are great analysts out there, and I am a fan of Jim Cramer like the rest of you. But, had you listened to many of these folks without doing your own due diligence, you could well be under water. So, you should proceed with caution when investing, do your homework and discard all the noise while performing your own due diligence. Without question, that includes anything you read here on the blog. Hope you find the next cup and handle!

A Great American Growth Story

As we get set to drop the green flag today at Dover Downs International Speedway, I got to thinking about the incredible growth story NASCAR is. From a collection of drivers who ran moonshine in the foothills of North Carolina and the beginning of a sanctioning body hosting a race on the beach in Daytona Beach to the top level sporting events the races are today, the story is a remarkable one.

Dover International Speedway, which opened in 1969 hosting the Mason-Dixon 300, is up for sale. NASCAR, owned by International Speedway Corporation (ISCA:NASDAQ), is hoping to keep tracks representative of it's roots, and Dover is one of those. A potential buyer for Dover Motorsports Inc.,(DVD:NYSE), owner of the track, is said to be Bruton Smith, of Speedway Motorsports(TRK:NYSE). Speedway Motorsports already owns several tracks which host events annually.

With all the companies at play listed on the stock market indices, it should drive home the point of the value involved here. Several well written books chronicle the history and emergence of NASCAR, but sometimes pictures do it best. Below, King Richard Petty arrives in Daytona in 1971 with the famed #43 in tow.

Earlier this year, the #43 hauler arrives at Las Vegas carrying a pair Dodge Chargers, a full collection of operating equipment and several sets of Goodyear (GT:NYSE) Racing Eagles for driver Bobby Labonte to pilot on raceday.
How far has NASCAR, one the greatest corporate and family growth stories in modern history, come? Thankfully, for entertainment at my house whenever they drop the green flag, quite a long way. Boogity Boogity Boogity!

I AM A SHAREHOLDER IF INTERNATIONAL SPEEDWAY CORPORATION (ISCA:NASDAQ) AND GOODYEAR (GT:NYSE)