J.K. Rowling on Poverty

From J.K. Rowling's June 2008 commencement speech at Harvard:

Poverty entails fear, and stress, and sometimes depression; it means a thousand petty humiliations and hardships. Climbing out of poverty by your own efforts, that is indeed something on which to pride yourself, but poverty itself is romanticized only by fools.

http://www.news.harvard.edu/gazette/2008/06.05/
99-rowlingspeech.html

Or, in the words of Chaim Topol, "You made many, many poor people. I realize, of course, it's no shame to be poor, but it's no great honor, either." 

Stocks Update

For some reason, I have always tried to highlight the bad news rather than the good. I suppose it keeps me humble, but really, I do it to ensure a sufficient amount of fear. Mark Cuban, owner of the Mavs, was once asked why, after making billions, he kept going. His answer: "Fear." In that vein, I am going to provide a "stocks update" on a day when the Dow and Nasdaq went down over 3%:

Open Positions
CNB = 0
EQ = 0
EWM = (slightly negative; 150 shares)
GE = 0 (slightly negative; 179 shares)
IF = -2.1
PFE = -6.4
PPS = +0.1
WYE = -2.6

Total: losing/negative 2.75%

I am not worried. Except for IF, these are all good dividend plays (meaning, they have enough cash flow or cash to pay their dividend over the next year). Even if Pfizer (PFE) has to "repatriate" (bring some money to its U.S. operations from abroad, thereby taking a tax hit) some cash to pay its dividend, I am guessing it will still do whatever it takes to pay the dividend.

Here is what my friend, who is a tax lawyer, said about repatriation--and it sounds like good news, rather than the bad news the general media is making about the possibility of repatriation:

I took international tax in law school but I am fuzzy on the subject not having reviewed it in awhile. The only thing I remember about repatriation is that foreign earnings of controlled foreign corporations were not subject to tax until they were brought back into the U.S. When the funds were brought back to the U.S., or repatriated, a corporation could then file some sort of election to exclude up to 80 - 90 percent of the repatriated funds from income.

I would guess that PFE would try and take advantage of that generous tax break on repatriated earnings if they did not want to risk cutting their dividend to U.S. shareholders.

If the tax hit is only 10 to 20%, that isn't so terrible. My hunch is that Pfizer's board sees its stock as a "widows and orphans" stock and won't cut the dividend for another year a half at least.

(Today, I bought 100 GE @ 30 and change; also, on June 9, I bought 29 more shares of GE at around 30.)

Overall, I am down about 1400 dollars since I sold off almost all of my holdings earlier. Most of the 1400 dollar loss is because of my recent large buy of Pfizer. My prediction last month or so was correct; i.e., that the market would suffer a large hit. For the most part, I heeded my own advice; otherwise, the damage would have been more severe.

Closed Positions:
Daytrades: PFE (0.5%)

MMM (0.5%), MRK (0.1%), SCUR (15%) (held less than seven days; record in this category is a 5.2% average gain)

The information on this site is provided for discussion purposes only and does not constitute investing recommendations. Under no circumstances does this information represent a recommendation to buy or sell securities or make any kind of an investment. You are responsible for your own due diligence.

Stocks Update

Today, I sold my 100 shares of MRK @ 38.57. Including the fact that a dividend will be paid, I am slightly ahead, but only by a few dollars. That lowers my averages in my closed positions.

In other news, Goldman Sachs cut Pfizer (PFE) to "neutral," with a price target of 22, causing PFE to go to 18.50 a share. I am not worried--if anything, this means the bad news is finally out of the way (and being cut by Goldman is definitely bad news). Now, value investors will enter as disenchanted stock holders exit. Plus, I only need PFE to go to 20-ish before making a decent short-term profit on the trades. I figure PFE will hit 20-ish in about a month or two, if not sooner.

I bought and sold a large position of PFE in about an hour today: bought 2000 PFE @ 18.49 and then sold at 18.57--made 200 bucks. Now, if I had held the shares for another 30 minutes, I would have made another 200 dollars in an hour and a half (400 dollars total). That's the issue with day-trading--if you blink at the wrong time, it costs you. As long as I am in the black, however, a few hundred here and there is inconsequential. Rule #1: don't be greedy. Or, as Cramer likes to say, "Bulls make money, bears make money, pigs get slaughtered." 'Tis true.

I bought some shares of PPS today at 34.37 as well. Pure value play and potential buyout target.

I bought 500 shares of CNB at $5.00/share, a little-known bank in Alabama (or, as they like to say down South, 'Bama). This one is a value and dividend play. Just two months ago or so, CNB sold 350 million dollars' worth of its stock for 8 dollars a share. I like the shares at 5 dollars, but don't ask me what I'll do if it hits $6.50.

I also bought 15 shares of YHOO so I could attend their shareholder meeting on August 1, 2008. For purposes of this blog, however, I will not report on trades consisting of positions with a cost basis (money spent to buy a company's shares) below 1,000 dollars.

Closed Positions:
Daytrades: PFE (0.5%)

MMM (0.5%), MRK (0.1%), SCUR (15%) (held less than seven days; record in this category is a 5.2% average gain)

The information on this site is provided for discussion purposes only and does not constitute investing recommendations. Under no circumstances does this information represent a recommendation to buy or sell securities or make any kind of an investment. You are responsible for your own due diligence.

And now, for something completely different...

Once in a while, I will post something that is completely unrelated to anything and everything. Below is a poem I wrote today:

Shimmering with sweat,
Eyes shut,
Heavy with the day’s labour,
She nestles her face in the womb of your arm.

You see a faint glow in the small room,
A room too small for this, you think,
And you see it comes from her.

A soft light reflects on her skin,
Not quite sorrel, not quite copper,
Vestiges of a trip to Utah,
A mark where an insect had its fill days ago.

She lies on the floor,
Ethereal.

A round face, quiet with sleep,
Minutes ago was not quite like that.
I rise, but remain close to the ground,
Like the insect who had its fill.

Stocks Update

Today, I bought 600 shares of PFE at 18.92; 150 shares of EWM at 11.07; and 50 shares of EQ at 47.32; and 150 of WYE at 43.83. PFE has gone down too far, which makes no sense. A WSJ article actually said that the stock might go down to 10 to 12 dollars without the high dividend (the entire article was pablum, as far as I'm concerned). Sometime soon, there will be a day when most pharma goes up 3% on an analyst's upgrade of the sector. Personally, I just want to sell before November 2008, so I have plenty of time. I bought EWM for more international diversification. Also, being close to Singapore should help Malaysia's economy stay vibrant, even if only due to a spillover effect from foreign investments and deposits. Malaysia's "Second Home" program--basically allowing foreigners to buy a long term visitor visas in exchange for making a large deposit of funds in the country--is a very astute idea as well. And finally, I bought EQ solely for its dividend.

I might be able to sell all the pharma stocks by this Friday at a profit. MRK is already ex-dividend, and PFE just paid out its dividend.

Here is my record with respect to the stocks I bought after I started the first "Stocks Update" entry on May 23, 2008:

Open Positions
761 of PFE; losing 2.4% (bought at various times, but major purchase of 600 shares bought on June 4, 2007)

150 of EWM; losing 0.4% (bought on June 4, 2007)

100 of IF; losing 3% (bought on May 23, 2008; indicated long-term hold at time of purchase)

100 of MRK; losing 0.6% (bought on May 30, 2008)

250 of WYE; losing 0.7% (bought on May 30, 2008 and June 4, 2008)

50 of EQ; even (bought on June 4, 2008)

Record in open positions: negative/losing 1.42%

Closed Positions:
MMM and SCUR (held less than seven days; record in this category is a 7.75% average gain)

The information on this site is provided for discussion purposes only and does not constitute investing recommendations. Under no circumstances does this information represent a recommendation to buy or sell securities or make any kind of an investment. You are responsible for your own due diligence.

100th Post: "Magical Realism"

For my 100th post, I thought I'd do something different. I will share with you one of my favorite poems by a little-known Kashmiri poet, Agha Shahid Ali. The poem--which contains incredible imagery--is introduced by the simple, unassuming title, "Snowmen." Enjoy after clicking either one of the following two links:

http://www.salemstate.edu/sextant/v4n2/keyes_poems.htm

http://www.poetryfoundation.org/archive/poem.html?id=181394

Here is the last stanza:

No, they won't let me out of winter,
and I've promised myself,
even if I'm the last snowman,
that I'll ride into spring
on their melting shoulders.

After reading the full poem, take a moment to enjoy the images--a woman frozen by a man's embrace, a "snowman" riding into the future Spring--and then check out this link, which explains the poem a bit more:

[FYI: link no longer works] http://www.himalmag.com/2002/february/passing_1.htm

From the above link:

I approached the poem “Snowmen”, from which these lines are taken as an immediate sensuous apprehension. It was later that I thought of its feminist implications. There are two things hidden in that poem. One is a poem by Wallace Stevens called “The Snowmen”. If you read it you won’t see the connection but it is there for me. The other is a scene that has haunted me for a long time from Wuthering Heights. The narrator is staying at Heathcliff’s house because there has been a terrible storm and the ghost of Katherine knocks on the window. She says, “I’m cold. Let me in”. He opens the window and the glass breaks somehow. He takes the hand of the ghost and rubs it against the glass and there is blood. It’s an amazing scene. Talk about magical realism. People think about that novel and they want neat answers. [Bronte’s] whole enterprise is that there are no neat answers. But to provide you with a neat answer: I’m thinking about my ancestry and the lost women in this ancestry who we never hear about. I know everything about my father, his father, his father’s father and so on for nine generations. But I know nothing before my grandmother. So I’m trying to find these lost women. These are difficult questions, there are no neat answers. You can have a feminist construct when you read that poem.

I love how Agha Shahid describes "Snowmen," but his explanation strikes me as too opaque. I would have never independently arrived at his "feminist" interpretation.  After all, much of the poem focuses on male imagery, such as "his skeleton," "his breath," "a man of Himalayan snow," and of course, the title itself, "Snowmen."  Shahid seems to be playing all sides by saying there are no neat answers, providing one, and then reminding us that there are no neat answers.  For me, "Snowmen" means something different. It represents the immigrant experience and persevering through difficulty to ensure that previous generations--both male and female--did not toil in vain. That's how I interpret the poem, especially the last stanza, which is my favorite. 

Richard Fisher Understands the Real Enemy...Inflation

We know from centuries of evidence in countless economies, from ancient Rome to today's Zimbabwe, that running the printing press to pay off today's bills leads to much worse problems later on. The inflation that results from the flood of money into the economy turns out to be far worse than the fiscal pain those countries hoped to avoid...

Inflation is a sinister beast that, if uncaged, devours savings, erodes consumers' purchasing power, decimates returns on capital, undermines the reliability of financial accounting, distracts the attention of corporate management, undercuts employment growth and real wages, and debases the currency.

--Richard Fisher, Dallas Fed Reserve President and CEO

http://www.dallasfed.org/news/speeches/fisher/2008/fs080528.cfm

The above link contains the full text of the speech at the Commonwealth Club I attended last week. It doesn't include the Q&A session, but is still worth a look-see.