Monday, August 29, 2005

Katrina Looters..........

Should be shot on sight........the values of the old West should be resurrected.


I am sorry for the property loss for so many. Watching the politicians worry about getting the Gulf Coast casino's back into operation is comical. They want the tax revenue to clean up and continue their unabated spending habits. Yet the gaming coffers are filled daily by individuals who could do far more with their discretionary dollars to clean up what they need to clean up. America is not "winning" from the "something-for-nothing" gaming mentality. Everyone knows it, no one admits it. Especially the politicians.

Saturday, August 27, 2005

Prices headed higher...............

The lobster catch in Maine is down about 75%, to approximately half a lobster per trap, from the normal two of the last several years. The price of lobsters having increased 50%, total revenues from lobsters are down by about 60%. The catch of herring, the basic feed, is also down, increasing the cost of feed. Thus, things are very bad for Maine lobster fisherman right now.

French nonsense................

The Associated Press Friday, August 16, 2005; 11:00 PM PARIS,
Lance Armstrong's record setting seventh Tour de France victory, along with his entire Tour de France legacy, may be tarnished by what could turn out to be one of the greatest sports scandals of all time. Armstrong is being quizzed by French police after three banned substances were found in his South France hotel room while on vacation after winning the 2005 Tour de France. The three substances found were toothpaste, deodorant, and soap which have been banned by French authorities for over 75 years. Armstrong's girlfriend and American rocker Sheryl Crow is quoted as saying "We use them every day in America, so we naturally thought they'd be ok throughout France." Along with these three banned substances, French authorities also found several other interesting items that they have never seen before, including a backbone and a testicle.

Motorola -- Oakley

Last night I had the opportunity to preview an interesting combination of Oakley sunglasses with a tiny Motorola Razorwire cell phone attached. I'm not a technogeek but that combination will attract alot of interest. If nothing else, it looks real good for the fashion conscious, "must-have" types out there that can't miss a phone call while working out in the sun. Together the package runs over $550. Far beyond my reach of buying 5 pair of sunglasses for $30 bucks at the mall. Have a great weekend. Do something fun, eat something delicious, teach a kid something, spend an hour in a church and tell someone you love them. It'll do the body good.

Friday, August 26, 2005

Does your broker make you broker?

You may not know it or want to admit it, but your stockbroker is just a salesman. Sometimes, they go by the titles of financial consultant, financial adviser and financial planner to name just a few. Many of these sound quite similar to “investment advisor”---but there is a huge difference. Investment advisors, like Chippewa Partners which is a Registered Investment Advisor, have a fiduciary duty to their clients. That means they have a legal obligation to place the clients interests ahead of their own, and to clearly identify all sources of compensation, the amount of compensation and any potential conflicts of interest. It’s all laid out in the Investment Advisers Act of 1940.

A broker has no such obligation, unless the client has given him discretionary authority to trade without the clients’ approval. Many brokers, however, masquerade as investment advisers. Television is full of advertising which trumpets “objective” advice and makes the firms sound more like trust companies. The firms try to project an image of having a fiduciary duty without actually having one. But how can any salesman or sales organization offer truly objective advice. They can’t. Very few investors understand that a broker’s role is to buy and sell investment products. Never forget, the nature of broker’s compensation and the relationship with their employer can seriously diminish chances of having efficient, well-performing portfolios.

As an arbitrator for both the New York Stock Exchange and the National Association of Securities Dealers I have had plenty of opportunity over the last decade to look into the bowels of Wall Street brokerage houses. It’s not pretty. Every year I am more afraid for investors who don’t have the time or training to understand how brokerage firms operate.

Here are some things to consider:

Most brokers are paid by a formula that increases the broker’s portion of commissions and fees as revenue increases. Some brokers will sell anything to anybody before year-end to cross larger investment schedules that put them into a higher pay-out grid. And the products they will rely on the most are the ones with the highest fees and the highest commissions, such as variable annuities and “loaded” mutual funds. The situation is even worse if the broker is switching firms and is offered an increased payout for bringing clients to the new firm.

“Flipping” or “churning” of syndicate equity offerings is rampant. Brokers are paid far more to sell investment products that are syndicate offerings than stocks that have been trading for some time. If your broker is trying to get you to purchase syndicate offerings of stocks or proprietary products and then sell them soon afterward, watch your wallet. “New” investment products are usually money-makers for the firms and brokers, not for clients.

So-called separately managed accounts, a popular form of customized portfolio, can lead to unusually high fees. With these accounts, the broker charges a “wrap fee,” with the broker’s fee wrapped around the fee of the investment manager. And the broker’s fee is often a good deal more than the manager’s fee—sometimes twice as much. Total annual fees can exceed 3%. When the fee is debited from the account each quarter, the broker’s portion is not itemized, so the client is in the dark on exactly what the broker charged.

The brokerage industry’s alternatives to money-market funds are called sweep accounts, which are very profitable to the firms. They make much more money on sweeps than they would by farming out your cash to a money market mutual fund, like the Reserve Fund, which we use for clients’ at Chippewa Partners. A money-market fund has a fiduciary duty to provide the best rate possible for its shareholders, while a brokerage firm does not.

Stockbrokers worry about generating income for themselves, before worrying about your results. If they don’t, they lose their job even if market conditions warrant doing nothing with your portfolio. They still need to churn your assets. Also, your stockbroker’s fancy title is not awarded for achieving results for clients’, it is for generating big fees and commissions to his employer no matter how well your portfolio performed. Do you think it is responsible and prudent to trust your retirement and lifesavings to a salesman rather than a fiduciary like the investment management firm of Chippewa Partners?

For an independent, fee-only relationship-based alternative consider,
Chippewa Partners
Native American Advisors, Inc.
Dean T. Parisian, Chairman
(770) 772-1621
A Registered Investment Advisor, established in 1995. Alpharetta, Georgia

Tuesday, August 23, 2005

The "Golden Arches" of Mickey D's...........

8/22/2005Like an Old Friend, by Victor Niederhoffer
On a trip back from Maine, the first thing that comes to mind is that McDonalds has saved more lives from car accidents than all the safety rules since the beginning of time. Their coffee is excellent and after billions of servings in tens of thousands of restaurants, they've come up with the perfect blend for taste and staying awake. I had such a coffee on my journey and it kept me awake infinitely better than the comparable cups at competing places.
Some other great things about McDonalds:
It's like an old friend. You always know you're going to get the same food and of a high quality anywhere you go. Their limited menu from which billions of people have been served makes an the incentive that McDonalds owners and customers alike have to create a better product. This means that each product has evolved so it fits the know-hows and tastes, and aptitudes of all humanity.
Everything is special, unique. The natural flavor in their French fries. The vegetable oil they cook them in. The flavor of their fish fillet. The variety of the goods served range from tofu and ginger salad to yogurt with fresh strawberries and a granola, fruit and walnut salads -- at all of their restaurants now.
How many people have been made happy and clean by their clean restrooms, been able to go into a safe well lit establishment for their ease of mind, had their deals closed by young lawyers working late at a 24 hour establishment, had a chance to enjoy a family dinner with their kids or a meeting with their friends without being chased out or harassed, been able to read a book with good lighting -- or in the case of a McDonalds in New Haven, had an opportunity to run a club of antique car hobbyists in their parking lot without hassle and in complete safety.
Not to be minimized is the freedom that McDonalds provides for all families to allow a two wage earner family where the cooking doesn't have to be at home every day. And related to this are all the men that don't have to worry about messing up their home and cleaning the dishes for a breakfast. I once read that something like 15% of the population eats breakfast at McDonalds each day. And considering the opportunity cost of cooking, and cleaning the quality of the Egg McMuffin, this seems like a reasonable choice.
It's a litmus test for the servile people to hate the fast food restaurants because as Durkheim said, such restaurants take away the conspicuous consumption that they were able to achieve by being able to afford a meal away from home that their lower status neighbors or competitors were not able to afford. Don't tell me however that the lack of alcohol at McDonalds, the cleanliness, the lack of smoke, the ability to be with their kids has not done more for the happiness and good of the world than all the do-gooders and tree huggers combined.

Monday, August 15, 2005

Worth reading again.....Mark Cuban on the market

The Stock Market
I get asked all the time to write a book about business and my approach to it. I’m not ready to take that leap yet, but along the way, when I find a book that really impresses me, I try to help it find an audience. In this case, it wasn’t long ago I read my now favorite book about the stock market called The Number by Alex Berenson. I liked it so much, I volunteered to write the forward for the paperback edition which comes out this week.
Here is the foreward I wrote for The Number. I recommend that anyone with an interest in the market jump at the chance to buy it.
In 1990, I sold my company, MicroSolutions — which specialized in what at the time was the relatively new business of helping companies network their computer equipment — to CompuServe. After taxes, I walked away with about $2 million. That was going to be my nest egg, and my goal was to protect it at all costs, and grow it wisely.
I set about interviewing stockbrokers and settled upon a broker from Goldman Sachs, Raleigh Ralls. Raleigh was in his late 20s, and relatively new to Goldman. But we hit it off very well and I trusted him. As we planned my financial future, I made it clear that I wanted my nest egg to be invested not like I was 30 years old, but as if I were 60 years old. I was a widows and orphans investor.
Over the next year I stuck to my plan. I trusted Raleigh, and he put me in bonds, dividend-paying utilities and blue chips, just as I asked.
During that year, Raleigh began asking me a lot of questions about technology. Because of my experience at MicroSolutions, I knew the products and companies that were hot. Synoptics, Wellfleet, NetWorth, Lotus, Novell and others. I knew which had products that worked, didn’t work, were selling or not. How these companies were marketed, and whether or not they were or would be successful.
I couldn’t believe that I would have an advantage in the market. After all, I had read A Random Walk Down Wall Street in college. I truly thought that the markets were efficient, that any available knowledge about a company was already reflected in its stock price. Yet I saw Raleigh using the information I gave him to make money for his clients. He finally broke me down to start using this information to my advantage to make some money in the market. Finally after more than a year, I relented. I was ready to trade.
Notice I didn’t use the word invest. I wasn’t an investor. I just wanted to make money. The reason I was ready to try was that it was patently obvious that the market wasn’t efficient. Someone like me with industry knowledge had an advantage. My knowledge could be used profitably. As we got ready to start, I asked Raleigh if he had any words of wisdom that I should remember. His response was simple. “Get Long, Get Loud”.
Get Long, Get Loud. As we started buying and selling technology stocks, most of which were in the local area networking field that I had specialized in at MicroSolutions, Raleigh put me on the phone with analysts, money managers, individual investors, reporters, anyone with money or influence who wanted to talk technology and stocks.
We talked about token ring topologies that didn’t work on 10BaseT. We talked about what companies were stuffing channels - selling more equipment to their distributors than the distributors really needed to meet the retail demand. We talked about who was winning, and who was losing. We talked about things that really amounted to the things you would hear if you attended any industry trade show panel. Yet after hanging up the phone with these people, I would watch stocks move up and down. Of course as the stocks moved, the number of people wanting to talk to me grew.
I remember buying stock in a Canadian company called Gandalf Technologies in the early 90s. Gandalf made Ethernet bridges that allowed businesses and homes to connect to the Internet and each other via high-speed digital phone lines called ISDN.
I had bought one for my house and liked the product, and I’d talked to other people who’d used it. They had decent results, nothing spectacular, but good enough. I had no idea Gandalf was even a public company until a friend of Raleigh’s asked me about it. What did I think about Gandalf Technologies? It was trading at the time at about a buck a share. It was a decent company, I said. It had competition, but the market was new and they had as much chance as anyone to succeed. Sure, I’ll buy some, and I would be happy to answer any questions about the technology. The market size, the competition, the growth rates. Whatever I knew, I would tell.
I bought the stock, I answered the questions, and I watched Gandalf climb from a dollar to about $20 a share over the next months.
At a dollar, I could make an argument that Gandalf could be attractive. Its market was growing, and compared to the competition, it was reasonably valued on a price-sales or price-earnings basis. But at $20, the company’s market value was close to $1 billion - which in those days was real money. The situation was crazy. People were buying the stock because other people were buying the stock.
To add to the volume, a mid-sized investment bank that specialized in technology companies came out with a buy rating on Gandalf. They reiterated all the marketing mishmash that was fun to talk about when the stock was a dollar. The ISDN market was exploding. The product was good. Gandalf was adding distributors. If they only maintained X percentage of the market, they would grow to some big number. Their competitors were trading at huge market caps, so this company looks cheap. Et cetera, et cetera.
The bank made up forecasts formulating revenue numbers at monstrous growth rates that at some point in the future led to profits. Unfortunately, the bank couldn’t attract enough new money to the stock to sustain its price. It didn’t have enough brokers to shout out the marketing spiel to entice enough new buyers to pay the old buyers. The hope among the “sophisticated buyers” was that one bank picking up coverage would lead to others doing the same. It didn’t happen. No other big investment banks published reports on the stock. The volume turned down.
So I did the only smart thing. I sold my stock, and I shorted it to boot. Then I told the same people who asked me why I was buying the stock that I had shorted the stock. Over the next months, the stock sank into oblivion. In 1997, Gandalf filed for bankruptcy. Its shares were canceled - wiped out - a few months later. I wish I could take credit for the stock going up, and going down. I can’t. If the company had performed well, who knows what the stock would have done?
But the entire experience taught me quite a bit about how the market works. For years on end a company’s price can have less to do with a company’s real prospects than with the excitement it and its supporters are able to generate among investors. That lesson was reinforced as I saw the Gandalf experience repeated with many different stocks over the next 10 years. Brokers and bankers market and sell stocks. Unless demand can be manufactured, the stock will decline.
In July of 1998, my partner Todd Wagner and I took our company,, public with Morgan Stanley. used audio and video streaming to enable companies to communicate live with customers, employees, vendors, anyone with a PC. We founded in 1995, and we were well on our way to being profitable. Still, we never thought we would go public so quickly. But this was the Internet Era, and the demand for Internet stocks was starting to explode. So publicly traded we would become and Morgan Stanley would shepherd us.
Part of the process of taking a new company public is something called a road show. The road show is just that. A company getting ready to sell shares visits the big mutual funds, hedge funds, pension funds - anyone who can buy millions of dollars of stock in a single order. It’s a sales tour. 7 days, 63 presentations. We often discussed turning up the volume on the stock. It was the ultimate “Get Loud.” Call it Stockapalooza.
Prior to the road show, we put together an amazing presentation. We hired consultants to help us. We practiced and practiced. We argued about what we should and shouldn’t say. We had Morgan Stanley and others ask us every possible question they could think of so we wouldn’t look stupid when we sat in front of these savvy investors.
Savvy investors? I was shocked. Of the 63 companies and 400-plus participants we visited, I would be exaggerating if I said we got 10 good questions about our business and how it worked. The vast majority of people in the meetings had no clue who we were or what we did. They just knew that there were a lot of people talking about the company and they should be there.
The lack of knowledge at the meetings got to be such a joke between Todd and I that we used to purposely mess up to see if anyone noticed. Or we would have pet lines that we would make up to crack each other up. Did we ruin our chance for the IPO? Was our product so complicated that no one got it and as a result no one bought the stock? Hell no. They might not have had a clue, but that didn’t stop them from buying the stock. We batted 1.000. Every single investor we talked to placed the maximum order allowable for the stock.
On July 18, 1998, went public as BCST, priced at 18 dollars a share. It closed at $62.75, a gain of almost 250 percent, which at the time was the largest one day rise of a new offering in the history of the stock market. The same mutual fund managers who were completely clueless about our company placed multimillion orders for our stock. Multimillion dollar orders using YOUR MONEY.
If the value of a stock is what people will pay for it, then was fairly valued. We were able to work with Morgan Stanley to create volume around the stock. Volume creates demand. Stocks don’t go up because companies do well or do poorly. Stocks go up and down depending on supply and demand. If a stock is marketed well enough to create more demand from buyers than there are sellers, the stock will go up. What about fundamentals? Fundamentals is a word invented by sellers to find buyers.
Price-earnings ratios, price-sales, the present value of future cash flows, pick one. Fundamentals are merely metrics created to help stockbrokers sell stocks, and to give buyers reassurance when buying stocks. Even how profits are calculated is manipulated to give confidence to buyers.
I get asked every day to invest in private companies. I always ask the same couple questions. How soon till I get my money back, and how much cash can I make from the investment? I never ask what the PE ratio will be, what the Price to Sales ratio will be. Most private investors are the same way. Heck, in Junior Achievement we were taught to return money to our investors. For some reason, as Alex points out in The Number, buyers of stocks have lost sight of the value of companies paying them cash for their investment. In today’s markets, cash isn’t earned by holding a company and collecting dividends. It’s earned by convincing someone to buy your stock from you.
If you really think of it, when a stock doesn’t pay dividends, there really isn’t a whole lot of difference between a share of stock and a baseball card.
If you put your Mickey Mantle rookie card on your desk, and a share of your favorite non-dividend paying stock next to it, and let it sit there for 20 years. After 20 years you would still just have two pieces of paper sitting on your desk.
The difference in value would come from how well they were marketed. If there were millions of stockbrokers selling baseball cards, if there were financial television channels dedicated to covering the value of baseball cards with a ticker of baseball card prices streaming at the bottom, if the fund industry spent billions to tell you to buy and hold baseball cards, I am willing to bet we would talk about the fundamentals of baseball cards instead of stocks.
I know that sounds crazy, but the stock market has gone from a place where investors actually own part of a company and have a say in their management, to a market designed to enrich insiders by allowing them to sell shares they buy cheaply through options. Companies continuously issue new shares to their managers without asking their existing shareholders. Those managers then leak that stock to the market a little at a time. It’s unlimited dilution of existing shareholders’ stakes, death by a thousand dilutive cuts. If that isn’t a scam, I don’t know what is. Individual shareholders have nothing but the chance to sell it to the next sucker. A mutual fund buys one million shares of a company with your and your coworkers’ money. You own 1 percent of the company. Six weeks later you own less, and all that money went to insiders, not to the company. And no one asked your permission, and you didn’t know you got diluted or by how much till 90 days after the fact if that soon.
When went public, we raised a lot of money that certainly helped us grow as a company. But once you get past the raising capital part of the market, the stock market becomes not only inefficient, but as close to a Ponzi scheme as you can get.
As a public company, we got calls every day from people who owned stock or had bought it for their funds. They didn’t call because they were confused during our road show, were too embarrassed to ask questions and wanted to get more information. They called because they wanted to know if the “fundamentals” - the marketing points - they had heard before were improving. And the most important fundamental was “The Number,” our quarterly earnings (or in our case, a loss). Once we went public, Morgan Stanley published a report on our company, as did several other firms. They all projected our quarterly sales and earnings. Would we beat The Number?
Of course, by law, we were not allowed to say anything. That didn’t stop people from asking. They needed us to beat the forecast. They knew if we beat The Number the volume on the stock would go up. Brokers would tell their clients about it. The Wall Street Journal would write about it. CNBC would shout the good news to day traders and investment banks that watched their network all day long. All the volume would drive up the stock price.
Unfortunately, patience is not a virtue on Wall Street. Every day, portfolios are valued by at closing price. If the value of your fund isn’t keeping up with the indexes or your competition, the new money coming in the market won’t come to you. It just wasn’t feasible for these investors to wait till the number was reported by companies each quarter. The volume had to be on the stocks in you fund. To keep the volume about a stock up, and the demand for the stock increasing, you needed to have good news to tell.
Volume, The Number, whisper numbers, insiders granting themselves millions and millions of options - these are the games that Wall Street plays to keep on enriching themselves at the expense of the public. I know this. I have tried to tell people to be careful before they turned over their life savings and their financial future to someone whose first job is to keep their job, not make you money.
Till I read The Number by Alex Berenson, I never had a book that explained how the market truly worked that I could tell my friends, family and acquaintances to read. I never had a book that would truly warn them that the market was not as fair and honest as mutual fund and brokerage commercials made them out to be. I may be a cynic when it comes to the stock market, but I am an informed cynic, and that has helped me make some very, very profitable decisions in the market.
If you are considering investing in the market, any part of it, or if you are considering giving your hard earned money over to someone else to manage, please, please read The Number first.
— Mark Cuban, Dallas, Texas, January 2004


Don't Ever Leave The Airport. The egregous pay/benefits packages that were cherry picked for former managment by former management should be addresses by the bankruptcy referee. The sooner the better. The writing is on the wall. My disappointment comes for the rank and file. Those loyal employess who have toiled for years with the flying public trying to put the company spin on what they had to do and say to keep their jobs. Union labor, higher fuel prices and shoddy treatment of the SKYMILES customers are working against the company. Remember the disgusting Saturday night stay-over requirement? The public will win long term.



9:45AM Qiao Xing subsidiary partners with Telecommunications Operator and Technology Supplier in China (XING) 5.90 +0.09:Co announced that its subsidiary, CEC Telecom, joined with the telecommunications operator China Communication and technology supplier Shenzhen Rongine Technology Ltd (Rongine), to manufacture and market the first batch of satellite navigation terminal products including GPS/GSM mobile phone that accord with the national standard in the near future. Under the agreement among the three parties, with the technological support from Rongine, CEC Telecom will manufacture at least 500,000 units of GPS/GSM mobile phones for China Communication to launch to the China market on an annual basis. A press conference was held in Beijing on August 11 to announce this new project and has drawn wide media coverage.


In 1982, a mere short career ago when i was a broker at the venerable firm of Kidder, Peabody and Co., Inc. it was my good fortune to sit in the NYSE Board Room and listen to the fodder espoused on the specialist system and market surveillance. Some things never change. The small room where a couple of geeks sat to uncover insider trading was rather laughable. I laughed at it then and i laugh at it now. The hundreds of millions of dollars pumped into the computers systems at the NYSE were not meant to uncover illegal trading by any stretch. They enable the "insiders" to make their bucks and then some. Back then, the likes of Boesky were busy doing their thing. Today, as proprietary trading accounts for over half, yes over 50% of daily volume and the specialists continue their monopoly on trying to steal a buck from the "middle" of the spread to maintain the "fair and orderly market" lingo that permeates the Exchange even today, I keep looking for Elliot Spitzer. Why pray tell, should specialists be allowed to profit on daily trade? Our NYSE marketplace is one of few in the world where the specialist/market maker is actually allowed to take a position in the asset being traded. They trade against customer order flow every single day. The purpose of any market is to facilitate the exchange of goods and services, to facilitate trade whether that market is for guns, butter or bonds. Worrying about Grasso's paltry $190 million is chump change when the cost of the middleman, working every day in the bid-ask spread, is added up every quarter of every year. Take a look. It is easy. It is public record. Check out the quarterly filings of the publicly traded specialist firms. And you thought the system was fair?

Friday, August 12, 2005

Failure to Deliver.............

Is it true that 6% of short sale transactions are FTD? (failure to deliver)

Wait until the market takes a plunder. Imagine the problems the SEC will be working on.

Monday, August 08, 2005


I met William O'Neill back in 1984. The guy has made thousands and thousands of dollars off of me. I have been to nearly a half dozen of his Advanced Seminars. I pay for nearly his entire universe of online software offerings. Yet at any time maybe 30 to 40 stocks actually fit the CANSLIM criteria. Yet, I will always use the basic CANSLIM methodology. The reasons as to how the technical patterns come to be, the human emotions, greed and fear, pain and pleasure reflected in stock prices will never go out of style. Momentum doesn't change. Novel products and services are just that, new and novel. It all adds up. Plus the most important element of the equation at Chippewa Partners, hard work. Doing the work, day after day after day, remaining optimistic and working at the art of investment management.

What will provide you with an edge in the market, and what will enable you to maintain that edge? It's guys like me on the other side of your trade. Trade with an edge or protect your capital.
Or just hire us. You'll sleep better. And probably make more money.

World Markets............

It is amazing to note how the US market, continues to lag all the other markets this year. Indeed, except for the rare birds like Venezuela, Brazil, Costa Rica, and China we seem to be bringing up the rear. Here are some approximate return figures, year to date.
Canada 14%, Mexico 12%, Argentina 10%, Brazil 1%, Chile 20%, Europe500 12%, UK 10%, Germany 13%, France 16%, Spain 10%, SW 16%, Italy 7%, Netherlands 12%, Norway 16%, Japan 2%, Hong Kong 6%, Korea 21%, Pakistan 19%, Philippines 8%, New Zealand 9,Indonesia 17%, China 11%, Taiwan 4%, Aus 8%, India 17%, Singapore 13%, Malaysia 4%. The US markets range from -2% for the Dow, to 1% for the S & P and 7% for the Midcap.

Sunday, August 07, 2005

Toby Keith..........

put on a hell of a show tonight at Phillips Arena here in Atlanta........much better than i had ever anticipated..........if you get the chance, check out a concert, you won't be disappointed!

Cisco - Nokia............

an interesting friends with benefits perhaps?


This vaccine sure popped up in a hurry..........can we trade on the news?

Call me at 404-202-8173 immediately if you have any information.

Saturday, August 06, 2005

The odds of a crash are 1 in 57 attempts .........

'We will just have to get through it and see how it turns out,' said Nasa chief Mike Griffin at a briefing about tomorrow's landing. 'This manned spaceflight stuff is really hard.'
The agency is particularly jittery because it had to ground its entire shuttle fleet last week after a large chunk of insulating foam was spotted falling from an external fuel tank during Discovery's launch, a problem that doomed Columbia in 2002.
Managers reckoned they had fixed the foam insu-lation problems during the 30-month grounding of the fleet that followed that tragedy. More than £1 billion was spent on refits. Now Nasa is back to square one.
'We are seeing the death throes of the space shuttle,' said Dr John Logsdon, director of the space policy institute at George Washington University. 'The problem is not that the machinery is old but the whole concept was a mistake. The shuttle is an evolutionary dead-end.'
For a start, the shuttle is overly complex; it has 300,000 moving parts. By contrast, SpaceShipOne, the world's first private spaceplane - flown for the first time last year - has 30. As one space engineer put it: 'Complexity means fuck-ups. Simplicity means safety.'
The decision to place the manned orbiter beside, rather than on top of, the shuttle's fuel tanks has also had dire consequences: Columbia was wrecked by falling insulation from the top of a fuel tank, which damaged its heat protection tiles so it disintegrated during re-entry.
In addition, using a single craft to carry both humans and cargo is now seen as a major blunder. Hence Nasa's decision - revealed last week - to replace the shuttle with two very different spacecraft: a manned capsule to be launched on top of a medium-sized rocket and a huge cargo launcher to put Moon and Mars vehicles in orbit.
'Separating crew and cargo functions and putting manned capsules on top of rockets will improve safety enormously,' added Logsdon. 'Astronauts have less than a one in 100 chance of dying on the shuttle at present. That is simply not good enough.'

Check this out...............

Friday, August 05, 2005

January - 2005 Chama, NM

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Am I the only guy in the world who thinks the underwriters should be assinated for pricing this deal and watching it run up over 100 points on the first day of trading? I call it theft of corporate assets by Wall Street.

The nonsense that this stock was priced right is asinine. Just more of the same. Goldman Sachs going to the bank. I guess Google's Dutch Auction IPO wasn't enough to convince them.

Thursday, August 04, 2005

AOL - Time Warner

Watching Richard Parsons and David Faber of CNBC fame in an interview yesterday almost brought tears to my eyes i laughed so hard. It is absolutely comical how this merger failed in such a big way. It was hype to begin with. Steve Case and Gerald Levin probably should be in jail for such a massive eradication of shareholder equity, ie; the respective owners of each stock. Steve Case I hear did nothing but fly around on the corporate jet after his massive accumulation of wealth and Levin faded off to a golf course somewhere, no doubt, much to the chagrin of Jane Fonda's last ex-husband.
And to think Ted Turner didn't protect his massive shareholdings thru his broker at Merrill Lynch. It is one thing to lose a billion or two, a whole other deal to lose 5 or 6 billion of your own money in one stock. Wow, the Ladder Ranch may have been impossible for him to buy these days at 550 square miles!!
AOL is now giving away, for FREE, what i basically pay $240 a year for. Sounds like a great case for Harvard Business School to dissect down the road. Parsons doesn't have a clue how to turn the ship. The stock goes lower from here. Trust me.

Wednesday, August 03, 2005


The current NASA manned space flight program has degenerated into a full-employment program for the military industrial complex. The rewards are no longer adequate for justifying the risks nor is the burden on the American taxpayer worth the expense. The West Point ring-knockers might have to go to work again if we shuttered the progam. Imagine.


If you’re having a bad day, if things aren’t going right for you, then change your mind. Because that’s where your life is. Your life isn’t in what other people do to you. You are the one in control. You change your mind." Ann Richards, former Governor of Texas

Amazing fleecing.........

The esteemed stockbrokers at Morgan Stanley were fined $6.1 million simply because the NASD, for which I was an arbitrator for about a decade (before the SEC abolished Registered Investment Advisors such as Chippewa Partners, of which I am Chairman, from being arbitrators due to our extremely unbiased opinions as to who the guilty parties are) found that 2,062 customers generated $2.8 million in fees for ZERO trading in their accounts. The public, in sheeps clothing, can't see the wolves behind all the slick advertising and Wall Street hype and hyperbole. Broker hubris is alive and well. Scary.

Las Vegas Sands...........

This morning this casino gaming company reported their revenunes increased by 49.6% in the second quarter.

Is losing money really entertainment in a casino? Apparently so. Long term, you have no chance. Look in the mirror. Repeat slowly, "I have no chance, none, zero."

The odds are the "house" will take your money and send you home with the sound of one-armed bandits fresh in your mind from the Las Vegas airport. The beat goes on.

Foreign Exchange.........

Recently there has been some media coverage on the pitfalls of small investors to be "day-traders" in the foreign currency exchange markets. The slick ads you hear and see on television are just that. Slick to allow for a faster separation between day traders and their money. I had the pleasure of reading Victor Neiderhoffers timely retort to those who engage in such activity and thought it worth sharing. I have never traded in the FOREX markets and have no intention to do so between now and forever.
"I have found that the best way to analyze the dollar/yen, dollar/euro, Southeast Asian currencies, the rand and the other components of the baskets generally used to track the movements of foreign exchange is that whichever way you have a position, the markets will move in an opposite way, as the banks would have that position and the banks at the end of the year must make $50 billion-$75 billion a year on their trades. So every dollar you invest must be dissipated at a proper rate into their firmament whilst leaving you with hope. I could elaborate further concerning the bid-ask spread, the running of stops, and the total irrelevance of which side you take. Victor Neiderhoffer"

Monday, August 01, 2005

Statistical signifcance?

Nasdaq returns on one month tend to have a moderate positive correlation of 10% with the returns in the next month? Is August up? A nice start. I'm a buyer.

Earnings Management........

It's no secret that companies not meeting their quarterly earnings estimates or giving negative guidance have had their stock price hammered. Probably lots of boardroom "chiefs" long stock and/or options that will be thinking twice about coming public with bad news when their stock is moving up. If their kids don't need new shoes the house in the Hamptons needs a renovation. Wall Street is quick to dish out penalties for not keeping pace and it is awful easy to manage earnings. Call it intentional distortion or call it a lie. It is being done big time. Right now.

Native American Advisors CHIPPEWA PARTNERS