Non Sequitur

I was on the stairmaster at the gym for a few minutes yesterday and on one of the TV monitors was coverage of Scrabble from ESPN2. You might expect Scrabble to be on the Ocho but there it was on the Deuce. Over the weekend, although I did not watch, I saw a listing on the onscreen guide for ATV racing (also on the Deuce). As more and more channels get put onto our set top boxes there will be more and more “sports” televised in the future than now. There are more sports televised today than ten years ago. This will seem crazy but I think there is a retirement planning tie in to this along the lines of a part time job. Where I live plenty of people drive ATVs (this is an example). A few years ago, before I had the blog, I owned shares of Polaris (PII) as a demographic play. The idea was boomers get older, buy second homes and get a couple of big toys to go along with the home like an ATV. I had a lucky trade and have not really thought about the stock since and while I don’t know if the stock has benefited from this since I sold out the company should be, at least I am seeing it play out first hand here on the mountain. It would behoove all of the manufacturers to sponsor events in all sorts of age groups with prize money to be won. Now think about applying this to products from other types of activities. I am envisioning a wide but shallow...

Non Sequitur

I was on the stairmaster at the gym for a few minutes yesterday and on one of the TV monitors was coverage of Scrabble from ESPN2. You might expect Scrabble to be on the Ocho but there it was on the Deuce. Over the weekend, although I did not watch, I saw a listing on the onscreen guide for ATV racing (also on the Deuce). As more and more channels get put onto our set top boxes there will be more and more “sports” televised in the future than now. There are more sports televised today than ten years ago. This will seem crazy but I think there is a retirement planning tie in to this along the lines of a part time job. Where I live plenty of people drive ATVs (this is an example). A few years ago, before I had the blog, I owned shares of Polaris (PII) as a demographic play. The idea was boomers get older, buy second homes and get a couple of big toys to go along with the home like an ATV. I had a lucky trade and have not really thought about the stock since and while I don’t know if the stock has benefited from this since I sold out the company should be, at least I am seeing it play out first hand here on the mountain. It would behoove all of the manufacturers to sponsor events in all sorts of age groups with prize money to be won. Now think about applying this to products from other types of activities. I am envisioning a wide but shallow...

Can He Be Right?

Jeremy Grantham is quoted in this Marketwatch article saying the S&P 500 could lose 40% between late 2008 and the end of 2010. We may all be as mad as this guy if he is correct. It certainly seems reasonable that we could at least have to endure a normal bear market at some point between now and then but cutting in half, or coming close to it, twice in a decade is pretty far outside the fat tail. However any scenario is possible and it makes sense to have at least a rough idea of what you would do if Grantham turns out to be correct. A move of 40% over a period of 18 months or more (the time period implied in his statement) is sort of a slow decline. The kind of decline that many people will tell us not to worry about as we go. To frame this in the way I write about it (and think about it too) is that on the way to the down a lot he calls for is the the down a little that happens every now and then. Any time the market goes down a little it could be on its way to down a lot. This does not happen very often but slow declines that result in down a lot hit down a little first. In this context sticking to whatever get-defensive strategy you believe in becomes of paramount importance. An important point to remember is that if the market does actually go down 40% and you do a great job in protecting against most of it,...

Can He Be Right?

Jeremy Grantham is quoted in this Marketwatch article saying the S&P 500 could lose 40% between late 2008 and the end of 2010. We may all be as mad as this guy if he is correct. It certainly seems reasonable that we could at least have to endure a normal bear market at some point between now and then but cutting in half, or coming close to it, twice in a decade is pretty far outside the fat tail. However any scenario is possible and it makes sense to have at least a rough idea of what you would do if Grantham turns out to be correct. A move of 40% over a period of 18 months or more (the time period implied in his statement) is sort of a slow decline. The kind of decline that many people will tell us not to worry about as we go. To frame this in the way I write about it (and think about it too) is that on the way to the down a lot he calls for is the the down a little that happens every now and then. Any time the market goes down a little it could be on its way to down a lot. This does not happen very often but slow declines that result in down a lot hit down a little first. In this context sticking to whatever get-defensive strategy you believe in becomes of paramount importance. An important point to remember is that if the market does actually go down 40% and you do a great job in protecting against most of it,...

Sunday Morning Coffee

The poll question from the video drew some interesting responses and questions that I’ll try to answer here. RW has been shooting the lights out with some good short sales, congrats. As far as his question about call writing funds that own foreign stocks; I am aware of two a Blackrock fund with ticker BOE that I own personally and for clients and an ING fund with ticker IGD. I would also suggest checking with Eaton Vance; it seems to me that they have one but I am not sure. There were a couple comments surrounding the YTD number for the S&P 500. It closed 2006 at 1418.30. It closed Friday at 1479.37. That is a gain of 4.305%. Next add 88 basis points for two dividends (ETFConnect has the yield for SPY at 1.77% and it works out to 5.185%. As for VFINX, the Vanguard fund, I have no idea how closely it tracks the index. One reader asked what it would take for me to become more sanguine on the markets given the lift. Well lets not forget I might get this wrong but thanks to the snapback noted by some readers in emerging, commodities and a couple of foreign names my having added to my double short fund the day of the discount window cut is not holding me back. It might start to when the snapback effect peters out. As far as being sanguine it just doesn’t add up to me that the events that unfolded won’t create another down leg of some sort. I added some double short last summer with bad timing, the...