April 2004 

Joan Crawford's Daughter

My wife says that this picture is too sick even for me to post.  See how well she knows me?

April 3, 2004

The jobs report on Friday was so very good that it truly moved the markets.  The Repbulicans want to take the credit for finally coming through with some jobs, while the Democrats still want to say that everything is terrible, and would be better if only they could raise taxes on people making more than $200,000.  I got E-mail from the Democratic Party asking me to tell my sad story.  They are cultivating the losers.  In the meanwhile it would be nice if the Democrats had some better plan for the economy than to tax people. Kerry does want to do some reform of the corporate tax code, but if he really thinks that his plan will cut down on outsourcing, then he is truly delusional.  The benefits of outsourcing call centers is said to be around 40% of costs.  It would take an incredible tax incentive to offset that.  

In the meanwhile, most of the stuff that can be moved over to Merrill Lynch has been moved there.  I sold the last gold fund, and will put the money into RYMKX on Monday, unless something terrible happens.

Speaking of something terrible, one policeman was killed and several wounded in Spain when the terrorists blew themselves up.  Well, at least the garbage is in the trash, so the expense of a trial is avoided.

An explosion is seen from an apartment building in Leganes, south of Madrid, Saturday night, April 3, 2004 in this image made from television. The explosion happened as police prepared to storm an apartment looking for terrorists suspected of carrying out the March 11 train attacks in Madrid. Spain's interior Minister Angel Acebes said the ringleader of the Madrid terrorist attack died in the blast, along other suspects. One special operations officer died in the blast and fifteen other police officers were wounded. (AP Photo/Antenna3 via APTN)

Spanish police and rescue workers inspect the scene of an explosion in a Madrid suburb, April 3, 2004. Suspects sought for the Madrid train bombings apparently set off an explosion when cornered by police, an Interior Ministry source said. Spanish media said a policeman was killed. (Andrea Comas/Reuters)

 March 18,2004

What a terrible week!  Bad news was bad news, and good news was bad news.  The market just wanted to go down, no matter what.  I have lightened up a bit to raise some cash, and I have also put on a short position in the Russell 2000.  I hated to sell FBRSX, but the fact is that financials are taking a hit, and I should have sold earlier. The only thing that kept me from doing it was the ERF on the fund.  

This current situation with actively managed mutual funds has convinced me that it is best to avoid them until the market timing stuff gets out of the way one way or another.  If a fund would clearly state the rules, then there would be no problem.  However, I have never seen a definition of market timing anywhere in a prospectus - at least not one that was specific enough for me to tell what I can do or not do.  To make things worse, the brokerages like Waterhouse and Brown are taking the side of the mutual funds, so that when the funds act in an arbitrary and capricious way then Waterhouse and Brown do the same.

Anyway, I am going to get out of the actively managed funds gradually, and move into the Rydex funds and the ETFs entirely.  Then I may add some individual stocks as well.  Eventually, all my assets will be at Merrill Lynch.

March 21, 2004

This market is really jittery.  After a few days of doing nothing, I got rid of the small hedge I had, selling RYSHX.  I did this in the morning, when the market seemed quite strong.  Then Greenspan spoke, and said some rather obvious things.  The market tanked, and I ended up making money on RYSHX.  Now I wonder if I should have kept it.  I do believe that some good news from Iraq will lift the market - but the bad news keeps coming in.  Maybe if we kill several thousand of the rebels, that will be taken as a good sign.  It certainly would be.  We are being far to merciful, and that is interpreted as weakness.

March 28, 2004

BTW, nobody should ever buy a closed end fund when it is issued. They charged $20/share, but the inception NAV was $19.03 - see www.etfconnect.com. So you had a 5% immediate loss to overcome.  All of this is a testimony to the idiocy of many investors and the greed of the salesmen, of course.  Of course, Tim has the sense to know it is a bad deal to buy such things upon inception.  We even discussed that when I talked to him about opening the account.  Personally, I think that selling such an obvious bad deal is a terrible way to make money.  

At any rate, if you are into bargain hunting or bottom fishing, and want some income, this one might be OK to buy in the next several weeks. It is currently trading below NAV, and there is most likely a distribution coming up soon. Many people may wait for the distribution to get out.  That might be an opportunity.

March 30, 2004

I am mostly cash and a couple of short funds.  This was a terrible month, and I really should have kept the position in RYSHX, particularly since that was at Brown, and it does not yet seem to be available at Merrill Lynch.  Resolution:  Never again buy anything with a redemption fee for any period greater than 30 days.  It clouds my judgment.  I would never have held AEMGX this long, except for the redemption fee.  Now my loss is greater than the redemption fee would have been.