Me Vs. The Bulls

Just this month I broke even again on my stock portfolio. I had been down as much as 53% at one point, but now I'm up somewhere between 4 and 6%. I figured the Dow Jones was unsustainable at 8,200 so I sold my only winners, Tata Motors and Ford. I've included charts of those investments because I feel like every blog post needs pictures. The chart to the right is of my Ford investment. I bought in at $1.75 on November 11th and sold just a few days ago, on the 14th of April, at $4.26. I used a logarithmic scale for my chart so it doesn't look like it, but I made a 140% profit on that decision. I felt like a genius too because in the next day or two Ford plummeted to $3.41 in intraday trading. I didn't buy back in at that price, because I'm hella greedy. The Dow Jones rose 23% in the past 5 weeks, the biggest rise in post-war history. That made me doubt whether it would last since the fundamentals of our economy haven't improved. Things just look like they're getting worse slower. Not better at all. That's why I predicted then (and still do) a big fall in the Dow. So I'm waiting. And I'm greedy.

I also decided to sell my Tata Motors (pictured here) while it was at new heights. I bought Tata Motors on October 28th for $3.87 and sold it at $7.56. I bought Tata Motors for what I still assume will be the success of the Nano. However on the same assumptions of a bear market, I sold it. Also, most of Tata Motors' profits come from its commercial vehicle business, which has fallen apart in India and in its export markets. The Nano, wile exciting, is going to have margins so small that Tata will never make a lot of money on them. The benefit of producing the Nano is that Indian consumers will own a Tata as a first car, and hopefully they will be loyal to the brand as they trade up.

So, I'm predicting a fall. I don't know how long we have before it happens, and I don't know how bad it will be, but I think it's coming. I'm excited about Ford's long term prospects, but until GM and Chrysler (and probably a lot of their suppliers) go bankrupt, how can we think it's only up from here?

The only problem with what I'm predicting is that Ford had a great few days after I sold it. It fell to $3.41 and has since risen to $4.40 or so. It was up 12% yesterday and doesn't seem like it's coming back down. Dammit.

Ginger and Samm: Proud Parents

I always lose video quality when I post to YouTube, but I guess that's the cost of uploading there. This video was taken April 19th while Daniela and I were at my dad's place in Greenfield. His two purebreed Golden Retrievers had 5 puppies and we got to play with them! They were 4 weeks old when this video was shot.

Sweden: Not hip

The Stockholm District Court has found the four guys behind the The Pirate Bay guilty! A Google search will get you millions of articles on this, but here's the BBC's take. More importantly, here is the response from Peter Sunde.

This isn't the final ruling. There are courts of appeal and even the Supreme Court of Sweden (if it were to accept the case). The guilty verdict has been handed down by a district court and The Pirate Bay guys are already appealing.

The four guys were fined 30 million kronor ($3.5 million) in damages, and a year in jail each! In response to the fines, spokesperson Peter Sunde said:

"Even if I had money, I would rather burn everything [I] own and give them the ashes… Not even the ashes, actually. I’d allow them to pick the ashes up and give ‘em to someone else."

I think this quote is rockin', but it belies how quiet and reasonable they seem. These aren't anarchists or anything. They're entrepreneurs.

Chairman of the International Federation of the Phonographic Industry (IFPI), John Kennedy, said of the rulings:

"These guys weren't making a principled stand, they were out to line their own pockets. There was nothing meritorious about their behaviour, it was reprehensible.

Making money is reprehensible to a guy who represents the music industry? Moving on...

For anyone who doesn't download things online, The Pirate Bay is a BitTorrent tracking website. It performs the exact same function as Google, but it tracks BitTorrents, not web pages. A BitTorrent is any file, broadcast to the internet, for anyone who wants it. And people want burned copies of Monsters Vs. Aliens and Lupe Fiasco albums. The difference between Napster and The Pirate Bay is that Napster actually hosted the files. When you downloaded a movie, you were downloading it from Napster. The Pirate Bay is only a seach engine. If you tore apart their servers, you wouldn't find any of the copyrighted material that they are accused of "facilitating." BitTorrent technology is the difference between the two sites.

So, while this is very interesting for Sweden's system of justice, in reality, who cares? In a world where The Pirate Bay could only be hosted in Sweden, this decision might matter. In fact, of the 4 guys found guilty, only Sunde still lives there. Let's say somehow this court case gets all the way to the Supreme Court and they lose. After their jail time and fines, these guys will be able to just pack up their computers and go to some other country where they can get away with it. If the Swedish courts uphold this ruling, they're going to create a hostile environment for internet business and they could potentially chase all of Sweden's e-trenpreneurs out of the country. And what will it have accomplished? Sweden can try to block sites it finds objectionable, but anyone who really wants to find copyrighted material online can find it easily enough. Plus blocking sites violates the very spirit of the internet.

In his video response, Peter Sunde says someone should sue Google. You can find all of the BitTorrents that are available on The Pirate Bay through Google, it's just more difficult. So why not sue Google? I don't think it would be a good idea, but why not?

Red Sox Galaxy

NASA astronaut Sunita Williams appeared on The Colbert Report last night to tell Stephen that NASA isn't naming its new node after him. Did anyone else notice the T-shirt she was wearing to deliver the bad news? Red Sox Nation has made it into space!

Tax Day Teabaggers

First a little history:

The issue at hand in Boston in 1773 was taxation without representation. You know, that unfair and despicable thing that the British did to us, and that we now do to Washington, DC. The British East India Company successfully delivered a shipment of tea to Boston, where it was taken on consignment by the sons of the royal governor. Every other American colony had managed to force the shipments back to England in protest of the hated Tea Act, but the consignees in Boston refused. 17 days after it arrived, an unruly mob of Bostonians, dressed as natives, boarded the ships and tossed all of the cargo into the harbor.

So what exactly are the 500 planned "Tax Day Tea Parties" all about? Surely the British aren't trying to tax us again. According to taxdayteaparty.com:

... We believe the government is far too big already. Yes, this includes the previous administrations excess spending and the idea of bailouts to banks. The plans of the current administration are to make it even bigger. We resent the intrusion and control of government into our lives and liberties. This is a key factor prompting protests.

and from the site specific to Boston:

The “stimulus” bill and TARP subsidise some favoured companies, banks, and people at the expense of those that the government does not take as kindly to. Any company whose cost of doing business decreases is given an advantage over its competitors, not on the basis of excellence or ingenuity, but on the basis of favourable government treatment - bought and paid for by its competitors and the American people. Less costly and more ingenious ideas, rather than pushing the American economy forward, will be sidelined as the government artificially lowers the cost and increases the resources given to more expensive and less effective business models, inventions, and ideas.

I think these statements could read "we're freaking out about all of this spending. It's too complicated and we don't understand it. Bankers make millions and they caused this whole fucking problem. All of this is unfair." That's my interpretation, because these statements don't actually make a whole lot of sense. Bailing out the banks is an attempt to control our lives and liberty? The Stimulus Act shows favoritism? Of course it does. To the squeakiest wheels. And the government has intervened in markets since there have been markets. Why is it suddenly not OK to do that?

But, motive aside, what are these protesters actually going to do? Nothing as far as I can tell. They're going to assemble near the capital buildings in each state, wave some home made signs, and listen to speeches. There's no real agenda so there can't be a strategy. I think I'm going to head over to Boston Common on Wednesday to see this circle jerk, but I expect to see a lot of nothing going on.

Ninja, Survivalist, Investor.

I just wanted to brag a little bit: my portfolio is making money again! For those of you who don't own stocks or aren't following your 401ks anymore, we just had an awesome 5 weeks. I read somewhere that these are the biggest gains since the Great Depression. I have no idea if that's true or not; I've cleaned up regardless.

I picked 4 losers and 2 winners. Bank of America, MGM Mirage, and Freddie Mac are still down 60% from where I bought them back in October. US Steel is down 24%. Ford and Tata Motors are up 140% and 100% respectively. How does that make sense? Ford has been in good shape relative to GM and Chrysler, but it's not doing well. I bought Tata for what I assume will be the success of the Nano. But before either of those companies can get their acts together, finance and materials have to recover, right? A US Steel recovery should precede an automotive recovery... I think the reason that I've done well is that I just got lucky with my timing. And it's also the reason I was burned by everything else. I bought in way too early. Lesson learned. Again.

The Inheritance by David Sanger

David Sanger is the Washington correspondent for the New York Times and he just wrote a book on some of the foreign policy challenges that Barack Obama will face in his 4 (hopefully 8) years in office. The book identifies 6 problem areas: Iran, Afghanistan, Pakistan, North Korea, China, and terrorism. Ahem. Duh.

My advice is to skip the chapter on China. Read In China's Shadow by Reed Hundt if you want to understand China's challenge to American business. If you want a political assessment, try China Rising by David Kang. Just know that China has learned a lot watching our poor performance in Afghanistan and Iraq. And China is both a competitor and a partner in the world. It's important to remember it's both.

North Korea is a problem because it's selling its nuclear technology and equipment to whoever wants it. That thing that Israel blew up in Syria in 2007 was a nuclear reactor, identical to the one at Yongbyon. Bill Clinton didn't have much success with the Agreed Framework of 1994, but at least he got the North Koreans to stop production at Yongbyon. George W. Bush had even less success (although the North Koreans blew up the smokestack at Yongbyon in 2007 -- probably because it was a rusted-out piece of crap by then and may not have been operational since 2003).

Iran is a problem not because it will launch a warhead at Israel, but because it's going to trigger an arms race in the Middle East. If Iran gets the bomb, or gets close enough to make one, its Sunni enemies in the Middle East, Egypt and Saudi Arabia, are going to want one too. I don't know what that will mean for the Middle East, but everyone seems to agree that a Middle East in which Israel, Iran, Saudi Arabia, and Egypt are nuclear-armed is a bad thing.

We are losing the war in Afghanistan but Barack Obama has recently committed more troops. That's a good start, but according to a general in Afghanistan, winning will take 50 years. I wonder if most Americans can get behind an effort like that? And if anyone missed it, we have accomplished precisely nothing in Afghanistan. The problem has just shifted over the border into Pakistan.

The last thing that I want to comment on is our vulnerability to nuclear, biological and cyber attacks. Representatives from the government and private industry got together and created a likely scenario in the event of a massive cyber attack. Our energy grid would be wiped out, no communications, etc; Terrifying. I was thinking about how I would keep Daniela and myself alive in the event of a catastrophic event like that. I know that the first step is to fill up the bathtub and sinks with water while it's still running. But after all the food in the fridge spoils, what then? I thought I should know how to salt meat (that's how colonial Americans did it, right?) so I read about it for hours yesterday online. I think I might try it and see if I can get it to work. I did find a lot of blog postings by people who know how to do this. People who hunt their own food, smoke and salt it, and can do everything else that you would need for survival. If I can't figure out how to salt my own meat, I should at least make friends with someone who knows how. And get a gun. And figure out where in Western Mass we'll build our cabin to get away from the looters and zombies. I've seen enough in movies to know that zombies are going to be a real problem.

Is it insane that I thought about that?

David Sanger on The Daily Show

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David Sanger
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Originally aired on January 21, 2009

A Heroin Junkie on Government

"We have a new type of rule now.

Not one-man rule, or rule of aristocracy or plutocracy, but of small groups elevated to positions of absolute power by random pressures and subject to political and economic factors that leave little room for decision.

They are representatives of abstract forces who have reached power through surrender of self. The iron-willed dictator is a thing of past.

There will be no more Stalins, no more Hitlers.

The rulers of this most insecure of all worlds are rulers by accident. Inept, frightened pilots at the controls of a vast machine they cannot understand, calling in experts to tell them which buttons to push."

Williams Burroughs in Dead City Radio, 1990