Learning from History, A Calm Market?, Pokes, and 5G-

History is a great subject because it is full of all kinds of great stories, events, people, and situations which actually took place. Many of these events caused great sorrow and destruction, like World War One and Two, the murders of the Holocaust, and the massive loss of human life during the Civil War and Crusades. It is instructive to pay attention to these events because you can learn how the world came to be where it is today, and how countries and regions were shaped from previous generations.

Just as important, you can also digest how people have been successful in various different situations or industries. I think the whole process of learning encourages and stimulates growth in many different ways. There is much in the media about how college costs, especially student loans, are so great that it has renedered a generation saddled with so much debt it will be hard for them to get out from under the loan repayment burden. However, there is always another perspective. Knowledge can be gained in many ways, and growing as an individual is a never ending process. Part of the growing process is meeting and socializing with people who have different backgrounds and knowledge bases than you do. They can help you discover worlds which you may not have known existed. Most people change jobs many times during their lives. Yet, in many instances, the group you meet and become friends with in college or high school are your most cherished acquaintances and may even become part of your immediate family. Can one really put a price or value on those relationships? I think not.



As my focus usually involves the equity markets, this week I spent some time learning about some of the legends in the financial world and how they approached investing. Many are people I am very familiar with or had extensive knowledge of before this weeks quest. Still, what I found interesting about many is the mindset they had in their approach to the market and life in general. The common theme was staying optimistic, constantly learning about new companies and industries, and to not worry about broader problems in the global or domestic economy. In addition, having a healthy lifestyle and a robust social life were important as well. Many of these individuals lived very long lives, made huge fortunes, and are a shining example of good for their communities. All of these attributes are noteworthy for anybody and if I can have a smidgen of their success I will consider myself very fortunate.



In the financial world, the major events of last week included the focus on the fiscal cliff negotiations, as well as Bill Ackman's announcement and presentation of his best investment idea ever, the short of Herbalife. Herbalife's stock, as well as those of similar ilk (Avon, Nu Skin Enterprises), suffered losses of over 30% during the last two days. Yes, 30% in the last two trading sessions. Mr. Ackman has what is called market credibility. Having seen many of Mr. Ackman's presentations, he is incredibly thorough and spent a year researching Herbalife. Not all of Mr. Ackman's investments have had great success, as Border's and Target come to mind. Many are openly skeptical of how his position in J.C. Penny's will fare, and as of today, it remains to be seen how the famous department store can turn their financial performance around. However, I would not want to take the other side of the Ackman trade because he is like a dog with a bone. He will not exit the position if he feels he is right. It took him many years to take down MBIA, yet he ultimately prevailed and made a ton of money doing so. The position with Herbalife all goes to charity, so he really has no personal skin in the game. Still, it is a situation I will definitely keep my eye on.



The fiscal cliff situation remains unresolved and most analysts believe it will not get solved before 2013 arrives. During the presidential election, I commented to friend's and family the same belief I have today, only I will apply it our entire political leadership in Washington. Please take no offense at the language as it is harsh. If it is bothersome, I am sorry. THEY COULD NOT LEAD A WHORE TO BED. A major problem is neither side cares that the positions they take and will affect the other side. The President does not want to cut spending for fear it will hurt his group of constituents. John Boehner does not want to raise taxes as it is a bedrock principle of Republicans. So what do they do? They do what they do best- go on vacation, and next week they will probably give themselves a raise. Fabulous. (Sorry for the sarcasm)



Many believe market participants are way too calm given the number of problems facing the global and U.S. economy. If the answer is cash, CD's or Treasuries, I would rather be calm-



http://www.businessweek.com/articles/2012-12-19/in-a-world-full-of-risk-why-are-investors-so-calm

Don't look now, but look what is the number one free application- http://techcrunch.com/2012/12/22/its-a-facebook-and-google-world-on-apples-app-store-poke-hits-1-a-day-after-its-release/



A pretty cool article on where mobile networks are headed-

http://www.businessweek.com/articles/2012-12-19/the-future-of-mobile-networks-beyond-4g



If you are really into the tax situation, an interesting editorial commentary on the capital gains debate. I do not agree with the reasoning at all because it does not take into consideration incentives, but that is just my two cents-

http://www.bloomberg.com/news/2012-12-19/the-capital-gains-tax-a-tragedy-in-two-acts.html

Finally, I hope you have a great weekend. In addition, I hope the holiday season is a happy and healthy one for you and your family!!!!

Y H & C Investments, Yale Bock, and the family of Yale Bock own positions in securities mentioned in the blog post. Investing in stocks can lead to the complete loss of your capital
. As always, on any company mentioned here, past performance is not a guarantee of future returns. Investing involves risk of losses on invested capital. One should research any investment and make sure it is suitable with your objectives, risk tolerance, risk profile liquidity considerations, tax situation, and anything else pertinent to your financial situation. Also, the CFA credential in no way implies investment returns will be superior for any charterholder.

Innovation and Why It Matters, Contenders vs Pretenders, a Broken Market?

One of the great things about the investment business is it constantly forces you to learn. You have to keep abreast about what is going on all over the world, and in many different industries. The longer you are a market participant, the more you experience situations where you wake up one day and something happened in the world which affected the price of one of your positions. Interestingly enough, what usually builds wealth over time is the consistency and predictability of business performance. When you see revenues and profits marching in a pretty chart that slants upward and to the right, you have found exactly what you want. However, it is not easy to find these companies, and with the advent of new technologies and innovative thinkers all over the planet, markets are the least static they have ever been.


Industries change, and sometimes very quickly, which affects individual enterprises dramatically. For example, if you look at the coal industry today, almost every analyst believes it faces huge challenges competing with natural gas, regulations which make it hard to compete, and issues about scale relative to substitutes. Coal companies have been going out of business for the last year, and still, even today, coal makes up almost 30% of all energy produced. The only constant is change, and it has a dramatic effect on how to view the investment world.


Still, nobody wants to hear about the challenges, what people are interested in is how to succeed. As a result, I believe you have to allocate capital to companies who have management teams who are leaders and not imitators. Imitation not only does not work, it is actually a very sloppy and lazy way to approach business. The risk is immense, when you do not innovate, do not push the envelope, do not think about new products or new ways to be more efficient. A company can now literally disappear in a few years. For example, look at what Apple has done to Microsoft, or what Netflix did to Blockbuster, or Amazon.com has done to Sears or Best Buy. You can also extend this to LinkedIn vs Monster.com, Facebook vs Myspace, or Apple (again) vs Sony or Nokia. So when I see Microsoft and Hewlett Packard attempting to imitate Apple with a new smartphone, I have to think in these instances, they are going to fail, and flame out miserably. Innovation can take many different forms, from new materials being uses, to new processes developed, or a new way of approaching the supply chain. Let me offer a few examples to help illustrate my point.



Having been a shareholder of Starbucks for many, many years, and hopefully for many more, I believe they are an innovative company. I also believe McDonald's is an imitative company. Yes, both have done very well for shareholder's, but if we are talking about taking chances on new products, or new acquisitions, or integrating new concepts into your business methods, it is not even a contest. Starbucks has failed with some of its innovative ideas- like the infamous Chantico (heavy chocolate drink), or an attempt at italian ices. Still, if you look at their new attempts at buying a juice company to compete in health and wellness (Evolution Fresh), or in tea (buying Teavana), or buy buying La Boulange (French Bakery) to help improve their food offerings, Starbucks is thinking, searching, striving for improvement. Some of their new store designs (more mobile for hard locations), the introduction and improvment of the Starbucks card, and the integration and investment in Square, are illustrative of using new methods to become more efficient in all areas. Pushing into new countries like India and Vietnam, show more aggressiveness about growing their business in untapped markets. On the other hand you have McDonald's, which I believes just copies what others try. You have a new smoothie, ok, McDonald's introduces a new smoothie. Got coffee? Ok, McDonald's now has that too. On Wall Street, the investment world worships both Starbucks and McDonald's, but it was not always that way. I think it will be fascinating to see how these two companies perform over the next decade. (Please know in no way am I recommending anyone invest in either or any company- see the disclosure at the end of the blog) Latte or Quarter Pounder?


A company I am not a shareholder of and made a big mistake with is Google, which I believe is as enterpreneurial as any large public business in the world. I just think they try all kinds of different ways of improving and growing their business. They were originally a search engine, and have bought Youtube, and then they purchased Motorola (among others). The development of the Android operating system may yet prove to be Apple's undoing, and certainly poses a huge threat to Microsoft as well. I just read where Google has a trial in Kansas City for fiber into the home for 70 bucks a month. Something like that could displace the telecom and cable companies if it were ever to catch fire on a large scale, maybe five to ten years out. Certainly, a few of their efforts have not paid off, which is the nature of trying new things. Typically, they do not pay off. The important question is if it does work, what is the potential benefit? Fiber in the home could be a 10-50 billion dollar business, so if Google invests $50 million and has a potential winner, they could make 100-1000 times their investment. Innovation makes it possible, whereas the copycat approach is just a way to cover the backside.


The fiscal cliff approaches and our political leadership remains wedded to idealogy. More speeches, more tv appearances, more of the same nonsense. The only guaranteed action will be to vote themselves raises and take a vacation. Forward huh?


Square is a very interesting company and will probably be an emerging leader in the payments space-http://techcrunch.com/2012/12/09/square-introduces-gift-cards-the-slow-death-of-physical-credit-cards-and-cash-continues/



Now more than ever, and increasingly so going forward, online personal data becomes a critical area of focus. Here is an interesting approach to this subject-
http://www.nytimes.com/2012/12/09/business/company-envisions-vaults-for-personal-data.html?ref=business&_r=0



Is the stock market broken? It looks like the ex-CFO of the NYSE feels it is-http://www.bloomberg.com/news/2012-12-02/stocks-markets-that-flummox-masses-do-no-one-any-good.html

I hope you had a great weekend. In addition, I hope the holiday season is a happy and healthy one for you and your family!!!!

Y H & C Investments, Yale Bock, and the family of Yale Bock own positions in securities mentioned in the blog post. Investing in stocks can lead to the complete loss of your capital. As always, on any company mentioned here, past performance is not a guarantee of future returns. Investing involves risk of losses on invested capital. One should research any investment and make sure it is suitable with your objectives, risk tolerance, risk profile liquidity considerations, tax situation, and anything else pertinent to your financial situation. Also, the CFA credential in no way implies investment returns will be superior for any charterholder.

Black Friday, The Fiscal Cliff, the Perception of Banking, and Cyberwar in Israel-

The annual rights of passage known as 'Black Friday' came yesterday with all the fanfare which goes with it. The day after thanksgiving is very important to retailers as it is a day which helps set the tone for their performance during the fourth quarter. For many companies, the holiday shopping months account for the majority of their profits for the entire year. As a result, thoughtful enterprises put a great deal of planning, effort, and resources into having an approach which allows for high levels of execution across all areas of the business. Mobile based efforts are increasingly being integrated into existing strategies as more and more shopping moves to smartphones and tablets.

Consistent with this customer migration are the development of applications which take traffic away from web sites. Smart organizations use a variety of strategies to attract customers and make the buying experience as convenient as possible. I do not own shares in Amazon.com, but their management does a great job of attracting customers any way it can. I certainly think their efforts in the tablet space with the Kindle, Kindle Fire, and a growing library of content puts them in great position, along with Apple and Google (I know, really going out on a limb there, huh) , for many years to come. The hard part about technology based companies is they are constantly rapidly changing , but for that matter, so is almost every part of the business world, just not as fast as tech focused sectors.


The negotiations for averting the "fiscal cliff" will intensify this week as both President Obama and House Majority Leader John Boehner try to come to an agreement which will both please and upset their bases. The main players are Obama, Boehner, and Senate Minority Leader Mitch McConnell. Every other politician is not worth paying attention to as they only make the discussions more difficult. The people with the decision making power are the three I mentioned. A deal will probably get done, but it is hard to have any confidence at all in this group.

The market anticipates a deal and as a result had a nice run last week. Usually this is a time when the stock market does well, but one never knows as investors have been very pessimistic for a long time. If institutions ever get the sense the economy will grow quicker than they thought, or large companies will start to invest the large cash balances sitting on their balance sheets, the stock market will move higher. If the big boys do not believe those things, we will keep meandering along with performance based on individual company execution, which is what pretty much happens anyway.



The perception of bankers in both the United States and Europe is very poor-http://www.bloomberg.com/news/2012-11-22/jain-gets-silent-treatment-as-bankers-eat-humble-pie.html



Large institutions are now seeking retribution based on the idea J.P. Morgan Chase misallocated capital in an investment process designed for trading-http://www.bloomberg.com/news/2012-11-21/jpmorgan-turned-cio-into-prop-trading-desk-pensions-say.html


The media is focused on the war in Gaza, but even more interesting is the cyber efforts Israel is making to keep their government sites protected-http://www.bloomberg.com/news/2012-11-19/israel-wages-cyber-war-with-hamas-as-civilians-take-up-computers.html

I hope you had a great thanksgiving and enjoy the weekend. In addition, I hope the holiday season is a happy and healthy one for you and your family!!!!

Y H & C Investments, Yale Bock, and the family of Yale Bock own positions in securities mentioned in the blog post. Investing in stocks can lead to the complete loss of your capital. As always, on any company mentioned here, past performance is not a guarantee of future returns. Investing involves risk of losses on invested capital. One should research any investment and make sure it is suitable with your objectives, risk tolerance, risk profile liquidity considerations, tax situation, and anything else pertinent to your financial situation. Also, the CFA credential in no way implies investment returns will be superior for any charterholder.

Here are some articles written about specific companies by Yale Bock at Seeking Alpha-
http://www.y-hc.com/resources/newsletters/50-seeking-alpha-research.html

Reality Sets In, the Market Reacts, and Say Goodbye to Hostess!!

Well, it is all over but the shouting, as Mr. Obama gets another four years. The only problem is it is not really not finished, as the country has the mess that is the fiscal cliff to deal with, along with the joy that is Obamacare (let's not even discuss the Libya affair). In addition, businesses facing increasing regulatory costs are already starting to react. Papa John's pizza (you might know it from the Peyton Manning commercials) has decided to either reduce workers hours or cut back on health care coverage. There are other reports from fast food enterprises who are considering layoffs as well. Some eateries are considering a 5% increase in food costs to help pay for the implementation of Obamacare. The citizens of the U.S. voted for him, and now we have the joy that are his policies as well. Lovely.

The stock market certainly made its opinion felt regarding the outcome of the election as stocks have sold off for the last week and a half. An increase in capital gains, dividends, and marginal tax rates looks like a matter of when, not if. Investors figure they will take gains and a lower tax rate now versus holding and facing higher tax rates in the future. Unless of course, the holdings are in tax advantaged or tax free accounts, where your proceeds accrue until you have to withdraw the assets. Strategic thinking is necessary if one wants to build wealth, and tax advantaged accounts are great vehicles if utilized correctly.

Naturally, once we have a winner in the presidency, Hamas decides to rain missiles into Israel. Moreover, the lunacy of the muslim fanatics continues to show its ugly head. You have to think Iran will also instruct Hezbollah to attack from the north. With Egypt in the pocket of the Muslim Brotherhood, the middle east looks like a powederkeg waiting to explode. Leading from behind, huh?

The shock, the horror, yup, Hostess will be liquidated-http://dealbook.nytimes.com/2012/11/16/hostess-brands-says-it-will-liquidate/?ref=business

Kyle Bass is a unique investor with strong opinions. He also has very good performance, so you might take a look at what he is invested in-http://www.bloomberg.com/news/2012-11-16/bass-says-half-his-fund-is-invested-in-subprime-bonds.html

It is always nice to see good products for kids- http://techcrunch.com/2012/11/16/timbuktus-educational-app-for-kids-relaunches-with-new-design-daily-content/

Lytro is trying to revolutionize the taking picture business, and they have an updated new product-http://techcrunch.com/2012/11/15/lytro-reinvents-the-camera-once-again-now-lets-photos-change-perspective-along-with-focus/?icid=trending4&grcc2=5476355bc666b2e92559cb464a7025ed

Y H & C Investments, Yale Bock, and the family of Yale Bock own positions in securities mentioned in the blog post. Investing in stocks can lead to the complete loss of your capital. As always, on any company mentioned here, past performance is not a guarantee of future returns. Investing involves risk of losses on invested capital. One should research any investment and make sure it is suitable with your objectives, risk tolerance, risk profile liquidity considerations, tax situation, and anything else pertinent to your financial situation. Also, the CFA credential in no way implies investment returns will be superior for any charterholder.
Here are some articles written about specific companies by Yale Bock at Seeking Alpha-
http://www.y-hc.com/resources/newsletters/50-seeking-alpha-research.html

Obama's Win, Money Moves Before the New Year, and Amazon's Wine Venture-

Barack Obama got reelected President of the United States on Tuesday in a bitterly fought election. Many Republicans are offering reasons and explanations on what happened, why Romney and other Senate candidates lost, and how to proceed in the future. Democrats are hailing the election victory a mandate for their policies. Without question, the citizens of the United States sent a message to people who are wealthy that they are not wanted as political leaders, at least not in the contests of 2012. Across the country, voters also in some instances approved tax increases, certainly in California. I find it interesting, and in my opinion wrong, to believe a country with 50 trillion dollars of unfunded liabilities, and a state like California, which is running 10 billion dollar annual deficits, is not going to focus on ways to cut costs first. Any successful business person knows you take care of what you can control, which is your own spending. If you can find ways to become more efficient you do it right off the bat, as a more productive business is more profitable. However, the majority of the voters across the country apparently do not feel the same way.



With respect to the political situation between the two parties, you must look at the demographics to understand what happened. It is very simple, and obvious, the current Republican party is not seen as an attractive alternative to the Democratic party for young people (especially young women), hispanics, asians, and african americans. The percentage of these voters the democratic party won is way too large of a hurdle for any opponent to overcome. These voting blocks will continue to grow, and the percentage of the vote which is caucasian, around 72%, continues to decline. Barack Obama spend the last 5 years courting these voters and getting them to register to vote, and when it was time to show up to vote, they certainly did. The unwillingness or lack of effort the Republican party made in attempting to engage these constituencies decided this election, and could continue to plague the party of Lincoln for many years to come.



I believe there were many other issues which contributed to the Obama win, certainly with to respect to a few of the choices Mitt Romney made, some of which were forced on him. First, with so much of the Republican primary devoted to a race to see who could be more conservative, Romney had to take positions on immigration and abortion to get himself elected. When the Republican primary dragged on and on it hurt his financial position, so it left him depeleted at the ouset of the general election. At that point, Obama used his resources to paint Romney in such a way as the swing voters in the midwest became convinced Romney was not somebody who they could relate to. Certainly, a legitimate question is how can a guy worth $200 million talk about tax fairness and economic opportunity with someone who earns 30-50 thousand dollars a year? Romney did a good job of trying to answer those questions in the debates, but mindshare is earned by repitition, like advertising. When people see things a thousand times, eventually, they begin to believe the narrative. I also believe picking Paul Ryan was a major mistake, as Romney went 0- for the midwest. The obvious choice was Marco Rubio, and Rubio has a very good chance to be the nominee in 2016. My last thought on the election is I think Mitt Romney very much helped Obama because his ideas about leadership and working with the other side are mandatory for Obama to have any success in his second term. The interesting question is whether Republicans, after having been the recipeint of a brutal advertising campaign by President Obama, are going to want to cooperate.



The stock market has sold off the last few days after Mr. Obama got reelected. Investors are obviously concerned about the fiscal cliff, impending dividend and capital gains tax increases, possible marginal tax rate increases, and the implementation of Obamacare. The stock market always has stocks which are trading where people think they are a bargain. Currently, you can probably find many companies where you can look at the valuation and the stock may be trading near multi year lows. Stepping in to buy these equities can be painful as you are trying to "catch a falling knife." However, you will only know 2-3 years later how wise a decision it was to buy the stock.

Here are some interesting thoughts about how investors are approaching the new year- http://www.bloomberg.com/news/2012-11-08/obama-victory-leads-wealthy-to-make-quick-pre-2013-moves.html



Voters decide to raise our taxes-http://www.bloomberg.com/news/2012-11-08/voters-to-congress-raise-our-taxes.html



Amazon decides to make a big push into wine-http://techcrunch.com/2012/11/08/third-times-a-charm-amazon-tries-again-with-launch-of-new-vertical-amazon-wine/

Y H & C Investments, Yale Bock, and the family of Yale Bock own positions in securities mentioned in the blog post. Investing in stocks can lead to the complete loss of your capital
. As always, on any company mentioned here, past performance is not a guarantee of future returns. Investing involves risk of losses on invested capital. One should research any investment and make sure it is suitable with your objectives, risk tolerance, risk profile liquidity considerations, tax situation, and anything else pertinent to your financial situation. Also, the CFA credential in no way implies investment returns will be superior for any charterholder.

Here are some articles written about specific companies by Yale Bock at Seeking Alpha-

http://www.y-hc.com/resources/newsletters/50-seeking-alpha-research.html

How Will the Election Turn Out, and More Craziness!!!!

With 10 days to go until the 2012 Presidential election, the country stands divided about nearly everything political. Big government vs small government, big business vs unions, pro-choice vs right to life, foreign policy strength vs apology tour, and on and on it goes. However, the reality is one side will win, and one side will lose. The country will still be divided after it has a winner, and the process of governing will be very difficult. In so many ways, every part of the election has become sadly pathetic. From the unbelievable reality each side will raise nearly 1 billion dollars to run, to the farce that is the debates and how little time is spent on them. Throw in a dash of media malpractice and moderator meddling and you just have to shake your head. To top it off, we have the United Nations telling us they are going to check the fairness of our voting process. If I wanted to, I could not make this up. Still, every 4 years our grand country has an election, and we are oh so close to having one, for better or for worse.

Turning to another realm where hearts get broken on a daily basis, the stock market continues to be concerned about poor corporate earnings. Quite a few companies have announced more layoffs, like Kimberly Clark, and Dupont, just to name a few examples. All is rosy in the world, uh huh, which is why these companies are laying off workers. The market is just punishing as any company must prove it is worthy of investment dollars. If not, it gets sold off in a big way. For example, I own a company which had revenues up 38% and profits up 45%, but one small division gave guidance which indicated it would not be operationally profitable. The stock fell 11% that day because of the confusion. I have seen companies raise the dividend 50% and get sold off. Others have profits up 30% and raise guidance, and again they get sold off. Things are tough all over, and the stock market is another place where only the strong survive.


On a personal note, regardless of what happens in the election, I think it is important to focus on the great things about daily life. If you have a loving family and you have your health, you are blessed with a great deal. Neither of the presidential contestants are going to call you to ask you what to do if they win, I would bet on that. Consequently, the results of the election are going to be important, but life will go on, and it is important to maintain a realistic perspective about what really matters. Now, who are you going to vote for?


Money transfers are a huge business, and here is a startup trying to help inform consumers-http://www.businessweek.com/articles/2012-10-26/a-startup-that-aims-to-be-the-kayak-for-money-wiring


Apple is planning a new music service for 2013-http://techcrunch.com/2012/10/26/watch-out-pandora-apples-streaming-radio-service-could-launch-in-early-2013/?icid=wym1&grcc2=9cd03ed9f064903720ea82e6acfa2acf~1351270797765~


Capital allocation decisions are crucial for corporations. Take a look at how B of A is still paying for the Countrywide acquisition-http://dealbook.nytimes.com/2012/10/25/tallying-the-costs-of-bank-of-americas-countrywide-nightmare/?ref=business

Finally, I hope everyone has a great weekend and a happy, healthy, and safe Halloween!!!!

Y H & C Investments, Yale Bock, and the family of Yale Bock own positions in securities mentioned in the blog post. Investing in stocks can lead to the complete loss of your capital. As always, on any company mentioned here, past performance is not a guarantee of future returns. Investing involves risk of losses on invested capital. One should research any investment and make sure it is suitable with your objectives, risk tolerance, risk profile liquidity considerations, tax situation, and anything else pertinent to your financial situation. Also, the CFA credential in no way implies investment returns will be superior for any charterholder.

Here are some articles written about specific companies by Yale Bock at Seeking Alpha-
http://www.y-hc.com/resources/newsletters/50-seeking-alpha-research.html

Election Thoughts, Earnings Season, and Mobile Growth-

The second presidential debate took place last night at Hofstra University in Utica, NY, and any interested observer was probably a bit uncomfortable. Without question, whether you are a Democrat or a Republican, I would imagine most people who have watched the debates might agree there has to be a better way to inform the public than what we currently have. You have two people who are auditioning for the highest office in the United States, which is probably the most powerful job anyone can have. Under any foreseeable circumstance, these people are going to be strong willed. Interruptions, a lack of respect for the other participant and general viewing audience, and certainly, very little cooperation with the supposed moderator were all noticeable during the first three debates. As a result, there has been a lack of order in these debates. In addition, using one moderator as a filter to ask questions leaves the process vulnerable to questions of partisanship. Why not have a panel of moderators, from say the NY Times, Wall Street Journal, Reuters, Bloomberg, and the debate commission, and have them set up rules for the participants to agree on? Alternative questions, time limits, buzzers, whatever, there has to be a better format than what we have.

Moreover, more time should be spent on subject matter so candidates can properly explain their views about important concerns. For example, Obamacare is a piece of legislation that much time and effort was devoted to. Health care comprises over 15% of the economy. It affects every person in the country at some point in their lives. I cannot recall one question on it, other than in the health care segment in the first presidential debate. How much sense does that make? There are plenty of other subjects which certainly could use an extensive discussion but we are stuck with 90 minutes at a time. There is a reason why we get the fighting and interrupting- because the structure lends itself to a cramped, rushed, talking point oriented, sound bite based result. You reap what you sew- and I would imagine quite a few people are incredibly turned off by these debates.

Regarding the state of the presidential election, anyone who thinks they can forecast how this turns out is engaging in a fools errand. The demographics of the country and the electoral college favor the Democratic candidate. One never knows how these important events play out. Monday night is the next debate on foreign policy and it is moderated by Bob Scheiffer of CBS News. He is a long time veteran of the political reporting class and could do a good job in maintaining an orderly debate. I am sure you will be watching and so will I.

The stock market has performed pretty well as earnings season arrived. The money center and investment banks have exceeded expectations, and anything housing related shows continued strength. One of the reasons why you want to own a diversified portfolio is to have exposure to plenty of different industries. When one goes down, another one goes up, or at least, that is the rationale. During the 2008 downturn, everything went down except cash. Many investors look at correlations to try and structure their portfolios in such a way so they will always benefit from what the market does. In that light, they try to find strongly negative correlated companies or industries with the general market. However, and here is the cruelty of the market, what often happens is your longs go down and your shorts go up, thus negating your attempt to outstrategize the market. The market is not easy, and it is not supposed to be.

We have reached the point of the year where what has worked, will continue to work. What has not performed will get sold off. Now is the time to really focus on companies which have been beaten down which you want to own, for whatever the reason. Good luck in your efforts!!

The mobile area is massive and continues to grow-http://www.bloomberg.com/news/2012-10-17/smartphones-in-use-surpass-1-billion-will-double-by-2015.html

With the housing market booming investors are looking to take advantage of the rebound-http://www.bloomberg.com/news/2012-10-17/private-equity-in-atlanta-after-picking-phoenix-clean-mortgages.html


Facebook has over a billion users and they have a sharp guy running the show. Here is their latest approach to help their business, already a very good one- http://techcrunch.com/2012/10/17/facebook-mobile-app-install-ads/

I hope everyone has enjoyed reading the blog, and has a good week. If you have any comments or questions about the blog, please post them.

Y H & C Investments, Yale Bock, and the family of Yale Bock own positions in securities mentioned in the blog post. Investing in stocks can lead to the complete loss of your capital. As always, on any company mentioned here, past performance is not a guarantee of future returns. Investing involves risk of losses on invested capital. One should research any investment and make sure it is suitable with your objectives, risk tolerance, risk profile liquidity considerations, tax situation, and anything else pertinent to your financial situation. Also, the CFA credential in no way implies investment returns will be superior for any charterholder.

Here are some Seeking Alpha articles Yale Bock has written about specific companies.

QE 3, Middle East Mayhem, The Debates, and Much More!

The summer ended, and fall started with a very eventful week. The continuing insanity which is the middle east showed once again the region is not a place which can ever be thought of as stable. Ben Bernanke unleashed the financial version of being "All In," with the announcement to buy up to $80 billion of mortgage backed assets per month (in some form or another). The focus of the Fed has completely become reducing the unemployment rates, essentially saying it has inflation under control. Time will tell about that as ignoring inflation usually is not a wise move for central bankers. Hmmm, could it be a coincidence we have a presidential election coming up in 50 days or so? No, I knew you did not think so either.

Speaking of the little contest known as the Presidential election, well, there are no words to describe what took place with respect to their handling of the events in the middle east. Sorry, yes there are, "MISGUIDED. STUPID. MORONIC. CHEERLEADERS. BLEEP-BLEEPS."

You have a U.S. government whose responsibility is to protect U.S. citizens, diplomats, and assets throughout the world. In Libya, a U.S. ambassador was killed on the anniversary of 9-11. You would think the government would provide extra security, or arrange for extra security for those people in countries where extra danger could be present. Instead, the country saw valuable people, people who have wives and families die. The radical muslims blame the attacks on a film made in the United States, a country which has what is called the first amendment, the right to freedom of speech. One of the great things about the U.S. is you have the right to say you disagree with things. Apparently, nobody can make anything which would in any remote way criticize Islam, or the prophet Muhammed. In the U.S., people make films advocating Naziism, show people defacating or uriniating on all kinds of religions, and plenty of kind of pornography, and I have never seen the kind of rioting and violence which goes on in the middle east.

Mitt Romney gets attacked by many members of the media for saying the U.S. government should support freedom of speech. The U.S. government asked Youtube to pull down the video, and Google refused here in the U.S. Essentially, what has happened is the media are tools of the campaigns. Forget about neutrality, that has long been thrown out the window. On the right, you have Fox. On the left, you have CNN and MSNBC. The degree of cheerleading depends on who is doing the rooting. The only problem is politics is not a game, it is serious business, and it has real world consequences. You know, like a country with radical islamic leaders running it, Iran, potentially getting a nuclear weapon. It is a country which has stated it wants to wipe other countries off the earth. There are no extra points for a good routine here. You had families lose their head this week, those kids will not see that parent again. Real consequences result when leaders do not do their jobs and instead are focused on public perception. It is tragic the media does not ask the tough questions which need to be asked- sis boom bah!

Regarding QE3, yes, the market went up nicely last week. There is a very high probability it will continue to go up through the end of the year. However, in many instances, the cure is worse than the disease. When you are running trillion dollar deficits with no end in sight, and have nearly 50 billion dollars of unfunded liabilities, eventually there are consequences. As someone who tries to benefit when asset prices are not accurate, in many instances, especially financial matters, things are seldom what they seem. The equities market has been performing well, and corporate profits are enormous, which has a great deal to do with the market going up. However, the underlying currency, the dollar, faces a terrible financial situation with a very weak balance sheet and deficits which continue to grow. In addition, there is no indication the U.S. has leadership which can enact policies to solve the enormous financial challenges which face the country.

Having taught history and been a basketball coach, I am very familiar with competition and how things can change rapidly. In contests, there are ebbs and flows, but many times, the status quo exists, until, bam, it does not. You are ahead and you stop scoring and lose by 10. In World War 2, Holland, Belgium, and France were thought to be unattackable. They fell in less than a week. This presidentail campaign is a long haul, and a terribly bitter struggle. Both sides want to win badly. The country is deeply divided. I suspect the final chapter has yet to be written, but one can be certain November is coming quickly, and all eyes will be watching the presidential debates and anything else which could affect the outcome.

Nice interview with Zillow CEO-http://techcrunch.com/2012/09/16/make-sure-your-company-is-ready-for-ipo-prime-time/

About time, HP is getting into the smartphone business. Very good chance it could be a case of too little, too late. You are going head to head with Apple, Google, Microsoft, etc. Not for the faint of heart. http://www.denverpost.com/business/ci_21548816/hewlett-packard-developing-smart-phone-computer-business-dwindles

Apparently, the world's largest money manager things stocks are the place to be. http://www.bloomberg.com/news/2012-09-12/fink-belies-being-boring-telling-customers-to-buy-stocks.html

Very interesting story about a gold bug. http://www.lasvegassun.com/news/2012/sep/16/gold-worth-7-million-found-house-after-nevada-man-/

Mark Zuckerberg fires back, and the stock had a very good week-http://marketday.nbcnews.com/_news/2012/09/14/13867775-facebook-stock-recovers-sort-of-after-zuckerberg-speaks?lite

I hope everyone has a great week, and please comment on the blog, regardless of whether you agree or disagree!!

Y H & C Investments, Yale Bock, and the family of Yale Bock own positions in securities mentioned in the blog post. Investing in stocks can lead to the complete loss of your capital. As always, on any company mentioned here, past performance is not a guarantee of future returns. Investing involves risk of losses on invested capital. One should research any investment and make sure it is suitable with your objectives, risk tolerance, risk profile liquidity considerations, tax situation, and anything else pertinent to your financial situation. Also, the CFA credential in no way implies investment returns will be superior for any charterholder.

Here are some Seeking Alpha articles Yale Bock has written about specific companies.