Tuesday, September 30, 2008

Dumb Luck Investing Update



Welcome to the wonderful world of scrambled nest eggs.

At a quick glance, followed by some quick barroom napkin calculations, Monday’s stock market selloff put the major markets down from their bull-market closing highs as follows:

DOW down roughly 27%
S&P down roughly 29%
NASD down roughly 30%

My modest little portfolio is now even more modest than before, down 8.5% from its bull market high. With the equities portion losing value, my cash position now sits at 60%. Adhering to my personal investment rules, October is my next window for a portfolio change. For now, my inclination is to move another preset monthly allowable amount from cash into equities. My rules do not obligate me to make a change each month; I can choose not to do anything. If I skip a month, my rules do not allow me to make two changes the following month; it is strictly one change allowed per month.

One would think we would see some market support in this -30% area of losses. If all of the cards were face up on the table then we could all start feeling optimistic, but there may be more surprises. The markets going another 10% to the downside would not surprise me, but there is absolutely know way of knowing.

Hang in there; I am sure that Paulson, Bernanke, Bush, and Congress have a bailout plan ready to cover all of our investment losses.

Monday, September 29, 2008

Just Let it Bleed!



Citizens have told their representatives that the bailout sucks, and the house today voted NO on the bailout package. It is refreshing to see elected representatives actually represent their constituents. Bravo.

Citizens are used to hard times, and the apocalyptic scenarios prophesized by Paulson and Bernanke do not frighten them. My daughter put it best; when it comes to hard times, the average American is an experienced, highly trained professional. They know when to pull in their belts; they know not to buy new cars or big screen TVs when times are tough. If it comes to a choice of feeding their kids or paying for cable TV, they will cancel the cable. The government has never bailed out the average American; those citizens must suffer through life armed only with guts and determination. The government does not save the average American from foreclosures and repossessions; we take our beatings and move on. The average American knows what it is like to lose their job; many know what it is like to lose everything. The economy can burn, the average American will handle it, and the average American wants to see their rich corporate American counterparts learn what the tough side of life is really like.

The “experts” all say the bailout is essential. The “experts” got us into this mess. Why should the average American trust the “experts”? All of the “experts” agree on only one thing; they agree that the bailout may not even work. I do believe, that for $700 Billion, the average American wants an ironclad guarantee that it will work, and they want to see some regulations enacted to see that greed and stupidity does not let this ever happen again.

Everyone, back to the table, do it all again. Do not pass a bill that rewards bad behavior. Pass a bill rewarding the banks that did not screw up. There are many sound institutions sitting on cash simply out of fear. Take $700 Billion, loan it to those banks, at a preset rate and a fixed term, so they can get back into action doing what they do best, making loans to responsible people and corporations. Let those institutions that screwed up rot while trying to figure out what to do with all of those bad loans.

James A. Zachary Jr.


Saturday, September 27, 2008

Pinky and the Brain



Are you pondering what I’m pondering? This economic meltdown and subsequent Paulson and Bernanke bailout plan seems like something concocted for a Pinky and the Brain cartoon plot.

I really miss that show.

Pinky: “Gee Brain, what do you want to do tonight?”
The Brain: “The same thing we do every night, Pinky --- try to take over the world!”

Could a mastermind
mus musculus have orchestrated our economic woes?

YES!


Thursday, September 25, 2008

Shepard Chevrolet

The 1999 GMC van went in for service today. Barring bad luck, it should now be ready to do what it does best, which is to carry me through bad winter weather.

Shepard Chevrolet in Lake Bluff, Illinois had mailed me some coupons that I put to good use, such as the one for a free loaner car. Almost all of the service I had them do on the van was at discount coupon prices. Even though they are a Chevy dealer, they will service anything made by General Motors. They have done good work for me on my Cobalt, which I have had since it was new in 2005, so I decided to give them a shot at the old GMC.

Their service department still knows how to use a grease gun, and they know how to go through everything on the customers list without trying to sell extras. For example, when I was at Sears recently getting my battery replaced (twice), they tried to sell me a new serpentine belt, saying the one on the GMC was old and cracked. Serpentine belts are big moneymakers for quickie oil-change franchises. The belt looked fine to me, so I decided to put it on the list for the mechanics at Shepard Chevrolet to check; they said the belt was just fine. I also trust the service staff at Shepard to tell me if they find something critically wrong with the vehicle that I have overlooked.

My one disappointment with Shepard Chevrolet is that they got the work done on the van excessively fast. The loaner car they gave me was a
2006 Chevy Trailblazer with only 26,000 miles on it, and I was relishing the ride. Darn, that was a nice, comfortable, vehicle. It really fed my desire to move on from the old van into something newer. Smooth ride, plenty of power, quiet, plenty of room, four wheel drive. The gas mileage is lower than I would like, but not much worse than the van. I am sure the gas mileage would have been better if I had quit leaning on the accelerator so hard. Ah well, barring the unforeseen, the old van will have to do for maybe another year or so.

Wednesday, September 24, 2008

Chicken Little Economics


Hey Paulson! Hey Bernanke! Last week you guys promised us an immediate end-of-the-financial-world unless Congress paid $700 Billion, no questions allowed. You promised! Here it is a week later and we still don’t have an end of the world! Come on guys! Make with some serious Armageddon; this has become boring. Without an end of the world, each day that passes without Congress paying your extortion money makes you two boobs look like cheap parking-lot-insurance mobsters.

What will President Bush have to say tonight? Personally, I no longer care what that unlettered misfit has to say about anything. Things are bad; things most likely will get much worse before they get better, with or without Paulson and Bernanke’s plan.

James A. Zachary Jr.


Tuesday, September 23, 2008

The FBI is on the hunt!



WOOHOO! WAY TO GO, FBI! Make us all proud!

The Associated Press clip below (with link to the full story) says the FBI is now on the case of the financial meltdown! Fantastic! First, we lock them all up and then we see if Congress wants to bail them out.

FBI investigating companies at heart of meltdown
WASHINGTON (AP) - The FBI is investigating four major U.S. financial institutions whose collapse helped trigger a $700 billion bailout plan by the Bush administration, The Associated Press has learned. Two law-enforcement officials said Tuesday the FBI is looking at potential fraud by mortgage finance giants Fannie Mae and Freddie Mac, and insurer American International Group Inc. Additionally, a senior law enforcement official said Lehman Brothers Holdings Inc. also is under investigation

Sunday, September 21, 2008

Ruger P90


Goodness, has it been 17 years already? In 1991, not too long after Ruger started production of their first pistol chambered for the .45 ACP, I was the first on my block to run out and buy a Ruger P90. Rated for +P loads, weighing in at 34 ounces, it has a 4.5 inch barrel, stainless steel slide, anodized aluminum frame, double action / single action; mine came with a safety decocker. It is a reasonably light carry, easily fits in a winter coat pocket, and the large trigger guard accommodates a gloved trigger finger.

Initially I was concerned that I might wear it out so I called Ruger and asked for advice on longevity. An engineer said to shoot the hell out of it, that if I could break it they sure would like to know how I did it. The engineer went on to say they had sent a bunch of the pistols to gun ranges to be used as “loaners,” and that after thousands of rounds, and no cleaning, all of the pistols were still sound. After a blowing few thousand rounds through mine, many of them +P loads, I felt secure that my P90 would last a lifetime. I also felt secure that if it did break, Ruger would be around to provide repairs.

Little has changed on the design of the P90 over these many years; I was told that they eliminated the nub on the guide-rod, and they updated the magazine capacity from seven rounds to eight. Since my pistol guide-rod is of the original design, and supposedly, is not interchangeable with the new ones, I ordered a few extra guide rods and recoils springs at Ruger’s incredibly low prices. (NOTE: There is some confusion as to whether or not there was actually a change made to the P90 guide rod.)

The best pistol for the .45 ACP is the one designed for the load, the model 1911. That said, I wanted to have a double action .45 ACP pistol available and the Ruger P90 has been it since 1991. I’ve had the money and several opportunities to buy a
SIG 220, but never felt it was that much better than the Ruger to be worth the expense.

Ruger still makes the P90 today, even though they have one or more newer models chambered in .45 ACP. Mine has been a great utility gun, one that I will keep for as long as it is in condition to shoot, which likely will be until the end of my days.

James A. Zachary Jr.

Friday, September 19, 2008

Dumb Luck Investing Update

I blogged about the bailout a day before The Treasury and The Fed announced their “new plan”, which they devised as soon as they saw the blood in the streets and the hordes making a run on their stock accounts, money markets, banks accounts, 401Ks, 457Bs, etc. People were not happy with the assurances that “your money is safe” and they all were going to take what money remained back on home to feather their mattresses. We were inches away from a depression era financial system collapse, and that is no exaggeration.

Don’t believe one word of Washington’s claim about this bailout costing “hundreds of billions.” I stand by what I said in my blog entry, the price tag is trillions.

How much exotic toxic debt is out there? I refer you to a
February 2008 Steve Bonine blog entry. Credit swaps exist in the neighborhood of $45 trillion. How much debt will fail? Your guess will be closer than Washington’s guess, but “hundreds of billions” is a prayer.

To pay for this mess Washington will saddle trillions of dollars folks, not hundreds of billions, onto you, onto your children, and onto your grandchildren. Done correctly, the financial institutions that are being bailed would “pay to play” and Washington could actually make money. Washington has never failed to miss an opportunity to miss an opportunity, so I expect instead of making money, or breaking even, this will be the largest welfare program in the history of the world.

I give McCain and Palin a one in ten chance of successfully distancing themselves from this calamity. Deregulated and unregulated facets of our financial system once again proved human nature is dark and greedy, not to be trusted to do “the right thing.” I would like to see a return to some fundamentals, such as 20% down payments for homes, verified incomes, verified assets, and verified debt burdens. I have never been happy with the blurring of the lines between brokerages, banks, and insurance companies. Bring back some of the old standards.

At the closing lows of a couple days ago, the markets were down about 27% from their highs, and my portfolio was down to 6.72% from its high, mainly because of my increased exposure from buying the market on its way down. Obviously, there has been some recovery over the past two days, but I doubt the market will be heading polar north from here. If we revisit the market lows again in October, I will put another preset amount of cash into equities; otherwise, I am happy with my allocations. I am not happy with my tax dollars rewarding the bad behavior of highly educated people.


James A. Zachary Jr.


Rudy Parker


Everyone needs a Rudy Parker in their life, a person who can wear the many hats of mentor, colleague, and confidant. He guided me through many rough times that I saw on the job, and through very tough periods that I faced in my personal life. He could always see the good in people, and he would help turn that good into something even better. He always had time for you, always made you feel welcome, and always made you feel important. Rare is the man who will pick you up out of the dirt, dust you off, and call you his equal.

Rudolph E. Parker my friend, it has been eight years since we lost you. You are missed, not forgotten.

Wednesday, September 17, 2008

Dumb Luck Investing Update

These are some of the most exciting, interesting, and educational economic times during which we could ever expect to live. I hope that every schoolteacher dwells with every student on the events we have seen thus far, and the events that have yet to play out.

The finest minds in our country, perhaps the finest minds in the world, run the financial industry in the USA. Armed with the best educations money can buy, these experts led each of the now failing corporate giants down the alleyway to ruin. All of these experts have disgraced their credentials; they have all failed. My granddaughter’s first grade class would never have made the fundamental mistakes that spawned the debacle to which we have been witness to, or unwilling participants in. What we have before us is a total failure of fiscal discipline and responsibility. This is greed and stupidity running amok. Our “house of cards economy” has not only collapsed, the cards are burning under our feet.

I don’t want to see these companies trying to survive by furloughing people from the ground up. I want to see well-publicized wholesale firings from the top down! Begin with the CEOs and fire the living hell out of every executive that sowed the seeds of this disaster. GUILTY GUILTY GUILTY! Where are the newspaper headlines of the executive resignations? When will the subpoenas start arriving? Let’s see some serious jail time here! How can the experts say that they could not foresee all of this? No expert can use the defense that he is nothing more than a “village idiot.” They were in positions of great power, they knew the risks, and they pocketed their rewards long before the sludge hit the fan. It is high time for some very public punitive actions.

This is much more than just a housing industry meltdown. The defaults from the bad mortgage loans were only the start. Normal corporate investment diversity, loan insurance, and cash reserves should have been enough to weather that meltdown. However, bad mortgage debt was often bundled and sold with other debt. Hey geniuses, that is a bad combination! When a number of people cannot afford their mortgages, an even greater number of people will also default on their credit card debt and on everything else! AIG insured much of this bad debt and they now are dancing buck naked in public. Nobody is sure how much exotic debt is ready to fail. What else went wrong? The same firms that lost their asses with bad mortgage debts tried to hedge their losses by buying commodities. When the oil futures recently tanked, these corporate giants sank even further into the slime. Did they make any more dumb moves? My guess is that the financial giants all held stock in each other's corporations, some kind of bizarre circle-jerk investment strategy. Owning hundreds of thousands of shares in a competing company that goes from $50 per share to $2 per share is more than a crisis when everything else you own has failed, including the price of your corporation’s stock. Were there any other financial crunches? Sure, when credit became tight, leveraged corporations suffered margin calls and had to unload securities and other assets at fire sale prices.

This purging of our financial industry will be a long, difficult road, but look for a much better system if rebuilt correctly. Taxpayers, as always, will pay for most of the repairs. Trillions, baby! Swing with that thought in your head, trillions of your dollars will fix all of this, and you won’t even get a kiss.

James A. Zachary Jr.

Tuesday, September 16, 2008

Entry for September 16, 2008

Darn hay fever or a cold has me all out of sorts. Benadryl is my good buddy for this evening.

On Monday I looked at some
GMC Yukon Denali hybrids, 20 MPG rating for both city and highway, $56,000 sticker price. That is one bucket full of money, if I had it sitting around I still would take a pass. When looking for a new vehicle it usually takes me a year of searching before I make my mind up on what exactly it is that I want. A brand new big-ass hybrid Denali is off the list, although I may consider a used one with an extended warranty.

The hunt continues.

Monday, September 15, 2008

Gun Holsters


This blog entry has information that is somewhat time specific. Lefty Lewis at Bell Charter Oak is having a fall sale. Certain pancake holster designs have been marked down $10 and shipping is free if you buy two holsters, which gives you a total savings of $40.

There seem to be far more gun makers today than there are top tier holster makers. Our armed forces in “hot zones” are always looking for quality holsters, so along with the orders from those in law-enforcement and orders from civilians that carry concealed, all of the top makers have orders stacked up. A Bell Charter Oak holster is about six or seven week wait, about average for the top makers. If you are shipping out to Afghanistan or Iraq, give your favorite holster maker a call; I am sure most will move you up the list.

I am quite surprised at the number of hits this blog site gets for “gun holsters,” and more surprised about the number of hits from those searching for “wheelchair concealed carry holster.” I know for sure that Bell Charter Oak has a design specifically for the special needs of a wheelchair, and several other designs that may serve just as well. Click through the “gun holster website” links on the left hand side of
the Google Blogger version of this site, there are many custom holster makers that can help you with your needs.

If you are a holster maker / seller and do not find your name listed on the left hand side of the Google Blogger version of this site, I did not deliberately exclude anyone, please send me your URL; it will be my honor to add you.

The shark-trimmed holster with the Glock 26 in the photo above is one I am proud to own, purchased from
Del Fatti Leather. Due to a large backlog of orders, Matt Del Fatti is not accepting new orders until further notice. However, it is worth peeking in on his site to look at the gallery of some of his work, and to see if he pops any surprises into his “in stock” listings.

Thanks for the visit.

James A. Zachary Jr.

Saturday, September 13, 2008

Entry for September 13, 2008

My 1999 GMC Safari Van now has 150,000 miles on it, only 1,000 miles more than what it had when I last blogged about it on May 20 of this year. Gasoline prices above $4 per gallon kept use of the 16 MPG van to a minimum.

A couple of weeks ago I decided to start shaking the old van down to see what all it would need to see me through the snow and cold of this coming winter. On Tuesday of this week I had
Sears put in a new DieHard battery since the existing one was several years old and acting kind of tired. On Friday I was back at Sears arguing with them to warrant the brand-new battery in full because it went dead on me and would not hold a charge. After much battery testing and acting-out by their staff, they finally put another new battery in the old van. Hopefully this new one will last more than the three days of the previous new one, and hopefully Sears someday will learn that the reason their stores have more employees than customers is because of their bad service. The last time I had a Sears do an oil change on the van they had nobody available that knew what grease fittings were for, and once I explained the concept they could not even load a grease gun to attempt to lube the fittings. Many other “quick oil change” franchises also will not grease older vehicles.

The engine in the old van flutters a bit when cold, and it has some other symptoms typical of a dirty fuel injection system. Even though Shell brand gasoline has cured most of the problems, I believe I will have a GM mechanic flush the injectors and clean the plates again. Even though I only have 9,000 miles on the last transfer-case fluid-change I may also have them do that since the full-time all-wheel-drive gets quite a workout and will start chattering again if I wait too long. GM mechanics know that older vehicles steering assemblies still need grease, so I will have them do a lube job and changed the engine oil and filter. With luck, maybe the GMC can chug through another winter without needing any major repairs. Will it make another 10,000 miles? I doubt it, but my “major purchase fund” does not yet have enough money in it to buy a replacement, so I may need to push the old van for as long as I can. Of course, it would help if I quit lusting for a new truck that is so lavishly decked out it costs as much as does a new Corvette.


Thursday, September 11, 2008

September 11, 2001 plus seven years


It is September 11, 2001 plus seven years. Nobody has forgotten.

I am not a righteous man; it is hard for me not to hate those that hate us. It is impossible for me to understand cultures, governments, and religions that sanction slavery and the “honor-killings” of female family members. It is impossible for me to understand why members of a religion can claim the right to kill those that leave their religion, and the right to kill people solely for belonging to other religions. When people declare holy war against us, I do not understand why we do not utterly obliterate the ground they walk on and burn their oil fields beyond recovery. It is impossible for me to understand many things, for only the righteous can love beyond hate, and only the righteous can possess the wisdom to understand the absurd, and only the righteous can forgive. I will never be a righteous man.

We have not had a major incident or attack in seven years thanks to good fortune, and thanks to the efforts of the FBI, CIA, NSA, Homeland Security, ICE, and many other agencies. They take it in the ass when things go wrong; we owe them a sharp salute when things go right.

“Thank you” to all members of our armed forces for taking the fight to the enemy. “Thank you” to the family members of those in our armed forces for their sacrifice and pain. “Thank you” to all of the countries that have stood by the USA.



James A. Zachary Jr.


Monday, September 8, 2008

National Preparedness Month 2008



September is National Preparedness Month.

Every now and then, give some thought to “what if.”

Hurricane Katrina was radiant proof to all government agencies that they cannot possibly take care of everyone. Can you take care of yourself and your family? Floods, earthquakes, tornadoes, blizzards, and other events can be so widespread and so devastating that help may take days, even weeks to reach you. How long can you hold out?

Get a kit. Make a plan. Be informed.


Saturday, September 6, 2008

FRS and GMRS Radios


Some highlighted words or groups of words in my blog entries are hyperlinks to articles relating to the entry topic. On some web browsers, the highlights may not stand out very well. If you see a highlight that interests you, put your cursor on it and give a click; it will take you elsewhere, use your browser “back arrow” to return here.

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Most of you have seen the little
FRS (Family Radio Service) walkie-talkie style radios that are now sold almost everywhere. These inexpensive half-watt gems are fun for kids and somewhat useful for adults. Some businesses issue them to store maintenance and security employees. Range is limited.

The National SOS Radio Network is an all-volunteer organization encouraging people to make FRS radios part of their emergency kits, and encourages development of neighborhood networks. It recognizes that during some emergencies, both wired and wireless phone systems can fail, leaving people no way to communicate.

The FRS radios don’t require any license, the somewhat more expensive and more powerful
GMRS (General Mobile Radio Service) radios and hybrids do. FRS radios and GMRS radios share channels 1 – 7, channels 8 – 14 are for FRS half-watt use, and channels 15 – 22 are for GMRS radio use.

Channel-1 is suggested for use as the FRS emergency channel, but it is has no true legal restriction. Channel-20 is considered the GMRS emergency channel, but here again there is no official rule. Beware, I doubt that anyone within range of you will be monitoring these channels unless there is some sort of regional disaster underway. If you want to use these for emergencies you may encounter while hunting or hiking, make sure you have a friend or family member listening and within range.



Thursday, September 4, 2008

Dumb Luck Investing Update

This afternoon I closed out some bond funds and moved more cash into the equities; I love days when all major market indicators dive. Today the Dow, S&P-500, and NASDAQ all took a 3% trimming; I believe all markets are once again back into true bear-market territory, 20% or more off their respective market highs. Dumb luck still has me down only 2% from my portfolio highs, but my benchmarks say I am 7% below portfolio minimum goals; it was time for another adjustment.

Restating for the record, the total value of my portfolio is very modest. It is large enough to provide me with retirement security should my pension not keep up with inflation. It is small enough for me to avoid mental irregularity if my luck goes polar-south. It keeps me busy and it is fun.

Is this “Dumb Luck Investor” calling a bottom to the stock markets? Nah, I don’t look for bottoms or tops, I just make random purchases and sales with the market trends. My instincts tell me not to be surprised if the markets eventually capitulate with another 5% - 10% to the downside. I’m a contrarian; when we all believe that investors are doomed, the markets will then make fools of us all. Are the markets making a statement against Obama or McCain? Pundits have tossed that card in both directions, I believe the markets don’t really care who wins. I do believe that the markets don’t like doubt; markets simply don’t like not knowing who will win. Once one or the other candidate is the obvious winner, then doubt is out of the process and the markets can move on to other distractions. The markets do seem to enjoy a gridlocked government when the president is from one party and the other party controls congress, but that lucky event easily runs aground with the inept economic piloting of our bipolar Federal Reserve Board of Governors.

Currently I am still comfortably conservative, 55% cash, 45% equities. Will I ever go 100% equities? At this point in my life in this crazy world, I doubt it, but if I see the market go low enough to where people are jumping from tall buildings I may give it a go.

DISCLAIMER: None of this is advice; we all are truly on our own.


James A. Zachary Jr.

Wednesday, September 3, 2008

Colt Delta Elite


If the world allowed me one handgun, a choice of a revolver or a pistol, it would break my heart and give me fitful anguish making a choice.

I would want it to be versatile, with possible use as a hunting gun, carry gun, and home defense gun.

I have long been a fan of the
1911 system as a platform for different calibers. One of my favorite blasters is the Colt Delta Elite, chambered for the 10MM auto. There are hunting loads and personal defense loads available for the 10MM. My favorite load is the 175-grain Winchester Silvertip, reliable and accurate in my particular gun, not the upper end of potential power for the 10MM but still very substantial.

Yeah, if I had to live in a one-handgun world, this may well be my choice. Then again, if the one-handgun world allowed me to keep a few rifles and shotguns I would probably choose a 1911
.45ACP over the 10MM auto.

CLICK HERE to clear your fear of Delta Elite frames cracking.

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Monday, September 1, 2008

Gun Holsters


Several hits to the Google Blogger version of this site used keywords indicating a search for holsters. Search engines often return everything except what people are looking for, so on the left-hand side of the Google blogger page I now list over forty sources for gun holsters, sometimes searched as “gun leather.”

Very few areas of this country allow open carry of a handgun, so if you want to strap on a gun and holster to parade around in public you had better know what the law in your area allows.

With the exceptions of the states of Wisconsin and Illinois, it is possible for law-abiding citizens to qualify for a concealed carry permit that allows public carry of a handgun, provided no one discovers you are carrying it. Should you accidently flash the gun and holster, or display a telltale gun-bulge under your clothing, you face arrest and loss of your carry permit. Choice of truly concealable handguns and holsters is imperative. If you have the body-frame of Clint Eastwood, carrying a full-frame S&W .44-magnum may be easy. Most find pocket or purse carry of a Seecamp or similar size pistol much easier to manage. The above photo shows an S&W J-Frame revolver in a deluxe Gaylord 8-ball pocket holster, designed by the legendary Chic Gaylord in the 1960s, today made by the well-respected holster maker Lefty Lewis of Bell Charter Oak. If you are restricted to a wheelchair and need a holster that fits your special needs, Lefty has some designs for you too.

Most holster makers offer goods that will last a lifetime, and a very few such as Matt Del Fatti offer custom leather that is nothing short of artwork.

I hope you find what you seek. Stay safe.


James A. Zachary Jr.