Return to Normalcy?

In normal times (whatever those were), rising oil prices and interest rates would be a cause for worry. Oh for the early ‘80s when the Hollywood actor became president and there was a USSR trying to tame Afghanistan and Paul Volcker targeted bank reserves!

In these fascinating days, hikes in energy prices and bond yields should be welcome. The not so hidden agenda of the controlling authorities is to inflate away debt and worry about the consequences later. Krugman and others insist that inflation Cassandras are false prophets and that deflation is the enemy. They may well be right, but Kev thinks the Nobelist and his ilk are betting as wrongly as Kev did on baseball this past week.

Though rates dropped after spiking earlier last week, they can only go up this year. If they don’t, then the Obama presidency will be a failure because it will mean the problem that was thrust upon it – restarting economic activity – has not been solved. Fiscal and monetary captains will not turn off the spigots until the prices of goods, services and money go up. Lock in a mortgage now if you have a job.

And jobs data will be key this week. ADP will report corporate layoffs on Wednesday, and the Labor Department will tell us on Friday how many more lined up at the soup kitchen in May. Any negative number below 550,000 will be greeted with cheers in the equity market.

But there are no normal times. They have never existed. What’s good for General Motors is good for the USA? It has taken Kev, because it’s all about him, well into his later years, to realize his expectation that eventually all secrets would be revealed was a mirage. Yet, we still court Miss Market. We can do no less. Finer minds than Kev’s summon her. Be nimble, be quick, and believe in God or not, but take your time on putts.

Still in with PALM, F, AMD, and looking to get back into DXO. Get out of government bonds while the getting is good.

Innoculation Nation

Attempting to make money from misery is miserable, positively swinish. But someone’s got to do it. And directing capital to drug makers who aim to profit by alleviating misery makes me feel better, which I could use after my common cold caused me to find every bunker at Dyker Beach yesterday. At least that’s my story for shooting 106 and I’m sticking to it.

How many of us have been able to survive and reproduce, have stellar careers in the arts, sciences, professions and hamburger flipping because of a mold called penicillin?

Now, my stellar career has been more white dwarfish than super nova, so I hesitate to offer ideas to all but the intrepid sailor willing to test his balsa wood Kon-Tiki against the mighty Pacific. But just as I know my next approach shot will hit the green next week, I know there are people brainier than I attacking the H1N1 influenza and they could be right -- saving lives and enriching investors.

Kev (yes, in his megalomaniacal certainty that it’s all about Kev, he is referring to himself in the third person) is adding Novavax (NVAX) to the portfolio at $2.03. This Rockville, Md., company reported encouraging results from its virus-like particle (VLP) vaccine in mice and ferrets dosed with the 1918 Spanish flu virus.

I’m no scientist or lover of rodents, and this is obviously a speculative roll of the dice that only the lonely should play, but I’m buying into it for now.

PALM, F, AMD, DDR remain as well. This is no bear market rally. Obama’s competence becomes more evident every day, and markets are responding.

Don't know much about the NBA, but Bulls-Celtics series is terrific. Derrick Rose sunk me in last year's NCAA championship game. Maybe he'll make up for it in Boston tomorrow like he did last night in Chicago. The Bulls will win outright.

Meanwhile, taking Dunkirk in the Kentucky Derby tomorrow. Hopefully, some horse’s behind (there are a bunch of them) won’t get in his way.

Mona Lisa, Mona Lisa, Men Have Named You

There’s no need to fear, Underdog is here.

Hoping to redeem my last place finish in my group’s bracket challenge and 1,009,587th finish over all, I took the Michigan State Spartans and the points against the Tar Heels of North Carolina. It was the equivalent of rejecting momentum investing for the contrarian pick. The outcome is one more reason that Wall Street coined the phrase, “Don’t fight the tape.”

But I still have issues. Why does NC have a ram as a mascot instead of a guy in a black foot suit? And why does Alabama, the Crimson Tide, have an elephant as a mascot emblem instead of a surfer riding a wave, back lit by a blood-red sunset? These and other weighty matters bother me while re-tooling my golf swing to the stack and tilt and licking my handicapping wounds.

I suppose I could google the answers, but I resist. I prefer to ponder these mysteries as Plato or Thomas Aquinas or some other deep thinker of yore would have done, without the benefit of instant access to all sources for all things. I want to have someone whose grandfather told them tell me, a much more satisfying path to knowledge than the digital crutch that makes experts of everyone and every blog a newspaper.

Though my mind is distracted by these imponderables, hail to the sticky footprints of Chapel Hill and the tarred toe of Ty Lawson. This was no bear market rally, which is the debate Miss Market is moderating now. Which team will win? Miss Market is giving us a Mona Lisa smile, impossible to interpret. Come hither or You fool?

F, PALM and AMD have been good to us so far. Taking profits would be forgiven. But I’m sticking with them and avoiding financial names.

One Mona Lisa I think I do know is C.C. Sabathia. If he would put his hat on straight, he might get someone out.

Lenin Is Relevant

Of course, many unpredictable things can happen, but straws in the wind suggest that life goes on -- existing and new home sales data, bullish talk from chastened banks, Obama's grace under pressure, inflation rising.

The short sellers and Rush Limbaughs cheering for failure might have to return to shouting about the nation's moral shortcomings and forget the apocalyptic economic rants.

I know, perhaps instead of straws in the wind, I am grasping at straws. After all, I once thought the market bottom was in November! So my imagination may be just that.

However, optimist that I am, I prefer to believe that the next shot is hitting the green from 200 yards out and putting for birdie. I base this on the evidence that stimulus in the pipeline and the economic data point to earnings gains and higher equity prices this year.

Mr. Geithner, the Treasury secretary is wrong, saying today the market cannot handle the crisis. No, the market will solve the problem. What he really means is the market's terrible swift sword would tear such gaping holes in the social fabric that a world lit only by fire would result.

Distasteful as it may be in some quarters, government must intervene aggressively to keep those who would let the market work its "magic" from losing their shirts, not to mention their heads. It's called saving capitalism from itself. Joseph Schumpeter (the economist of "creative destruction" fame) thought it couldn't survive.

Lenin's strategy of accentuating contradictions, i.e., things must get worse before they get better, works for Bolsheviks, but it only leads to dropping those who have the most to lose on the ash heap not only of history but a foreclosed McMansion.

Sticking with PALM, AMD and F, despite the Sooners' demise (OU held the Tar Heels to well below their average point total but still couldn't score themselves!). Oh well, it's just a game and I'm aiming for the green and replicating Woods' miraculous touch with the putter.

I'm in with the In Crowd

Let's face it. All of us prefer to think we're right.

Failures and busted dreams are always the fault of others. Our straitened circumstances, failed relationships and foozled tee shots, not to mention our ravaged portfolios, which I will mention in a moment, are always the result of implacable, unseen forces that only the In Crowd (Dobie Gray, 1965; The Ramsey Lewis Trio instrumental version later that year) can control and take advantage of. Sing it, guys, "We make every minute count! Yeah! Our share is always the biggest amount..."

The credit crunch, not wearing a watch, "the sun was in my eyes" and slick suits in league with the Federal Reserve all serve as convenient foils. Just ask Dick Fuld.

However, as Grantland Rice put it much better than I, these are only aliases. The real names of these Four Horsemen are: Baby, the rain must fall; didn't want to know what time it was; forgot to wear a visor and Ivy League envy.

In other words, the day of the stock picker has arrived, in my view. The volatility of the market is as great as trading in individual names these days, so why not swing for the fences? Briefly, the downside risk appears to me to be roughly the same, but the upside potential seems greater.

Fifteen years ago, Byron Wien of Morgan Stanley fame (not name-dropping; I'm sure he doesn't remember me) penned a piece in the firm's Investment Perspectives that resonates with me still: "I Hear the Death Rattle of Indexing."

The death rattle is now as threatening as the menacing announcement of a diamondback's desire to survive.

Here are two names I would look at for a short-term trade: Advanced Micro Devices ($2.28, up $0.08 on Friday) and Palm Inc. ($2.30, up $0.52 on Friday). They're chasing Intel and Research in Motion, respectively, but both, I believe, have competitive products that the big boys need to have in the mix to keep them on their toes.

Full disclosure: I currently own neither AMD nor PALM, but plan to buy at the opening market price Monday (Dec. 15, 2008) morning and then go play golf at Dyker (supposed to be 60 degrees and sunny). As I said, I'm like everyone else. I prefer to think I'm right and will crow if I am and make excuses if I'm not. Sell ideas to come.

Kev's buy list: F (recommendation initiated 12/12/08; I own F shares, bought at $1.15 on 11/20/08), AMD, PALM (recommendation initiated 12/13/08).