Greetings!
It was 1964 and Bob Dylan said it all in the song "The Times They Are A Changing" and the album by the same title, where he bemoaned the fact that the times were changing. Forty-five years later I find myself having similar discussions with clients as we collectively wonder whatever happened to the "good old days." The fact of the matter is that times are always changing, especially for those of us who are always ageing.
This week marked the death of another national icon and boy wonder, Michael Jackson. His talent took music and dance to new levels that had worldwide impact. Michael Jackson's life also epitomized much of what has changed since 1964. Not least of all is the fact that Michael Jackson was a consistent income earner of nearly $20 Million annually, yet was immensely creative in finding ways to consistently spend well above that amount. If any one life epitomizes the mess we find ourselves in this country, and the cause for it, it is Michael Jackson's.
A history of bad financial management and excessive spending, aggravated by ongoing legal issues and therefore big legal bills, left Michael Jackson at his death facing continual rumors of bankruptcy. Those close to the star have been quoted saying "After all is said and done, he was almost broke." This was not an overnight problem, but one that began its life cycle in the mid to late 1990's. It never ceases to amaze me how excessive wealth left untamed often times leads to ruin. If you haven't realized it yet, the "Good Old US of A" is also suffering from excessive wealth left untamed and ill managed by Republicans, Democrats, and most of all by Corporate heads who got too big for their britches. This crisis began with excessive banking debt, and the political solution has been to replace that debt with excessive Federal debt. This crisis has now also created increasing State debt. States are on the verge of bankruptcy and the Federal government is so deep in debt that we may have to create another word to replace 'bankruptcy" in order to adequately describe the federal financial mess.
Now, for the rest of the news. There has not been very much to report as the Market has been in a consistent funk the entire month of June.
This week the Market continued its two steps forward and three steps back routine that we have endured through the entire month of June. While significant pent up energy amongst institutional investors to enter the market exists, they have heretofore not entered due to the Markets current Jekyl & Hyde personna. Selling continues to exceed buying and that scenario will always bring prices down. Add to this that June represents the end of the Second Quarter, and with very little to no good news reported this month, the market drifted.
This week ended with a wimper, partly due to a short work week and institutions closing their books for the 2nd quarter. Currently we are only 50% invested in the Market with the rest in cash. If Monday starts out like recent Mondays with selling dominating the ticker tape, then we will seriously consider moving 100% to cash. For now, despite the fact that most of what we feel are good stocks in our portfolio underperforming, with only one huge winner in FUQI, the overall portolio for the year is down -2.18%.
There is plenty of time left in 2009. We will continue to re-align the portfolio by eliminating non performers and replacing them with potential candidates that can emulate the performance of a stock like FUQI. Our ultimate goal is to have a portfolio with 5-7 holdings performing like FUQI. To achieve that, we will have to be patient. Have a great 4th of July weekend! |
