BAGAKOAA;  6 June 2011 The New Normal 

 

Post 442June/2011

The New Normal

 

We find that terminology rather contradictory.  New and Normal do not play well together.  If you see something new it implies it is unknown, unusual, as of yet indefinable, and normal means just the opposite.  If you are talking about the market, the new normal term entered our lexicon about the fall of 2009 after we clawed our way back from the fires of collapse in March of 2009.  By fall the market had recovered but was a bit yoyo-ish.  We wrote a series of posts about the sideways market.  We are sure you were sick of how often we used the term sideways market, but it became known as the new normal.

 

Now our life has a new normal.  While our restoration project is not completely over, we have some essence of normalcy interrupted with chaotic episodes of pure frustration.  For us that has become the new normal.  Today we started out with a nice little swim and taking care of the dogs.  I spied on our baby tanigers and they seemed to have survived the unusual little storm we had last night.  

 

The we visited our local bagel and brew establishment which was a staple moment of my day pre-flood.  Of course I was swimming everyday pre-flood so when the swimming stopped, my bagel consumption created the effect of the stay puff marshmallow man in the way I looked.  So we switched back to cheerios and blueberries until we could get back in the pool.  So after our exercise, the bagel shop seemed like a nice treat and another step back to normal.

 

Unfortunately normalcy in the new normal is short lived.  We had conflicting priorities at the house again today, and in an effort to keep the fire breathing hydra locked safely in my wife's skull, I came home at lunch to see if I could intercept some of these tasks.  My mission was to retrieve the bike we had one at the charity Friday night.  I also chose to drop off our mud covered bikes at the bike shop for a tune up and an oil change or what ever they do to bikes to make them pretty.

 

I drove to the auction house and realized I had grease on my good wool slacks from putting the bikes in the back of our Ford F 250.  I was not happy.  Then once I had made the trek to the auction house to pick up our bike and other booty, I was told that someone from the Charity was there earlier and picked up our stuff to deliver it to us.  I got the bike and headed home to find bed people in the house.  Bed people are people who deliver beds.

 

Bed people are not the strangest thing you can find when you come home.  Earlier in the day when I came home to intercept tasks, I was a bit taken back to look out in the backyard to discover our faux paint artist in our pool.  Martin is an extremely handsome, funny, pleasant, tall, good looking, charming, experienced, chiseled, handsome mans man.  He is incredibly talented and while I would not have been surprised to find him touching up the now marble looking columns, I was surprised to see him in our pool.  He was apparently starting a new project on the walls of our pool.  Devin must be having a very good year as I don't remember seeing the quote for Martin doing any work around the pool.  He is handsome though.

 

The work day (yes I finally made it back to work about 2 ish) finally ended with a call to run by Radio Shack and pick up a cable for the new TV in our guest room.  That would be a good things as it means we are almost finished with the guest room.  Just in time as the mother in law is in town for Jacks (Man Child) graduation ceremonies this week. 

 

It is impressive what they do for an eighth grade graduation at this school.  A banquet earlier tonight, prayer service tomorrow morning, they get a day at Disneyland on Thursday, Mass and Graduation services on Friday.  When I attended the 8th grade it was OK your out here now.  Not so fast Cronin.  By the third year in the eighth grade even I was ready to go.

  

How Low Can You Go

 

We were expecting lackluster news day today and we got one.  We expected Mr. Market to patch a few holes in the life raft after last weeks bouncing off the jetty rocks.  We were wrong.  Instead of a half a point up the broader market was a full point down.  The sea anchors were energy and the financials.  Even a return from the dead appearance from Mr. Jobs could not revive AAPL stock.  It was down but we made a quick profit on some sold calls.  Volume was in the mid range so there is some conviction to this sell off.  While Mr. Random Walk Malkeil says there is no credence to past trends, psychologically 1300 was an important support pattern the S&P 500 fell through today.  It could keep going down to 1,250.

 

 

Bias and Decision Making

 

One of our readers and one of my key managers was telling me about a management book she was reading about decision.  She was telling me that the book was explaining how natural biases built up by our own paradigms generates sometimes poor decisions. 

 

It is true and I explained to here the importance of having hard fast rules when you are investing just to avoid bias and paradigms that would cause a foolish mistake.  In the same breath we explained that we were in the process of making a mistake and I had all of the excuses in the world (Based on my biases) to continue making that mistake. 

 

We were referring to BTN Ballantyne which is down 11% since we pimped it here a while back.  Now if you know me and my RULES, I should not own this stock anymore.  8% and out, that is my rule.  Yet, I still have it and bought more on Friday, 3% ago.  Why?  My rationalization based upon by biases and greed and ego is they are really under valued, there are a long time well run company, they have a great balance sheet, we are going hold this stock 18-36 months so to hell with my rules. 

 

Can't wait to read the book.

 

 

Mold Is Our Friend

 

One of regulars, Hutch who is still upset with himself for pimping WY Weyerhaeuser to us ran across an interesting article in Barron's weekday (June 1, 2011) that is basically a smorgasbord of bad news about the housing market, but Hutch caught a nice little comment in the article and found some nice linkage.  The glut of abandoned and unkept homes is leading to a serious explosion of mold growth.  The infestation could force scrape and replace programs though out the US.  That kind of tonnage is definitely not built into the earnings outlook for WY.  Nice one Bob.  If the mold don't gettem maybe the termites will.

 

Sorry No Art Tonight

 

Salve Lucrum

 

 

 

 

Brian Ireland
BAGAKOAA;

I am not a professional investment advisor. Anybody reading my blog and investing accordingly must be out of their minds. I have made more money than I have lost. There are many more qualified people than I to actually tell you how to invest your money.

BAGAKOAA=Boys And Girls And Kids Of All Ages

Salve Lucrum=Latin for Hurrah for Profit.

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