Camp and Kampo

Thu, 2012/12/27 - 6:09am | Your editor


The Congressional Grinch stole Christmas shopping this year. London seems to be doing better, partly because the shops began discounting even before the holiday. The British like to close their eyes and think of England when asked to defer gratification.

We never made it to Oxford St. because the Underground and the Jubilee line were taken out by bolshie train drivers in a third annual post-Xmas day strike on the start of the sales. So we took the Docklands Light Railway to Stratford Westfield, the new mall for East Enders near the Olympic grounds. My fellow foreigners were out in force in hijabs, Scheitels, and saris, all aggressively shoving prams, and record-breaking commerce was conducted. I bought a pair of low boots to deal with the dank wet weather for GBP 30 while deciding against a campier pair at GBP 165 and now feel virtuous.

Being so far away I can only wonder at the Washington shenanigans over Ye Fiscal Cliffe. No idea how it will work out. Over the holiday the central banks of Israel and Colombia cut interest rates and the Japanese Yen fell to a further low. More on what this means for our paid subscribers follows along with stock tips (2) and big news from one of our companies.

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Kings of Orient Re-send

Mon, 2012/12/24 - 10:38am | Your editor

Tonight we sing about three kings of Orient. I was thinking of Genghis Khan who apparently is the ancestor of hundreds of thousands of Europeans, thanks to the Mongol horde which snatched land and women during the Middle Ages.

There is good news from Mongolia. The Mongolian Independent Authority Against Corruption has released the Australian lady lawyer who was being held for allegedly organizing bribes for South Gobi Resources, a coking coal producing sub of Rio Tinto. She will spend Christmas at home in Oz. Ms. Sarah Armstrong may be descended from Genghis, but it is hard to tell for women, while easier to tell for men.

More for paid subscribers follows from Mongolia, Singapore, Finland, Canada, and the usual suspects. Merry Christmas to all and to all a good 2013.

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Kings of Orient

Mon, 2012/12/24 - 6:59am | Your editor

Tonight we sing about three kings of Orient. I was thinking of Genghis Khan who apparently is the ancestor of hundreds of thousands of Europeans, thanks to the Mongol horde which snatched land and women during the Middle Ages.

There is good news from Mongolia. The Mongolian Independent Authority Against Corruption has released the Australian lady lawyer who was being held for allegedly organizing bribes for South Gobi Resources, a coking coal producing sub of Rio Tinto. She will spend Christmas at home in Oz. Ms. Sarah Armstrong may be descended from Genghis, but it is hard to tell for women, while easier to tell for men.

More for paid subscribers follows from Mongolia, Singapore, Finland, Canada, and:

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Tables Posted

Sun, 2012/12/23 - 4:53pm | Your editor

Greetings from very wet England where Christmas is being restrained by financial problems. The shops have begun sales early to pay the rent which is due tomorrow on annual leases, and because London Transport workers plan a strike for Dec. 26, Boxing Day, the normal start of the sales.

So far all I have bought was a new converter plug for my notebook computers as the old one, from Brookstone, has gone bad, along with Brookstone itself. We did spend some money otherwise, going to the Queen´s Gallery in Buckingham Palace to view the Northern European Renaissance art which was absolutely splendid (Thank you, Ma'am even if you did charge admission) and then today to the theater to see Salad Days, a relic of the past.

With my new plug I did the tables today. You can view them on the website. Use the printer-friendly button to make the spreadsheets more readable. You can view our closed positions before you subscribe to see our track record. Only current subscribers get to see the positions we still hold because that is how we make money for our paying customers. Read more »


Fri, 2012/12/21 - 8:23am | Your editor

In the Northern Hemisphere the primitive ancients worried that on the shortest day of the year, unless the gods were propitiated, the days would get shorter still until the sun disappeared entirely and left us frozen and foodless. So they would burn a huge log in the fire and get drunk and disorderly, while the rich would pretend to be poor and the poor to be rich. It was called Saturnalia.

The Mayan astronomers also worried about Dec. 21 and used it to mark calendar cycles also celebrated, by tearing the heart out of a living virgin.

Meanwhile in our US congress, the bickering Republicans decided to break ranks with John Boehner and refuse any tax increases for plutocrats to mark their midwinter bottom. They got disorderly but I am not sure they got drunk.


Steven Halpern who writes send me an email reading:

“Just wanted to let you know that I calculated return for Top Pros Top Picks report last year and of the 50 adivsors who participated, you came in 3rd. Yor exceptiona performance dos not surprise me as you have been among the top performers frequently.”


More for paid subscribers follows mostly from Ireland and Bermuda, but also from Finland and Britain, Canada and Israel.

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Unhedged but not Unhinged

Wed, 2012/12/19 - 11:06am | Your editor

Before heading for Europe I this morning arranged to cash out of my only hedge fund. I think this is a good time to explain the difference between how we get information and how some hedge funds do it.

As a dirt-poor newsletter writer, I cannot afford to pay bribes to semi-retired academics who are supervising phase III drug trials for telling me how well or badly they are going before the results are announced so I can buy or sell shares based on non-public information.

I cannot play up ethnic links or biz-school reminiscences to get members of the board of a major investment bank to share information with me when Warren Buffett bails them out.

I cannot lure lawyers into telling me about the acquisition candidates they are doing the paperwork on with cash or secret investment accounts.

I do not accept from stock promoting “investor relations” company funds for mass mailings to build up my subscriber base while boosting some tiny stock the IR is pumping and dumping.

Nor do I publish (or threaten to publish) advice on shorting stocks.

Despite this we have a respectable track record for beating the market with our picks, sometimes dramatically. And I think we are doing it again right now.

We did this first with Teva after a French analyst covering the stock for the Swiss Rothschilds decided to confide in me when this newsletter began. We did it again with Telefonica de Argentina bonds after I visited the company in Buenos Aires in 2003 to make sure the prospectus correctly assigned the debt to the phone company's Spanish parent.

We did it again two years ago with foreign bank preferred stock again based on careful reading of legal documentation. And now we are doing it again because a former bio major expert with an emptying nest escapes from the problems of looking after her elders and girlfriends by reading learned journals in between dealing with her father's first wife and his third wife and her aunt who never married. I can never keep her relatives straight but one has Alzheimer's and the other has Parkinson's, one had cataracts, and the other macular degeneration. And the girlfriends have grim diseases too. More for paid subscribers about this follows along with news from India, Israel, Canada, Ireland, Spain, Switzerland (2), Britain, and Brazil:

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Trading Alert

Tue, 2012/12/18 - 3:14pm | Your editor

Trading alerts are only for paid subscribers. Join them to gain, for a happier New Year. Read more »

Hedging? Unhedged?

Tue, 2012/12/18 - 1:04pm | Your editor

Mark Hulbert of Hulbert's Financial Digest (HFD) compares performance by newsletters and hedge funds on the marketwatch (Dow Jones) website. Hedge funds are a select Wall Street niche occupied by the supposed best and brightest. Only qualified (i.e. rich) investors are legally allowed to engage their services. Most retail investors don't have hedge fund access.

Meanwhile there are investment newsletters and blogs, like this one, reputedly produced by a gaggle of lunatic self promoters whose research departments are their kitchen tables. They sell mostly to small investors.

Here is Mark's view:

“Guess what? Newsletters this year are handily beating hedge funds. The average newsletter, according to the HFD, has produced a year-to-date gain (after transaction costs) of 9%. In contrast, the average hedge fund, as measured by the Hennessee Hedge Fund Index, has gained 5.5%. (These numbers are through Nov.)

“Longer-term data paint a somewhat better picture of the hedge fund world. Over the last decade, according to Hennessee, the average hedge fund has produced a 6.6% annualized return, vs 6.3% for the average investment newsletter. That’s a surprisingly small difference.

“Naturally, the hedge fund world believes that raw performance numbers fail to capture the true value added by hedge funds. One major category of value added, they argue, is reducing volatility. After all, that’s the reason they're called hedge funds.

“But how much volatility are they really reducing? Again courtesy of data from Hennessee, I was able to measure the extent to which the average hedge fund is correlated with the overall stock market, as measured by the Wilshire 5000 index.

“The metric I used was the correlation coefficient, which ranges between minus 1 (a perfectly inverse correlation) and plus 1 (a perfectly positive correlation). When focusing on monthly returns over the last 20 years, the correlation coefficient was a surprisingly high 0.80.

“And, high as this was, it undoubtedly underestimates the true extent of correlation because hedge fund holdings often are illiquid, and therefore priced infrequently. As a result, when calculating their net asset value at the end of a given month, hedge funds often end up using out of date prices for their illiquid investments.

“None of this is to say that there are no good hedge funds out there or that all investment newsletters are worth following.”


I got into trouble with Tamar the compliance officer of the only hedge fund I currently own, from Weiss Asset Management. I published here a couple of weeks ago a report by its head, Andrew Weiss, an emeritus ec prof at BU, noting that finding matching hedges for the Eastern European closed-end funds his group invests in is proving harder and harder. I also noted that Andy's performance topped most hedge funds compared to his.

The compliance officer told me weeks ago I would be cashed out for writing up Andy's fund which in invested in more than 20 years ago with his then-brother-in-law in NYC. I'm still waiting to hear from Andy to confirm that this is what he wants me to do. Natch I want out legally in 2012 to avoid the capital gains tax increase next year if Tamar axes my account.


In Globes Israel, Schlomo Cohen writes on Mellanox, MLNX, which we sold before its price sank:

“Our frenetic friend Jim Cramer of 'Mad Money' on CNBC also had a part to play in last week's collapse. In August, at a price of $115, he went out of his way to praise the company's performance. 'It's become my obsession,' he said then, and after a fairly detailed explanation, he recommended buying it, despite the amazing run it had had. Last Monday, at a price of $70, Cramer suddenly turned against Mellanox without explanation, and just said, 'I don't trust them. I want you to sell the stock.' Don't worry. Sooner or later, he'll go back on himself again, because, in practice, nothing negative whatsoever has happened at the company.”

More from India, Singapore, Canada, Sweden, Finland, Britain, Bermuda, Israel, Brazil, Spain, and Belgium. Prior to going off tomorrow to London and Paris (for vacation with laptop), I tackle a couple of tough technical issues about ADR trading today. Prepare for MEGO (mine eyes glaze over), paid subscribers. You will get presents from Santa Claus if you persist.

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Hessians and Assault Weapons

Mon, 2012/12/17 - 2:42pm | Your editor

I know little about constitutional law, but do know about Hessians and NYC locals' need for self-defense against the German mercenaries who fought against the American Revolutionaries'  “well-regulated militia”. The battle of Fort Washington took place in the autumn of 1776 to control the lower Hudson River from the New Jersey Palisades and what is now Washington Heights where I grew up. The site of Fort Washington was Bennett Park, the highest point in Manhattan, where the Hessians overran American forces. It was the park I played in with my nursery school class, all of us children of German-Jewish refugees who had settled in the neighborhood, the northernmost part of Manhattan and its hilliest.

What gave this history extra spice was that my parents, refugees from Germany, were both Hessians.

The Americans were incompetently commanded by Mr. Magaw (of Magaw Place, where the World War II draft board was located), and the British by Mr. Tryon who is commemorated in the much larger Fort Tryon Park. There was also a heroic revolutionary gunner, Margaret Corbin, the first woman to fall in our Revolution, after whom the Fort Tryon Park restaurant was named.

The 2nd Amendment to the US Constitution says: “a well-regulated Militia, being necessary to the security of a free State, the right of the people to keep and bear Arms, shall not be infringed.” The idea was that Americans should own and know how to use weapons if faced with another invasion or threat from Britain, Hesse, Canada, or Mexico. Americans may protect themselves and their communities by bearing arms. But New Yorkers are subject to state and local laws which regulate and restrict my right to bear or own or hide a gun; not so Connecticut folks. States regulate guns now. New Yorkers under no circumstances are allowed to own an assault weapon, for fear for public safety. Regulation seems to be inherent in the wording used by the Founding Fathers. I don't think they meant that protecting our liberty requires allowing us to own and conceal semi-automatic combat assault weapons, with 30 rounds in the clip, as used by mad monster Adam Lanza, among other things because they didn't exist in the 18th century.

The 2000 election pitted gun-lover George W. Bush against gun-control advocate Al Gore. When Gore was defeated, with help from the National Rifle Association, W's Administration refused to renew laws restricting combat weapons. The Supreme Court which had decided the 2000 election, in 2008 ruled against a Washington DC ban on hand-guns. The impact was to link any control on guns to the 2nd Amendment and scare the Democrats away from any gun-control.

Recall that the first amendments to the Constitution also worked out how a census should count slaves. That wasn't written in stone. Nor is the right to bear arms. You are not allowed under the rules of free speech to yell “fire” in a crowded theater either.

Our government has banned use of term “lunatic”. It can interpret the Constitution to protect little children in their schoolroom, families going to the mall, high school or college students, young people at the movies, worshippers at a Sikh Temple, constituents meeting their Congresswoman. Yes, nutters can kill by other means. But a handy gun makes it easier to kill masses of people on an impulse. To do this with a knife puts the killer at risk; to murder with explosives or box-cutters take time and careful planning. But a semi-automatic combat weapon which lets you fire 30 shots with one clip without reloading encourages impulse mass murders.


I will dash away for London Weds. There will be no blog on Thursday when I arrive jet-lagged for Christmas (or Cliffmess.) There will be no blogs Xmas Day, New Year's Day, and Boxing Day, the British second day of Christmas. We go to Paris in the New Year, too briefly.

We began our Christmas holiday last night with a lovely choral service at St. Peter's Church in Chelsea (West 20s of Manhattan). The church, opened in 1832, was unconsecrated by the Episcopalians and is now a non-denominational musical inclusive faith center-food pantry. A college classmate sang bass. The service included a reading of the neighborhood favorite writer's “A Visit from Saint Nick” by two Irish actors. Even apart from the accents, I was struck by how un-Anglo-Saxon the 1823 poem by Clement Moore is, with a Turkish saint, and reindeer named Donner and Blitzen.

Then we went to basso John's house where the goyish buffet (choice of shrimp or ham) offered by a couple born Jewish and half-Jewish was lit by Chanukah candles. I today got a Christmas-themed card from the Confucius Institute for Business, part of SUNY. The next Chinese year is The Year of the Snake, it told me. Welcome to multicultural NYC.

One of our stocks topped the chart in today's Financial Times reports on the best performing stocks, and the worst. Other picks were 13th and 14th worst performer. And over the past month, a Japanese stock I bought for my own portfolio but not that of my newsletter (mainly because our Japan reporter doesn't like it) ranked 5th best. I told my paid subscribers about Fanuc, a maker of robots for building cars. Now you can buy it too. It us up over 20% in the past 4 weeks.

More from Switzerland, Pakistan, Canada, Britain, South Korea, Israel, Japan, Finland, Mongolia, Sweden, Spain, and Colombia.

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Tables Posted

Sun, 2012/12/16 - 1:31pm | Your editor

I just posted the tables on our website. Please visit to see the ones you are allowed to view: closed positions for everyone, and our current stock and bond positions, and exchange-traded and closed-end fund holdings for paid subscribers only. Remember that you can click to view the spreadsheets more easily by using the "printer-friendly" button on the site (even if you don't want to print.)

Again a request that everyone who likes this site be so good as to vote for it at, preferably daily.

More for paid subscribers follows:

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