Fed Up with the Fed

May 21st, 2016

May 21, 2016

Don’t think smart guys can’t  get it wrong ?

Our ” Best and our Brightest ”  got it terribly  wrong  in  Viet Nam and did it again , a generation later , in Iraq.

Now, enter regional Fed officials ,  letting us,  ( the financial markets ),  know they have smart power, can toy with our emotions and that the jury is out on a June interest rate increase.

There seems to be no rational explanation why regional Fed officials can’t constrain themselves and let the next move, or non-move, be obvious and be data driven, rather than an ego driven mouth trip.

We used to play a game called ” Bullish or Bearish “.  This is a game for wannabe ” traders ” and requires fast and intuitive thinking.

An event is announced,  and it is your task to verbally pinpoint the impact on different areas of the financial  market; currency,  precious metals, the stock market,  the bond market,  housing market etc  that would be positively or negatively impacted by the event.  And, that’s at the macro level.  You can drill down through sub categories into specific situations.  The more specific you  get the more valuable your correct answer.

For instance, when the housing market collapsed and mortgage loans began to default, if you had said you were  bearish on buyers  of Collateral ized Debt Obligations, CDOs ,  and ultra bearish on issuers of Credit Default Swaps ( Credit Insurance Issuers ) and named AIG as a short target you would have been a gzillion percent correct !

So,  this week  the Fed has hinted, strongly,  about a rate increase in June and investors  ( governments, institutions , hedge funds,  and individuals )  must consider the hint tantamount to an announcement and see the need to hedge the possibility of the hint becoming a reality.

Any increase in interest rates by the Fed will strengthen the  dollar because, simultaneously,  interest rates in Europe are be lowered  to stimulate activity. Europeans  will buy dollars and invest  in USA issued bonds, because money seeks a higher return.. ( Short the Euro ? )

A  stronger dollar will make it more difficult for USA firms to export because a stronger dollar will weaken the purchasing power of the local currency of  overseas buyers ).  Loss of exports will mean loss of USA jobs. ( Buy equities confined to USA sales activity and avoid USA companies carrying a cross currency sales pricing handicap.? )

The stronger dollar will make it more difficult for USA firms whose overseas manufacturing , operations and sales activities, result in an accumulation of local currency profits, to convert those profits back  into dollars  whether or not the profits get remitted home to the USA..  These non-repatriated profits will still get included in the USA parent’s consolidated income statement, but at a lower cross currency  benefit , and have the net effect of reducing  the overall profits of the USA firm….a determinant of the perceived value of the stock in terms of earnings per share. How many times have you heard the quarterly result of  a USA equity being a disappointment because overseas earnings did not translate well on the USA firm’s consolidated  income statement ?.   Also, lower stated profits will have  an inhibiting effect on the capital investment decisions made  by USA Boards.. ( Avoid USA firms which generate operating profits overseas )

As the dollar gets stronger, the price of commodities, including oil,  gold and precious metals weakens.  And this means closing down rigs, mines etc and the loss of more jobs.

The down stream impact of a strong  dollar will negatively impact overall consumer confidence and undercut any attempt to create the ” wealth effect”  required to get consumers to buy houses and big ticket items. The consumer is 70% of GDP and the stock market looses all the psychological thrust required to achieve higher stock prices.

Bottom line, based on the present lackluster performance of our economy, a rate increase by the FED could dramatically increase the possibility of a recession.  Got the picture ?

So….Why increase interest rates ?

1 – To keep Russia and Iran on their heels ?

2- To give the big USA banks the profit margin they need to create profitable loans. ?

3- To give China the possibility to keep exports ( including to us ) steady so that China’s expansion doesn’t falter and create the need for further  Chinese currency devaluation..?

4- To give Europe and under developed countries an opportunity to reflate their own economies by exporting to the USA while American expansion takes a time out for the sake  of world prosperity.?

5- To give the market a rest and re-set of valuations  before the next leg up.?

None of the above are worth snuffing out an upward trending stock market ( wealth effect )

To me, it seems the smart money, including George Soros and Carl Icann, already recognize this and they  are bad mouthing the Market because they have established positions which will allow them to invest at more ” realistic ” valuations if the FED makes good on its hint…

Count Mini Me in with the smart money because   I am way under invested,  but still invested enough  to check my year to date  unrealized Profits at the end of each day.

We are still on a ” buy SPY ” signal.  But,  I am committed to accept  SPY shares  at $180 and $ 185 per share if SPY falls below$ 180 and $185  by July 15.  I do not consider it prudent for me to blindly buy SPY  at today’s closing price of  $205.89. when I can get paid a premium equal to SPY’s yield for being patient instead of exposed.

Remove the interest rate cloud and I will consider getting  much more involved and aggressive, bearing in mind that for the past 50 years between May and November the average gain in the market has been only 1.3%……November thru April 7.2% average gain.

Richard Maurice Gore

 

 

 

 

Index to Gore Time Capsule Posts

May 9th, 2016

May 9, 2016

All are found in the April archives except ” Lilibeth Gore and Me ” which is in May archives

#1     Maurice Gore….To the New Babies, Sammy and Cooper

#2     Throggs Neck

#3     Home Base,  2923 Myers Street

#4     My Fathers Family

#5     My Mother’s Family

#6     A Few More Words About Ruthie

#7     Maurice Gore,   Of  The Merchants Bank of New York

#8     A Tale of Two Banks

#9     ” My Matt ”

#10       Lilibeth Gore and Me

 

 

 

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Handicapping the Donald / Hillary Matchup

May 8th, 2016

May 8, 2016

 Donald versus Hillary.

Here is how I handicap it.

Donald…….Unscripted, childish, emotional….but transparent.  Hillary is scripted with fake and exaggerated displays of emotions. You don’t even get to see her Goldman speech… brazen or what ?….. + 1 For Donald

Donald   is without restraint and will not hesitate to aim for your crotch and then rationalize it.  Just ” Win Baby Win ” versus  deserving to win. Doesn’t measure up to the standard   ” Win One  for The Gipper “,..or  ” Shane”, or…….  the ” You start it, We’ll  finish it ” image of a Reagan or a Kennedy with which most Americans identify.  Hillary is sufficiently self righteous and  delusional enough to risk allowing  100 potential killers  cross the boarder rather than unfairly block the entry of  just one innocent man.  + 1 Hillary

Donald.…Inclined to be mean spirited and vengeful, cunning  and self  advised enough to  present an inviting target for a three dimensional chess player who knows how to face down or otherwise manipulate bullies.   Hillary is a schooled, disciplined politician and believes in measured diplomacy with access to  no nonsense advice from experienced staff.  Don’t worry…she is a match for Putin.  + 2 Hillary 

Donald’s…. support base is from white, under educated, working class men who didn’t double down on education while the unions were protecting them. Now they are angry and instead of looking in the mirror they are fingering everyone in sight as betraying America. World economics has left them behind in the same way Fordham Prep left me behind ( on the dunce platform ) when I didn’t keep up with my Latin vocabulary.

They don’t see that $50 per hour will create more  Detroits and a mass exodus of manufacturing unless you can out produce and out R&D overseas competition..  They don’t see that in true ( non-perverted capitalism ) borders don’t count when you are competing world wide, the way the French didn’t see they were fighting the blitzkrieg in the  last war hid behind their Maginot line, and were outflanked.. They don’t understand that you can artificially sustain the protection of tariffs for only so long before mutual self destruction creates a world wide depression. They don’t understand that profit and the shareholder are the foundation of the  non-socialized system they say they want…but then they  want  protective tariffs  from the big government they say they hate. Unfortunately, for them , capitalism is based on money seeking its highest risk adjusted return and the shareholder having a first alligience to his investment not any flag, even ours.  Any gross manipulation of this is a perversion that will cause disruptive problems. Hillary is for trade deals which manage the situation while we adjust to the new reality.  I feel a lot safer with Hillary and so does Wall Street. + 3 Hillary

Hillary takes money from Wall Street and re-distributes it  to buy the vote of  minorities ( maybe keeping a little for herself ? )  the way the Saudis contribute to world-wide Jihad just  to keep the Jihadis away from Riyadh.   ” Reparations ” ? That is a non-starter with American voters and she better steer clear of that!  This  Black Lives Matter crowd better double down on raising their children to be responsible citizens if they want the rest of America  to give a hoot about Black Lives Matter. Donald  can’t be bought ( except with flattery ) +2 Donald 

So whom do I vote for ?

The instrument of white anger, Donald Trump. is counting on his supporters not realizing that he can’t deliver a lot of what he promises….unless he dismisses Congress and issues edicts in the manner of a Charles II, Napoleon or Hitler. Or,  do I vote for Hillary where you need to accept her aquisitive inclinations……  but get to BUY One and Get One Free…..Bill..aka ” Slick Willy ” in  a tag team match against Putin. +4 Hillary

Since I have money in the stock market and don’t want to risk my money speculating on the performance of an unpredictable entity, I will go for On Base Percentage Hillary rather than the possibility  of a homer ( or strikeout  from Trump.)…...+5 Hillary

at this point Hillary 5 Trump 2.

# 10 Lilibeth Gore…and me

May 3rd, 2016

May 3, 2016

Seven years younger,  a girl ,  and having been plucked from a garbage pail,  my new  sister, Lilibeth,  ( March 12, 1944 ),   didn’t make me feel threatened in the slightest.

But,  truthfully , I didn’t see the need for her and my vote would have been…….thumbs down..

Nor was I lonely,  or looking for a playmate.  I was quite happy playing my own games, listening to my radio programs,  and expressing to my parents and anyone else who would listen my opinion on any subject I thought I knew anything about.  And,, her arrival notwithstanding, I was still the one and only Prince Richard, with all rights and privileges pertaining thereto.

But, then, things started to change.  The first hint that my world was changing was the day Beth  came home, and  I  saw my parents dis-assembling my youth bed which had occupied space parallel to their bed along the hall-side  bedroom wall.  Then, a crib was erected in the  spot my bed had occupied.  I was told that as a big boy,   seven ,  I could now be trusted to occupy a ” grown up ” ( no side rails ) pullout bed on wheels which could be rolled into the living room for me  each night. They made it sound like  grade promotion at school , and I ” bought into it”  , even  though I felt something was strangely amiss.

From the start , people commented  on Beth’s good  looks……far more enthusiastically than one would consider them  just being polite..

And,  I didn’t mind that either,  because looks,  including mine,  meant so little to me . My life revolved around my radio interests which included “Captain Midnight”, ” Jack Armstrong, The All American Boy” ,  and “The Lone Ranger ” or, after school, riding my bike all over Throgs Neck  or sending away for prizes enclosing  box tops from products such as Ovaltine chocolate drink.

And,  my feel good relationship with my mother and father continued. EXCEPT, I was starting to notice they weren’t being as protective of me as they had been,  and were beginning to have higher expectations about my performance at school, and how I went about doing  things in general. They were beginning to stress the benefits of self reliance.  So, while  my sister went through a  stage where she was a passive baby doll , my relationship with my parents began to change..Sometimes my father looked at me with what could be considered  bad intentions, especially if I talked back. I decided they were both capable of  giving me a parental  spanking…..although not to the degree or intensity  of the    “spanking machine”,we were told was  located behind the” green door ” at school..

I plainly remember my mother having an afternoon coffee and crumb bun conversation  with her sisters  Rose and Lilly ( with me  on the floor , all ears but doodle playing with my plastic cowboys ), saying  how lucky we were that the government had changed selective service classifications soon after my sister was born.  Before the change,  my father would have been  “1A “, draft bait,  even with two children. Now the army was no longer drafting men with two children..providing the wife didn’t have a job.   My father never wanted my mother to work. And, neither did I.  Her job was at home and that wasn’t questioned in any way…..EVER…especially now that my sister required lots of attention and care…And, my mother never worked,  the entire 34 years they were married.  And,  it was always made clear to me that a father’s role was to  work and provide  and the mother’s role was  at home…..if at all possible.

Then, I was told that my sister would become a Walter Thornton model because of her 2-3  year old good looks. And,  my Aunt Rose swung her focus from me to Beth as soon as Beth could walk. .  But, I knew my Aunt Rose would be there if I needed her,  and I was just as happy that she wasn’t totally focused on me because she could be a loving ” obstacle “..untitled (8)

Looking back, I can now  see that my sister was far more likely to be dependent on family and school relationships than I.  She smiled and never complained,  made friends easily  and was a  pleasure to be around.  I, on the other hand,  was more likely to question everything ,  especially  in terms of the  “fairness and  justice “.of rules and how they were applied.  I was far more assertive than Beth and accepted all the admonishments and penalties that came  with being a ” trailblazer” for childhood , individual freedom..

I was more likely to find my friends  in the neighborhood, because with neighborhood friends you had ongoing,  year round, daily contact via sports, pretend games and mischief such as stealing  peaches by infiltrating an orchard on a moonless  summer night, or, smoking cigarettes ( age nine- ) hidden among the reeds that General  William Howe found so unsuitable for military operations, or hollowing out these marsh reeds to construct  blow guns suitable for use with dried split peas.. We also found wood dowel sticks and rubber bicycle handlebar grips excellent for dueling. And, surprise….no one lost an eye.  My friends went to Public School 14.  I attended  Saint Benedict (  $1.00 per month tuition ).

And then, there were the chestnuts falling from trees to be drilled and threaded with a shoelace and hung from an outstretched arm awaiting the overhand pendulum  slam from another boy’s chestnut. If he missed, it was your turn again until one of the chestnuts was destroyed.  You would continue to use your chestnut against others until it  suffered a similar fate.  A win was recorded as a ” year “, so a chestnut with 40 wins ( years ) was probably as hard as a rock  and had been soaked in mysterious solutions to make it even harder.

While Beth was becoming an angel in an ” alice blue gown “,  I was sliding down the slippery slope of negative incidents  which upset my parents to the point where I no longer could consider myself  Good Prince Richard… Left to my own devices and the influence of older Throggs Neck boys, who could be merciless if you didn’t go along to get along,   I slowly became Richard the Perpetrator.

I was hit by a laundry hook thrown at my head by a neighborhood  kid and needed to get 5  stitches in my forehead.  I took a yellow towel from our bathroom and headed toward the trolley tracks determined to show my friends,  to their delight ,  that, like Billy Batson,  I could become Captain Marvel and stop a trolley with a good stiff arm.

I jumped from our bathroom window  because I was convinced the ” Invisible Man ” had somehow  entered the room and ,  I helped my friends liberate an unwanted ( we thought )   boat hull from the Marine Supply Yard  which backed onto the Green and in doing so  sliced my wrist while climbing over a fence . My mother drove me to the doctor’s office for seven stitches in my wrist, driving with one hand  while reaching across to the passenger seat so that she could backhand me and drive at the same time. That is when she told me that if I  kept on my present path, I would wind up in the electric chair at Sing Sing prison. Not  exactly positive reinforcement.

I was sent to the A&P for groceries with our ration book.  I lost it.  When my mother found out, she informed me that I better dress warmly because she was putting me out of the house.  I was to go to the trolley  stop and wait for my father to arrive from work and tell him that, through carelessness I had lost our entire book of food ration stamps for the month.  There I stood, in the cold November dark, waiting for my trolley of doom to arrive carrying my father, my  executioner.  But just then, a little girl came up to me and said..”.did you lose this ? ”  I replied ” you were  sent from heaven to rescue me !!!”   Can you imagine the outrageous  egocentricity of me  literally believing  that, …giving absolutely no credit whatsoever to anything of possible  worthwhile purpose in  her life other than finding my ration book ? !

My sister gave no one any trouble whatsoever.  She was a ” pleasure ” and I was a ” pain “. And, I had to listen to my Aunt Lilly fill in everyone on the latest accomplishments of   “My Matt”.  I wasn’t jealous of Beth or Matt.  I just wasn’t happy with the total absence of  optimistic predictions for me..

Beth really entered my consciousness in 1948 when we spent the summer renting on the ocean,  at Long Beach, Long Island.. I can remember her sitting there watching “Howdy Doody,”  eating from  a dish of dry Cheerios,   playing Solitaire and carrying on a conversation…..simultaneously.  That’s when I had my first preview of how smart she was. She never caused a problem or had a tantrum.  Everyone marveled at her non -confrontational disposition. The only thing she didn’t do was rub it in by sticking  out her tongue at me from behind  Aunt Rose’s skirt. She didn’t need to…the praise she received was unending …..but well deserved..

Its a good thing she was a girl and seven years younger, otherwise our relationship would have taken a more confrontational turn because I  would have felt compelled use my older brother status to demonstrate my seniority in all sorts of ways.  And, whenever, due to circumstances,   I wished I had a protective older brother instead of her , I quickly dispelled that notion,  realizing that I valued my higher place in the pecking order far more than being protected.

Once in a while, my sister was a pain.  After we moved to an apartment ( 234th Street, Woodlawn, the Bronx ) , she is the one who alerted my mother to Mary Biggins and her red pigtails and me carrying her books from school ( Saint Barnabas ).  It wasn’t too long after that that our neighbor Mrs. Slevin alerted her actual biological sister, my 7th grade teacher, Sister Delores that I couldn’t think straight because of the influence of that girl ( who sat two desks in front of me ). The relationship with Mary was terminated by Sister Delores forthwith.

And, there was the time my sister noticed that some of the 16 and 17  year old tough guys of the neighborhood ( furniture movers )  had decided to punish me, a thirteen year old,  for being” bold and  impudent” with them..  The punishment decided upon was to take  me to the 238th Street Bridge over the Bronx River Parkway and dangle me by my ankles  above ( far  above )  the oncoming traffic.  My sister caught wind of their plans just as they were getting ready to move me to the bridge.  She raced home and alerted my parents.  My father raced out of the house in his undershirt, ran two blocks  and confronted this gang and forced my release, which , in the eyes of the Council , was merely  a stay of  execution.

Then, my dad,acting  as general contractor,  had a house built on  McCollum Place, just next to the Hillview Rescevoir in Yonkers,  about 2 miles  away.. We were no longer residents of the Bronx and never would be again.  My sister was attending Saint Paul’s Grammar School , McLean Avenue,  Yonkers.  Aside from one after school incident playing running bases,  in which  she had  her front ( second ) tooth knocked out,  she never gave my parents an ounce of worry.

I was a different story because I still had pals in Woodlawn.  Fourth of July was coming and I and a big fellow named Ray were assigned the redemptive  task of travelling to the Gun Hill Road section of the Bronx to buy $35 worth of fire crackers from a curbside Vegetable Truck which was parked  next to an unimproved,  barren building lot / field.  We  made our purchase and were walking back toward Gun Hill Road when we realized we had company. Several guys our age  started to walk along side us and tell us about the intense police  activity focused on confiscating fire works. They said it would be best if we just dropped our shopping bag and ran if we encountered any  police.  Well, before long someone shouted ” police “, but I didn’t drop my bag and I didn’t start running until I saw the  switchblades come out.  And then, I did run as fast as I ever ran in my life.  So fast that I reached the car  traffic of Gun Hill Road faster than Ray,  shopping bag and all..

I raced out to the middle of Gun Hill Road and got a car to slow down enough for me to throw myself on its hood.  This brought the car to a complete halt.  The  driver later said the look on my face made him decide to open the door for me.  Both Ray and I hopped aboard with our shopping bag and we made it back to Woodlawn with our  haul.  It would not have been a  good outcome  if we had come back minus the $35 and minus the fire crackers.  My punishment for being impudent was satisfied by successfully accomplishing this task. And, we had a great time with the fire works until the police showed up and gave chase through the streets of Woodlawn.  I was able to save myself by sneaking into Saint Barnabas Church and stretching out under the first pew, nearest the altar, and staying there for one hour , planning the safest route home.

My sister and I were at home for dinner just about every night and I had as little to do with her as possible because seven years apart,  we had different lives. She thought I was a tease. a  ” torturer ” and I suppose I used to tease her a bit, especially by threatening to twist the heads off her dolls if she bothered me when I was with my friends…In truth, my feelings for her were a lot more protective than I wanted her to know.

We each had our own bedroom.  Mine was set up like a sitting room with wood panelled walls, a big desk and a couch which opened into a double bed.  Beth had a girls room that could have been decorated for Olivia Newton John, with a girls double dresser,   mirrored tray upon which sat a hand mirror and a brush….ugh!.  In fact, now that I visualize it, that’s who Beth was…Sandy  in ” Grease ” the movie. and believe me, we had a few John Travolta type guys   at the intersection of McLean and Kimball Avenues which was Woodlawn’s outer boundry with Yonkers.   But Beth was not a ” hang out ” type person like me and had nothing to do with anybody at the corner  of McLean and Kimball..IMG_1477 (480x640)

It showed  whose genes she carried, when  Beth formed a company ” The Offsetter Flower Company ” and traveled the neighborhood, door to door, selling her flowers ( colored toilet paper folded into various shapes ).  She always could sell and  she always had a gunslinger mentality when it came to risk….just like my father.  She has always had trouble dealing with the unpredictable consequences of unpredictable events which  couldn’t be handicapped in  advance. That loss of control could drive her to tears and to me.  I always expected the worst and always planned for it, so I had far fewer nasty surprises to deal with.   I find it interesting that Lloyd Blankfein, President of Goldman Sacks says he spends his day planning for 98% of what has 2% chance of happening. That has always been me..

Time flew by , Beth  attended Saint Barnabas High School and won a full four year New York State Scholarship to College and gathered  lots of friends with whom she has stayed friendly to this day..

I told you she was smart!

She later proved it again when she appeared on” Match Game ”  and won with her partner,  Roddy McDowell.   She had what I would describe as a memory that would allow her to spread out  cards, turn them over,  and them re-locate them from memory, on demand. Another a gift from my father. And, she and my mother loved to play cards and  gamble,  because they both had luck.

The turning point for me came when I overheard my parents discussing me and Beth after discovering  I had cut the afternoon session of the College Entrance Boards.  I heard my parents saying ” lets put whatever money we have behind her because he has the attitude of a loser “.  That infuriated me and I said to myself, ” I’ll show them “.  That very night,  I decided that when I started college I would turn over a new leaf and totally re-educate myself, and, to a much higher standard.  And, I did, graduating college Magna Cum Laude .four years later.and then, aiming still higher seeking an overseas career in international banking.

Beth then graduated from Saint Barnabas High School and decided with my parents to attend Manhattanville College of  the Sacret Heart, Purchase, NY . as a boarder, even though the campus was less than a half hour from our house so that she could experience the full college experience. Those were the days when the school was famous for the Kennedys and Ethel who had graduated just a bit before Beth. My parents made no bones about her meeting someone  who could support her in the style they wanted for her.  My marching orders were to prepare myself to support a family the way a man should…as my father had.  I got what I deserved, and wanted, four years as a day hop at Iona College, re-educating myself among the bookstacks and brick chimneys of  Iona’s Library attic.  And, summers working as a wire lather , mainly on housing projects, as my cousin Matt had done before he died.

My parents moved to Bronxville just as Beth was hitting her stride with the boys.  Take a look at her photo below and you will know why she was absolutely pursued  by the boys. And, like my mother, she was a great dancer, only it wasn’t the Charleston. it was the Watussi.beth0002beth0001

 

 

 

I won’t get into her marriages or mine because I don’t think its good to bring up the past when you have been married more than once.

I’ll close by saying that it wasn’t until Beth could be comfortable.. without being hostage to the limitations of  a marriage partner,  that she really came into her own as an independent and self assured person…and , today she is indeed a happy lady ,deservedly enjoying her sons, their wives and her grandchildren. And, I know for sure,  my parents would be absolutely happy at  the way her life has evolved !  Great  job …Betsy!

 

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Please tell me where I am wrong !

May 3rd, 2016

May 3, 2016

I have been told,  according to a recent  Charles Schwab communication…..For the past 50 years…..nearly ALL of S&P 500 gains came between October and April.

May through October……+ 1.3%…..average

November through April + 7.2%…. average

That reinforces the idea of Play till  May…..

But ,positioned  opposite ” Play till May ” are concepts which are pushing back against it as a course of action.

#1 ..The chart of SPY is in an uptrend with its price $204 above its 200 day moving average, $196.

# 2 Reinforcing # 1 is that SPY’s 10 day moving average is above its 50 day moving average and its 50 day moving average is above its 200 day moving average.  Nice.

#3 Interest rates remain low and the Fed is signalling they will stay low because world wide inflation, including ours, is tame.  Martin Zweig always said that equities tend to go higher when the perception of the market is that interest rates will stay low.

# 4 The average closing price of SPY over the past 52 weeks is  $197….Only 3.55%  below today’s price…so the market is not on an unsustainable trajectory.

All the above being stated,  the truth remains that the market could go lower.  

Since making money in the market is buying great stocks at great prices, I have decided to position myself  to buy SPY at a lower price and to buy more specific equities if the prices of these equities collapse…not as a result of specific causes, but because the market has gone down. I own between 10 and 50 shares of  enough stocks so that it is worthwhile to be in the market , but emotionally can accept a market retreat as a buying opportunity. At this very moment I am discarding equities that don’t conform to my ” be in it ” but ” be ready to buy more ” strategy.

I don’t want any money in fixed income because the return is so low.

My alternate strategy is to sell options that pay me a premium competitive to SPY’s dividend but, if the market corrects, deliver me 500 great stocks ( SPY ) at a price which is about 12% below SPY’s today price.

Therefore, I have sold 10 SPY Put option contracts  expiring July 15 with a strike price of $185, and 10 contracts with a strike price of $180. at a premium level that will pay me the same dividend as if I owned 2,000 shares of SPY right now at $204 per share..

Richard Maurice Gore

 

” SPY ” buy signal remains in force

April 29th, 2016

April 29, 2016

SPY closed April at $206.43 per share which is above its 200 day price  moving  average of $ 199.76.

That means the SPY model Buy Signal remains in the GREEN…I’m to.be long the ETF…. SPY. ( a basket of 500 shares which trade as one share ).

If you had followed the dictates of the month end  SPY model, you would have sold your SPY position on January 4, the first trading day of 2016 in response to the Sell signal generated December 31 as the price of SPY violated its 200 day moving average on a closing basis that day.

We are tracking to see how much of your theoretical investment of $1,000,000 you would have now by ignoring or following the dictates of the model.  The model has been wrong only once since the year 2000…..and right 5 times…..and far more profitable than Buy and Hold.

Following the model, you would have sold all 4,905 SPY shares and received $983,500 leaving you with a realized loss of $16,500.

You would have stayed on the sidelines until March 31, 2016 when a Buy signal was generated ( still in effect ).  You would have used your $983,500 to purchase 4,786 shares of SPY… the number of shares you have today.

As of the close today, your 4,786 shares of SPY would be worth $987,973.  Versus the $1,000,000 you started with on January 1,2016.

On the other hand

If you had ignored the December 31, sell signal because you preferred to Buy and Hold,  your 4,905 shares held since January 1, would now be worth $1,009, 664. resulting in an unrealized profit of $9,664 , ….instead of a realized  loss of  $12,027,  a net difference of  $21,691.

This doesn’t mean this is how the year will end , with Buy and Hold , on top as a strategy, because the next sell signal, if ignored might trigger a disaster where better than 50% of your investment could  vanish ( at least temporarily ). I believe my stomach isn’t strong enough to deal with being under water to that degree.

I follow the model specifically because it results in fewer trades, smaller losses  and has been right 5 times and wrong only once over a period of 16 years.

When you factor in fundamentals such as historically low interest rates and consider Professor Martin Zwieg’ s theory that stocks tend to go up when interest rates are low and go down when rates begin to trend higher, then, I’ve reached my comfort level to invest. Zweig is famous for calling the 511 point one day crash in 1987 which he predicted on the previous Friday’s Wall Street Week and for owning the top floor of the Hotel Pierre, Fifth Avenue….which was acquired by following his own advice.

On the other hand ” Play till May, then Go Away” is only a day or two away and I am already respecting it and moving to the sidelines on some volatile stock positions I have been holding

 

Richard Maurice Gore.

#1 To The New Babies……Here is Maurice Gore, Previously Posted on Facebook

April 23rd, 2016

April 23, 2016

 

From Richard Maurice Gore

TO:

Sammy Waters, August 21, 2015, Delray Beach, Florida,…meet your Great Grandfather……

Cooper Morgan, February 29, 2016, Victoria BC, Meet your Great, Great Grandfather

 

MAURICE GORE, August 4, 1908, New York City- October 14, 1966….yes, almost 50 years since he passed.

 

First child born to newly arrived Russian Jewish immigrants, a melting pot American original, his playground was among the tenements and push carts of New York’s lower East Side.- Delancey,  Hester, Rivington,  Canal, Lafayette and Grand Streets.

Though he strongly preferred to speak only “American “, as a small boy he was pressed into service as a street guide, helping newly arrived relatives and family friends acclimate. But, he was happiest playing Stick Ball , Punch Ball, Stoop Ball and other games developed in the neighborhood such as Ringalevio ( sic ), a people hunting / collecting game played on the run with his melting pot friends.

His formal education was not extensive, but he could do math in his head while carrying on a conversation and his Relationship / Sales  IQ was off the charts.

He was Head Payroll Teller at The Merchants Bank, 434 Broadway, NYC  and he,  personally,  knew just about every owner of every factory in the Canal Street area..His favorite discussion expression was ” get what I am trying to bring out ?”.

He married his Ruth….an Irish Catholic girl from the Bronx ( Throggs Neck ) he met on subway on their way to work. They had a long and happy marriage in which it was difficult for me and my sister Beth to tell who was Jewish and who was Catholic.

He was a grass roots capitalist and founder of Majestic Bolting Cloth Corp., 450 Broadway, New York City…which eventually evolved into a fifty million dollar sales and manufacturing Division of the SAATI Group, of Como, Italy.

I have a great many stories to tell you both about him and his Ruthie and I intend to hang around long enough to pass them on to you !

Richard Maurice Gore

To Sammy, tomorrow is your name day and I congratulate your parents Chris and Dana on selecting MAURICE, a name you can carry wiith pride

# 7 – Maurice Gore of The Merchants Bank – Previously Posted on Facebook

April 23rd, 2016

April 23, 2016

As Head Payroll Teller at The Merchants Bank, my father had several phone lines running into his ” cage ” and a team of young clerks to assist him,….because in those days, in Manhattan’s factory district,  workers received their weekly pay in cash, in an envelope.

He had a great many relationships with factory owners, because these were fashion factories and many of these owners were trying to get a handhold on an upward trajectory of sales and earnings.  And, they paid very close attention to their expenses, especially their payrolls. And, they appreciated the way he answered their payroll related questions and the express, dependable service he would give them on paydays.

The Bank had no restrictions on key personnel receiving gifts as long as they were declared and documented. I can remember, age nine, my father arriving home Christmas week evenings with gifts and a blizzard of envelopes which were dumped on the kitchen table. And all that money was saved against the day when he could start his own business.

Since my father had ongoing personal contact with these factory owners, they often used him as an information clearing house to find out if other bank customers could provide this or that for their factories. For sure they came to the right place….and lots of inter-factory connections were created..In fact, that’s how Majestic was started…doing such  a favor for a bank customer who added….Why don’t you just locate it,  sell it to me and make a little something for yourself ?

And, there were rare occasions when these businessmen contacted my father if they used up their  credit line  at the bank and were afraid  of not being able to meet a payroll. I know of more than one occasion of my father making a deposit of his own money into a customers  account so that a payroll could be met. And, I know of more than one instance where my fathers deposit wasn’t sufficient to head off the inevitable failure and Gore money went down with the ship. But, not a total loss,  because the Canal Street factory district was like a small village and these types of favors were not soon forgotten by the Dayton Dairy Cafeteria breakfast and luncheon crowd who referred to my father simply as ” Goro “..

And at the Bank, my fathers performance was equally appreciated.  He turned down promotion after promotion.  He wanted that phone in his cage so that he could maintain direct contact with the local entrepreneurs.  They knew his sights were set to be in his own business, and they knew he thought and saw things as an owner would,  ( a quality I refer to as owner’s eyes ),   and wanted to be able to reach him directly…including, to place an order for screen printing mesh after Majestic was founded.

Many years later, after I had joined Majestic and my father had died,  and Merchants Bank was still our number one Bank, I can remember the President of the Merchants Bank telling me that the day my grandfather had died my father had to rush home. It was normal procedure for the replacement teller ( who just happened to be the future President of Merchants Bank ),  to have a cash count before taking over the cash to protect himself against a shortage at closing. There were hundreds of thousands of dollars in my fathers cage. The future President told me he knew of my father’s reputation for accuracy, so he took over the cash… without a count…..and proved out to the penny at the close of business.

Take another bow Dad !

dad bank

 

# 8 – A Tale of Two Banks .. Previously Posted on Facebook

April 23rd, 2016

April 23, 2016

My dad ,Maurice Gore, worked for The Merchants Bank of New York, a Jewish bank located near Canal Street which was focused on helping factory entrepreneurs finance their accounts receivable and inventory via working capital loans as cash flow could be difficult to gauge.

Thanks go to my dad for having paid for my college education and to my mother in law , Lorraine Puckett,for  having paid for my graduate school, The American Graduate School of International Management, ( Thunderbird ). With schooling behind me, ( I thought ),  I was fortunate to be hired by Citibank and be accepted into their Overseas Division training program.

The Citibank Overseas Division training program was ultra WASP and cuts above Citi’s New York Branch Division and Citi’s National Division as a career launching pad. The Bank’s recent Presidents had been Executive Vice Presidents in the Overseas Division.

And, I could tell the status of the Overseas Division by its most recent trainee hirees which included George Champion Jr whose father was Head of the Chase Overseas Division,and David Oliphant whose father was President of Hanover Bank . Later,  in South Africa, Citibank made it possible for me to have a friend, David Andersen, whose father was Head of JP Morgan’s Overseas Division..

The Citibank  program only accepted Ivy league graduates ( almost only )  and I was later to learn they hired far more graduates than they needed and expected the training process to thin the herd. That’s because trainees still needed to be accepted by a Desk such as the UK Desk, the Africa Desk, the Middle East Desk, the Far East Desk, etc.

So, here I was expecting to be cut from this herd almost any day based on my Iona College credentials not to mention that I was a half Jew,  in hiding. But, as luck would have it, perhaps my hidden half Jewishness was a subliminal magnate that they couldn’t resist, because you can be sure I wasn’t intentionally transmitting a Jewish beacon.  I was invited to a screening  lunch by a Princetonian and a Yalie ( affirmative action ? ) and then was asked to work with them on the Middle East Desk which covered the entire Middle East from Turkey to Aden with branches in Beirut, Cairo and Jiddah.,

You may find it interesting to know that Israel was not served by the Middle East Desk, but by the UK Desk and God forbid a KuwaitI Sheik and an Israeli official should enter the same elevator at the same time.

The boss of my boss was Ed Thorne, Senior VP, a guy you would never expect to have a family which had  owned ( in his youth ) the whole of Hilton Head Island…the whole of the second largest island on the East Coast,  after Long Island !  It was said, the family had been  fond of taking weekend safaris into the interior of  Hilton Head  with domestic help carrying a silver tea service and everything that went with it.  Lots of Monday’s I heard my fellow trainees discussing their  weekend trips to the Bahamas, Vail,   or wherever,  and yet they were very open to me joining them for lunch. ((With   me remaining silent about my weekend in Yonkers ).

My job was to learn how to express myself in writing in a conversational way and write letters for Vice Presidents to Kuwaiti and Saudi Sheiks relating to their business with the Bank. which included large time deposits. And , to immerse  myself into customs and procedures of  the  middle east relating to lending, collateral , interest etc   mainly by reading branch manager’s ongoing memos such as how to negotiate loans with Saudi  merchants who were brilliant traders , but paid no mind to traditional accounting practices including the preparation of financial statements.  Part of my day was to take a language lesson and to have  one on one instruction in writing from a professional writer ( Rudolph Flesch ) .

I ghosted a letter for James Stillman Rockefeller , President to Gamal Abdel Nasser of Egypt informing him that the Bank was freezing Egypt’s deposits at our Bank in reaction to Egypt seizing our Cairo Branch.

Mr Rockefeller’s secretary informed me in advance, that when reading my draft, Mr Rockefeller would be expecting to hear violins in the background. I responded by supplying what I believed sounded like a full string quartet. The letter was duly signed, on my third try, and returned to me with a pink transmittal slip on which Mr Rockefeller’s secretary inscribed ” WOW” !

And, it was out of correspondence with the Kuwaitis and exchanges with Greek oil magnates such as Onassis that Larry Heath, VP sitting just         four desks away from me, invented the first Time Certificate of Deposit . Yes,  the CD  we all know today, which instantly caught on as being far more negotiable than a letter from a Vice President to a wealthy depositor.

The sensory impression created by  the fifth floor  “Overseas Officers Platform ”  at 55 Wall Street was instant and of  Charles Dickens. … tall  and wide mahogany roll top desks which hid a VP or higher and allowed him to keep his back to a window on the street ( five floors below )  and remain hidden from other occupants of the platform, including me.

I prided myself on believing I could converse with Mr Rockefeller if called to do so ( without my heart pounding ), and just as easily fit in with construction workers pouring concrete in the street below ..

So, when my father showed up unexpectedly one afternoon, in a custom silk suit hand tailored by one of his Canal Street contacts, to offer me a ride home, I wasn’t thrown for a loop. I introduced him around the platform including to Hans von Fleugge , a self deprecating, always joking, German trainee, and everything went off without a hitch.  I once shared an Officers elevator with von Fleugge and we were confronted by an officious, matronly, territorial , senior secretary from somewhere who wanted to know our titles.  Without missing a beat,  von Fleugge replied ” Madam, I am Baron Hans von Fleugge. Is that title enough ?  I don’t want to say we left her with her mouth open…but it was close.

And, now when I looked in the mirror, I didn’t see a Bronx Irish Catholic anymore, I didn’t see a Jew.  I saw a WASP banker in a three piece J.Press suit and did I enjoy the role.!

This was confirmed  when Dave White, Princeton and I were asked to pose with Walter Wriston, Head of the Overseas Division for an article the NY Times was doing on careers in Commercial Banking.

And then,  I was told I was being assigned to Johannesburg, not Jiddah…..Thank God…more hours of sun each year than the French Riviera, 5,600 feet elevation and lots of sports to play including rugby, cricket, and tennis !, A free country club, first class steamer accommodations to and from, kids educated for free in Switzerland, nearby  game reserves for photo safaris, a two months home leave every two years…..Lucky us. Me, Rosie, and Kris…..with Lisa on the way.

I had learned how to navigate in different types of worlds, as a man ,  just by observing my dad and using his way of relating to all types of people as my behavior model. I didn’t realize it then but my experience as a 15 year old sorting checks at Merchants Bank and my experience as an Overseas Officer at Citibank, would synthesize into the greatest experience of my life, working side by side with my dad.

I didn’t realize it , but all the perks of a career at Citibank, wearing J Press suits, eating in the Officers Dining Room and Clocks of the World decorating couldn’t hold a candle to working with my dad and being his best friend.

Within three years I would be trading Wall Street for Canal Street , for a junk yard desk and for  lunch at the Dayton Dairy Cafeteria. And, I would consider it the best trade I ever made.!,

# 9 ” MY MATT ” with new photos

April 21st, 2016

April 21, 2016

 

After visiting her sister Lilly, my aunt Rose would stop by our bungalow to visit my mother.  She would express how worried she was about  Lilly beating the hell out of her son Matty, ( born 1924 ) . ”  She won’t leave that boy alone. She’s after him all the time and smacks him for everything .”

As it turned out, my aunt Rose was underestimating my aunt Lilly’s talent as a motivator.  If you followed Aunt Lilly’s suggested regimen, and bought into her pep talks  you could begin to think of yourself as special to the point where there is no way you could conceive of not measuring up to her opinion of you.  That’s how she got me to stop sucking my thumb and wetting the bed. It took her only one week to get results.  The week my parents were away and busy finding my sister Beth in that  hospital  garbage can.  My parents had been working on me for a year without  results. Now,  imagine the attention you would get as Lilly’s  son , 24 / 7, fifty two weeks a year! For sure you would see both the carrot and the stick.

Anyway, Aunt Lilly succeeded beyond everyone’s expectations with Matty.  Matt became an exceptional student and an enthusiastic  athlete who totally loved and doted on his parents.  He was accepted at Fordham Prep, a Jesuit Prep school,  on the Fordham University campus which was where Vince Lombardi acquired his work ethic as one of the  ” Seven Blocks of Granite ” for the  nationally  ranked Fordham University football team.

Matty was at the Prep while Vince Lombardi  was at the College.  Same kind of discipline required because Fordham Prep was no country club, with two hours of Latin daily in addition to either Greek or German. Miss two days of vocabulary and watch the train pull away with you standing on the ” dunce” platform. In addition, Matty was a starting  infielder for  the varsity baseball team.

When Matt graduated the Prep  in 1942,  he was primed to be swallowed up by the USA draft, the World War II  being only six months old.

Aunt Lilly approached her brother Vince seeking a draft exemption for Matt as a welder on the ” Liberty “Ships”   he built as General Superintendent of  the East Coast Shipyards,  at Bayonne, NJ.   The problem  was my Uncle Vince had enlisted in Navy at fourteen ( ! )  and didn’t think an exemption would be good for Matt as a man.  So, he turned my Aunt Lilly down. Nothing was ever said to me, but to the mother of an only child I can see how  the turn down could easily have seemed like her brother had handed down a potential  death sentence to her son.

That didn’t faze Matty.  He applied and was accepted for an accelerated 15 month course in Marine Engineering taught at Fort Schuyler..  At that point, Fort Schuyler  was the  Officers Candidate School for  the US Merchant Marine,  and if Matt could complete the course he would become an Ensign in the US Merchant Marine, and then a Lieutenant JG in command of an engine room on one of my uncle Vince’s Liberty Ships….at age nineteen!

I have all of Matt’s letters home to his mom and dad throughout his three year  service  including how the course was so accelerated he had no choice but to study nights under the covers with a flashlight,  after lights out..

At around this time, my Aunt Lilly began referring to Matty as ” My Matt “.  To me, that is the ultimate acceptance by a mom or a girlfriend or a wife. (  I know when my daughter Kris refers to me as ” my dad ” it makes me feel good ! )  I was too young to appreciate it at 7 years old but I was already being  compared to Matt .  Maybe my mother had some  ” My Richard ” thoughts  incubating .  But,   my little sister was taken from that hospital garbage pail just in time  ( 1944 ) to take that type of pressure off me.

As time went on, Matt graduated and was assigned duty on ships running  Hitler’ submarine s gauntlet in the North Atlantic,  sometimes on convoys all the way to Russia.  He sailed to Murmansk, Rio de Janiero,  Scotland,  England etc.  and once invited me,  at age 8, on board his ship, anchored at Fulton Street,  for a stem to stern solo  tour just hours before weighing anchor and  sailing through the Narrows, outward bound for God knows where,  at what risk.  But, a smile never seemed to leave Matty’s face and, as a young Officer he seemed to be just as  popular with his  shipmates as he was at the Prep and on the baseball field …..and with the girls..

 

matt

 

The summer the war ended , Matt  began working  under a union permit as a wire  lather on apartment houses , reinforcing floors with steel rods tied at intersections to accept  wet poured concrete .  His parents were waiting for a time slot  for him to start at Fordham University.  And, because they didn’t want him to waste time his parents enrolled him at Delahanty Institute in a course for reading building plans and estimating costs.  It was thought he could possibly join my Uncle Harry in his construction business at some point down the line.

For me to tell you that my cousin Matt was my inspirational  and aspirational role model  is a gross understatement.  And, he was some tough act to follow !

He really loved to  play baseball ( we both were Giant fans ),  and every Sunday most of the family, including my mother and father and I,  would go to watch him play short stop for the Throggs Neck Mohawks .  These guys were age 22 or so,   but mature beyond their years because of the war,  They played teams from different parts of the Bronx, and the games were hard fought with lots of betting. And, you could sit right there, up close, and really see and hear a pitched ball disappear into a catcher’s mitt almost as if you were at the plate,  batting.  Sunny, dusty, grimy, sweaty , the way the game was meant to be played and the way ice cream was meant to be eaten.

Matt had dated a girl, Virginia Green all during the war . I had to march in line with my classmates  past her house on the way from daily Mass ( ugh ) to my schoolyard ( Saint Benedict ) and often  she and her mother would come to their upstairs  window and smile and wave to me as I walked past.  I really liked her and I thought she was beautiful and I was looking forward to the day when she and Matt would get married and we three could be friends.gin0001.

But something was going on. Aunt Lilly wanted ” My Matt”  to finish college ( 4 years )  before he got married.  And, Ginny wanted to get married ASAP because she had patiently waited for him all during the war and, though engaged,  all her girlfriends were getting married.

The next thing I knew my parents were waking me up on Sunday night August 23, 1946 to explain to me that Matty and Ginny had been in a terrible accident and that a babysitter for my little sister Beth would be arriving momentarily.  My parents weren’t home the next morning when I got up, so I got dressed and walked up to the candy and grocery  stores at the intersection of Bruckner Blvd. and Tremont Avenue  to pick up a newspaper  bring home  some breakfast rolls.

As I approached the corner,  a little girl pointed me out to a man saying ” that’s his cousin “.  The man came up to me and asked me for the latest news on my cousin and I said all I know is that he was in an accident last night.  Then he said… ” your cousin wasn’t in an accident He was shot by his girlfriend and he’s in critical condition at Fordham Hospital.”  What???!!!.  I didn’t believe it ! Then he introduced himself as a reporter for the New York Daily News.  Very tough news for a just turned  ten year old to comprehend.  I was confused. I ran home hoping to learn what had really happened. My mother was home  and she  told me she didn’t want me up all night worrying,  so she had to tell me  a white lie.  And, that we were all going to the hospital.

What actually happened was that the day before,  Sunday,  my Aunt Lilly wanted Matt to play in the scheduled double header and then go out to dinner with his parents….I assume Ginny was invited but these details are fuzzy.  All Aunt Rose kept saying for years after was …” Why did Lilly need to control him so.?  Why did she need to interfere ? . Why couldn’t she just let the boy have his own life ? ”

At about 10:00pm  Sunday night , Ginny walked the three blocks from her house to Matt’s house, threw a pebble at his 2nd floor  bedroom window and told him she had his bathing suit.( we all had been at Compo Beach, Westport, Ct. Saturday afternoon ). My Uncle Harry was having a beer  at  the Pub just around the corner , on  Tremont Avenue..   My Aunt Lilly was already in bed.

Matty told Ginny he would meet her at the side door which was on a landing which either led down to the basement or up to the kitchen.  Matt opened the door for Ginny and then turned to head up to the kitchen assuming she would follow him.  Instead, she pulled her fathers duty revolver ( he was a policemen ) and shot Matty once through the back and then turned the gun on herself, shooting herself in the head.  It was later speculated that she had enough bullets to have one ready for my Aunt Lilly if she had been present.  But, that’s pure conjecture.

The 45th Precinct was just across the street from my aunts house and it wasn’t long before police were on  the scene.  An ambulance arrived from Fordham Hospital and it had only one bed.  Matt insisted that Ginny be given the bed and he rode the half hour to the hospital sitting up on a metal ambulance  bench.

He was taken to emergency surgery and stabilized.  He kept asking about Ginnys’s condition, but she was already dead and nobody wanted to break the news to him in his condition. For sure,  I know they loved each other .  Then why ???    Nobody had any answers except that Ginny was probably despondent, had probably given Matt a marriage ultimatum at some point during the weekend , and somehow they broke off the engagement.

We were at the hospital almost non stop for three days.  Then,  we were told Matt had caught pneumonia.  These were the days before antibiotics. When I,  my Aunt Rose and my mother took a lunch break at a nearby restaurant,  and were walking  back to the hospital.  Suddenly  we could see my Aunt Lilly staggering down the hospitals steps and sink to her knees.  Her Matt was gone.

Think Romeo and Juliette was sad ?  Welcome to another Tenety tragedy.  The Tenetys had  the 1940s version of Kennedy hard luck.

Whenever I listen to  the song  Bye Bye Miss American Pie and the music stopping,  I think of my cousin Matt and Ginny and the  the sudden end to their lives.

That’s when the music stopped for me.

Richard Gore

 

Matthew Kingston,  August 13, 1924…..August 26, 1946

With his mother Lillian Tenety Kingston at Fort Schuyler, Merchant Marine Academy, Throggs Neck, NY