Dow down 94 points yesterday. Gold was flat.
Yesterday, we drove out to the country. We had rented a mini-excavator over the weekend and needed to return it. It had gotten stuck in the ditch we were digging. So, a giant bulldozer had to be called onto the job to get it out.
What were we doing with an excavator?
Therein hangs a tale. We will tell it because it is (remotely) connected to our mission here at the Diary.
But maybe we should answer that question first…
What is our mission?
That’s easy: We try to connect the dots. We try to make sense out of the world of money. We try to understand what is going on.
Alert readers will recognize that this has more in common with philosophy than with modern economics. But there’s a tale there, too. The only kind of economics that is worth a damn is philosophical, not mathematical or scientific. Real economics is philosophical – like history or literature – in the sense that it merely tries to observe and understand, not to manipulate people as if they were pawns on a chessboard.
The other kind of economics – modern, “scientific” economics – is a fraud. It pretends not only to understand an economy, but also to be able to improve it.
Modern economists have been at it for nearly 100 years: planning, organizing, theorizing, controlling, adjusting, pontificating, forcing, setting prices, suppressing interest rates and committing other acts of wanton economic vandalism. During that time, there has not been a single confirmed sighting of anything close to success.
Wanted: Men of Action
But why bother to try to figure things out?
Nobody cares. Nobody likes philosophers. They forced Socrates to drink poison. They drove Nietzsche to insanity. Wittgenstein went insane on his own steam.
Sensible people have no use for philosophy or philosophers. It’s men of action they want. Alan Greenspan! Larry Summers! Ben Bernanke! They want big-mouth humbugs – people who will “do something”… no matter how foolish.
Oops… We’re beginning to rant and rave like a total lunatic.
Back to our story. Where were we? Oh, yes… Our mission: to try to understand.
But why do we want to? Good question, dear reader; you’re really on your toes today.
First, because we want an edge. We want to understand things other people don’t.
Why?
Maybe because it makes us feel superior. That is the goal of all honest men: to feel superior to their fellows. Fortunately, it’s not hard to feel superior in today’s America.
But there’s another reason…
The more you understand what’s really going on, the better you are able to make long-term investment decisions.
Or not… Some people believe you shouldn’t even try. They say you’ll never be able to do it. You’ll only mislead yourself, thinking you know something that you really don’t. Besides, the effort of trying could be better spent on stock research.
They may be right. But we’ve been trying to connect the dots for a long time. And we’re not going to stop now.
That doesn’t mean we always get the dots connected in the proper way. But we keep at it anyway.
‘Cool Tubes’
Now, back to the excavator…
We had decided to put in a “cool tube.”
You see, when we are not trying to figure out how the dots should be connected, we are usually at work connecting other things or repairing the connections we put together years ago.
One of these projects – which we put up about 25 years ago – is an architectural marvel. It is a ferro-cement partially underground house in the shape of a football helmet. We can confidently tell you that no one ever built such a house before. Nor has anyone done so since.
Imagine a football helmet, with the visor made of south-facing glass, and the rest of it mostly buried in the dirt. Inside, there are three floors, with an atrium at the front behind the glass.
The sun warms it. The earth cools it. It is extremely energy efficient. It needs no heating… and no cooling. Modern economists – who believe people become richer by consuming rather than by saving – are appalled by it. Not only does it need almost no energy, it also needs almost no maintenance, because most of it is buried.
It is “green,” too. Well, the walls are green… because the warm, moist air of Maryland summers comes in and licks the walls with its wet tongue. Result: green slime.
What to do about this? Cool tubes. They take in the air… run it six feet underground, where the humidity collects on the cool pipe walls, and then bring the drier, cooler air into the house.
Will they work? We don’t know. But we’ll let you know when we find out.
Regards,
Bill
Market Insight:
Watch What Corporate Insiders Are Doing
From the desk of Chris Hunter, Editor-in-Chief, Bonner & Partners
The recent Investors Intelligence survey reveals that the number of bearish financial advisors is at the lowest level on record – at just 14%.
If you’re looking for a reason to get out of US stocks, this could be it. The market looks as though it is entering a “euphoria” phase. (Remember Warren Buffett’s advice: Be greedy when others are fearful and fearful when others are greedy.)
Meanwhile, corporate insiders – aka the “smart money” – are net sellers.
According to FactSet, in November, corporate insiders of S&P 500 companies sold about $7.4 billion worth of stock. That’s a massive 85% increase from October… and the highest amount since May.
The crowd hyper-bullish… corporate insiders selling…
Time to take profits on the US stock market rally? We think so.
