Bear Stearns...Not A Bailout

Unless you have been living under a rock for the past week, you have undoubtedly heard about the mess at Bear Stearns: their CEO proclaiming things were fine on CNBC, experiencing a liquidity crunch/good old-fashioned bank run on their assets, and finally the Fed-orchestrated JP Morgan Chase buyout for the princely sum of...$2...down from $170 a year ago and around $60 at Thursday's close. The important thing to understand here though is that, despite the non-recourse loan given to JPM by the Fed, this was not a "bailout."

Consider the following: Bear was counterparty to $13 trillion in various derivative contracts. To put this number into perspective, the GDP of the United States is approximately $13 trillion. So what does this mean? If you were a hedge fund, or really any kind of brokerage client of Bear Stearns, and you chose to to purchase/write some kind of derivative, Bear would take the other side of your desired trade as a service to you, and in attempt to make money. If Bear Stearns were to go bankrupt, any derivative trades that were held in your name would then no longer be valid. This would mean that $13 trillion in assets would be wiped to slightly below the stock price of Bear. This would undoubtedly lead to a wave of bankruptcies and destroyed wealth, as worthless investments on hundreds, even thousands, of leveraged balance sheets are wont to do.

But wouldn't SIPC (Securities Investment Protections Corporation) help? They only cover up to $500,000 worth of cash and investments in the case of a brokerage failure. Also, to my knowledge, this would not include the more exotic derivatives such as swaps. I'm not sure about more vanilla derivatives such as simple put/call options.

But how was Fed involvement, namely the $30 billion non-recourse financing to JPM, not a bailout of Bear Stearns? Because it was more like an orderly liquidation, whereby JPM was given an incentive to bring Bear's liabilities onto their own balance sheet, ensuring that a wave of panic and bankruptcies would not submerge Wall Street. Despite the objections by BSC shareholders that the company should go bankrupt so that they have a chance at more than the measly $2 of JPM stock, the reality is that preventing collapse of the U.S., perhaps even global, financial markets takes precedence, not to mention the fact that shareholders are last in a long line of creditors to receive anything in the event of a bankruptcy (read: be glad you are even getting $2).

While some might say that free market economics, of which I consider myself a follower, dictates that failures should be allowed to fail, and that the markets will deal with the aftermath, I believe that no one would benefit from the markets trying to deal with such a massive amount of vaporized assets. There are some occasions where the government, or a goverment entity, must act in order to prevent chaos. I believe this is one of those rare times. By orchestrating the takeover of Bear Stearns, I think the Fed has rightly avoided a potential catastrophe.

Stock Pick: Sun Hydraulics (SNHY)

The impetus for this post is the earnings release this past Tuesday, where SNHY reported a year over year increase in annual net income of 36% and a 34% increase for the 4th quarter yoy number. All that in a pretty poor market and overall economy too! I'll give a brief overview of the company before continuing on about why I like the company as an investment.

SNHY, based out of Sarasota, FL, designs and manufactures screw-in hydraulic cartridge valves and manifolds. These devices are used in control systems for various industrial applications. They fit comfortably into the small-cap category with a current market cap of $423 million and 2007 sales of $22 million. Only 52% of their sales for 2006 were generated in the Americas, giving them a fairly large international footprint, especially for such a small company. The cartrides that SNHY designs are currently around 1/3 of the $3.5 billion market for hydraulic valves. This is important because SNHY's products are such that several functions can be combined into one central manifold, rather than having the different valves and actuators spread throughout the system. The advantages SNHY's designs offer over the currently used technology should be readily apparent.


So, what else is there to like about the stock? Here are some metrics that I usually use to assess a potential investment:

• Trailing P/E.......................20.24


• Forward P/E.......................17.10


• PEG Ratio............................0.76


• Profit Margin......................12.93%


• ROA.................................20.40%


• ROE...................................27.03%


• % Insider Ownership................31%


• % Institutional Ownership.......44%

As you can see, their P/E is relatively low compared to the rest of the market. In fact, their forward P/E is around the historical P/E of the S&P 500. The PEG suggests that they will continue to see pretty significant growth in the future. Their margins, ROA, and ROE all are much better than the competitors listed by Yahoo! Finance, Parker Hannifin (PH) and Servotronics (SVT). The numbers are pretty great in their own right though. Finally, the % owned by insiders and institutions shows that there is definitely room to grow as far as interest from mutual funds, etc. Also, I love the fact that the management is so heavily invested in the company. That tells me that there will be great things to come in the future.

Looking at the chart (click for larger image), its not very pretty (especially when I see the point where I bought it). The stock is currently heading toward being overbought, as the RSI suggests, and the 50 and 200 day moving averages crossed in January, both sending a pretty bearish signal. However, the MACD shows a bullish trend beginning to emerge. In fact, the YTD chart is not that bad, especially since the beginning of February, where it has been stuck between support at 21 and resistance at 23. Even more interesting is that the earnings release signaled the 3rd test of the resistance, and the subsequent breakthrough to higher prices. Although it is too early to tell, it looks as if a new upward trend has begun since the bottom in January at around 18.

The financial statements continue to support my bullish thesis on SNHY. They have been paying down their long term debt consistently, from $11 million at the end of 2004 to a meager $292,000 at the end of 2007 Q3. They also have more than enough cash to pay off all current liabilities if necessary.

Even though I currently have a paper loss on this one, I remain convinced that they will do extremely well in the future. Once capital expenditures pick up again, I really expect SNHY to do great things. Until then, I'm just going to sit by and watch.

All data is from Yahoo! Finance as of end of day, March 6, 2008. Chart from StockCharts.com. Insert generic disclaimer about me not being an investment professional and not being able to make suggestions for your specific portfolio here.

Pfizer, MBIA, and the Ratings Agencies

This is a pretty thought-provoking article from Mish's Global Economic Trend Analysis blog: http://globaleconomicanalysis.blogspot.com/2008/02/mbia-maintains-highest-rating-pfizer.html.

The only reason I can see for not downgrading MBIA while Pfizer gets the axe is simply because of the fallout that would take place if MBIA, which truly relies on its credit rating to operate, was no longer able to insure bonds (ignoring the fact that they have so little cash that they probably couldn't cover many defaulting bonds at this point anyway). But is trying to forestall a potential blowup really the best thing for the economy or all those MBIA-insured bonds? After all the lack of insight/intelligence/due diligence on the part of the ratings agencies when it came to CDOs, I would think that it would behoove them to become ruthless in their ratings, to show that they really actually do what they claim to do.

Something drastic needs to happen with the way ratings agencies are currently run, since they seemed to have not learned anything from the whole CDO mess. If investment banks are required to have so-called "Chinese walls" in place to prevent improper conduct on the part of analysts and traders, maybe something similar should be instituted with the ratings agencies where those doing the actual analysis and rating are unaware of how much the agency has been paid by the company seeking the rating, or if they have paid at all. It may be hard to implement something, but since the ratings agencies seem unable to handle their responsibilities, as evidenced by the Pfizer/MBIA ratings, something should be done.

Misguided Derision of Black-Scholes

I just finished reading an article by Michael Lewis, of Liar's Poker fame, where he essentially blames Black-Scholes as the reason for catastrophic market failures, from 1987, to LTCM and even the current subprime debacle. I think he's gone a little far however.

Black-Scholes is a model which is supposed to give fairly accurate predictions of option prices. The problem that Lewis failed to understand is that the formula, in and of itself, is not necessarily faulty. The problem is that people have come to expect and use the model to actually price different securities instead of predicting the movements that result from dynamic variables.

This would not be the only time that traders/bankers/fund managers/etc. have used models as a means of pricing things in fact rather than in theory. Consider the write-downs from CDOs and other similar asset backed securities which presented themselves due to the inability to mark-to-market and the ensuing reliance on marking-to-model. In fact, I wrote the following for a research paper on CDOs, with regards to their pricing:

Interestingly, the Marshall-Olkin copula, the so-called “shock model” that accounted for successive catastrophic default events, was found to be a poor model of true market values of CDOs due to the fat-tails it created on the distributions of losses from defaults. This is interesting because the research was done in 2005, and the CDO market has actually trended toward fat-tail loss distributions and catastrophic default events in recent months. Obviously, such strict mathematical models should always be taken with a grain of salt, or at least with the understanding that such models should only be used as approximations for the price of an illiquid security. Instead, many investors (again, in the institutional sense) regarded the prices placed on the CDOs by their models to be the actual value, and in many cases felt that their models were still correct even in the face of a large divergence between the market prices and the model prices [1].

[1] X. Burtschell, J. Gregory, J.-P. Laurent. “A comparative analysis of CDO pricing models.”

It doesn't take college-level laboratory courses to see that theory does not always exactly match actuality or take into account the existence of outlying data points. For that reason, it seems that Lewis is misplacing the blame, at least to some degree. While Black-Scholes, or any market model, certainly comes with limitations and downfalls, it is the implementation of said models that determines their utlimate accuracy.

An Intersection of Engineering and Economics

In going through some of the stories posted on Abnormal Returns, I came across a story from the WSJ Economics Blog and found it interesting that Ben Bernanke and his ilk like to refer to what happened during the Great Depression as a form of a feedback loop. They apparently term the failing of one bank as a detrimental effect to other banks as a negative feedback loop. However, this is incorrect. The negative feedback is what the Fed would want to provide in the form of lower rates and increased liquidity while the compounding effect of cascading bank failures would be the positive feedback. That is, negative feedback causes attenuation of the input, eventually down to zero if it was a true feedback control loop. Conversely, positive feedback would result in the values taking off toward infinity.

This actually got me to thinking about what kind of system this bank data would actually look like, and if you could come up with some kind of control design (P, PI, PID, velocity-feedback, etc.) that would translate into how much to lower interest rates or what other actions should be taken in order to keep banks on their feet longer, thereby avoiding the calamitous outcomes of the Depression Era. Of course, this would require much more time than I would care to put into it. I guess the Fed will have to figure that one out without me.

Economic Stimulus: A Couple Months Late and a Couple Billion Short

President Bush just signed the surprisingly bipartisan stimulus package into effect today. I'll give the government an A for effort, and an A+ for actually doing something expeditiously for once, but I can only muster a D- for the actual package itself.

While I certainly won't send back the $600 check that's coming my way, I also don't plan on spending it the way so many other Americans will. What do you think that money will be spent on? Something like a new LCD TV that is made in Japan from Chinese parts. That is not exactly stimulating the overall economy here in the US. With the influx of foreign capital, especially into the battered banking system, Americans should do something really patriotic and either put that money in a high-yield savings account, invest it in a retirement account, or pay off the over $8,000 (on average) they have in credit card debt. In fact, the $150 billion dollar stimulus package would probably be better spent in reducing the national debt than giving it to consumers. Taking it a step further, for maximal benefit, the government would give all of the money to primarily small businesses as a means of encouraging expansion and capital expenditures, instead of just providing for equipment purchases. Such purchases do not really help businesses in the service sector that saw some awful numbers a few days ago.

Also, the checks won't even arrive until some time in May, meaning that the economy will already be in a recession, if that is indeed the future of our economy...something I'm not entirely conviced on yet.

The fact is, the stimulus package is only about 1% of GDP. That is a drop in the bucket. More than anything, this seems to be a political move in a year when a Presidential election and a slowing economy happen to be occurring.

Not So Super Tuesday

Well, unfortunately the Republican party seems to have been split. Huckabee, unsurprisingly, swept the Bible Belt states of Alabama, Arkansas, Georgia, Tennessee, and West Virginia, most likely stealing quite a bit of Mitt Romney's thunder. Of course, Romney did not turn out too poorly himself, garnering about 7 states to bring him to 269 delegates. Its going to be tough from here on out though, as McCain has about half of the delegates he needs to clinch the nomination.

I'm not really sure what happened. It seemed like most of the conservatives I've heard (personally and calling into talk radio) were ardently against McCain and tended toward Romney over Huckabee. It is disappointing because Americans seem to either be uninformed, apathetic, just plain stupid, or some combination of the three when it comes to voting. The economy has consistently been the key issue for the past few months, yet the candidate who has admitted to having fairly limited knowledge in the way of economics is poised to win the Republican nomination for President. That does not bode well for the Republican party or America.

Which is why I'm supporting Romney. He has the business experience, much of it in taking faltering companies and returning them to their prior glory, that "that other malfunctioning corporation called the USA" could use a healthy dose of. While I've always been of the opinion, unlike so many others out there, that the President and/or Congress have little to do with the performance of the economy, I do believe that they can create incentives to a certain degree that can stimulate businesses and consumers to do things that will make the economy grow. Bush's tax cuts are a good example of this. Businesses and consumers will almost always make better use of money than the government, whether that is measured in return on investment or utility.

Luckily, Romney's pockets are fairly deep, thanks again to his background in business. So, I'm not losing hope yet, despite how far Romney has to go after a fairly disappointing Super Tuesday.

Democrats and the Economy: A Losing Combination

In an article from the most recent Fortune titled "Make the World Go Away," which talks mainly about the recent backlash against Free Trade due to the slumping economy, there is a poll with the following question:

Regardless of which political party you support, which party would do a better job of keeping the economy healthy?

The results? 45% of respondents thought Democrats would keep the economy healthy, followed by 35% for Republicans, 9% for neither, and 2% for both.

Now, before I continue, I think it is impossible for either Democrats or Republicans to have enough control over the economy to determine whether or not it is healthy. All they can control are regulations and taxes. If anyone should take credit or blame, its the Federal Reserve and the actual participants in the economy. That's right, you and me. But, for the sake of argument, let's say that it actually is Congress and the President that help or hurt the economy. I say that if that's the case, you can not logically come to the conclusion that Democrats would be better stewards of the economy than Republicans. I will use the current Democratic Presidential candidates, Barack Obama and Hillary Clinton, and their platforms/rhetoric to support this. In this edition, I'll examine Obama's economic platform, as stated on his website.


OBAMA:

Making Work Pay Tax Cut - This would eliminate the first $8,100 of payroll taxes, presumably for every U.S. taxpayer. How will we then be able to fund a Social Security or Medicare that is already heading towards the red, much less a Universal Healthcare Plan? Obama doesn't seem to understand that you need more revenue to pay for more programs. He seems to want to decrease taxes and simultaneously increase spending.

Eliminate Income Taxes for Seniors Making Less Than $50,000 - While I tend to agree with this, its only because of the first three words. His main idea here is that these seniors have been paying into Social Security for decades with the promise that they would be taken care of. Here's a question: What about all the money Social Security will take out of Generation Y's pocket that we will most likely never see again, unless something changes drastically. The main point from me though is, again, decrease spending before getting rid of revenue that will just pop up someplace else. That, and how many seniors are there really that make less than $50,000?

Simplify Tax Code and Give the Option of Pre-Filled Tax Forms - He wants to simplify the tax code by creating more credits and changing existing loopholes? That's not simplification, that's obfuscation and will just make it harder for people to fill out their taxes. And pre-filled tax forms? Will the Federal Government soon help me balance my checkbook? How about send me reminders to pay the utility bills, or refuel my car? The answer to fixing the problem of not being able to fill out tax forms is two-fold: replace the dense, confusing tax code with something universally understandable (perhaps a national sales tax?) and the acceptance of personal responsibility by Americans.

American Opportunity Tax Credit - This will give a tax credit to offset the first $4,000 of college tuition in an attempt to make college affordable to everyone. There are enough scholarships, grants, and other forms of financial aid out there, that the taxpayer does not need to subsidize college educations any more then he already does. After going to high school in Georgia (where the HOPE Scholarship pays for 100% of tuition for residents of Georgia that attend an in-state public university) such subsidation leads to two things: more people attending college (good), and the high schools making sure nearly all of their students leave with a B-average (a requirement of HOPE, also bad). The point is that not everyone is smart enough to go to college. And even fewer are smart enough for me to want to pay their way via higher effective taxes for myself.

Promote American Business Abroad - Sounds great, but one of the things Obama points out is "Bush's failure" to address China's currency manipulation to the detriment of the U.S. It is a little hard to tell such a nation what to do when they are holding massive amounts of U.S. debt in the form of Treasuries that they could easily dump on the market, REALLY destroying the economy.

Expand Loan Programs for Small Businesses - Again, the solution here is to expand the government by expanding the Small Business Administration. I'm all for small business, but not by creating larger government that will just want to tax away the benefits reaped from the more favorable loans.

Digital Inclusion - Use tax and loan incentives as part of a plan to GIVE HIGH-SPEED INTERNET ACCESS TO RURAL, URBAN, AND MINORITY COMMUNITIES. I couldn't believe it when I read that Obama wants to do this. How about going to the local library? I think most libraries currently have internet. Even if its 56k, its still internet. Why waste taxpayer money on this?

Fund to Help Homeowners Avoid Foreclosures - While there is a ton of blame for the subprime crisis, which led at least in part to the overall housing slowdown, there is still a decent chunk left for the homeowners who took out loans they couldn't afford. Personal responsibility rears its head once again (aka, something taxpayers should not pay for). The fact of the matter is, a large number of these foreclosures were from defaults on second homes (where the original home was put up for collateral), or the homeowner overstated income. Foreclosure is not that bad either. A lot of these people will probably just go back to renting the way they did before they tried to move into a half-a-million dollar house for a $600 monthly mortgage payment. Its not like these people had 90% equity in their home and missed a few payments at the end.

Credit Card Rating System and Bill of Rights - The problem here is with "universal defaults," where credit cards can raise your interest rate for late payment or default with a completely different creditor. If you use your credit card responsibly, this doesn't affect you. That, and this is simply the credit card companies making sure they are being compensated for the default risk that you pose. The credit card use in this country is bad enough without further removing disincentives to reckless use.

Make Corporate Tax Code More Fair and Efficient - Hmm...sounds good, right? All Obama wants to do here is eliminate corporate loopholes "that benefit only a handful of companies." So that means the playing field will be level, but still elevated (as in high corp. tax rates). Wouldn't it be better to make it so that there is no tax code in which to find loopholes?

Eliminate Capital Gains for Start-Up Businesses - Again, those first three words were fine on their own. If eliminating capital gains is so beneficial to start-up businesses, why is it not just as beneficial to the everyday American? Obama should go that extra step.

Ensure Competitive Markets - Here's another one that made me laugh for the following reason: "...the government has a crucial role to play in ensuring competitive markets." I think Adam Smith is rolling over in his grave. The government will end up making markets worse by dictating what it believes to be appropriate levels of production and/or consumption. Competition is all about making a better product or providing a better service than someone else, not having government come in to make sure that every company gets an equal piece of the pie. Also, Obama thinks Sarbanes-Oxley is great, but wants to make sure that compliance is not burdensome to start-ups or small businesses. Well, as long as those start-ups and small businesses are privately held, that will be the case. That will also mean fewer investment opportunities for average investors, as public companies go private to escape the headaches and costs associated with complying with SarbOx standards.

Create Career Pathways for Workers to Move Up the Ladder - Once again, everybody is a winner! Hey America, every one of us is smart and capable of managing other people, taking on massive responsibility, and perhaps even running an entire company! Hate to burst your bubble, Barack, but that's not the case. While America is a place where anyone can succeed if they put the effort forth, not EVERYONE can. Its simple math more than anything: there's only one CEO of a company. Also, factories need those workers out on the floor who have been there for 30 years because they can do a better job than some 22 year-old who's never used the equipment before. And a 22 year-old straight out of college is probably better able to manage and run that factory than the guy who's been on the floor for 30 years because the college grad has been taught how to analyze the whole operation, not just one station to which the factory worker is accustomed.


Increase Minimum Wage - Read an econ text book, Obama.

A Quick Guide on Dressing Well: Business Edition

After being at an engineering school for 4 years, and studying amongst them, I've had many interactions with real engineers - you know, the ones who have long, unwashed hair, pimply faces, thick glasses, graphic wildlife t-shirts, wear no shoes, and run from one place to another as opposed to walking. Of course, there is an exception to this uniform: Career Fairs. This is the one time when all of these engineers try desperately to dress as smart as they actually are. However, I have noticed that these attempts almost always fail miserably.

One example, that I have seen several times, is that the manufacturer's tag is left on the left cuff of a suit jacket. It seems pretty obvious, but in a world where formulas often outnumber actual words, this is only the tip of the iceberg.

In an attempt to educate the "unwashed masses," I present the following rules and tips to turn a squirrely guy into a well-dressed man, ready for the world outside of academia.

The Suit
Every guy should have at least two suits. Start out with a charcoal gray suit as it is the most versatile as far as occasions and seasons. The second suit should be a navy suit. I'm a fan of pinstripes, especially on navy, so that to me would be acceptable, although some say you should wait until you have more suits. After those two, it is pretty open as to what colors can be bought. A nice tan or khaki is good for a summer color that will make you stand out from the gray and blue crowd. As far as material, a wool suit is the standard. Stay away from the higher quality wools for daily wear though, such as Super 120s and Super 150s, as these will wear out quickly compared to the coarser, less expensive weaves. The main suit I have seen worn that speaks to the lack of knowledge of the wearer is a black suit. These suits will either make you look like you are straight out of a trendy, modern designer ad (like Prada or Armani) or that you are on your way to a funeral. So, keep in mind the rule that black suits are for funerals and formal occasions.


The Shirt
The shirt may seem like the simplest part of the suit ensemble, but there are several variations to the shirt that can make the overall outfit look better or worse. While pockets are not absolute faux pas, having none will give the shirt a more tailored and elegant look. As for cuffs, I prefer double cuffs, or French cuffs, for business formal. These are much more formal than the typical single cuff, or barrel cuff, worn by nearly every man in a suit. Also, the need for cuff links, which will be discussed further down, give an additional chance for individualism as well as a possible point of conversation. For the collar, a simple pinpoint collar with stays, or collar stiffeners, is the best choice. Button-down is far too casual and also looks a little strange with a tie, in my opinion. As far as other types of collars, like spread or cutaway, it all depends on what kind of face and neck you have. For example, someone with a short neck and round face should not wear a spread collar as it will emphasize the undesirable traits. For collars, you would basically need to balance out whatever shape of face you have. This brings us to the topic of contrast collars, sometimes referred to as Winchester collars. These are very formal and should always been worn with a tie (i.e. not for business casual). Due to their formality, French cuffs look best. In addition, the cuffs should be white, as is the collar. This just provides a little more "balance" to the shirt. As a disclaimer, these shirts are often considered to be loud and carry an air of pretentiousness with them. Not everyone thinks this, but since some do, it would be wise to refrain from wearing such shirts to an interview or to a new place of employment. For interviews, a plain white or light blue shirt works best. Obviously, the white shirt is the most versatile when it comes to suit and tie combinations. As far as when/how to wear all the various stripes, checks, and different colors, it depends on the personality and skin tone of the person wearing them as well as the situation or atmosphere. Things become even more complicated when trying to match ties to such shirts, so I would advise looking elsewhere for that kind of information.


Ties
There's not too much to say about ties, as they depend mainly on the personality of the person wearing them, and also on the colors and patterns of the suit and shirt. The main thing that can be said about ties is that the knot depends either on the situation or, more importantly, on the type of collar that is being worn. The Windsor knot is a very wide, thick knot. The Windsor usually works best for spread collars, but not pinpoint collars. Since the Windsor knot has a certain presence to it, almost demanding attention, many say this is the knot that should be used in situations like interviews or important presentations, in order to convey an air of confidence. I tend to think that the knot should be determined more by the type of collar than by the situation. Another problem with the Full Windsor is that it uses a large amount of the tie material, which leaves very little to tuck into the label or holder on the reverse side of the tie. Then there is the Half Windsor knot, which is slightly thinner than the Full Windsor. I have never used this knot, so I can't really say whether it works with any collar as some claim. The most common knot, probably because it is so simple and quick to tie, is the Four in Hand knot. This is the knot that you will most likely see on any man in a suit. This is the knot I use on a regular basis. One thing to be careful of is that the knot can be small with thinner fabrics, like silk. A final word about ties would be to pay particular attention to the length of the tie. I often see guys wear their tie very short or very long. The tie should always hit the belt. If you can, aim for the angles created by the triangular end to just hit the very top of the belt. The signature of a well-worn tie is the presence of a dimple in the middle of the top of the tie, vanishing into the knot. This just takes some practice to accomplish, but when perfected, shows to everyone that you are no novice and that you take your appearance seriously.

Cuff Links
Cuff links, like ties, are another chance for personal expression in an outfit that otherwise might feel like a uniform. The points I would emphasize is to be a little more reserved with cuff links, even if you have a life-of-the-party personality. If you walk into an interview with large, colorful cuff links, you may end up making yourself look gaudy and classless. Depending on the color of your watch and/or wedding band, gold or silver links are probably the best choice. Of course, this doesn't prevent you from choosing shapes or symbols that have meaning to you. The other possibility, if you absolutely need to have some color, is to use fabric knots. Matching these with your tie can create a nice combination without becoming tasteless.

Shoes
With so many different types of shoes out there, I will not attempt to say which type is more formal or which is more fitting for certain types of suits, etc. However, there are just a few simple rules to follow when buying dress shoes. Always go for leather soles instead of rubber. While the rubber soles may give you an expectation of longevity, this is probably false. Once the rubber wears down, it will be hard, if not impossible, to replace. Leather soles, on the other hand, can be replaced infinitely. The leather sole also speaks to the quality of the shoe. When looking for a shoe, always avoid "box" toe shoes. Kenneth Cole Reaction shoes are a nice example (of what not to wear) that pops into mind. The shape I like most is somewhat pointed, in that it extends a little past the actual toe line, with a rounded tip. This creates a longer shoe that looks elegant rather than stubby. The most important thing to realize with a pair of shoes is that, if cared for properly, they can last decades. This nature almost makes them an investment. The best tips on keeping dress shoes in excellent condition is to place cedar shoe trees in them immediately after removing them, keeping them in cloth shoe bags, and giving them a good polish every once in a while. The cedar shoe trees help maintain the shape of the shoe as well as absorb excess moisture created throughout the day. The cloth bags, of course, keep off dust and simply protect the outside of the shoes when not being worn.


While these rules may come off as too in depth, or if you believe that no one will notice, I would say that is partially the point. The hallmark of a good suit or outfit is that no one will notice the suit or how good it looks, only that you as a person look excellent. It takes several different pieces coming together in a particualr way to achieve this - hence the attention to detail. Finally, one should realize that these rules do not always have to be followed exactly. These are just a combination of rules I have learned combined with personal preference and experiences. Hopefully, these rules will help provide a basis for creating a versatile business wardrobe as well as providing an extra amount of professionalism.

Ramblin' Tracks #1: Down-tempo

I don't know about you, but I have a hard time doing anything in complete silence. Whether its reading, studying, working on projects, checking the internet, whatever. While I can handle lyrics to a degree, I like to listen to stuff that's a little more down-tempo or instrumental when I'm doing these things. So here's a breakdown of the first installation of Ramblin' Tracks, Down-tempo edition:

1. Halcyon + On + On - Orbital/ This song is a little old, but its one I've always enjoyed. I originally heard it from the soundtrack for The Saint.
2. Half Light - Low with Tomandandy/ Another song from a soundtrack (Mothman Prophecies), this played as the end credits rolled. Probably one of my first exposures to Post-rock...at least, I would categorize this song as post-rock.
3. Untitled - Interpol/ Interpol has some amazing songs, but the guitar on this one and the subtle build-up made it irresistible. This song is actually what attracted me to their Turn on the Bright Lights album.
4. I Will Follow You Into the Dark - Death Cab for Cutie/ Great song, despite the fact that the lyrics can sometimes distract me from whatever I'm doing. I think the video with the rabbits was what originally intrigued me.
5. Hide and Seek - Imogen Heap/ Found out about this one from mtvU. No actual instruments, just acapella with a vocoder effect. Despite that, it still has a very melodic sound to it. Because of that, you can choose to listen to the lyrics or not.
6. Svefn-g-englar - Sigur Rós/ Has to be one of the greatest bands around. They create sounds you can't find anywhere else and they seem to find the perfect combination of lyrics and melody to keep it interesting without being distracting.
7. [Vaka] - Sigur Rós/ So great I had to put them twice...although, listening to just one track of ( ) is an injustice. It is one of those albums that you have to listen to all the way through, because each song is connected to the last but still somehow different.
   

Meeting Etiquette

Meetings. For some reason unbeknownst to me, people often want to have meetings...in person. I would much rather sort things out through e-mail or phone before taking the extra time to set up a meeting. Because I'm anti-social? No; more because nothing gets done in a face-to-face meeting, at least in my experiences.

For example, for a group lab report, my fellow group members wanted to meet at the library. So, I showed up and after 15 minutes, all we did was divide the work amongst ourselves...and that was it. We then ended the "meeting" and left. So many times I have been sucked into non-productive meetings that, beyond being a waste of my time, have left me fairly pissed off.

I think if people adhered to the following, meetings would be more productive, and everyone would be happier:

1. Electronic Means of Communication: Before calling a meeting, use e-mail, cell phones, conference calls, maybe even chat rooms, to try and achieve whatever goals need to be met. Too often this "step" is skipped summarily.
2. Remove Distractions: Sometimes, a meeting is necessary. If that's the case, everyone should turn off/ignore Blackberries, cell phones, and laptops (or at least the internet part of laptops). I have been stuck in so many meetings that get drawn out because people seem unable to disconnect themselves for even 10-15 minutes to accomplish the task at hand. It also comes across as disrespectful, as many of the Blackberry users I know tend to zone out, even while others are talking directly to them, in order to focus on whatever it is Blackberry users focus on (Blockbreaker).
3. BANG IT OUT: If you are going to have a meeting, be prepared to come in, get it done, and leave. I'm so tired of the constant hemming and hawing over some mundane detail for half an hour. You would think an agenda would help with this, but that is usually not the case. I think this is usually because some people like to hear themselves talk or just disagree for whatever reason, rather than legitimate concerns being raised.

So, go forth and follow these rules. The other people at your meeting will thank you for it.

First Post

Here it is, 2008, and I've finally jumped on the blog bandwagon. I guess it was mainly my daily reading of several other blogs that I felt I could at least equal in intellect, and in my own mind wit. That, and I figured I needed another hobby outside of finance/investing...don't want to burn out at the new job.

So, what can you expect to find here? Politics, investing, work-related posts, interesting articles, maybe the occasional video, and plenty of my own thoughts, ideas, and rants on a ton of other topics.

With that, off we go...