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The Cody Blog: June 2006

Friday, June 30, 2006

What Year Is It?

Why can't Apple simply put the year the album was released in the spot where the year the album was released is supposed to go? I marveled a long time ago at the wonders of Tivo's showing what year each show comes from. iTunes supposedly gives me that option, but albums such as Boz Scaggs' debut which I think came out in the late 1970s was released, according to iTunes on October 18, 1988. I have to google each album and spend minutes looking for what year they actually were released. How hard can this be, Apple? And another thing, put in the name of whoever wrote the damn songs since you offer us that viewing option too.


Cody on RM: Breathtaking Rally

Breathtaking Rally
06/30/2006 9:43 AM

Paranoia strikes deep, Into your life it will creep
It starts when you're always afraid, You step out of line, the man come and take you away -- Buffalo Springfield

Put simply, it stinks to be wrong, but that's no reason to change your strategy. I was wrong in thinking the Fed announcement wouldn't be a catalyst. It was a catalyst, and it was a big one.

I spent most of the night beating myself up for having missed a chance to profit off that announcement. Heck, I even considered buying some Semiconductor HOLDRs and QQQQ on Wednesday when they were both trading poorly and had been trashed the day before. But I didn't, and that upsets me.

To be sure, I wouldn't have used much capital on such a trade at all, as I've explained that it doesn't make a whole lot of sense for me to risk hard-earned gains at this juncture.

This setup of mine is new territory for me as a hedge fund manager. As long-time readers of my columns know, I've spent most of the last nearly four years aggressively long, using lots of common stock and calls in what some would call high-beta tech stocks and what others would call speculative, high-risk tech stocks. From my long-held Apple and Google positions to JDS Uniphase and Tellabs, which I also owned and traded around for years, I've been very aggressive on the long side. I've had long-term positions and I've put on short-term trades, often right before an earnings report.

And that approach, as my practically nonexistent personal life and the omnipresent knot in my stomach attest, is difficult and scary although also often profitable. In April, after a huge first quarter, I felt like I went ice-cold into the first quarter's earnings reports, and no matter how good a grasp I had on the fundamentals, I felt that the market wasn't rewarding my analysis. Seeing commodities and commodity companies go into parabolic blowoff-top mode and then interviewing the CEOs of some of those commodity companies and hearing endless commentary about how this cycle is going to be "different" and perhaps "secular," I pulled my chips off the table for the first time in years.

I told Larry Kudlow on TV and wrote here on the site about that move and explained it at times as "wanting to catch my breath." And, up until yesterday's huge rally, which I missed, I was really enjoying my newfound inhale, exhale pattern.

Now comes the test. I've got investors, readers, subscribers, friends and family who want to know when I'm going to get back into the market with some gusto again. I can feel the pressure building after the Nasdaq spiked 3% yesterday. "How could you miss something so obvious?" ask some of them. Others say, "I told you so." And yet others want to know, "So, is it safe to get back in now?" Even my friends Bob Marcin and RevShark unwittingly added to the pressure last night. Bob, when he pinged me last night rightly reminding me how he repeatedly told me that we'd spike after the Fed met and that I should be high-fiving him right now. I agreed. And RevShark, when in his column last night rightly chastised those of us who doubted the market would or even could rally post the Fed.

So much for catching my breath.

The fact of the matter is that, as longtime readers of my column also know, I'm going to be wrong a lot. Certainly anyone who takes a stand about the market, the economy, stocks or anything else will often be wrong. I was wrong yesterday, and it makes me upset, and the pressure that comes with it now builds.

But pressure is a terrible catalyst to trade on, and I'm not going to play that game. I'm going to continue to strive to just be cool, and not be goaded into making any trades or even market calls simply to meet the expectations of anyone else, whether readers, investors, emailers, blog commentors, editors, or anyone else at all. You should do the same.

At the time of publication, the firm in which Willard is a partner was net long GOOG and AAPL, although positions can change at any time and without notice.

CNBC's High Net Worth, Sunday at 8pm EST

Hey, I mentioned it Tuesday, but wanted to highlight again -- I went in and filmed a fun segment about American capitalism for CNBC's "High Net Worth with Tyler Mathesin" yesterday morning. Also on with me is Michael Santoli from Barron's. Pretty thrilling to sit down with those two men to discuss stocks, you know?

Anyway, hope you'll check it out (though I wish I'd made a joke about Warren Buffett's love of Coke and Burgers when we got to that topic...) this Sunday, July 2 at 8pm EST on CNBC. Shoot, tell a friend to watch even.

They also replay it at 11pm, btw.

Tuesday, June 27, 2006

The Cody Cam on CNBC Wednesday

I have to say, I sure am having a blast with this TV stuff. If you haven't caught the "Cody Cam" clips on Kudlow & Company, I hope you can this time. As long as it's not raining tomorrow morning, we'll be filming the latest "Cody Cam" segment for CNBC's Kudlow & Company tomorrow morning at 9am outside Rockefeller Center tomorrow where they film the Today Show. And then I'll be on the show from the studios in NJ tomorrow to show the clip at 5pm-6pm. Hope you'll tune in.

Also, I'll be on CNBC's High Net Worth with Tyler Mathesin Sunday night at 8pm EST this Sunday, July 1. (They replay it at 11pm and 2am EST also).

Cody on RM: Changes Will Drive Our Future

Changes Will Drive Our Future
06/27/2006 3:58 PM

I can't remember before '49,
But I know that '48 was there,
My ears let in what I should speak out,
Hmmm, there's something in the air. - The Who

The trashing of the world's financial markets has us all questioning the sustainability of the ongoing bull market and economic boom times. We all look around and wonder if we're about to melt down like we did in 2000. Or maybe we'll crash like we did in 1987, and head into a recession like we did in the early 1990s. Heck, maybe we're doomed to a 1930s style depression.

These are serious issues and matter to all of us as investors, traders, employers, employees and citizens of the global economy. But are things really that bad? Is the world really teetering on the edge and our economy and society really that fragile? The short answer is a resounding no. We must not lose sight of the reality of this economy and society and how bullish both really are for our financial markets.

We often hear commentators say that the current market or economy is similar to the market or economy back at some other time period. They'll argue that 2006 is a lot like 1996, because the Fed's raising rates and the economy's cooling. Or that this time period is parallel to 1933 because the U.S. savings rate, in the way that our bureaucrats report it, has turned negative. Meanwhile, anyone who ever proclaims that it's "different" this time gets filleted for not having learned from the bubble. Well, despite the risks of becoming a piece of sushi, I'm willing to call it like I see it, and I'm here to tell you that it's a very different time, and that difference is a reason to believe that our stock markets, economy, and society are heading to all-time highs.

The fact is that, over time, just about everything does change. Here's a big change that nobody really knows how to reconcile with the past: We got off the gold standard back in the early 1970s, and the implications and ramifications of having a fiat currency are ignored when people make economic comparisons to times past.

And that currency debate is changing today, even though nobody's really writing about how big the change is going to become, because now that Google has rolled out GBuy to compete with eBay's PayPal, the two have created what in some sense could be argued to be a new class of currency. And MasterCard and Visa have made short-term debt freely available to the majority of the population, and we have to wonder how relevant the U.S. fiat currency, currently the world's standard, will be in another 70 years, when some young money manager will be arguing that any parallels to the first few years of the new century are specious at best and silly at worst.

Let's underscore a few more differences to times past.

In the 1930s, less than half the world's population could even read. Today, more than 80% of the world can read. And most of that 80% is in the developed world. And most everyone in the developed world now has access to the Internet in some form or another. And that means they have unfettered access to all the information the world has to offer, and that they can contribute to that information. And as all that information flows around, and lies, corruption, fraud, and other wrongs become increasingly difficult to carry out on any type of a large scale because everyone is watching everyone and can now reach out to everyone else. And that alone is another hugedifference, and yet another one that makes me more optimistic about the future of my stocks and economy.

In his piece yesterday repudiating 10 bullish arguments , Doug Kass wrote that the 1950s were "placid" and that today "is increasingly fraught with continued risks of terrorism, political change and other factors that will weigh on commodity supplies." I completely agree that our time is far different from the 1950s, but I believe we live in a much more placid time, and that placidity makes me more bullish than I would be otherwise because capital and information can continue to flow mostly unfettered during these times of relative peace.

In the 1950s, the southern U.S. was terrorized by the KKK and other terrorist groups who were born and raised right here on this country's soil. Not to mention that the developed world had just lost tens of millions of young, productive men to World War II, which came just a couple decades after the first. I will say that firsthand experience of terrorism weighs on my life and mind, but I don't think it's anywhere near the terror that folks must have felt in those world wars, though such a statement is purely anecdotal and impossible to quantify. More importantly, I think these terrorist concerns do impact the multiples of stocks (and boost the price of oil tremendously), and that as those concerns are alleviated, multiples will expand, driving the stock market in general higher over the coming years and decades.

Both today's, as well as the 1950s' political changes seem to me to be all about rooting out evil and corruption, although today's movements are driven by the fact that there are now billions of us who can report on such political and social evils. That means there's much less violence, death and war in these political changes. I think that the political changes in the world are increasingly positive, driven first and foremost by the aforementioned free information flows. These trends and the technologies driving them are now fully entrenched and aren't going to just disappear tomorrow. Someday, far, far in the future, probably, but not tomorrow.

Doug Kass wrote about the impact the differences in the time periods will have on commodities. I don't know how all of this will weigh on commodity prices, but my best guess is that with more than a billion people who can read, learn and invest in commodities and the incredible capital flow that follows, that the commodity cycles of years past are going to discounted and played out in much quicker time frame. Jim Rogers says 16-18 years is typical. In the modern, connected, literate world I believe that cycle will be cut by at least half. That would be another big change and one that would work to the benefit of all of us, both consumers and enterprises who consume the finished goods in which those commodities go into.

I really do hesitate to write all of this about how different it really is, because I fear the stigma that comes with being overly optimistic. I think that most people who argue against ever saying "it's different this time" are looking at a much broader picture and have their time frames messed up. Indeed, I agree that the economic dominance of the US will at some point be threatened by our endless borrowing and fiat currency. Every fiat currency in the history of the planet has eventually gone worthless, as the political reasons for devaluing a currency in the short run at some point always get the best of those in power. At some point. For all we know, that point could be 300 years in the future. Or thirty years in the future. So in that's sense, yes, I agree that it's "never different this time." But you have to frame that statement with time. And that time frame is mostly irrelevant to the near and intermediate term.

In all seriousness, with things getting so ugly and pessimistic, it's high time that we remind ourselves that we are indeed living in the most wondrous time full of more opportunity for more people in more places in the entire history of the planet. The single most important reason to be excited and bullish about the long-term future: We've got a lot more work ahead of us to keep the changes going. Let's get on it.

P.S. I want to note that I'm using the "mean" vs. "median" in regards to those literacy rates. I could very well use the same argument as Barry Ritholtz made when he grabbed some random report from some bureaucrats somewhere that shows the top income earners are growing richer at a faster pace than those below them. Following that same logic, I could sound the alarm bells about how it's the developed world that's getting a higher percentage of the world's literate population, but, just as it is when discussing incomes, it's not a zero sum game. The point being that we should all cheer for everybody everywhere to get more and learn more. And as most of the world is indeed getting and learning more, I see yet another reason to be excited about the future.

At the time of publication, the firm in which Willard is a partner was net long GOOG, although positions can change at any time and without notice.

Friday, June 23, 2006

Cody on RM: Break From The Herd

Administrator's Note: In his RealMoney Blog Cody rants on the money management business selling its soul:

By Cody Willard
RealMoney.com Contributor
06/22/2006 2:04 PM

Break From the Herd

Wall Street has always been a bunch of lemmings who copy whatever system has been working and attempt to further systemize it and then scale it for profit. And just like corporate group-think has all but ruined the music business, it is also a major threat to the markets and our economy. As the monies at stake have scaled to historic proportions, the growth of systemized money management has been exponential.

In particular, there are the fund-of-funds that have systemized the management of hundreds of billions of dollars. These systems lead these fund-of-funds managers to select only those money managers that will put money to work in accordance to the fund-of-funds expectations, and that leaves no room for free-thinking or flexibility, two traits I believe are valuable on Wall Street.

Running institutional money and want to change your approach because your analysis dictates such? Tough. Stick with the system that got you the money or the fund-of-funds will pull that money, regardless of your performance.

I've had systemic money in my fund before, and I kicked it out after they hounded me for being overly flexible. I'm serious. These system managers have no time and place for free-thinking and flexibility. In my approach to the market (and in my approach to life), I strive to be independent and free willed, and I have sacrificed size for flexibility.

Of course, the record-breaking decline in volatility over the past few years abetted the growth of many of these systems, and that cycle fed itself, delivering steady returns that appear to be "safe."

So what does Wall Street, in its endless greed and systemization of everything go and do? Rather than adjust, these managers try to juice those returns by levering up. And not just at the money manager level, but at the fund-of-funds level. So levered up money gets levered up, and the "safe systems" feed on themselves, further juicing those returns and "proving" the value of those systems.

In a similar vein, just this morning several new ETFs were launched that are double levered up, as Roger Nusbaum noted earlier. I often write about the virtues that the democratization of, well, everything, that the Internet and cheap computing brings about. But it's not all virtuous. These levered ETFs formally mark the introduction of levered systems to the masses.

Maybe this all works out smoothly and maybe even if it does get ugly it won't be for years to come. But music provides a case study here. Record labels spent millions convincing the public that the Simpson girls have a place in music. But they have since been reminded -- and harshly! -- that the public will only accept systemized groupthink until it doesn't. And then it gets ugly indeed. I worry that Wall Street's current trends, at the institutional and retail level, have our markets headed down this same path. As Dylan wrote: "Live by no man's code, And hold your judgment for yourself, Lest you wind up on this road."

I would love to get a dialogue about all of this going in our town hall of blog commentary. Are you running money? Are you part of the systemization of running money? Are you sure that is something that will pay off in the long run?

The Cody News (June 23,2006)

Drilling Firm Seeks Favor as Expatriate

Published: June 23, 2006

WASHINGTON, June 22 — The language in the House measure seems innocuous enough. Tucked into the Coast Guard budget bill, it says merely that Section 608 ( c ) (1) "is amended by striking the second sentence."

Okay, here we go AGAIN. So let me try to get this straight. Nabors moves its "tax headquarters" and "legal headquarters" so they don't have to pay taxes into our system. But they've greaseed enough Republican and Democrat pockets that they seriously think they can get a permanent exception to another law that some other crony had put in place to keep non-American companies from competing for US business. Please, please, please -- enough of the cronyism of the two mainstream parties.

9/11 Suit Tests New York Stand on Immunity

Published: June 23, 2006

A federal judge heard oral arguments yesterday on the city's motion to dismiss a lawsuit brought on behalf of more than 8,000 firefighters, police officers and construction workers who say they were harmed by exposure to toxic substances while working at ground zero.

I spent too much time down on Ground zero in the days right after 9/11, and I am worried about my exposure to those toxic substances. I should do something about that. Guess I'll have to spend some of my own money to do so, since I don't use public assistance (except for those unavoidable roads and schools and etc etc) and I don't have but "disaster" health insurance with a $5k deductible. Regardless of the finances, this toxic substance stuff scares me, because I remember how strange and bad it smelled down there after the towers collapsed.

For Dealer, Stolen Maps Point Way to Jail

Published: June 23, 2006

NEW HAVEN, June 22 — A map dealer who specialized in finding elusive treasures for rich collectors admitted in federal court on Thursday to having stolen 97 antique maps worth more than $3 million from more than a half-dozen universities and libraries over the last seven and a half years.

The b*lls on that guy, eh? Simply stunning. You can't make that type of stuff up.

Knicks End Year of Disharmony

Published: June 23, 2006

Larry Brown was cast as a savior when he came home to coach the Knicks last July. In the months that followed, he came to be viewed instead as an enigma, an agitator, a failure and, finally, a pariah.

I've long argued that Isiah Thomas, as great as he was, is the single most over-rated basketball player in the history of the NBA. I'm not going to bother arguing that anymore. It's too easy to just point out how he screwed over everyone in the CBA and how badly he and Dolan have messed up the Knicks. Larry Brown or Isiah Thomas? And Dolan goes with Isiah? Wonder how many trades for dudes from his era Isiah will put on the sheets this year. Wonder if Isiah will be able to convince Dolan not to fire him when he misses the playoffs by 20 games next year? Isiah disgusts me at this point. I think I'll move on.

Thursday, June 22, 2006

Cody on Kudlow & Company (June 20,2006)

Administrator's note: We've got clips from Cody's June 20th appearance on Kudlow & Company uploaded.

Click here for the first clip.

Click here for the second clip.

Wednesday, June 21, 2006

The Cody News Special Edition: The Death of the
Two Party Political System is Nigh!

Timber Becomes Tool in Effort to Cut Estate Tax

Published June 21, 2006

WASHINGTON, June 20 — In a new attempt to permanently reduce the estate tax on inherited wealth, House Republican leaders moved on Tuesday to win over crucial Democrats with a tax sweetener for timber companies.

Let me try count the ways that this upsets me:

1. Why are we subsidizing timber companies at all?

2. And are they serious about paying each other off like this in public -- vote for this bill, and we'll hook you up with a bunch of money for your croni, er biggest donors?

2. Why is the Democratic party, which pretends that they aren't as sold out to corporate America every bit as badly as the Republican party is, willing to be so upfront about this crony-ized horror?

3. Shouldn't the folks like, uh, Democrat big head, John Kerry who try to create alarms about things 40 years in the future to redistribute our wealth to their corporate cronies who benefit from that alarm be all over the timber companies for supposedly screwing up our environment instead of throwing nearly a billion frickin' dollars at them?

4. Why do I feel like I'm the only person who freaks out about how utterly criminalized the Dems and the Repubs -- each and every one who's willing to run under one of those parties -- appear when I read this stuff? Self-introspectively-speaking here for a moment, I always feel so isolated and confused around election time. Why do you vote for Republicans if you hate this type of stuff too? Why do you vote for Democrats if you hate this type of stuff too?

I know what you're going to say. Something about how it's always been this way and that you're voting for the lesser of two evils. But doesn't that mean that you're voting for evil? I don't want to vote for evil. I want to fight evil, don't you? So shouldn't we be fighting these evil-doing politicians in the Republican and Democratic parties instead of embracing them in any way shape or form?

Isn't the best way to do that to stop voting for them, and if you're an honest politician (naively or not, I do believe they exist, at least until they sell out to one of these parties) shouldn't you get out of these parties?

Does the Internet and the fact that I can write this and you can read this and then we can discuss this freely and, most importantly in regards to the change, EASILY in the comments change everything? I do believe it does! The death of the two-party political system is nigh!

Ah, long live democracy. Finally.

Friday, June 16, 2006

CW in FT: Free Downloads Are Worth Their Weight In Gold

Every day brings an article about how music labels, video studios or book publishers are facing new headaches caused by the content revolution. But they aren’t headaches – they are opportunities, and, luckily for everyone, the opportunities are so large that pretty much everyone in the content business is going to win, writes Cody Willard. | Read

Cody on RM: What's On My Mind

Administrator's Note: As a parting shot into the weekend, here is a post from Cody's Trader's Edge Blog on RealMoney this afternoon:

By Cody Willard
RealMoney.com Contributor
06/16/2006 3:29 PM

What's On My Mind

It's a beautiful afternoon here in NYC, and given that I remain mostly in cash, the action is dead out there today, and my parents are in town for the first time in years, I'm going share what's on my mind and then head out into the weekend.


Has the Fed's incessant jawboning of inflation this week already undermined its efforts at jawboning because it was so incessant as to become transparent?

Is Bernanke as classic a textbook economic thinker as it appears?

Does the Fed think about all of the change the unedited, unfiltered and freeflowing information in our society is having on their policies -- and how that is undermining its ability to control what the public reads?

And much, much, much more importantly, does it ever think about the effect that free-flowing information will have on the economy and society?

Are corporate spreads really indicating health? Or are they simply a trigger waiting to be hit by the rolling dislocations that have struck seemingly every other financial market?


Doesn't it make you nervous when you realize how ridiculous that last bullet point seems given how healthy and strong the corporate bond market has been?

So, from a trading perspective then, is the healthy corporate bond market really a healthy stock market signal? Or is it one giant complacency indicator?


How close is Apple to hitting critical mass in the legal digital video download business when we start reading articles that start off like this: "Three hours before a start against Florida, Colorado Rockies pitcher Jason Jennings sits in front of his locker, puts on his headphones and stares at his video iPod."

Isn't how much memory and processor power the new Vista system requires exactly what a believer in the coming Vista, dual-processor upgrade cycle wants?

I mean, seriously, what's with everybody talking as if they know that there aren't one, two, ten or a hundred new killer apps out there that Vista, dual processors, unlimited memory and fiber speeds will unleash?

Given the history of the ongoing technology and information revolutions and the amazing fortunes society and the economy creates, doesn't it make more sense to invest on the flipside of that "knowledge" and practically assume that there will be many new killers apps unleashed in the next year, two years, 10 years and beyond?

Am I the only one who gets butterflies of excitement and potential when he starts picturing that future?

At the time of publication, the firm in which Willard is a partner was net long MSFT and AAPL, although positions can change at any time and without notice.

The Video Revolution Will Be Televised

Administrator's note: We've got the "Cody Cam" clips from June 14th's Man on the Street segment on Kudlow & Company uploaded.

Click here for the first clip.

Click here for the second clip.

Click here for the third clip.

Wednesday, June 14, 2006

Cody and the "Cody Cam" Will Reemerge Tonight

Administrator's note: Cody and the "Cody Cam" will reemerge tonight on Kudlow & Company. Hope to see you there.

Monday, June 12, 2006

Cody on Kudlow & Company Tonight

Administrator's note: Cody will appear on Kudlow & Company tonight, along with Jordan Rohan from RBC and others.

CNBC Unveils the "Cody Cam"

Administrator's note: We've got the "Cody Cam" clips from last week's Man on the Street segment on Kudlow & Company uploaded.

Click here for the first clip.

Click here for the second clip.

Click here for the third clip.

Friday, June 09, 2006

Death to New Music Fridays

On Tuesday this week, I was on the street talking to strangers in front of the Apple store with CNBC. I quickly figured out that the best way to put people at ease was to first ask a very simple question: “Do you like music?” No surprise that every one I talked to answered affirmatively. I badmouthed radio to an older couple who told me they love the radio. The thing is, I’m utterly sick of Top 40 music. Isn’t everybody?

I remember when my brother was starting his first heavy metal band in high school that my mom told him that he needed to make sure they covered some Top 40 songs so that people could relate to them. I got to thinking about that logic a few weeks ago at a dinner with a group of Hollywood and music agents and managers as they debated the future of the business of music.

The debate covered topics that I’ve been writing about for a long time, from the decline of bundling to piracy to immediate access to all music ever recorded. Now the first two topics are obviously negatives for the music industry, and one look at what has been a steady, several-year-long decline in music sales tells the story clearly. But the latter point is finally starting to kick in and I think the music content ownership business might be in better shape than I’ve previously argued. That is, I was wrong that the value of music content would be more impacted by the former points than the latter.

A somewhat silly anecdote that I’d shared on Kudlow & Company the day I held up a hand-written sign saying “MSFT” saying that I wanted to pretend like I was on a 70s game show underscores the shift. You see, a few weeks ago, I had an epiphany. I don’t ever want to bother buying Top 40 music. I hear the very same songs in line at Duane Reade, in the elevator of my former office in a hedge fund hotel, when I visit my father’s animal clinic in New Mexico, in my car, in…well, you get the point. I got to thinking that there’s been about 40 years worth of Top 40 hits since selling music became a valid business model. 40 years of, say, 150 Top 40 hits per year equals out to about 6000 songs. All of which I think know every beat, rhythm and nuance of the music, not to mention a good deal of the lyrics you and I can both recite off the top of our heads. “I’m bad, I’m bad, you know it”? Why do we have to know who sang those lyrics? (It was Michael Jackson for those of you who want to pretend you didn’t know that already.)

And new music? Until I’d had my epiphany, I’d been writing a “New Music Friday” column on TheCodyBlog.com for months, as a lot of people send me new CDs and I figured I’d pass on some of the bands I get into.

But then one late Saturday evening when I’d turned on the “Classic Rock” station on my TV and pumped it out over my Bose speakers in my apartment, I’d heard this cover of called, “Time Has Come Now”, an eleven minute jam that blew my mind from 1967. How could I not have ever heard this song before?

I went straight to my iMac and pulled up the iTunes store and looked up this band called The Chamber Brothers. And I started downloading a couple of albums from the band. And every song I listened to got better, because the band had created art with their ALBUMS. Not this one song of theirs that became a Top 40 hit that I’d just not happened to have been privy to for some strange reason given my obsession with rock and roll.

And I realized, I don’t know anything about music history, despite knowing every Top 40 hit in the last 40 years note for note.

In my office, I’ve banned all singles. I’ve banned all music from 1982 and on. (Why 1982? Why not?) I almost always have music blasting in the background when I’m reading and analyzing stocks and when I’m writing these pieces for my blog. And from Bob Dylan’s amazing Nashville Skyline album to Curtis Mayfield’s smooth Curtis album, I’m in music heaven. Now that I don’t listen to Top 40 anymore!

And the label that owns the rights to the three albums by this Nick Drake dude that I’d never even heard of until I Googled “Best albums of 1970)? Methinks iTunes and the power of the Internet are probably the best thing that ever happened to them. If only because everyone who reads this post can immediately go purchase this “Bryter Layter” album with out even getting out of their chair because I’m going to put a link to it right here.

The Cody News (June 9, 2006)

With Oil's Cash, Venezuelans Consume

Published: June 8, 2006

CARACAS, Venezuela, June 7 — On a recent Sunday morning here, free-spending customers have emptied Vintage, a trendy upscale bar, of nearly all its best vodka. At the Castellana Chevrolet dealership nearby, buyers wait eight months to get the keys to cars they paid for long ago.

Confusing how this author seems to take some of the concepts of supply-side economics and writes as if this evil despot's methodical theft of the property and wealth of Venezuela's people has some parallels. While it's nice to read the anecdotes of how a few cronies and otherwise privileged few in the country are spending, Venezuela's certainly not in any type of cycle of empowering the "consumer".

None Too Friendly: Allegations Swirl At Ice Cream Shop

June 9, 2006; Page A1

WILBRAHAM, Mass. -- In a tweed jacket and paisley bow tie, 91-year-old S. Prestley Blake strode to the microphone at Friendly Ice Cream Corp.'s annual meeting last month. His voice quavering, he accused directors of "covering up" improper spending by the chairman. Executives gave the shareholder a frosty reception, interrupting him and even threatening to have him removed.

Sad story, but if the CEO's making self-dealing business transactions and using company money for private purposes, what leg does he have to stand on? It is what it is, no?

What Happens if Inflation Is Overstated?

Published: June 9, 2006

AMONG some Americans, it is almost an article of faith that the Consumer Price Index understates inflation — there are conspiracy theories about why that happens. After all, holding down the C.P.I. saves the government money in a variety of ways and hurts those with pension or Social Security benefits linked to the index.

Heads, the bulls win. Tails, the bears lose, I guess. Why does anyone even care what inflation rate is reported by the endlessly manipulated and adjusted and re-adjusted numbers from those who have political motivations to lie to the public?

At MoMA, Douglas Gordon: The Hourglass Contortionist

Published: June 9, 2006

THOUGH relatively few have seen it, and hardly anyone has sat through the whole thing, Douglas Gordon's "24 Hour Psycho" has become one of those mythic monuments — like Robert Smithson's "Spiral Jetty" or Vito Acconci's "Seedbed" — that embody the dreams, anxieties and aspirations of a generation.

Sounds trippy. I'm in.

To Find a Mate, Raid a Dungeon Or Speak Like an Elf

June 9, 2006; Page A1

Over the years, Mark Brown searched for Ms. Right in all the usual places: at parties, work functions and the occasional singles bar. He ended up meeting her inside a videogame.

The revolution! You see, every day, we're all growing closer. And that's the single best remedy to stop future wars, by the way.

Fishing on the Ubiquitous Ken Fisher

Got this email from a reader this morning. What a funny rant.

You want to know what is the worst thing to happen to me in "the market"?

Ken Fisher.

Not wipe-outs. Not spread. Not commissions. Not lousy advice. Not bad trades, late trades, missing trades, too-many trades. Not Black-Scholes. Not Yiddish. Not poor discipline. Not stock tips. Not greed and fear. Not bad record-keeping. Not phony hedging. Not Mr. Market. Not even being chucked into the "position trader" bucket by eTrade's software just for backing out of a few bad trades quickly. Not thousands spent on books. Not more thousands spent on subscriptions. Not who-knows-what spent on computers and multiple Internet portals. Not who-knows-what else spent on software, historical data, nice big screens. Not losing friends by yabbering on and on (and on) about the market.

No, Ken Fisher.

This guy is everywhere. Her's on TV. He's in my mail (he's in my MOTHER-IN-LAW'S mail). He's wrapped around otherwise entertaining Cramer StreetWatch shorts. He's staring back at me right now from my spam bucket -- "A Surprising Prediction by Forbes Columnist, Ken Fisher," courtesy of TheStreet.com's mailing list (this, by the way, is almost the best part, since he's paying, only to be chucked into the trash by Postini).

He smirks at me in my dreams. I can do his sales pitch from memory: "Which way is the market headed? Find out now. Hi, I'm Ken Fisher, twenty-year Forbes columnist and CEO of Fisher Investments, a multi-billion dollar, multi-product money management firm, serving prestigious institutions and high net-worth individuals. Get my latest stock market outlook. It's got powerful market insights you can use with your investments now. This is a (beat) limited time offer." He's taking over my brain! All hail Ken Fisher!


OK, Ken. I give up. You win. Send me the damn "surprising prediction." I already know what it says: "Hi, I'm Ken Fisher. Yuh wanna make money in the stock market? Easy. Whine, noodge, cajole, plead, beg, pester, kvetch, yammer, snivel, annoy. Crab, grouse, bellyache. Be everywhere. All the time. Smirk, smirk, smirk, smirk at everyone. Eventually they'll send you money just to shut you up. Or they would, if I hadn't thought of this first."

Thanks. I'm guzzling down the KoolAid. I feel much better now.

He's going to squash me like a bug, isn't he?
Jim B.

p.s. There is a "kenfisher.com" and... IT'S SOMEBODY ELSE!!! Har har har!!!

Thursday, June 08, 2006

Invading Protectors

Why does McAfee think it's okay to put up a pop up window on my Dell PC this morning with a 50% renewal offer on the software I pay them for, said software of course was supposed to keep pop up windows that offer 50% renewals off my Dell PC?

Wednesday, June 07, 2006

The Cody News (June 7, 2006)

Senate Contender in Florida Presses On

Published: June 7, 2006

VENICE, Fla. — Undaunted by a run of horrific poll numbers, staff turmoil and public doubts from leaders of her party, Representative Katherine Harris is thinking confidently beyond November.

Nothing's uglier than in-fighting over embarrassment. And on such a grandiose level too. You know, she only happens to be, single-handedly, one of the tiebreakers in who went on to lead the most powerful nation in the history of the planet vs. who has seeemingly chosen a self-imposed exile as the spokesperson for fixing Social Security because his cronies who want totransfer some wealth have found some scientists who have created "proof" that it'll collapse on itself in 2042. But take it seriously RIGHT NOW because, you know, we can see that far into the future.

Oh wait, he's a spokesperson for fixing the environment because his cronies who want to transfer some wealth have found some scientists who have created "proof" that it'll collapse on itself in 2042. But you better take it seriously RIGHT NOW because, you know, we can see that far into the future.

Silly me, sometimes I get confused about which party in power uses which panic-story because it wants to transfer wealth to its cronies who are paying millions to those telling us how scary the future is to convince that it's okay that they all keep stealing from us.

Enough already, no? (And yeah, I KNOW this was a major digression, but the silliness of the Harris lady running for Senate was a great segue!)

What Netflix Could Teach Hollywood

By David Leonhardt
Published: June 7, 2006
BETWEEN "The Godfather" and "The Godfather: Part II," Francis Ford Coppola made a movie called "The Conversation." It stars Gene Hackman as a paranoid wiretapper in Watergate-era San Francisco, and the cast includes Robert Duvall, a young Harrison Ford, the woman who played Shirley in "Laverne & Shirley" and the guy who played Fredo Corleone in "The Godfather."

I didn't see anywhere in this article where anybody gave credit to Chris Anderson at Wired, who told almost the exact same story using almost the exact same analogies....oh, about a year or two ago. Just sayin'

Class A Appearance for Clemens, First as an Interior Designer

Published: June 6, 2006

LEXINGTON, Ky., June 5 — When the Class A Lexington Legends staggered into their clubhouse at 3:30 a.m. Monday, bleary-eyed after an eight-hour bus trip, a few of them might have thought they were dreaming.

Clemens is far from perfect, but man, ever since I read about his workouts and work ethic as a high school athlete, I've been a huge fan. Sweet story.

Side Effects to a Remedy for Housing

Published: June 7, 2006

A State Superior Court judge last month stripped two Bergen County towns of their ability to enforce zoning laws and regulate development within their borders. He also demanded that officials read sections of a book by a Harvard professor who opines on fair housing, suburban planning and the virtues of activist judges. It's hard to be sure which of the two actions seemed more galling.

So, so so many ridiculous assumptions and arguments and points in this story. Get the government the hell out of housing so that the poor can afford housing, please. The only way for "affordable" housing to exist is to stop the inequities created by those in power. And that'll only happen when we all clue in to the transparent system of those mafiosos who keep the public convinced that the poor won't have housing unless those in charge choose who builds, who gets paid, where they can build, how much they can build....ah, the sweet feeling of freedom New Jersey style!

Friday, June 02, 2006

Cody on RM: Revolutions Make for Strange Bedfellows

Administrator's Note: As a parting shot into the weekend, here is a post from Cody's Trader's Edge Blog on RealMoney this morning:

By Cody Willard
RealMoney.com Contributor
06/02/2006 9:59 AM
Click here for more stories by Cody Willard

Oh, (I wanna show you) the different emotions,
(I wanna run to) the sounds and motions
Electric woman waits for you and me,
So it's time we take a ride, we can cast all of your hang-ups over the seaside
While we fly right over the love filled sea,
Look up ahead, I see the loveland, soon you'll understand.
- Jimi Hendrix

I believe Apple's going to take all kinds of market share from its biggest competitors, putting a serious crimp in its competitors' ability to make any money at all, much less grow.

I also expect that Google will take all kinds of market share from its biggest competitors, putting a serious crimp in its competitors' ability to make any money at all, much less grow.

And I happen to believe that Microsoft is going to take all kinds of market share from its biggest competitors, putting a serious crimp in its competitors' ability to make any money at all, much less grow.

YouTube.com? Huge market-share taker.

Yahoo!? Yup, gonna take market share.

P2P distribution? Yet another huge market share taker.

You see, Wall Street's got this Internet competition thing all wrong. Apple, Google and Microsoft are not each other's most important competitors.

YouTube.com's success isn't zero-sum with Yahoo's new user-generated video outlet.

And it's not as if Apple's biggest concern in growing its iTunes outlet is whether Yahoo! and Napster ever figure out that nobody wants to rent music but that they want to own it. GoogleTalk vs. Skype vs. Vonage? All are going to take huge market share and the first two will probably make their shareholders a lot of money.

"Alright then, Cody, who exactly are the losers around here?"

In video, the cable and satellite companies are going to lose huge chunks of viewership as their nearly 100% market share in video content distribution for the home has nowhere to go but down. I've mentioned this before -- I know I watch a little bit less TV these days as I watch a little bit more video on iTunes and YouTube and elsewhere on the Net.

Music? Well, I've been writing for more than two years that Apple is on its way to becoming the world's biggest vendor of music. It should pass Wal-Mart this year, right on schedule (well, my schedule from back in 2004 at least. Wait, did that prior sentence just outline how Apple's biggest competitor in music is ... Wal-Mart?! Yes, it did. That's who all of these Internet music distributors are competing against: the physical world retailers that still dominate music sales. But those retailers won't be a factor in music sales at all in 10 years.

Voice? The Bell companies and other originally tax-funded incumbents in this country still have more than 95% of the market. That'll be closer to 50% in 10 years, as I have written about before.

I was shocked to realize the other day, as I paid Microsoft for three sets of software at 99% gross margins for my new Apple computer that is running on Intel chips, that revolutions make for strange bedfellows. Apple taking share from the Wintel monopoly is actually a positive for Microsoft and Intel. Talk about "Flipping It!"

At the time of publication, the firm in which Willard is a partner was net long GOOG, AAPL and MSFT, although positions can change at any time and without notice.

The Cody News: Guantanamo, A Pock On Our Society

Tale of 5 Muslims: Out of Guantanamo And Into Limbo

June 2, 2006; Page A1
TIRANA, Albania -- After four years in Guantanamo Bay, Abu Bakker Qassim, a former terror suspect cleared last year of having ties to al Qaeda, got word last month that he finally would be set free.

Guantanamo Bay is a shameful, horrific violation of the Geneva Convention. But you know what? That’s beside the point. It is immoral and wrong to imprison people with no representation and no chance at justice.

Guantanamo Bay now holds around 460 detainees. These include four who have been declared "no longer enemy combatants" -- bureaucratic jargon for innocent. About 116 others, though not exonerated, are no longer considered a serious threat or valuable to U.S. intelligence.

On top of it all we’ve got innocent fathers, sons, brothers, and children being held for years even after they’ve been declared outright innocent. Are you frickin’ kidding me?

About a month later, Mr. Qassim and the other exonerated Uighurs were moved to less-severe quarters in nearby Camp Iguana. They could walk around without chains and were allowed to watch nature videos. News broadcasts were banned. Mr. Willett requested permission to send a Uighur-English dictionary and other language materials but was told this was forbidden. Defense Department rules bar inmates from developing any skill, even English, that might be used against the U.S.

Information flow. Education. Those are the best weapon against all forms of crime, including terrorism. Flip It™: Give these men access to every single piece of information they want. Teach them English! Bring them into the civilized world.

Mr. Willett appealed, and a hearing was set for May 8. With the legal pressure mounting, the government stepped up previously fruitless efforts to find the Uighurs a home. U.S. officials at one time considered letting the Uighurs into America, but that option was rejected "at a senior policy level" out of concerns over possible litigation and security, says a senior State Department official.

“At a senior policy level?!” Who?! We should demand accountability. Who made that decision?

Sending the Uighurs back to China was never an option, say U.S. officials. The State Department's annual report on global human rights, released in March, concluded that China had "used counter-terrorism as an excuse for religious repression of Uighur Muslims." It also reported that a Uighur sent back to China from Nepal against his will had been executed. The State Department's latest report on global terrorism, issued in April, now lists the East Turkistan Islamic Movement as a group of "concern."

Yes, China kills dissidents. And the best way to fight that? I suppose, we could take away all access to information and the ability for Chinese people to learn English just like the geniuses at the Defense Department think they should be doing with these innocent men who were wrongfully detained for years at Guantanamo.

Local newspapers splashed their arrival across the front pages. The opposition blasted the government for upsetting China. Two days after the Uighurs landed, Prime Minister Berisha met with Vice President Dick Cheney in Croatia at a gathering of three countries hoping to join NATO. The prime minister said Albania was ready to "pay any price" to join the alliance. Mr. Cheney said he endorsed the entry of Albania, Croatia and Macedonia.

Finally in the last section of the article, the reporter touches on the reality and roots of this shameful pock on the world—it’s all about rich white and rich Asian men’s politics.

The Cody News (June 2, 2006)

NASD Ends Case Against Quattrone

Published: June 2, 2006

Frank P. Quattrone, the most prominent banker in Silicon Valley during the 1990's technology boom, won a third major legal battle yesterday as securities industry regulators dropped all charges against him.

I couldn’t find there in the article just how many tens of millions of my tax dollars our fruitless government efforts at bringing criminals (whether that’s Quattrone or not I do not know but there was criminal misdeed done) to justice was wasted. Nothing irritates me more than these prosecutors who waste money and don’t get justice. As Andrew once asked me, and I now ask my assistants: “What business are we in?” (Andrew would tell you it’s the results business).

The Gauls at Home in Erin

Published: June 2, 2006

DUBLIN — This snug Irish capital might seem an unlikely destination for young French men and women. The weather would jar anyone from the Côte d'Azur. And the food is basically what the Michelin restaurant guide might consider a form of boiled stew.

Think Europe’s going to cause a World War III anytime soon with that kind of integration? Remind me again why we’re closing our borders to everybody?

Zaha Hadid: A Diva for the Digital Age

Published: June 2, 2006

ZAHA HADID has never built anything in New York. But to her followers around the world, that hardly matters. You can admire Renzo Piano's exquisite detailing or Frank Gehry's turbulent forms, but Ms. Hadid is architecture's diva, the most precocious talent in her profession.

Looks cool. I’m goin’.

At Duke, Coach K Avoids a Trap

Published: June 2, 2006

Typically a ubiquitous sermonizer on the choices young people make — from college to credit card to car — the Duke men's basketball coach, Mike Krzyzewski, has virtually gone underground since the charge made by an African-American woman that she was sexually assaulted by three white Duke lacrosse players while dancing at a team party March 13.

I happen to have a little bit different opinion of Mr. K and his reaming hundreds of student athletes for tens of millions of dollars to put into his own pocket. Why is it that Krzyzewski is the one making tens of millions of dollars in endorsements and salary while his students get some sort of BS education. Double entendre fully intended.

Which Bosses Really Care if Shares Rise?

Published: June 2, 2006
Investors should know how much the executive's wealth will rise if the stock goes up, and how much it will fall if the stock goes down.

We’re upset at CEO salaries, but not Krzyzewski's?