Updating the “Magazine Cover” Indicator

Rocky occasionally peruses his favorite magazine store for investment truths using the “Magazine Cover Contrary Indicator.”  Unfortunately, Rocky’s local store doesn’t sell Time, Newsweek or Business Week.  Rocky’s local magazine store sells mostly lurid  ”periodicals,”  ”videos,”  and cigars.

Hence, Rocky needed to develop his own contrary media indicator — independent of  bulls, bears, and cleavage.

He found one!!

Bloomberg Radio occasionally adjusts their hourly market summaries.  Bloomberg  no longer even mentions the overnight change in the Japanese Stock Market (up 15% year-to-date);  but instead they quote the “yield spread”  on defaulted Greek Bonds. For Rocky, this is a very bullish omen for Japanese stocks. And it also means that Greece is irrelevant. (Rocky also noticed his local magazine store has increased its inventory of extremely lurid Shukanshi.)

[Disclosure: Rocky NEVER gives investment advice and he reminds readers that sometimes a "Cigar is just a cigar."  However, he confesses that this "radio indicator" contributed to his decision to recently buy some Japanese stocks (currency-hedged) such as the DXJ and NKY Japanese Stock ETF's.  He may stay with this position for a long time, or he may spit it out tomorrow like a bad cigar.]

Guess this object and win!

Rocky’s been busy lifting large boulders, and then seeking medical assistance for the consequences of lifting large boulders. He apologizes for his recent blog silence, and offers another “Guess this object” contest as a goodwill gesture to his loyal readers.  As always, the reader who correctly guesses the object will receive a unique prize of dubious monetary value.

Hint: The dimensions are 30cm x 30cm x 30cm.  The yellow material is chamois (genuine). Inside of the object is a flashlight and a Poland Spring water bottle filled with 50% anti-freeze (Prestone) and 50% water. A piece of asphalt shingle is on the top of the object. And the stripes are “designer” duct tape.

[Disclosure: Rocky rarely uses duct tape with designer colors. As Trophy Wife will attest, he's strictly a grey-sort-of-guy.]

Help wanted: advertising copy writer

From OpenTable (the restaurant guide/reservation service):

“Bistro Z is the premier destination restaurant in Westchester County. We exceed all of our guests expectations by serving only the finest quality food.”

Rocky wonders: “How LOW can expectations be?”

Why Groupon resembles a ‘roach motel’

The term Roach Motel (“where roaches check in, but they don’t check out!”) was coined by Black Flag pesticides in a decades-old advertisement.  Judging from Rocky’s recent experience, Groupon membership is quite similar.

Groupon (GRPN) went public recently after some substantial kerfuffles with the SEC. In their IPO filing, GRPN said that they had over 50 million subscribers as of December 2010 (page F-37 of SEC Form 424B4) and by September 2011, that number had grown to 143 million!!  Notably, in 2009, GRPN had only 152,000 subscribers (of which 43,000 made purchases) whereas in 2011   29.5 million purchases were made by the 143 million subscribers. This means purchase activity among Grouponers declined from 28.3% to 20.6%. (If one considers that 16 million customers made multiple purchases, the activity percentage is declining much faster.) That GRPN paid people real cash to “join,” and that they have never been profitable is beyond the scope of Rocky’s “roach motel” insight.

Rocky doesn’t  like crowds, and he didn’t like being one of the 143 million Grouponers.  Also, as a bald man,  he loathed  the daily 20%-off Groupons for hair removal services. (There were never any discounts for hair retrieval services.)  Fed up,  he tried to “cancel” his Groupon membership yesterday. Alas, there was NO ability to do that on their website, nor were there ANY  instructions on how to cancel membership.

Rocky sent an email to GRPN “customer support” with the question: “How do I cancel (and close) my Groupon Account?”

The response:  ”You will no longer receive any promotional emails from Groupon. Please note that in the future you may receive transactional emails regarding past or future purchases made though your account and important business announcements that could affect your rights as a customer. You may receive an email if we update our privacy statement or our terms of service.”

Presumably this means that GRPN still numbers Rocky as one of the 143 million, but they won’t send him any more emails for nail salons, cooking classes, and discount sushi.

Gone, but not forgotten….

The cancellation experience reminds Rocky of  Antony’s speech from Shakespeare’s Julius Caesar,  ”I come neither to bury Groupon, nor to praise them. But the evil email address that Groupon captures lives on after them.”

[Disclosure: Rocky never provides investment advice and currently has no Groupon stock position. He notes, however, that Black Flag Roach killer comes in both "fragrance free" and "fresh pine scent."  Here, he smells a rat.]

The hair-raising secret for achieving higher SAT test scores

If you’re about to spend $2,000 on a Kaplan SAT prep class, save your money. Rocky shares an untold, hair-raising secret which will improve one’s SAT score for only $4.99.

Last weekend, Rocky drove his youngest daughter to her SAT test.  The crazed, competitive, collegiate- co-ed-to-be carried the consummate commodities:  pencils, calculator, wristwatch, ID card. She also carried the non-essentials:  banana, bag of veggie chips.  bottle of water. Additionally, she brazenly brought  the  backup bag: a dozen spare pencils, spare batteries…

The duo set out on the drive to the test site when Daughter suddenly screamed: “Stop the car. I need to go back home!”

Was this a case of sudden-onset diarrhea? Or perhaps a life-changing revelation that she wanted to skip college and launch the next Apple Computer Company?

Neither.

“Dad – I need a spare Scunci for my hair,” she said.

(Scuncis are those elastic bands that hold long hair in a properly coiffed manner. As Rocky is bald, he views them as useful only as sling shots and holding car tailpipes in place when the rubber hanger fails.)

“You’ve GOT to be kidding,” said Rocky, thinking that Trophy Wife’s frequent  caveats about Bad Hair Days had finally hit home. (Rocky failed to imagine the dire consequences of a  Scunci  that goes  “snap” — somewhere between reading comprehension and vocabulary. Would Daughter suddenly be blinded by her ample golden locks? Might Rocky suffer legal liability if an out-of-control Scunci went sailing across the room and injured a fellow test-taker?”)

Grumbling about “women,” he drove back  home and waited patiently (listening to NPR’s Car Talk), while Daughter ran inside to get a spare Scunci.

Later that day, Rocky asked Daughter about the test, and he also asked which was more useful: the banana or the spare Scunci…

“It’s really good that I had a spare Scunci,” Daughter said. The desks were incredibly tiny and my pencils kept rolling off them and falling on the floor. I used the spare Scunci to tie my spare pencils together and it surely boosted my score by at least 100 points!”

[Disclosure: Indiviudal results may vary.  Unlike the Kaplan Prep Class, the Scunci Company doesn't offer refunds if  SAT scores fail to improve.]

What to do with an old computer?

An old Dell computer has sat in the corner of Rocky’s home library for months. Rocky promised Trophy Wife that this unsightly dust magnet would eventually “disappear,” yet even Rocky’s trusted Computer Guru won’t carry the box away. The Computer Guru explained that no charity would want such a relic.

What to do? Rocky lists some possible uses for the “low profile” desktop computer:

1. It weighs about 15 pounds. Perhaps it can be used as a “medicine ball” … to be tossed back-and-forth in the gym?

2. In lieu of bricks, it could be placed in the trunk of a car…providing added traction for winter driving.

3. It can be donated to Habitat For Humanity and used as a substitute concrete block for new construction.

4. It can serve as a step stool to reach the top shelf in the pantry.

5. It can be used as a space heater to warm up the bathroom floor on cold mornings.

6. It can serve as a standing platform for meditation and yoga. Alternatively, smashed with a sledge hammer, it can provide a more effective release for life’s frustrations.

7. It could be buried in the backyard as a time capsule for future generations to find.

 

 

The Best of Beethoven

At dinner this evening, Rocky’s daughter reminded her father that he’s been promising to buy her a CD with all nine Beethoven  symphonies — for months. Rocky’s a terrible procrastinator. Especially when it comes to spending money.

Admittedly, some kids want iPads. And some kids want  new cars. And other kids want a shopping trip to Abercombrie & Fitch.  Rocky’s daughter wants the complete symphonic works of Beethoven, which is both  financially much less demanding and slightly amusing.

But — it’s not so simple. There are actually more Beethoven recordings than Baskin & Robbins’ ice cream  flavors…

There’s Von Karajan — with his iconic 1963 recording with the Berlin Philharmonic (digitally remastered so only one’s hair dresser knows for sure that it’s actually analog. )

And there’s Leonard Bernstein. With his “idiosyncratic” 1960′s recording with the New York Philharmonic.

And there’s John Eliot Gardiner with a 2010 recording by the Orchestre Revoltionnaire et Romantique.  (but that sounds FRENCH. Ugh!)

And the list goes on and on and on and on….Amazon has dozens of choices … Philadelphia Orchestra, Cleveland Orchestra, San Francisco Symphony, London Symphony, etc etc etc.

 

[Disclosure: Rocky picked  the Von Karajan Deutsche Grammaphon recording, and purchased it from a vendor who undercut Amazon's price! P.S. Rocky's daughter has no relation to Linus.]

How to prepare for financial armageddon? (Bring your own socks)

In light of the ongoing European financial crisis, Rocky is pleased to learn that the European Central Bank now provides visitors to their headquarters with a “hard hat” at no cost! However, they do ask visitors to  ”wear socks.”

No mention is made whether visitors must empty their pockets of spare change upon entering.

For a full text of the ECB’s dress code, see “What to wear” at:

http://www.ecb.int/ecb/visits/how/nep/html/index.en.html

 

 

 

 

 

 

 

 

 

 

Lady Marmalade

Skinflint. Miser. Penny-pincher. Frugal.  Tightwad.

All of these adjectives describe Rocky in most matters. However, Rocky throws open his wallet and spares no expense for three important purchase categories:  automobile tires, bath towels, and orange marmalade.

During her recent two-day trip to London, Trophy Wife’s marching orders were clear: find a jar of Fortnum & Mason’s finest Orange Marmalade, and carry it home for Rocky’s (discount) crackers and crumpets. 

Trophy Wife scored a bottle of “Wake-Up Marmalade”  early in the day, and all was well until Heathrow Airport Security seized the jar from her luggage as a “security threat.” Horrified, humiliated, and fearing the “Wrath of Rocky,” she ran to the Airport’s Duty-Free Shop, where she fortuitously found the marmalade section next to the Cuban cigars and over-priced single malt scotch. Unfortunately, the Duty-Free Shop’s marmalade selection was sparse, and she  selected a jar of Sir Nigel’s Orange Marmalade.  (Fortnum & Mason produces more than 40 marmalade varieties.)

From the marmalade bottle: “Noted 1920′s actor-manager, Sir Nigel Playfair was used to getting what he wanted – like the thick-cut, tough-guy marmalade remembered from his childhood rather than the effete flapper versions fashionable at the time.”

After sampling the marvelous marmalade on generic Stop&Shop water biscuits, Rocky agreed that he would no longer consume “effete” American marmalade . A tough guy like Rocky deserves  a tough-guy marmalade. But in a show of tenderness, Rocky thanked Trophy Wife profusely for her valiant efforts, and gave her a sticky peck on the cheek.

[Disclosure: Terrorists should note that airport security will detect explosives dissolved in blood orange marmalade . ]

David Hasselhoff, Baywatch & California finances

A recent article in the Orange County Register reminded Rocky of the glory days from  Baywatch , (the most-watched TV show of all time.)

The newspaper article explained that being a REAL lifeguard may be a better gig than being a TV lifeguard!

From the newspaper story: “According to a city report on lifeguard pay for the calendar year 2010, of the 14 full-time lifeguards, 13 collected more than $120,000 in total compensation; one lifeguard collected $98,160.65. More than half the lifeguards collected more than $150,000 for 2010 with the two highest-paid collecting $211,451 and $203,481 in total compensation respectively. Even excluding benefits like health care and pension, more than half the lifeguards receive a total salary, including overtime pay, exceeding $100,000. And they also receive an annual allowance of $400 for “Sun Protection.” Many work four days a week, 10 hours a day.

The article continues: “On face, the compensation packages for these guards are staggering. But take into consideration the retirement benefits being paid to currently retired lifeguards and lifeguards who will retire at these pay levels in the future and the problem is further compounded. Lifeguards are able to retire with 90 percent of their salary, after only 30 years of work at as early as the age of 50.”

The entire story can be found here: http://orangepunch.ocregister.com/2011/05/10/lifeguarding-in-oc-is-totally-lucrative-some-make-over-200k/44783/

[Disclosure: Although Orange County generously provides a $400 "sun protection" allowance, Rocky notes that they do not yet provide a plastic surgery allowance. Pamela Anderson wannabes should take note...]

New terror threat: snowglobes

Trophy Wife snapped this photo at a major NY airport, and then emailed it to Rocky. No word whether her Blackberry was seized during the ensuing pat-down search.

It’s good to see that the TSA has adopted the international “No Snow Globe” symbol.

[Disclosure: Rocky always carries a Pez Floaty Pen -- which is effective at filling out Government Forms, and earns compliments at serious Corporate Board Meetings. Rocky fears that the TSA ban on Snowglobes may spread to Floaty Pens. If that happens,  he'll switch to a Crayola Crayon. ]

Good news (gospel) saves Baptist savers

Rocky notes the Shiloh of Alexandria Federal Credit Union currently offers a 5.05% APY 1-year CD.

How can they offer such a high rate? Probably because they have no full-time employees, and they’re only open on Saturdays and Sundays from 9:30 to noon.

Additionally, to join this credit union, you must be a member of the Shiloh Baptist Church of Alexandria, Virginia.  The credit union does have NCUA deposit insurance (which is equivalent to the FDIC.) See: http://www.shilohfcu.com/savings.html

Since Rocky neither lives in Alexandria, nor is a Baptist, he cannot take advantage of this fabulous deal.

[Disclosure: Rocky avoids engaging in Faustian bargains. However, he acknowledges that high interest rates are an  innovative approach to increase church attendance!]

CPI shows women & children first?

The Captain of the Titanic supposedly said, “Women and children first!” when directing his passengers to the lifeboats.

Rocky, (hardly a chivalrous fellow), thinks recent Consumer Price Index data demonstrate “Women and Children LAST!”

He notes that women’s and children’s apparel prices are declining at a noticeably faster rate than men’s apparel prices. (See the bottom three lines of the chart above.) Although Rocky continues to wear the same ragged grey sweater and chinos, Trophy Wife may find this data to be an impetus for a visit to the shopping mall.

Rocky theorizes that women can wear men’s clothes (which support the price of shirts and pants), whereas most men wouldn’t be caught dead wearing a dress or skirt. However, if this trend continues, Rocky’s miserly nature will prevail, and he’ll try on a kilt or two.

Calculator batteries & tax returns

IRS data show an epidemic of  “math errors” on personal income tax returns. 

During calendar year 2007  the IRS  counted “only” 3,885,505 mistakes. Yet in calendar year 2010, they counted 10,554,735.  That’s a shocking 272% increase in arithmetic mistakes. The full IRS data set can be found here: http://www.irs.gov/taxstats/article/0,,id=207345,00.html

The IRS says math errors “include a variety of conditions such as computational errors, incorrectly transcribed values, and omitted entries identified during the processing of returns.”

Rocky wonders whether the epidemic of errors is due to the widely reported declining math skills of Americans. (“One-quarter of students at undergraduate and graduate levels believe that 1 divided by 5 = 5.”) Or perhaps it’s due to the increasing use of Turbotax (thanks to Treasury Secretary Geithner.)

[Disclosure: Rocky always changes his calculator batteries before starting his tax return, and highly recommends this practice for other law-abiding citizens. The IRS data did not disclose how many of the math mistakes identified were in favor of the government!]

Efficient markets meet efficient yogurts

At the behest of his daughter, Rocky sampled his first “Pinkberry” frozen yogurt in New York City’s Greenwich Village on Sunday. Pinkberry has a cult following, and it was time for Rocky to audition for the cult.

The small cup of plain with two toppings cost $6.25 — and while Rocky found the concoction uninspiring — he found the profit potential intriguing.

An unscientific 10 minute demographic survey revealed all of the customers in the store were ultra-skinny women under the age of 30 and just one skinny man (whose attire and makeup were sexually ambiguous.)  Judging from their fluency in Pinkberry nomenclature, all were regular customers. The tiny store was grossing over $300/hour — on a cold, rainy March afternoon!

Rocky started salivating. Not from the yogurt. From the profit potential!

But before he could grow lascivious about live cultures, Rocky looked out the window and noticed two stores across the street with “Opening Soon” banners in their window.  Red Mango and “YourGurt” had Pinkberry’s prodigious profits in their sights.  A frozen yogurt war would soon commence – and monopoly yogurt profits would undoubtedly become the first casualty….

[Disclosure: All that glitters isn't gold, and all that shines isn't Pinkberry pomegranate with strawberries. But the jingle is worth a listen: click here. ]

Rocky’s coif makes the Financial Times

Rocky’s daughter insists that Rocky is fake. He has a fake name. He has fake friends. He even has fake hair.

On the last point, a real reporter at the Financial Times agrees. Ms. Lindsay Whipp wrote a serious article in Wednesday’s FT about Japanese Government Bonds and quoted Rocky:

See- http://www.ft.com/cms/s/0/88bf1d5a-3eac-11e0-834e-00144feabdc0.html#ixzz1EtdJxVVH

The bald facts

Numerous investors who have shorted the Japanese government bond market have lost lots of money, writes Lindsay Whipp.

Some, such as US-based hedge fund manager who writes a blog under the pen name Rocky Humbert, literally lost their hair.

In 1996-97, he took a bearish view on JGBs. He recalls: “I aged badly, went bald and kept waking up my wife to check my Bloomberg.”

However, he had a very profitable 2008, having learnt “how markets can move in ways that don’t make sense to ‘reasonable’ people”.

[Disclosure: So is Rocky "real?" As the Clairol ad goes: Only his hairdresser knows for sure!]

A Jerry Seinfeld Index Fund

Rocky tips his hat to the uber-quants at Barclays Capital for creating an “index” (fund) that only Cramer (of Seinfeld fame– not Mad Money fame) could have dreamed up.

From their website: (see:  https://ecommerce.barcap.com/indices/index.dxml )

The Barclays Capital TOM™ Long Index invests in the relevant underlying equity benchmark Index on the close of the 4th business day before each month end and closes this position 3 business days after the same month end. The Long Index is not invested during the rest of the month.

The Barclays Capital TOM™ Long/Short Index takes a short equity position on the close of the 11th last business day before each month-end and closes this position on the 5th last business day before month-end. It then takes a long position Index on the close of the 4th last business day before each month end and closes this position 3 business days after the same month end. The long/short index is not invested during the rest of the month.

BarCap also has a series of funds aptly named the “Barclays Capital Astro Index.” This inspired Rocky to propose the following variations of this bizarre approach towards so-called “investing”:

1. The Rocky Moon Fund (Buy on the New Moon, Sell on the Full Moon).

2. The Rocky Blue Moon Fund (Sell EVERYTHING on the Blue Moon, buy it all back 1 day later).

3. The Rocky Lunar Eclipse Fund (Buy on the eclipse, sell 2 hours later).

4. The Rocky Solar Eclipse Fund (Stare at a solar eclipse and buy health care stocks.)

[Disclosure: Rocky acknowledges that markets rise and markets fall. But flipping a coin  may well be a  better approach than investing based on the day of the month. Statistics don't lie. People lie with statistics. ]

Blended whiskey meets blended crude

American v. London Crude Price

An interesting oil trade reminds Rocky of the song “America” from West Side Story (the Broadway show): “I like to be in America!  OK by me in America!, Everthing free in America! For a small fee in America!”

Rocky notes the price of WTI crude oil in America is at a record discount ($15/barrel) to London’s “Brent”  Crude Oil —  even though the London oil is worth slightly less to refiners. Oil’s not  yet “free in America,” but 17% is a remarkable discount.

Some  production problems in the North Sea and an inventory overhang in Cushing, Oklahoma explain  this discrepancy. Since America imports crude oil, Rocky believes it’s just a matter of time before cargos get diverted  from the USA to Europe, and this price spread collapses. Hence, Rocky is slowly buying crude oil futures in America, and shorting crude oil futures in London.

If the spread doesn’t collapse in the next few months, Rocky’s Plan B is to fill his many empty Scotch Whiskey bottles with crude oil and “deliver”  the recycled bottles to London…(which will also force the aribitrage to close.)  Of course he’ll have to convince airport security screeners that  the duty-free bottles of crude oil don’t pose an in-flight threat, and will explain that instead of a blended whiskey, it’s the  ”Brent blend.”  He’s also prepared to hear  the TSA Agent recite Anita’s words from West Side Story: “I know a boat you can get on.” See: VLCC.

[Disclosure: Rocky never gives investment advice, and these sorts of trades entail considerable risk not to mention a nasty hangover.  Nonetheless, this trade is a "Rocky V."  (See "definitions"  tab at the top of this page.)]

Reduce the deficit: sell the White House

Zillow.Com is a nice website that “values” properties across the country. But sometimes Zillow gets a little too cheeky.

Their “zestimate”  for 1600 Pennsylvania Avenue is $251,617,000. For only a monthly mortgage of $1,036,276, you can enjoy 16 bedrooms and 35 baths in this 55,000 sq. foot mansion. (Built 1752).  See: http://www.zillow.com/homes/1600-pennsylvania-avenue-washington_rb/

Zillow says the White House market value declined  25 % since the peak of the housing boom. Hence Rocky believes  it’s a great time for value-oriented condo-developers to swoop in. (“Great views, working fireplaces, bullet-proof windows, great yard for the kids and dogs….)

[Disclosure: Rocky continues to shop for a nice vacation home, but he hates DC's muggy summer weather.]

$7.2 Billion — This does not compute!

Mrs. Picower voluntarily agreed to return $7.2 Billion to the Madoff Trustee Recovery Fund.  As one of the largest beneficiaries of the fraud, she made the correct moral choice — but what was her real motivation?

Rocky figured this out!

He discovered that Mrs. Picower’s copy of Quicken Personal Finance Software crashed.

Quicken cannot handle dollar amounts larger than $99,999,999.99. Hence the $7,200,000,000.00 sitting in Mrs. Picower’s account was causing her computer to crash!

 Rather than rebooting the computer, she decided to boot the cash to the other victims.  For technical details, see: http://quicken.intuit.com/support/articles/using-quicken/reports-and-graphs/483.html  (The technical term is “maximum supported value.”)

[Disclosure: It's difficult to imagine a checking account balance of $7.2 Billion. It's even more shocking to realize that at  1% interest rates, she's accruing interest at $200,000 per day! It's worth noting that TurboTax does not list a "maximum supported value" so Internal Revenue Service Agents can relax...]