Archive for August, 2010

The Undertow Bank

August 25, 2010 5 comments

Rocky received an email  that Shore Bank had been seized by the FDIC, and his account had been safety transferred to “Urban Partnership Bank.”

Rocky previously sang the praises of Redneck Bank which sends new depositors a free beer can holder, pays 2% on its money market account, and has NOT been seized by the FDIC. Redneck Bank is from a “red” state.

In contrast, Rocky surmises that Chicago-based Shore Bank got “in too deep” with the loan “sharks,” and was eventually was swept out to sea. Some news reports even suggest that the Chicago-based bank had questionable ties to President Obama and other pols. See:

The email from Urban Partnership Bank isn’t too promising either. It begins:

It has been a very busy Monday here at Urban Partnership Bank, formerly ShoreBank. We are pleased to share with you that our new bank remains committed to meeting your banking needs and to the mission of serving low and moderate income communities. We will also continue to support energy efficiency and environmentally-friendly development.

[Disclosure: Rocky wishes that the “mission” of  taxpayer-funded FDIC-insured banks was to lend money only to credit-worthy individuals and businesses.  Instead of focusing on energy efficient lightbulbs, perhaps checking the loan documents should be a higher priority?  Rocky also notes that without FDIC insurance, he would  not have an  account at Shore Bank.  This is an example of “moral hazard.” ]


What’s for lunch?

August 17, 2010 26 comments

Rocky recently returned from a brief visit to the United Kingdom.  Despite the proliferation of  Starbucks and McDonald’s,  the quintissential pub lunch still survives (for better or worse). In this case, it was for the the worse, although a pint of proper English Bitter helped wash it down quickly.

Any reader who correctly identifies the name and contents of this “classic” pub sandwich, will receive a unique prize of dubious monetary value.

Hewlett Packard: its calculators & its stock

August 7, 2010 10 comments

Rocky purchased his HP12C Financial Calculator 25-years-ago,  and the calculator has been a loyal, trusted and always-present companion ever since.  It witnessed and assisted in life’s most important moments: 

  • It  computed the per-carat cost of Trophy Wife’s engagement ring; and the closing costs of The Humbert Family Estate. 
  • It calculated the required vitamin pills during pregnancy, and the travel and parking time to reach the local hospital.
  • It provided a “Discounted Present Value” for a lifetime supply of Rogaine.  ($11,000);  the cooking time for a gargantuan slab of discount bbq meat (3 days); and the hours required on a treadmill after eating the slab of meat (3 days).
  • It inspired The Second Law of Rocky.
  • It deserves credit for  every successful (and unsuccessful) arbitrage that Rocky executed over the past 25 years.

Desite dents, scratches and worn feet, HP12C never let Rocky down.  Yet suddenly,  two days ago, age caught up to HP12C. The display dimmed,  and commas/periods randomly appeared and disappeared. 

Even though Trophy Wife hates Reverse Polish Notation “RPN,”  she recognized the dangers of an unreliable financial calcuator, and located the tiny replacement batteries in a nearby town. Alas, new batteries did not fix the problem: HP12C was approaching the inevitable end of its life…. (Sentimental readers: the YouTube Video of the Byrd’s song “Turn Turn”  is here: )

But in calculators, as in life, there is always a silver lining!  As HP12C faded, Rocky studied the financials and prospects of HP Corporation (HPQ), and concluded that it could be an interesting investment… if entered at the right price. 

Amazingly, this opportunity occurred just one-day-later  … as the CEO resigned amidst a sexual harrassment/expense account scandal.  Rocky started buying HP stock around 6pm ($42), because the stock lost $11 Billion (11%) in value on the news. He will buy more if it keeps declining solely because of this resignation news.  (The stock is trading at 9x earnings, so that means Mr. Market attributes $1.22 Billion in EARNINGS and $19 Billion in SALES to the just-departed CEO.  Rocky thinks Mr. Hurd was a fine CEO, but he is neither Steve Jobs nor Warren Buffett, and the reaction presents a Rocky I opportunity.)

[Disclosure: Rocky doesn’t believe that the disclosure of his future purchase of a HP calculator constitutes material inside information that will impact HP’s stock price.  He appreciates that the CEO’s expense account irregularities could be just the tip-of-an-iceberg of  problems. And he never provides investment advice. ]

No dis-inflation on Wall Street?

August 5, 2010 2 comments