It's the Moopy and Mopey Show

Check this out!

I'm amazed at the enthusiasm, concentration and (dare I say) confidence this horse shows under pressure. Of course the rider has no small part to play. But this is collaborative- no one can force an animal to look that happy.

Who says discipline is a bad thing, for animals or people?

-Moopy

Read this

It's May. The Kentucky Derby is this weekend- just two days away- and I'm thinking about last year's winner, the great Barbaro.

Poor guy, he made it until January before they put him down. Long after the spotlight left him, after his tragic run at the Preakness May 20th last year.

I get teary-eyed just thinking about him. And why? So many feelings well up in me when I think about that day. Horror at the actual sight of the race favorite coming up lame right out of the gate. Shock as the understanding crept in about the seriousness of his injuries, apparent immediately from the jockey's ragged face- he knew his horse!- and the announcer's hushed tones. Maybe some disgust that these fine animals are bred a touch too delicately for their own good. And pure sadness that a great champion was cut down in his prime- a horse that had legend written into his performances, one that was going to make history. His glory was stolen from all of us.

Ultimately what I'm left with, though, is admiration. What kind of creature keeps on doing his thing when the chips are way down? Eats, drinks, patiently waits while being poked and prodded for days turning into months? Doesn't rear up in pain and fear at all the attention and physical manipulations that have become his daily life? Maybe it's easier for animals because they can't think about the future. They don't see the writing on the wall about their own fates, near-term or long. They react by instinct and training, and that's part of their programming.

Still one can learn from Barbaro's example. Better to go on with a daily routine despite the apparent futility as a demonstration of control and cooperation and dignity. Help the universe to help you, kind of a thing. Try not to think about what might have been (the past is long gone), but fight for your new future in whatever form it takes.

For heaven's sake DON'T go quietly into the night!

Funny how a horse can teach you so much about character and spirit......................

I'll be thinking about you on Saturday, Barbaro.

- Moopy

Hi Moopy:

I have much to say. Be warned!

First of all I want to apologize. Once AGAIN I mistook you talking about your fears to be more than it was. I thought you were getting cold feet and you wanted to boot the whole "plan" and totally start all over again with some other scheme (a scheme that looked frighteningly like the scheme everybody else has in their rulebooks and involved us staying in NJ).

So, I was trying to debate you point by point on why we shouldn't boot our plan, when in reality you were just sharing your fears. Sounds like a familiar situation huh? An unnamed husband giving advice and solutions when he should just shut the hell up and say "I hear what you're saying" every few minutes? :)

So I apologize for that.

But I really feel strongly about many of the things we are hashing through. Frankly I don't even have a strong view on what we do per se. I think I'm more concerned about being too absolutist in our thinking or being held back by our fears or other external things (like comparisonitis, "it's what you do", feeling out of the loop, we're in a cage of our own making and the door is open and right there--we just need to walk through it, etc. All of these euphemisms we use to describe why other people are deeply unhappywith life when frankly life is pretty good across theboard).

Also, my views mainly hinge on the argument that just because we think there's a chance (and honestly I think it's a really small chance, but I digress) we might not be happy with doing something "outlandish" (like quitting our jobs and travelling and having other amazing life experiences), it DOESN'T MEAN WE SHOULDN'T STILL DO THESE THINGS. If we want the experiences we should just go TAKE them (take what you want...isn't that what Moopy says?) and let the f*cking chips fall where they may.

Who's to say we won't be unhappy with doing the"traditional" thing? (I bet the odds of us being unhappy there are a lot greater than being unhappy choosing the untraditional thing--and keep in mind you can choose to go back and forth between universes too...more on that critical point later.) Granted if we choose the "traditional" road, we won't have the discomfort that comes with being outside the herd. We'll be a bit nutty and not have kids or whatever but we'll still be inside the the herd enough to avoid too much "discomfort". But isn't that just being "half a B------"? I'd rather go "zero B------" at least for a while and do some really really cool stuff and THEN we can go back to living inside the herd again later if we so choose.

I also think you should watch out for having too much of an "either/or" mindset. I really feel strongly about this. Our plans and schemes don't have to be all of one thing all the time (in the herd forever or OUT of the herd forever?). Our lives will have many phases and they can be whatever we want. Why do we NEVER have to go back to work once we quit? Who wrote that rule? And in addition to thinking of being non-either/or in a temporal sense (we quit for a while then work for a while, repeat as desired), we can think non-either/or in a current sense: maybe we work part time or even full time and live a diversified happy life someplace WITHOUT going in and out of the labor force. Or you can add permutations on top of that too (one of us lives in phases of work/quit/work/quit, the other works part time, repeat and switch roles as desired).

You see what I mean about throwing out the rules? Who wrote these rules about how you're supposed to work and live, and who says they have to apply to us (or anybody for that matter)? It is not arrogant or flippant to utter that--it is the truth. I truly believe that.

As an aside, the only time one makes a one-way decision in terms of being in or out of the herd is whether or not to have kids. Once you have 'em, you're stuck with some degree of herd life no matter how you slice it. But we've already solved for that variable, thus yet another door is sitting there right in front of us, wide open.

As for the money issue, I think there are many things we should hash out; both of us have issue we need to sort out together and severally. I think we both should re-read Your Money or Your Life and get our arms around the "Making a Dying" concept again as well as many of the other concepts in that book. I don't mean that in a condescending way, I really think we should once again put our minds into that book and its universe of thinking and roll it over a few times and make sure what kind of goals and dreams we really want.

This email is already too long but there are several talking points remaining!! :) I think we should put these down on our list of things to talk about overthe coming days/months/years:

* The "Budget" issue
* Our "Number" and why I'm beginning to think it doesn't matter all that much
* More review of the Waterfall/Reservoir method
* What we REALLY want to do with our lives
* How important it is to be careful when we "compare" ourselves to others--not just in standard of living and things we have/buy/do but in the broader sense of being in our out of the "herd"
* Any other talking points that Moopy wishes to discuss

Moopy, I know this is a work in progress, but I also know we are going to do some cool stuff together.

Love,
Mopey

One more chapter in the weighty tome of painful articles where the reporter, the editor and ALL of the sources they quote obviously know NOTHING about the subject about which they so authoritatively write. Make a man cynical about the media, doesn't it?

:)

Soapbox Mopey



November 3, 2006
New York City Marathon

Everything You Know About Marathons Is Wrong
By GINA KOLATA

Most runners have heard the marathon lore: Your time will be best if the weather on race day is about 55 degrees and overcast, or even drizzly. And avoid dehydration at all costs, because it will cause your muscles to cramp and you could collapse at the finish line.

But none of that is true, researchers said at a recent marathon medicine and science conference in Chicago.
The weather theory “needs adjusting,” said Scott J. Montain, a research physiologist at the United States Army Research Institute of Environmental Medicine in Natick, Mass.

“Most of what we know comes from the lay literature,” he said.

Thousands of runners are no doubt monitoring the weather forecast for Sunday, when the New York City Marathon makes its annual tour of the five boroughs. (As of yesterday, it looked promising, with temperatures expected to be in the upper 40’s and partially cloudy skies.) But the weather nostrums for marathoning that are cited so authoritatively in journal articles and textbooks are not always borne out in legitimate science. Montain and his colleagues set out to conduct a proper study.

They gathered data from 28 years of the New York City Marathon, 35 years of the Boston Marathon and 23 years of the marathons in Hartford, Vancouver, Duluth, Minn., and Richmond, Va. The routes for those marathons have barely changed over the years, and each had a large field — more than 10,000 runners. The investigators looked at the average times for the top three men and women, and at the times for the runners who placed 25th, 50th, 100th and 300th.

Elite runners ran fastest in the coldest conditions — 41 to 50 degrees. But the slowing effect with heat was not as great as had been previously reported. For every five-degree increase in temperature, times slowed by 0.4 percent.

Warmer weather had a greater effect on slower runners. On a 77-degree day, an elite runner would be about 5 percent slower than on a 41-degree day. But a runner who finished in three hours on a 41-degree day would be slowed by about 12 percent on a 77-degree day, finishing in 3 hours 21 minutes.

One reason, Montain said, could be that slower runners spend more time on the course, and the temperature generally rises through the day. Or it could be because slower runners tend to run with a larger pack. A tightly clustered group of runners generates heat and blocks it from dissipating. (HUH???? Here's the dead giveaway that nobody writing or editing this article EVER ran in a race.)

Montain and his colleagues also looked at whether marathon times were better under sunny or overcast skies. Only 13 percent of records were set on cool and cloudy days.

“It is more likely that a record will be set when it is sunny or when there are scattered clouds,” Montain said. He is not sure why that is; perhaps sunny conditions put runners in a better mood, he suggested. (Yep, I'm sure that's it...)

Then there is the issue of cramping, that often excruciating, spasmodic, involuntary contraction of muscles that can occur during or, more often, just after a marathon. It almost always involves the muscles that were used to run — the hamstrings or calf muscles, for example. And it can last a minute or two — or much longer.
Conventional wisdom says cramps are caused by dehydration and that the solution is to consume salt and drink more fluids. Not true, says Martin P. Schwellnus, a professor of sports medicine at the University of Cape Town in South Africa.

At the conference in Chicago last month, he reported that he could find no relationship between dehydration and cramping. He has studied cyclists, marathoners and triathletes, measuring levels of electrolytes and body-weight changes, both of which are indicators of dehydration. Those who cramped were no different from those who did not.

Two other studies looked at how much weight ultramarathon runners and triathletes lost during races — a measure of fluid loss and a direct indicator of dehydration. Those who cramped lost no more weight than those who did not. If anything, Schwellnus said, those who did not have cramps were slightly more dehydrated.

The cause of cramps, Schwellnus believes, is an alteration in the electrical signals going to exhausted muscles so that the balance between those signals activating muscles and those inhibiting them is distorted. One way to protect yourself is with proper marathon training and proper pacing. “Racing at too high of an intensity is one of the single most important risk factors,” Schwellnus said.

When muscles cramp, there is a simple and effective treatment: stop running and stretch that muscle. And, Schwellnus said, realize that the cramping will soon stop. (When I tell my doctor that I have knee pain or hip pain when I'm running, he tells me, "stop running." How helpful!)

“Almost no matter what you do, if you stop the activity, the muscle will come back to normal,” he said.
Beyond the finish line of every marathon are runners who feel dizzy, and some of them collapse. It is not as common as muscle cramps, but the condition can afflict up to about 5 percent of marathon runners, said Michael N. Sawka, head of the thermal and mountain medicine division at the United States Army Research Institute of Environmental Medicine. He wondered whether the cause could be dehydration, a commonly evoked mechanism.

Sawka looked at published studies. One compared 45 athletes who collapsed after an ultramarathon to 65 who completed the race and did not collapse. There were no obvious differences between the two groups: their body temperatures were the same (dehydration makes the temperature rise), as were their electrolyte levels. But those who collapsed were pushing themselves as hard as they could, were at or close to their personal records, or were medal winners in the race. Perhaps, Sawka said, “that final effort might contribute to collapse.”

The actual cause, though, does not appear to be dehydration, Sawka said. Instead, it is a pooling of blood in the lower legs and feet when vigorous exercise suddenly stops and the heart rate slows markedly.

Timothy Noakes, a professor of exercise and sports science at the University of Cape Town, said he had stopped giving intravenous fluids to collapsed runners.

“We completely changed the way we treat patients,” Noakes said. “All we do is have them lie down and put their feet higher than their head.”

Postmarathon collapse, Noakes added, “is a benign condition.”

“Just lift their legs and you will help the majority of patients,” he said. “That’s all you need to do to make most people recover very, very quickly. You can infuse as much fluid as you want, and you will not get the same response.”

Why is the middle class so "outraged"?

This is supposed to be a big issue in November '06 and the '08 elections too.

I liked how this article spelled out the basics: we're all better off than our parents and grandparents, and our kids are certainly indulged more than we ourselves ever were; there is tremendous jealousy created by a greater disparity between the classes, fueled by an overactive media; an increasing sense of entitlement based on a certain level of education or profession attained (I worked hard and I deserve it!, even if I can't objectively afford it); and the diminishing ability of each successive generation to defer gratification.

November elections are coming! I spent some time today learning about the Congressional candidates from around the country and from New Jersey in particular.

Read Tom Kean's blog to find out more about his views on taxes and immigration. I like his thoughts on taxes because you just can't deny that New Jersey taxpayers pay a large percentage of their income on various taxes: property, sales, income. Not sure what I think about the immigration issue- I see his point about respecting the law, but......gotta hand it to the "entrepreneurial" illegals who have the chutzpah to come over here and work their asses off for a better life.
See Bob Menendez's website to learn about his views on Iraq, energy/oil and the environment. I totally hear him on the bad choice to go into Iraq- I never thought in a million years they had WMD there- and to force democracy on random cultures around the world is the height of either arrogance, or stupidity. But now that we're there, I don't feel it would be wise to pull the troops out. Not all of them want to come home yet (THEY feel pretty strongly that it's their patriotic duty to be there, and who am I to say it isn't?) and I really feel that we should finish what we started there.

Poor Paul Aronsohn. He doesn't really have anything cogent to say, though he seems like a nice enough guy. See his video on YouTube.
Scott Garrett does scare me in some senses. He's a bit too socially conservative for me to fall in love with him. But I like his tax and business stances, and he's OK on the environment.

I can't help myself. I have to respond to this article from this week's Barron's.

This is their latest "REITs are overvalued and they're headed for doom!" article (Barron's 9/18/06) on page M4. More evidence that the people writing for this weekly are painfully clueless about investing. This post is a bit long but what I decided to do what post the unadulterated text of the article first, and then include another adulterated copy of the article with my impertinent retorts included in brackets:

Here's the article by itself for starters:
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When things are going badly at home, people tend to linger at the office. Investors seem to act the same way.

The well-advertised cooling--or, depending on who's talking, collapse--of the market for new and second-hand homes has done its predictable damage to the shares of homebuilder stocks and those of most every related industry. But commercial real estate, as represented by the real-estate-trust sector, has remained in avid demand.

The Dow Jones Composite REIT index is up nearly 20% year to date, 37% in the past two years, and has just about doubled over the past five. This gaudy gain has left valuations near record highs, dividend yields around all-time lows and the bears humbled. As noted last week (Follow up, Sept 11), Barron's noted a year ago that REITs looked toppy. That call hasn't worked out, in part because money keeps flooding into real estate funds.

Consider the numbers. Real-estate-oriented funds are handily the largest sector-fund category tracked by Lipper, in terms of total assets, with more than $67 billion in 276 funds. Adding in the $12.5 billion in real-estate closed-end funds, we get $80 billion in public fund assets devoted to real estate, mostly REITs.

All the real-estate-related segments of the S&P 500 amount to just over $400 billion, counting all homebuilders and even the home-improvement retailers, which account for about a third it. So assets in public real-estate funds total about 20% of the S&P's real-estate capitalization.

By comparison, there is $55 billion in health-care funds, or less than 4% of the sector's index weight. Dedicated sector fund assets for technology, energy and financial services make up similarly tiny portions of their industry's market value.

REITs appear to be too popular to come anywhere close to repeating their recent rates of return.

The heavy demand for real-estate equities in part reflects a zeal for scarce yield vehicles, particularly those that can increase their dividends over time. But more fundamentally it's a symptom crowding in the "alternative asset classes" that's raged since the stock market bubble burst.

Pension funds and others are giddy for direct real-estate ownership as a supposedly noncorrelated asset class that benefits to some degree from inflation. The research firm Private Equity Intelligence recently reported that cash reaised in real-estate private equity funds is on pace to set a record this year, with $32 billion raised so far and another $27 billion set to be raised, versus $45 billion in all of last year. This capital will be leveraged in the service of buying buildings around the world.

The same firm reports that in its survey of 300 current investors in real estate buyout funds, two-thirds said they plan to increase their allocation to the sector, with only 4% looking to trim exposure. All this will drive up purchase prices of properties, thus cutting potential future returns. Keep in mind, too, that unlike land, they are still making new commercial real estate. Just look at the cranes rising up on so many cities' skylines.

In an extensive report this month that attempts to test whether various alternative asset classes are in a bubble, JPMorgan's global strategy group suggests that commercial real estate is getting there but hasn't arrived yet. REITs' absolute and relative five year price appreciation has reached levels last seen in the 1987 and 1997 peaks in the sector, which were followed by steep corrections. Yields relative to long Treasury bonds are also about where they were at earlier tops. [Again would be nice to see some context here].

But REIT leverage is far lower than in earlier peaks, JPMorgan points out.

Real estate is a slow-moving market. REIT stocks have remained in firm uptrends that have proven remarkably resilient. And we've been wrong on the group before. But the stocks are getting far too widely loved and too broadly owned for the risk/reward trade to stay favorable.

Here's the article with my snarky comments. I just CANNOT help myself. :)
----------------------------------
When things are going badly at home, people tend to linger at the office. Investors seem to act the same way.

The well-advertised cooling--or, depending on who's talking, collapse--of the market for new and second-hand homes has done its predictable damage to the shares of homebuilder stocks and those of most every related industry [maybe I'm a total moron but I just nibbled at my first buy of DHI... Isn't the "collapse of housing" the most obvious and overly widely shared bear argument in history? Okay, maybe it comes in second to "the consumer is doomed/overextended etc"?]. But commercial real estate, as represented by the real-estate-trust sector, has remained in avid demand.

The Dow Jones Composite REIT index is up nearly 20% year to date, 37% in the past two years, and has just about doubled over the past five [funny but the WSJ AND Barron's have been saying REITs are overvalued for several, yes SEVERAL years...thanks so much for the advice!] . This gaudy gain has left valuations near record highs, dividend yields around all-time lows and the bears humbled. As noted last week (Follow up, Sept 11), Barron's noted a year ago that REITs looked toppy. That call hasn't worked out, in part because money keeps flooding into real estate funds [this is their version of an apology. "We're sorry we made you miss out on a HUGE move in a staid sector but it's not really our fault--it's those stupid retail mutual fund investors!!"].

Consider the numbers [okay, next will be a series of numbers that seem to add rigor to an argument, but are actually utterly irrelevant to whether the sector is under- over- or fairly valued.]. Real-estate-oriented funds are handily the largest sector-fund category tracked by Lipper, in terms of total assets, with more than $67 billion in 276 funds. Adding in the $12.5 billion in real-estate closed-end funds, we get $80 billion in public fund assets devoted to real estate, mostly REITs. [Thanks for the Numbers With No Context. Really useful. Now how about a graph or chart with some historical data here to help us compare? What is the rate of change? Are these assets exploding upward? Declining? Flat? Now THAT data might be useful.]

All the real-estate-related segments of the S&P 500 amount to just over $400 billion, counting all homebuilders and even the home-improvement retailers [irrelevant subsectors--we're talking about REITs here], which account for about a third it. [Okay, so the REAL number is $268b... maybe you could just say that?]. So assets in public real-estate funds total about 20% of the S&P's real-estate capitalization. [Uh, okay. So? More Numbers With No Context.]

By comparison, there is $55 billion in health-care funds, or less than 4% of the sector's index weight. Dedicated sector fund assets for technology, energy and financial services make up similarly tiny portions of their industry's market value. [specious data alert: health care, tech and financial services are all utterly out of favor right now and energy has only been in favor for a couple of years, not enough time for a critical mass of energy specialty sector funds to be created and marketed to mutual fund investors. Thus assets in all three of these sectors are below normalized levels and assets in sector funds for these sectors are going to be even more understated. This is a specious comparison, made worse by the lack of data for historical comparison. Maybe REITs sector funds have always been big relative to the size of the overall sector? I'd bet money that this is the case. It's an unusual asset class that pays lots of dividends and is particularly sought out by income investors. If you could make the case that REIT sector assets have exploded upward and are far higher than historical norms, then you'd have some ammo. Just saying something's big means nothing without context].

REITs appear to be too popular to come anywhere close to repeating their recent rates of return. [So? Based on ...? Just because they are bigger than other totally out of favor subsectors?]

The heavy demand for real-estate equities in part reflects a zeal [note the choice of the word "zeal". We at Barron's are cold and rigorous in our analysis. Those foolish investors out there are zealots!] for scarce yield vehicles, particularly those that can increase their dividends over time. But more fundamentally it's a symptom crowding in the "alternative asset classes" that's raged since the stock market bubble burst. [Yep those stupid herds of zealots out there rush from one asset class after it crashes--ie, tech--to another--ie, REITs--thus it's doomed to crash too. Also do you get the feeling that this article was hurriedly edited? The past couple of paragraphs don't really follow, and that last sentence is both ungrammatical and nonsensical. But maybe that's just me being a zealot. PS: look for more condescending phrases from those rigorous and "never a bullish zealot among them" Barron's folks in the next few sentences.]

Pension funds and others are giddy [Giddy? Who's giddy? Everybody out there but us anally retentive permabears on the Barron's staff of course...] for direct real-estate ownership as a supposedly noncorrellated asset class [yes a SUPPOSEDLY noncorrelated asset class...if that IS your real name...] that benefits to some degree from inflation. The research firm Private Equity Intelligence recently reported that cash reaised in real-estate private equity funds is on pace to set a record this year, with $32 billion raised so far and another $27 billion set to be raised, versus $45 billion in all of last year. This capital will be leveraged in the service of buying buildings around the world. [Uh and that's bad? In my mind they leave the more interesting question here unasked (and unanswered): Why all the recent interest in real estate by private equity? There has been at least one REIT takeout or LBO or acquisition a month for the past year (even more ironic to see all that buyout news next to WSJ articles calling for the death of REITs by the way). Why? Could it be that office real estate is undervalued? That REITs are also undervalued such that it's way easier and cheaper to take out a REIT than it is to put together your own portfolio of office properties? This is actually evidence for the bull case for REITs. These companies/equity funds are betting with real money and these are the guys that are providing an underlying bid for REITs in the market.]

The same firm reports that in its survey of 300 current investors in real estate buyout funds, two-thirds said they plan to increase their allocation to the sector, with only 4% looking to trim exposure. All this will drive up purchase prices of properties, thus cutting potential future returns [no it means there is still going to be a long term underlying bid for REIT stocks from these investors]. Keep in mind, too, that unlike land, they are still making new commercial real estate. Just look at the cranes rising up on so many cities' skylines. [How about some data here? How many cranes? Are they building offices or residential property? Which cities? Compared to when? What a useless anecdote].

In an extensive report this month that attempts to test whether various alternative asset classes are in a bubble, JPMorgan's global strategy group suggests that commercial real estate is getting there but hasn't arrived yet. REITs' absolute and relative five year price appreciation has reached levels last seen in the 1987 and 1997 peaks in the sector, which were followed by steep corrections [yes, I already got the part about how we're all DOOMED. But again how about some context? Are we about to fall back into a Savings and Loan banking crisis (see 1987 period)? How about 1997--all other assets were crashing because of the Asia collapse so of course domestic REITs outperformed massively. And as for steep corrections? Since 1997 it was just relative underperformance compared to the tech/internet bubble. The late 1990s were ironically an AWESOME time to buy REITs]. Yields relative to long Treasury bonds are also about where they were at earlier tops. [Again would be nice to see some context here].

But REIT leverage is far lower than in earlier peaks, JPMorgan points out. [what does that mean exactly? Please help. Is this one of those "on the one hand, on the other hand" comments to feign balance or is this actually a relevant datapoint? My guess is the former. They shoulda just left it out.]

Real estate is a slow-moving market. REIT stocks have remained in firm uptrends that have proven remarkably resilient. And we've been wrong on the group before. But the stocks are getting far too widely loved [evidence lacking here] and too broadly owned [evidence specious here] for the risk/reward trade to stay favorable. [Wait, I thought we were going to be doomed with a "steep correction" and now only the risk/reward trade isn't so favorable? Which is it? Since we're stopped clocks here at Barron's we KNOW we'll be right at SOME point, either on the one hand or on the other... :)]

---------------------------------

This article would be perhaps somewhat persuasive for us if we hadn't been reading articles saying EXACTLY THE SAME THING for the past 7 years in all Dow Jones publications. Seriously. The WSJ pretty much writes this same article about once every 6 weeks. I circle them for Mopey to read to try and help make her more cynical about the business and investing media. The Wall Street Journal and Barron's love to beat on any sector that seems to do better than it should. The WSJ is even more consistent, you can tell about once every 6 weeks or so the WSJ business section editor comes around, plops himself down next to the junior business writer and says, "it's time for another story on REITs"... :)

The bear case for ANYTHING just seems to sound so RIGOROUS. So erudite. So full of caution and propriety. These are the people who deep down think its improper and IRRESPONSIBLE to be bullish about anything.

The other really convenient thing about "bear case" arguments is you can always be right!! You just repeat your argument regularly. "I hate XYZ stock, it's overvalued and it's going lower." Then six months later when the stock is 40% higher, you can say it again: "I hate XYZ stock, it's REALLY overvalued now (!) and it's going lower." Note that all stocks and sectors have selloffs at times. You've submitted what they call "proof by vigorous assertion" and you WILL be right just like a stopped clock is (occasionally) right.

Note also that if there IS a selloff in REITs, no matter the duration or severity, you KNOW Barron's will follow up with an "I told you so" article. Ah, but will we hear the apology and see the "I was wrong" article? I doubt it based on their history.

Mopey

From Tom Brown's Bankstocks Website:

There’s a tendency by some to blame the big American oil giants (not to mention Dick Cheney) for the soaring price of oil. Few seem to realize that, as The Economist pointed out (8/12), most of the world’s oil reserves are controlled by state-run companies. Exxon Mobil, for example, ranks only 14th among oil companies ranked by reserves. The 13 companies ahead of it are all national oil companies; together they control as much as 90% of the world’s oil and gas (emphasis added by Mopey). Interestingly, most of the foreign government-owned companies have been badly run. They tend to overstaff, underinvest, and be plagued by political interference and corruption. (Mopey says, sarcastically: Nooooooo, they couldn't possibly be run that poorly! They're owned by the PEOPLE! :)

Production at Venezuela’s national company has fallen since 1998, partly because of inadequate maintenance. The Chavez government has fired most of its experienced and qualified employees, and has indulged in political interference and favoritism. Mexico’s Pemex has made a mess ofMexico’s oilfields since the 1930’s. The general expectation is that the national companies will become even more dominant, as the world’s most prolific fields are virtually closed off to the multinationals. Indonesia has become a net importer of oil, despite its big reserves; Iran pumps less oil now than it did in 1979. Generally, a lack of openness characterizes most NOCs.

The argument goes on as to whether the recent decline in oil prices will last. Ben Dell, analyst at Sanford Bernstein, calls the rise in oil prices a bubble that’s been caused in large part by a stampede into commodities by institutional investors (NYT, 8/20). (Mopey says: Huh? This Ben Dell guy has been saying this for years now--heck he sat right across from me about a year and a half ago and told our portfolio managers to get out of all our oil names because oil was goin' DOWN! What's KMG done since that meeting? Doubled? How about CVX? Up 40%? This guy's a stopped clock.) He compares it to the technology investment bubble of the late 1990s. Prices should weaken, he says, because global storage capacity has about filled up, which should limit the possibility of arbitrage profits. Goldman Sachs estimates that close to $100 billion will be invested in commodities futures contracts this year, versus less than $20 billion three years ago. Others feel that geopolitical concerns and fundamentals have played a larger role than the speculators have, and that oil prices are likely to hold near current levels.

Interesting thoughts!!