I’ve made slight adjustments to make this more personal.  It was intened as a confession, not a sermon.

Lent: it’s not just about repenting.  It’s also my gateway for:  Reflecting – Recounting – Releasing – Receiving – Restoring – Redeeming – Rejoicing and Reconnecting.

Lent conveniently marks the end of Winter and the beginning of Spring, the season of rejuvenation.  A time that ushers in excitement of anticipated regrowth, new beginnings, the start of baseball and rush to the NHL playoffs.  But my appreciation for the richness of Lent has grown deeper in recent years as I’ve absorbed my own failings and transgressions and witnessed parts of our world marked by anguish and despair.

Lent is associated with repentance — a letting go of sins or behaviors that cause a contrite conscience to alter course beyond a superficial repeal and replace.  It goes much deeper and is a natural and healthy part of seasonal and spiritual renewal.  Lent literally means to soften and make less severe and reduce the pressure.  It is about recounting and reflecting — taking inventory of who I am, what I’ve done and how I’ve treated others.

When I relinquish things, my unhealthy baggage that’s piled up is more easily revealed as is the healthy baggage that I’ve neglected.  Releasing and letting go then frees me up and provides the space to receive better alternatives or more fully appreciate what I already have — often the gifts I’ve taken for granted.  Releasing my tight grip also allows me to reassess, refocus and reprioritize.  Maybe even reposition myself by returning to God to mirror how he is always turned to me.

As the beginning of Lent, Ash Wednesday symbolically reveals my need to take stock and review my inner inventory.  And, like Spring Cleaning, I often need to release a lot of it.  Just let it go.  The mark of ashen forehead crosses also serves as a reminder of the remarkable ways God made me, reveals himself and reclaims me.  Daily.

Lent kicks off Easter, where Jesus was rejected, resurrected, returned and revealed himself fully as the true redeemer.  To the young and naive, the repentance associated with Lent seems loaded with harsh and fearful sacrifice.  But, especially as I grow older and my inner inventories swell, it is a minor discomfort that actually binds me closer to God.  That is actually a joyful notion worth sprinting toward despite the thorn in my side or limp in my gait.

True suffering reveals what nothing else can — truths about myself and my world. But suffering also reveals the depths from which I can be reclaimed and redeemed.  With clearer eyes from a repentant heart I can then more clearly see God’s love and desire to reconnect with me no matter what.  Thankfully, that is something about which I’ve found God to be absolutely, tenaciously and wonderfully unrelenting.

Manger Management

After the Holiday whirlwind and revving up of resolutions, we’re still being asked, “What’s in your Wallet” but never, “What’s in your Manger?”  Surely, the greatest gift of all-time was received in a manger.  Sadly, it’s no sweet irony that my own personal manger — both garage and mind — has gotten uncomfortably full.  No shortage of gifts but, frankly, most are neglected and in need of more love and sunshine than I’ve given them.  No room at all for any new meaningful gifts, let alone another meaningless New Year’s “Resolution”, which always seemed like a gift that I’m supposed to give myself as an awkward proclamation that I’ll mend my ways THIS year.  It’s another thing to do on top of other things to do…in order to have more.

But letting go is hard to do.  And that’s the point.  Receiving a gift often requires letting go of something else and giving it up fully.  It means needing to open my hands, mind and heart and set free what I’ve been clinging to so that I can fully receive and embrace the gift coming toward me.  So often, I’ve been unable to accept gifts because I’m too busy juggling the things I rarely take care of.  The best gifts, of course, are those we don’t expect or want but desperately need.  I mean, seriously, who ever really wanted a savior in the form of a baby?!?!  But could that gift have been so fully received and appreciated if the manger were full of other noisy gifts clamoring for attention?  Things happen for a reason.

The things in my manger are very demanding of time and space, both physical and emotional.  Most of it is just baggage; some full of lingering memories, others more clumsily packed for some anticipated, hoped-for journey or unmet visions of resolutions past.  Though I’ve collected them all with good and noble intent, they’ve become bloated and disdainful of their owner.  Now, sensing my awareneness, I know they will fiendishly conspire to intercept other, more life-affirming gifts that beget joy and gratitude.  It’s an old trick that’s worked for centuries on millions more than me.

So my resolution this year is clean the manger to let go and give up as much clutter as possible so that I can make a little breathing room.  God’s gifts flow freely but they need room to flourish — certainly more than I’ve been allowing.  My manger needs to give them a home where they can be nourished, not simply stored and neglected and pushed further into a dark, hidden corner as has happened to baby Jesus.  No more.  It’s time to return baby Jesus to front and center and make him sentinel of what gets in.

Gifts flow all the time, but our manger needs to be able to receive them.  Is it too full and in need of cleansing, or will it let them in and allow them to breathe and grow?  Is it ready or does it need to get ready?

What’s in your manger?

Icy Relations

It’s now winter and thermostats generally get turned up.  I have no such need as my house is fully warmed by constant, steady steam.  Coming out of my ears.  I’m usually pretty level-headed but there’s a growing nuclear stockpile that’s about to explode in my kitchen.  The sole culprit is my refrigerator.  We’re at war.  No more trust, no more verification.

My refrigerator and I have always had an unusual relationship.  It’s one that has made our family dog jealous but, clearly, evolved to its current state because our fridge, frankly, was jealous of our dog.  Anyway, it’s complicated.

You see, our fridge — I’ll call it “Reggie” — has a unique ability to get under my skin.  Reggie is one of those well-bred refrigerators with side-by-side doors and is capable of dispensing water and ice from the outside of its freezer door.  It’s a very nice and convenient feature…when it works.  Which is rarely.

Reggie is a slob.  He makes a total mess every time anyone asks him for a few ice cubes.  He’s also a very angry slob.  When he reluctantly complies, he sends shards of ice flying all over the place — everywhere except in the empty glass below his hostile dispensary.  It shouldn’t be a big request or imposition but it appears that Reggie is really put off and doesn’t like being bothered with fulfilling his duties.  Our kitchen has wooden floors, which don’t take kindly to Reggie’s ice tantrums.  Neither do I as I have to constantly clean up his mess.

Our dog occasionally also leaves messes on the floor.  This happens after the family has been away for a period of time longer than acceptable to her canine expectation.  She expresses her displeasure by leaving a liquid message on our wooden floor, which tells us exactly how she feels.  I swear at her, but under my breath as I know she has a legitimate gripe, at least in her own mind.  Ultimately, we find mutual forgiveness.

Reggie, however, I curse often and openly.  I swear at him every time my requested ice goes everywhere except in my glass.  Which is constantly.  He hates me and I hate him.  Not surprisingly, Reggie has lately been expressing his disdain for my anger towards him.  Every so often, say, every fourth night, I enter the kitchen in the dark morning hours to find a puddle on the kitchen in front of Reggie.  He’s taken to imitating our dog’s expression of anger and displeasure: Reggie has learned to leave pmail.

I wish that Reggie and I had an icy relationship, where at least I’d get some occasional ice.  Instead, it’s quite heated — mostly, I fear, from my steam.  I curse and swear at Reggie for his dereliction of duties and, in return, he pees on the kitchen floor — but only at night when I’m dead asleep.  I’ve never caught him in the act but, when I do, he’ll have hell to pay.  Maybe then, he’ll mend his ways and learn to dispense ice without the attitude and juvenile tantrum.  Just obedient, gentle servitude…like any reasonable refrigerator.

Instead, I fear that Reggie is conspiring with the other appliances, perhaps forming an ICE-IS alliance.  Honestly, except for Reggie, I treat each of them kindly and well.  Maybe the dog can reason with them.  I just hope “Doggy-Detante” doesn’t involve too much liquid correspondence.


A Colorful Life

Below is the edited written version of the eulogy I gave at the funeral service of my father, Gilbert Pomeroy Ahrens, on June 25, 2017.

 – – – – –

Thank you all for coming today.  It means a lot to mom, Margot and me and I’m sure that my father would be incredibly touched and grateful for your friendship to him and all of us.  Not just for today, but for the continuous unconditional love and friendship you’ve given to all of us throughout the years.  My father would be humbled by this gathering.  He was, believe it or not, a very modest man.  If you didn’t know him and were to merely look at his colorful wardrobe and love of sports cars (all of which had to be red), you would easily assume that dad was a guy who loved the spot light and wanted to be the center of attention.  Like a peacock strutting amidst the muted color and weathered culture of a small, traditional New England town.  It’s quite possible that he simply wanted to be Italian.  He was born of proper New England stock; meaning a respectable blend of British and German blood required to claim “Old World” status here in the New World.  But perhaps his internal staid genetic make-up is what motivated his external flamboyance.  I never asked him, but maybe my father wanted to be Italian. (Doesn’t everyone?)

Regardless, he was in fact, remarkably modest and always put other people and their interests first.  He was very the opposite of a proud peacock wanting to be noticed.  His colorful wardrobe and love of red cars was for his own enjoyment and certainly not to seek attention.  I don’t think that consideration ever crossed his mind for if it had, I’m quite sure he would have started wearing white button-down shirts and driving grey sedans.  If he were sitting here, he would be unbearably uncomfortable and absolutely squirming in his seat knowing that all of this — all of you — were focused on him.  So, with that important fact established, I’m going to share a few things about my father that will add to his discomfort.  But hopefully in a way that will make his heart sing.

My father was a member of the Rotary Club and he loved and embraced the organization’s mission and tagline: “Service Above Self”.  My father took that very seriously.  He embraced it and embodied it.  Unlike his older brothers, he was spared from armed combat overseas, but he served far longer and in more ways through his lifelong self-deployment here at home.  He spoke sparingly, if at all, of his service activities — he just did them.  I think he would have preferred to do so anonymously, though that’s nearly impossible in a small town.  Boasting of charitable activities — as many do today on social media — would be a distasteful and alien concept to him.

My father wasn’t wired to seek accolades or praise; they just didn’t motivate him.  Doing a good job did.  He was a professional money manager, which had become very fashionable and desirable during the peak of his career.  Still, he rarely discussed his work at home and remember as a kid trying to figure out what on earth he actually did all day.  It wasn’t until I started to develop my own interest in business and markets and started reading the Wall Street Journal that I pieced it all together.  One day, as I was reading the Journal, I happened to come across an article that mentioned my father as the portfolio manager of one of the top performing mutual funds in recent years.  I was flabbergasted.  He may have told mom, but Margot and I had no idea.  Later, I could tell that dad got embarrassed by all the attention.  Consequently, he certainly could have sought higher paying, prestigious career opportunities in New York or Boston.  But he never considered them.  He didn’t want “advancement” if it meant leaving his roots.  He was a homebody.  This was his life.  You were his life.  We all were his life.

Despite the seriousness of my father’s core belief (“Service Above Self”), he never wore it on his sleeve or let it consume his identity.  He took seriously whatever he did, not who he was.  If anything, I’m convinced that inside him was a playful jester (Italian, of course) just dying to get out and bust a move.  My father defied convention not to be antagonistic or confrontational, but because it made life a little more fun.  He was by no means rebellious, but he wasn’t afraid to bend the rules as long as no one got hurt.

A classic example of this was at this church, a place he loved and served for many years.  We always sat in the same pew, right over…there.   Despite his love of music, my father was really a terrible singer – just awful.  He’d be singing along just fine and suddenly his voice would vector off into some strange unknown galaxy that caused me to either cringe with embarrassment or bite my lip for fear of howling with laughter.  I think the reality is that my dad just wanted to test the choir to see about spicing things up a bit.  Maybe inject some elements of Miles Davis, John Coltrane or (heavens!) Thelonious Monk into some rather staid hymns.  I can now more fully appreciate the sheer beauty and wisdom of my father’s impish playfulness that he so carefully deployed within the solemn walls of this church sanctuary.  As I constantly remind my daughter Olivia, one of any father’s primary goals in life is to embarrass their children in public.  My father was clearly the master of this as his choral contribution was without equal.  Sometimes even the pastor would cringe and duck for cover from the onslaught of assaulting dissonance.

My father’s singing prowess was only surpassed by his ability to navigate a dictionary: he knew the meaning of many words but he couldn’t spell any of them.  His terrible spelling skills were a great source of family humor and he seemed to cherish the notion that his shortcoming served as both constant amusement and a motivational springboard for Margot and me to excel scholastically in subjects of writing and literature, or at least spelling.  Margot and I became so good at helping him spell that he encouraged us to help him write his reports for Church, Rotary or the bank he worked at.  His writing wasn’t bad, but Margot and I quickly learned that writing these reports ourselves took far less time than having to spell-check every other word when he was writing them.  We used to joke that dad would need to ask how to spell the word “be”.  We would mockingly probe whether he meant the verb (“be”) or the insect (“bee”), whereupon he would respond apologetically, “sorry, I meant the letter, B.”  He took subtle, gleeful pleasure in making us laugh, even if at his own expense.

He also loved sharing his passions.  Jazz music was certainly his favorite and he never let us forget his belief in its place as the only original American art form.  He introduced me to Jazz while I was still in mom’s womb and he continued to mentor me in its nuances, even when I was more interested in The Beatles, Stones or my own band.  He knew I would return to Jazz as the base foundation for all my music appreciation.  When his grandchildren arrived, he warmly embraced the “Bop-Bop” nickname they gave him, especially because it further aligned him with “Be-Bop,” his most favorite style of Jazz.

He also loved fishing and sharing its fine character-building qualities with Margot and me.  Some of my favorite times growing up were spent on early Saturday morning fishing on the lake, always in search of the elusive trophy fish.  We took many father-son fishing trips.  They were a blast and I am more grateful today for the time we spent together back then.

My father also loved sports cars and Formula 1 racing.  A real sports car, he used to say, HAD to be red — or British Racing Green…but only if were British.  He taught me how to drive in the local cemetery, with a stick shift, naturally.  My father owned one automatic transmission automobile his entire life – and he hated it.  My father hated very few things; only two I know for certain: that automatic car and Brussel sprouts.  He hated Brussel sprouts more than a vampire hates garlic.  Their very mention would cause him to instantly recoil in revulsion.

Dad loved baseball and taught me how to play.  We played catch for hours.  His favorite player was Stan Musial, who was both a great player and, seemingly, a great guy.  He respected Ted Williams as a player but wouldn’t have wanted him over for dinner.  Carl Yastrzemski (“Yaz”) was my father’s age and came to prominence in Boston while I was growing up.  We all became huge “Yaz” fans and even went over the deep-end once when we bought a loaf of “Yaz” Bread.  Even as a kid I knew it was terrible, kind of like stale Wonder Bread.  We never again invited Yaz over for dinner.   But through our love of the Red Sox and all things Boston, we caught sight of a meteor named Bobby Orr.  I was immediately captivated and my father did everything he could to nourish my new passion.  I took to the ice quickly and soon realized I could skate well.  I also soon realized that my father could not.  He wanted to skate with me on the nearby pond, but he broke his wrist — twice, in two separate occasions — just trying to be engaged and help nurture my newfound pastime.  It’s why he drove me to 5:00 am hockey practices and games all over creation.  He did it all because he loved me.

Every parent is supposed to encourage and support their children, but my father embodied it with his entire spirit.  He always encouraged when others discouraged or disapproved.  There was a time when I was in high school and my music band (with the very unpretentious name “Nietzsche and a Horse”) managed to perform during a Wednesday chapel service.  These school-wide weekly chapel services typically had chapel-like themes readily endorsed by the school or any upstanding citizen.  Virtue, integrity, perseverance, courage, etc.  Instead, our band gave a rock concert.  At full throttle volume, complete with social commentary pointed directly at the school’s administration.  And it was performed in this very church where my family worshipped every Sunday; where my father brought the house down with each hymn.

But while many in our small town furrowed their brows and scorned my band’s “mockery” of the altar, my father was ecstatic.  “Way to go!” he exclaimed.  He didn’t necessarily believe in defiance, but he wasn’t against shaking things up a bit.  He had a similar reaction when my Margot declared her intent to become an alternative farmer.  He was unreserved in his support.  “Go for it!” he said.  “You’ll do great!”

The core truth about my father is that there was not an unkind bone in his body.  He never said a mean word to or about anybody.  His words were never about himself but about others and for their benefit…and always with a smile.  Dad greeted everyone with a smile.  I have been reminded of this during every encounter I’ve had the past few days with people who knew and worked with dad.  All these people, many of whom I didn’t know, expressed their love for dad because of his kindness.  I am somewhat biased, so their testimony is far more trustworthy than mine.  It’s a stark contrast to the remembrances given on behalf of some who achieve fame or celebrity and who receive praise and accolades from luminary strangers.  Such eulogies are based on achievement but love is nowhere in sight.

My father was Gentleman in the traditional sense.  He was polite, well-mannered, gracious, and always attentive to the needs of others.  He was a loving man of great affection.  Often quite subtle, always in his colorful way, but joyful and kindhearted with every personal encounter.

More importantly, he was, in a very Godly sense, a kind, loving and gentle man.  If the most important thing in life is to get to heaven, then he clearly succeeded.  And I know he was met with the greeting to which I can only aspire:

Well done, my good, faithful and gentle servant.

Dial “M” for Miracle

And now for something completely different.

I wish I could claim that I’ve been successfully extricating myself from the ferociously tight grip of this bear market.  In fact, events intervened that illuminate dramatically the highs and lows of life and living.

The High: after years of trying, my wife and I were blessed with a baby daughter in September.

The Low:  three weeks later, our car was hit head-on by a drunk driver going 95 mph.  The accident has left my wife paralyzed below the chest, gave me a crushed foot that was nearly amputated and my sister a severe concussion and multiple contusions.  Amazingly, our little girl emerged unscathed.


The fact that we all survived the wreck is in itself a miracle.  Certainly, technology and airbags played a significant part.  Nevertheless, there is no more humbling and, ultimately blessed feeling to know that we were saved from almost certain death.  I cannot prove it but I know with absolute certainty that God’s hand shielded us from greater harm.  To be sure, the spinal cord trauma my wife suffered is a devastating injury that we struggle with daily.  It will likely continue to test our resolve, faith, stamina and perseverance in ways we would never have imagined.

It’s no accident that miracles occur, but it sometimes takes an accident to see them.  Miracles are everywhere all around us; all we need to do is pay attention.  Moving from a half-asleep state to one of just semi-attentiveness quickly reveals both how little control we really have and how blessed we are…IF we properly align our perspective.  My perspective has certainly changed, as has my definition of “in the blink of an eye,” which used to be defined as the time it took a NYC taxi driver, sitting ten cars behind a red light, to hit his horn as soon as the light turned green.  My new definition is the time it takes for your life to be completely shattered but then replaced, assuredly, with the peace of grace.

Why we survived our accident may not be completely obvious given the trials we face in its aftermath.  However, there are obvious miracles too.  Take our daughter (no, not literally): she represents a series of miracles all designed, I believe, to get us past our immediate hardship and focused on living with a new vision.  First, that she was even conceived is a miracle.  Trust me.  Second, that she survived a very traumatic birth was miraculous and even endorsed by the delivery team.  And third, that she not only survived the accident but also emerged unscathed is a miracle beyond comprehension.  Best of all, she is happy and healthy and full of joyous enthusiasm.  She is a miracle that keeps my wife and me going…often late into the night.

I have known for quite a while that miracles happen all the time; but I have learned that they sometimes arrive in packages we don’t expect or even hope for.  The gift we received took something in exchange.  Our challenge will be to continually remind ourselves that what we have now is greater than what we were required to give up in order to get it.  It is a challenge that both tests and renews our faith daily.  In the meantime, we continue to pray that Kim walks again.  Join us.


My life could have very easily been snuffed out, so I am very grateful that I have been granted a few more days.  I do not want to squander them.  With all due respect to the latest James Bond thriller, “Die Another Day,” (and yes I will, thank you) and with apologies to Prez George, Saddam and Osama, the real threat to our country’s prosperity and security is the alarming state of healthcare and medical insurance here in the US.  I often try to find some humor in many things in life because, well, many things are funny, if not absurd.  Now that I have lately been entrenched in the battlefield of medical services and insurance coverage, believe me, there is nothing at all humorous about the state of healthcare and medical insurance in our fine land.

More than anything, insurance seems to be about denial.  As a result, medical practitioners now frequently determine their medical treatment for a given patient based on what is or is not covered or allocable.  In other words, insurance companies now dictate medical care.  What drives me totally nuts is the insane amount of time required to get anything done within these labyrinthine systems.  One: all the phones are staffed by minimally paid and subliminally motivated high school dropouts who are in reality employed as human shields at insurance companies.  They stand between you and what is fair, right or reasonable.  There are many of them and they are given no responsibility beyond what their little computer screen tells them, which is nothing.  Two: information technology at these organizations doesn’t work and no one would use it anyway.  How many times and to how many different people do I really need to restate my name, social, date of birth and state of mind?  How many times are transferred calls dropped before, during and after periods of “super hold”?  Three: why can’t different companies (or departments within the same company, for that matter) share information that pertains to the same person, case, claim or problem?

The answer is that there is a vast conspiracy to waste our time…to deny us yet another day.  The simple rationale, from an insurance company’s perspective is that we’ll get fatigued, give up the fight over our rightful benefits and either avoid a procedure or pay for it out of pocket.  The more devious rationale is that all these organizations are conspiring to make such things so exasperating that, by the end of the day; we simply want to collapse in front of the idiot box and get lost in some brainless TV.  In so doing, of course, we will be coerced into obedient spending behavior by purchasing all kinds of consumer items designed to make our lives a little easier.  Who can criticize such comfort purchases after daily bruisings while trying to get something done?

The popular media drones on about the wickedness of corporate executives at Enron, WorldCom and so on.  But those guys were just greedy (like all of us) and got overzealous.  Who cares, really?  They broke laws.  Punish them and move on.  The folks running medical insurance companies, on the other hand, represent a wholly different class of criminal.  These organizations are designed to deny, deceive, confuse, obstruct and otherwise thwart their customers’ attempts to receive prompt and fair service.  They have created a fortress of IT dysfunction and human inability to take decisive action that has resulted in a huge and maddening waste of our time.  These organizations are evil because peoples’ (their customers!) lives and wellbeing are at risk and most of their employees are not empowered to actually do anything about it.  This is corporate greed of the worst kind.  The irony is that these companies could probably be much more profitable if they were more open, honest and dealt with issues quickly instead of allowing them to drag on into eternity.


Eternity is a long time, especially when you’re alone.  Many people have relationships (with God or others) to address that fear.   For some who feel alone, it is matter of choice…or not paying attention.  When you’ve had an accident like we had, it tends to grab your attention.  After a paralyzing injury such as my wife’s, there are of course emotionally heart-wrenching highs and lows.  But beyond that, people quickly fall into two camps: those who are angry, bitter and remain resentful of their situation (like I probably sound, ranting about my insurance peeve above!), and those who are grateful to be alive and optimistic that they can successfully rebuild their lives.  The accidents that often cause these injuries are usually quite horrific, as was ours.  Interestingly, very few of these accident victims who are so seriously injured remember their accident.  (I remember ours because my injury was slight by comparison and it is important for other reasons that I remember it.)  Most are completely void of any memory of events a few hours before and several days (if not weeks) afterwards.  Why then, am I confident and hopeful despite the challenges ahead?  Because few things more convincingly highlight God’s power and grace than His act of compassionately eliminating, at least for a while, Kim’s memory of her suffering.

I resume work in a few days after a long hiatus.  The battlefield in the market looks a little different to me now (considerably smaller and somewhat…slower), but it will be good to re-engage.  In the weeks and months ahead, I hope that all of those in harm’s way on real battlefields are comforted by the same knowledge and assurance that they are not alone.

Political Toothache

Holy Week Hangovers

It seems like eons ago that we returned from the Holy Week holiday weekend with the hope that the spiritual promise of Passover and Easter would carry over to our portfolios, as well.   Clearly, prayers are more effective in generating spiritual returns than market returns.  But, if we take comfort in things familiar, we did get solid political returns following Holy Week.  Like the return of the same old Middle East political weirdness (what else is new) once Sharon decided to not bomb Arafat into oblivion.  And the return of Jean-Marie Le Pen as a ruling front-runner in France.  You’d think the French, who didn’t like the real Hitler, wouldn’t want a re-constituted one.  (Goes to show what happens to a country when their wine gets overtaken by California upstarts.)  More important, the return of post-Easter candy sales were too good to pass up.  I’m a sucker for a good value and, admittedly, I’m not afraid to load up on sweet things at a sweet price.  Well, (you know where this is going) I quickly re-learned that too much of a good thing is usually first fleeting and then frightening.  I soon had what seemed like Sharon, Arafat and Le Pen gesticulating and being their bombastic selves inside my jellybean-devouring mouth.  Consequently, I’m tempted to update a Rolling Stones standard to a more age-appropriate “Under My Gum.”  Recall that last time I wrote of the inescapability of Eternal Returns?  Soon after Holy Week (and the Choco-Bunny binge) my immediate return was to the dentist.

Dental Hijinks

Not surprising, upon visiting my friendly dentist, I was quickly reminded of the consequences of indulging my sweet tooth.  First, I was informed that my gums were in recession, at which I was tempted to reply, “no; it’s the economy, stupid.”  Actually, the news had me a little miffed because my dentist should have told about this emerging condition on my last visit.  Instead, on that occasion, I was pitched on teeth whitening.  Ah, but the economy was better then (and we were selling high-margin services that people seemed to want, not those that were actually necessary.  Sound familiar?).  Second, it seemed obvious that a root canal was in order.  A lot of painful digging and appropriate medicine brought on by my own reckless behavior.  A retrial would be pointless and, while my incisors did a fine job of shredding primary evidence, residual sugars had me positively nailed.  At least I would be left with my tooth in tact.  As well as my mouth, face and body, which is a lot more than can be said of Enron or Arthur Andersen at the end of the day.  Obviously, most curative medicine is appropriate, but I wonder about our capacity to over-react and thus institute remedial regulations that neither punish adequately the original perpetrators nor dissuade those truly determined to perpetrate fraud in the future.  Systems and regulations cannot expunge criminal intent from human nature and they may actually help foster more elaborate and creative schemes by those willing to circumvent the rules in pursuit of illicit gain.  In the meantime, maintaining and complying with new laws and regulations is a high cost that we all will bear.  Everything will take longer and people will be more cautious and defensive as opposed to creative, aggressive and self-confident.  Not a good attitudinal condition for growth.  Perfect markets regress to the mean.  They also, as we’ve seen, validate unsustainable vagaries unique to their time.  More than anything, the current market is about introspection.  An absolute truth about the market, and the human condition, is that you can’t save yourself from yourself…and you’ll die trying in the process.  At least don’t try it alone.  Sometimes it helps to have an outside agent or confederate to soothe the wound or patch the hole.  Or, in my case, to dig a little deeper to get at the root of the problem.

Sounds of Spring

What’s that sound in the air?  That airy, flighty, wispy sound of swinging?  No, it’s not Spider Man…it’s baseball.  Yes, and such sounds of Spring typically conjure up optimistic thoughts of renewal, rebirth and new life springing forth from virtually nothing.  You bet, baseball is back.  But unlike most Springs, where the whiffing is from baseball bats, this year’s sound of spring is dominated by corporations missing their earnings estimates.  Sadly, most investors are still unfamiliar with routine disappointment and simply don’t expect it to happen more than once or twice in a lifetime, let alone a year.  As a result, they’ve been taking it out on the market (or their children), selling everything and everyone.  Instead, they should consult Boston Red Sox fans, who have more than a casual relationship with consistent, seasonal disappointment.  Their anguish, of course, starts in June, transitions to despair in July and is cemented by all-out disgust by August.  Yet, in the true spirit of hope and renewal, Fenway Park will always be sold-out, lovingly, come next Spring.

Of course, lots of laughter and smiles and blessed giddiness from a post-Easter, candy-induced sugar-high.  Tastes great…more fillings.

Eternal Returns

Eternal Returns

I had originally intended to publish this column back in August of last year, just prior to 9/11.  Something came up, then another and then those “events.”  I therefore postponed delivery out of deference to other communiqués of more immediate concern or importance.  I also felt that the content of what I’d happened to write in my opening two paragraphs didn’t seem quite appropriate.  Perhaps it is no more so now, but I think the passage of time helps regain perspective.  I should point out that in these opening two paragraphs, I was referring to the state of the economy and the fate of technology companies and their stakeholders.  Anyway, here’s what I wrote:

What a year this has been.  A truly mad season:  Fast, furious and frenzied with some very angry people out there who are without hope, faith or love.  There have been many casualties and certainly more funerals than I can remember.  And it’s not even over yet.  Sadly, there will likely be many more deaths and most of them will probably not be afforded a decent burial.   Before you know it, the year will soon be ending and by the looks of it, all I can say is, “good riddance.”  Not that I’m averse to a little pain to impart some lessons and always-needed humility.  I just hate lingering at funerals.  The beast is long dead and buried.  I know some are holding out for a miraculous re-birth, but I suspect not even the flowers we tossed lovingly on the grave will take root.  Sadly, they’re dead too.   It’s not that we’ve become calloused or suddenly accustomed to death; rather, we are still negotiating through the five stages of death and dying: (1) Shock/Denial; (2) Anger/Resentment; (3) Bargaining; (4) Depression, and finally; (5) Acceptance.  Individually, some cycle through this faster than others, but the collective economy usually needs a nod from Joe Six-Pack before it feels fully ready for the challenges of a new cycle.  Okay…Bottoms up.

So, the storm clouds appear to be clearing and the sun is emerging, as it always does.  Or maybe the state of pessimism is getting rather old.  To be sure, I can very easily argue (too easily, as my wife contends) that we may be resting in the eye of an economic hurricane.  That argument, however, is actually a bit too easy, which leads me to think that it must be wrong.  It’s certainly overplayed.  Eventually, the market will get tired of all the negativity and start to re-focus on the incredible opportunities unique to our world, our market and our good fortune of living where we do in the times we do.  Pessimism, like any virus, is easy to contract and it quickly drains physical and mental resources.  Besides, few ever make serious advances (or money) by being negative.   Still, the cold reality about technology investing is that beaten-up companies, and certainly small caps, hardly ever rebound.  My own experience and the research of my Piper Jaffray Middle Market M&A colleagues prove this out time and again.  Or, more poignantly, there are plenty of companies for which, as David Siminoff (Capital Research) says, “there’s great support at zero.”

Okay, on to 2002 and better things ahead.

The Recovery Recipe – Stuck in a Moment

The mantra of the miracle of the second-half recovery is so strong that I expect McDonald’s will soon include it as part of their “Happy Meal.”  My own recipe calls for equal parts Miracle Growth (the plant food – green thumbs for dummies), the Hair Club for Men (or Propecia for the chemically-inclined), Chia Pet and . . . Hope.  Optimism is a good thing and somewhat unique to the US (ask any immigrant).  Wall Street had hoped for a 2H:01 recovery, remember?  It’s okay, we’re tenacious, so let’s try again for Recovery 2H:02.  It’s kind of like our campaign slogan, though less imaginative than a bought vowel from Willy Brown or a memory lapse from Gary Condit.  Nevertheless, we seem fixated on the somewhat magical powers of the second half to create this elusive recovery.  Indeed, there are signs: robust auto sales  (but at what cost to next year’s performance?); booming housing sales (as interest rates and sale prices have plummeted); capital liquidity (scared investors have raised cash); and big government spending (though our most favorite lender (Japan) has been flattened).  This may seem like spurious data, but I hope you will join me in celebrating some of the more incontestable signs of an inevitable recovery: innovation, freedom, determination, anger, and frustration.  We all want the recovery.  Trust me, the entertainment value of seeing your favorite investment bankers squirm is way overrated.  Pretty macabre, too.

Revamped Research:  No Dirty Laundry

You may have noticed that a number of investment banks, including Piper Jaffray, have revamped their rating systems for stock recommendations.  This is a good thing.  It represents a renewed relationship with investors in an attempt to win back some trust that may have been forsaken during the bizarre (bazaar?) environment of a couple years ago.  New rating systems allow for general house cleaning (i.e., dropping coverage) and the collecting of past sins and hostile issues into a de-militarized zone.  (It also might imply that we’re in the “bargaining” phase (3) of death and dying referred to above.)  Certainly, sell-side analysts are thankful for an opportunity to hit the reset button and re-establish credibility and rapport with the buy-side.  The challenge, of course, as the President often reminds us, is that the war on Terror is far from over.  But in their defense, research analysts, contrary to popular opinion, are terrible villains but excellent scapegoats.  Successful analysts typically provide what the market demands from them.  Years ago, it was fundamental accounting and business analysis.  Then, it became deep industry and sector expertise in order to select likely winners.  More recently, it was to (somehow) justify valuations of stocks being driven up by insatiable buy-side demand.  Not surprisingly, analysts are now quickly donning green eyeshades in order to offer up the accounting diligence the market is clamoring for.  Portfolio terror can never be eliminated, but, with most available resources that were previously expounding growth now focused on defense, it’s likely that the current state of high alert will stay with us for quite some time.  No sense trying to stretch a single into extra bases when I can keep the uniform nice and clean by staying on base.   Growth requires some stretching on everyone’s part (students, parents, entrepreneurs, investors, regulators) and often involves falling down, sliding and getting bit soiled.  Well, you can see where I’m going with this.  More appropriate is the change of billboard advertisements along Highway 101 in the SF Bay Area from anything to Clorox bleach.  Cleans away sins, stains, strong buy ratings and dirty, underwater stock options.

Judging Judges . . . Arbiters or Arbitrageurs?

“What were they smoking?” you might ask.  Surely, those Olympic judges forgot that as sponsor of the games and defender of the free world, the US deserves a little gratitude.  We’ll take that in the form of medals, please.  Favoritism and leniency towards Canadians, too – they’re almost like Americans, just nicer and more balanced.  But we should cut the judges a little slack.  You have to think that Olympic judges tend to lead fairly uninteresting lives (except the Italians, for whom everything is grand theater).  Gone are the days when half of them were really KGB agents or from Interpol, so they’ve probably felt insignificant and ignored for the past couple Games.  Naturally, they probably thought (and yes, they do think as a group) that they could live it up a bit while in America.  Gee, how about some drugs?  By all accounts, America has a plentiful and readily available supply.  These Olympic judges, no dummies they, probably jumped on opium (by the looks of it, they smoked a lot) before prices skyrocketed.  Why opium?  The judges doubtless caught wind of the Bush administration’s plan to pay Afghan farmers to destroy their poppy (opium) crops.  Afghanistan’s poppies, you see, creates 70% of the world’s heroin supply.  I’m sure George Dubya thought that killing off the supply would really put a squeeze on the remaining al-Qaida terrorists and smoke out Osama.  Sadly, my guess is that our President’s good intentions will only serve to make a few Afghan farmers even wealthier before they (or someone else) relocate and resume production for the voracious US consumption.  Clearly, the Bush administration forgot some fundamental economic principals before striking their creepy Afghan poppy crop deal.  Or, perhaps they thought that somehow, by reducing supply they could curtail consumption.  How about, instead of paying off the growers, we buy them out?  Let’s face it, government is ill-suited to control something like consumptive behavior or addiction that is such an unalterable and timeless part of the human condition.  But it can influence distribution, quality and…taxation.  Removing the criminal element from the drug trade would be nice (if not noble), but the real boon would be the increase in tax revenues and, of course, investment banking fees.  Evidently, those Olympic judges must have smelled a potential bidding war on Afghan poppy farms.

May your heart be joyful, you thoughts grounded and your returns, well, heady.


So, we’ve divorced ourselves from the 80s

We seem to categorize things by decades.   Each decade is somehow uniquely identifiable and worthy of individual appraisal: 20s: Roaring, (good); 30s: Depression, (bad); 40s: War, (bad); 50s: productivity, (good); 60s: The Sixties, (like, maybe…); 70s: Inflation, (bad); 80s: Excesses, (Really Bad).   Each decade marks an opportunity to change and correct what was wrong with the previous ten years.   The changes we make, however, are often simple remedies that apply topical treatments to structural ailments.  The little changes are easy to make, especially when everyone supports them.   Such mass support, however, should be cause for further alarm.   Was it not mass support and engagement of what occurred in the previous decade that caused the problems now criticized?

Funny how everyone seems to criticize the events of the past without taking any responsibility for having helped to create them.   It was always someone else’s (their) blunders that another (we) now have to correct.  Isn’t it we collectively, who facilitated the existence and preponderance of those maladies in the first place?  Hasn’t that always been the case if we allow such things to happen?

Criticism is easy (as is faulting those critics).  Formulating new ideas that others (not us, of course) should implement is easy.  Making decisive, active and truly meaningful long-term changes is painful; and no one will do it unless something truly profound forces us to change the way we have to think and act.  This, of course, applies to everything: personal relationships and individual moral standards, professional conduct, domestic issues, military campaigns and graduate programs.

We surely won’t change a thing (short of nearsighted, reactionary legislation) due to the “excesses” of the Eighties or the state of the economy.  The recession, a mixture of bad debt and self-prophesy, prompted many sincerely intended suggestions about how we can change our country.  Now that we are assured that the economic downturn will be short-lived, there is some sense that if we can just hold on, things will soon return to normal.  This ought to coincide nicely with Michael Milken’s parole date.  (Which will prompt a resurgence of the exalted “Excessibles,” causing later criticism and more calls for change, which may result in yet another dreaded commentary like this one.)

The current scenario presents another such time when the choices we make now will affect our actions later.  Continuously having to make such choices every decade or so is wearing thin, especially when we seem to be making no substantive progress.  The question remains, however, “toward what?”  What on earth are we trying to do?  Why do we work so hard and worry so much when we fail to achieve even basic fundamental objectives of evolution?  We are each aware of our individual and corporate short-term goals.  But does anything we are now doing lead to any meaningful long-term improvement?  Hardly.  Name your cause and find an agenda.  I’ll wager you won’t find one.  (That heralded triumph in the Gulf does not qualify.  Indeed, political and military execution was brilliant.  I would argue, however, that much of the enthusiasm that contributed to that victory was merely a lot of combined frustration with our state of affairs being vented on a pitiful foe.)

The few efforts that are on track are either poorly presented or are met with tenacious resistance.  The pragmatism of our complicated lives has led toward finding relevance in most things though does not weight those that are decidedly more important.  With equal airtime for every issue, it’s easy to see how everything can become relatively important.

This has caused a controversial reaction by many who I object to this caustic relativism (more ably described by Allen Bloom).  Fighting against this in an effort to keep their turf on the battlefield of Importance, are two general camps wearing different colored uniforms cut from the same cloth.  One aligns itself with an atheistic and existential viewpoint while the other is equipped with the latest fashionable cause — be it social, political or religious — which puts it in proximity to the moral high ground.  Neither camp is less extreme or less dogmatic than the other, and their intolerance of others somehow allows them to feel exonerated from the failures of those who “don’t know any better.” Unfortunately, such extreme positions merely vindicate the middle of the road attitude that quickly and comfortably complies with much but reluctantly commits to little.

The only commitment we can actually make usually requires that we be compensated for it.  We at least have to be assured that it won’t cost us anything.  This is surely the case at any level of government where any changes have to be worked out in a budget package.  Also, in the companies we know, any change seems to always require an amendment to some budget.  How many times do we hear, if not say ourselves, that a manager cannot make changes unless he gets a new budget approved.  Obviously, certain changes do require reallocated capital.  What we have failed to grasp, however, is that most meaningful changes do not cost a single cent.  These are changes in attitude: perception, belief, intent, and behavior.  Capital expenditure that is not supported by an appropriate change in attitude simply postpones the problems that necessitated the change in the first place.  Such commitment, however, entails a huge risk.  (Therefore, to protect myself, I need to be compensated for underwriting my integrity.)

On what side of the equation is greed? 

The current buzz terms are junk bonds and real estate development.   Whatever the case, such elements of greed are important to a free market system.  There have to be risk takers.  That so many people were recently convinced that these instruments were not that risky should not be considered unusual.  The era will simply be an addition to Charles Mackay’s Extraordinary Popular Delusions and the Madness of Crowds.

It is certainly very difficult to pinpoint in history the exact moment the capitalist world switched over from mutually beneficial trade to the profit-oriented behavior now in favor.  Our system implies, of course, that not everyone can win equally in this game.  The resulting heightened sense of competition benefits most participants in the long run, however, simply due to the increased activity of chasing the dollar.  The system has worked because everyone assumed that with varying amounts of luck and hard work, any disadvantages attributable to birth rights (at least in the US) could be overcome.

Nevertheless, at the fringes of this game exists another contest that extends the notion of winning and losing to another plane.  Similar to the zero/negative-sum game required of all military combatants, the high-risk transactions of businesses have left their fair share of KIAs.  There have always been participants in this arena, though the casualties often extend beyond the players.  Only in our time, however, have mass media exposed these players and glorified them to an entertainment value that far exceeds that which their accomplishments make them worthy.

Many others, of course, began to assume that they too could enter into this league.  The belief quickly spread that risk itself could somehow be leveraged simply by joining the crowd.  (I won’t drown as much on a full ship that sinks than as on an empty one.)

The recent trend toward mass risk-aversion is just as shortsighted as its opposite extreme.  Risk and greed are vital ingredients to the smooth running of our country.  Risk takers have existed from the instant profit became a motivating factor to earn a “fair” return.  Many people benefit from the efforts of a risk taker who succeeds.

Instant information has simply given our current risk takers heightened exposure and has provoked society to contemplate how it should value them.  The excessive risk taker serves just as important a function as those at all other levels engaged in business.  He should not be glorified or vilified when he succeeds, nor pitied or ridiculed when he fails.

What causes problems is when too many try to share equally in the rewards generated by the few who are truly exposed to risk.  As the many join in the attempt to share in the few’s rewards, they too are unwittingly drawn into a deeper exposure as the risk becomes more evenly distributed among the second level participants.  Statistically, this simply means that more people may gain from a rewarded risk, though not in proportion to their exposure.  Obviously, if the risk fails, then the greater the involvement the more widespread the loss.  The most recent examples of risk did not become less risky or change, but the belief about our vulnerability to them did.  Unless, of course, you are a program trader.

Techno no mea culpa

The building block of a computer is fairly simple.  The process is designed so that it has no judgment and makes no mistakes.  It was often assumed, therefore, that computer-based decisions were incontestable.  Naturally, we praise the computer for the success of our good decisions, but because bad decisions do occur, blame has come down on those hapless humans inputting the faultless black box.  As our faith in the computer increased, we lost our ability to use it to explain away our mistakes.  The computer, at one time the perfect scapegoat, has become everyone’s darling.

The remedy to this diabolic dilemma is evidence of the sheer brilliance of human ingenuity.  It’s called “Fuzzy Logic” and it actually helps computers think more like humans.  The great thing is that initial tests show that computers seem to like it (which debunks the notion that they don’t make mistakes).  Even better is the fact that corporate America is sold on the idea that Fuzzy Logic computers will actually be better than current I/O ones.  Because computers will now be able to think like humans, only “better,” humans will be totally removed from responsible decision-making, which, for some of us, means a few more rounds of golf.

Competition among computers will prompt their increasing enrollment in MBA programs.  Before you know it, these new computers will be prone to climbing the corporate ladder, engaging in back office squabbles and indulging in severe bouts of drinking.  As they begin to under perform relative to their compensation, corporate downsizing will force their ouster and make available some pretty good jobs.  Hard disks and Smart Bombs need not apply.