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.
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.