Quiet Out There

Seems like a stunned silence out there. It is pretty depressing when the best you can do is say you're down 30%, instead of down 35%. I have heard that rats make better investors than men. They instinctively know when to scatter and hide.

Still, you take a look at the landscape and while it is bleak and barren in general, there are a few flowers to be picked. After my Thursday blog where I said ACE was a steal at the Thursday close, I did buy Validus (VR) at the opening bell for $12.61 on Friday. They closed at $18.03, so I gained a little bit of ground (I think ACE would have been a good buy as well, but I was encouraged by VR reporting Thursday evening about their investment portfolio (Validus Holdings, Ltd. Reconfirms Absence of Equities and Alternative Investments in Its Investment Portfolio).

The politicians are going around making speeches and talking unity, blah, blah, blah. I don't know, I think they have done what they can do. The time has come to step aside and let some of the actions gain traction. I keep waiting for some mega-company to announce something big to lift everyone's spirits (like Microsoft buying RIMM). I mean if companies were buying other companies 8 months ago, why wouldn't they now at a 50% discount?

Cramer was intriguing on Friday night. He said that we could go the path of 1987, where things were much higher the following year or we could go the path of 1929, where the market didn't regain it's former highs for about 15 years. Personally, I think economists have a much better understanding on appropriate fiscal policy than 80 years ago... so I think we'll dig our way out in a year or so. He did advise his legions to start buying again, though he seems to think there is still a chance of a 20 to 25% one day drop out there. The truth be known, the entire world economy is flying on baling wire, duct tape and a little krazy glue right now. But it always has been that way as in a weird way it is as much about belief as it is about fundamentals.

I did like the Wall Street Journal poll of economists asking who the next treasury secretary should be. There were the pat answers like Warren Buffet, Michael Bloomberg and Robert Rubin. But the one I liked best was "Harry Houdini"!

The area that has really stunned me of late are the Oil and Gas plays. How the mighty have fallen. I saw where the CEO of CHK (Chesapeake Energy CEO forced to sell company stock) was forced to sell "substantially all" his stock because of margin calls. He has been the one promoting the "Pickens Plan" recently on TV. I'd say he had an alterior motive in propping up natural gas prices. The other stunner was Bob Simpson of XTO. He also sold a large chunk of cash in what was not exactly a ringing endorsement for their future (XTO Energy Comments on Recent Events). It said he sold his shares for "debt, personal interests and family liquidity". He sold like $90 million worth, how much debt and family liquidity does he need? I won't be buying more of XTO anytime soon if that is the faith management has. I thought a lot of the sell-off in commodities was hedge fund driven, but these big guys selling suggests it runs deeper than that... unless they had huge margin calls on other investments (certainly a possibility).

Anyone wanting to dive back into EGY? It is down to $4.24 after pushing $9 in July. Oil is still going for $80, though perhaps that is short-lived.

The Oil & Gas equipment/exploration companies have been hammered as well. Sadly I bought BOLT from the MFI list in the summer. It has been crushed from $18.60 to $7.70. Brutal, there are many others in same boat.

Well, I guess I have rambled on long enough this Saturday evening. Break the silence. Don't be shy. Drop a comment in the comment box. Even if you want to talk about Palin - Biden or whether we can some how have McCain pair up with Biden (not a big Palin or Obama fan here).

Good night.