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Robert A. Christy
September 12, 2005
From: Bob Christy
To: Clients and Friends
Subject: Blog, Diatribe and Turret
I’m not sure what to call this communiqué, but
I’m pretty sure it’s one of the above.
I’ve had a pretty rough couple of weeks, a
friend’s mom died; a long time close friend and mentor had a stroke and toss the
usual Christy havoc onto the pile and it’s been rough.
So when I sat down at lunch today, I realized
that I was a tad off schedule in writing my weekly piece - pieces actually.
I may be the only person in Georgia who eats at
a sushi place everyday. I don’t eat sushi everyday, but I find myself at the
same sushi bar conversing in broken English and broken Japanese with Johnny and
his cohorts. For the records, Taksan is the best kept secret in Roswell. Not
only is the sushi and other food excellent, but Johnny is an excellent macro
thinker as well. His real name is Nakakuki.
- Time to ring the bell.
The party is over for China and India. Long term everything is OK, but in
the short run, I’m cashing out. My contrarian nature is going to be the
death of me, but when I see two major magazines covers telling me where my
next fortune will be made are identical, I tend to cast a skeptical eye.
That said, the August 29th issue of Business Week and the
September issue of Worth both inform me that China and India are place to
be. I’m not buying it, but I might sell short some of the riper names. Also,
Johnny hates, I mean HATES China. Nothing quite like a wild eyed sushi chef
waving a sharp knife in your direction to make a point.
- Hurricane Katrina. I’m
really tired reading about this. It’s sad yes. It’s a disaster yes. But when
you build a city below sea level AND plop it between two large bodies of
water AND do it in a place where the wind blows “real hard” – well chances
are real good that you are going to get your feet wet. Johnny adds that
shrimp and seafood prices are going to skyrocket. And he’s not eating
anything out of the Gulf for years. This from a sushi chef. He’ll get back t
me on where to get fresh oysters.
- I was watching the
morning roundup of talking heads on Sunday and they interviewed a “refugee”
who said that his grandfather lost everything 40 years ago (Camille); his
father lost everything 20 yrs ago and he has now lost everything. He said
they were going to rebuild because they were tough people. I’ve been hit in
the head with a baseball, but even I know when it’s time to move.
- Oil. Oil supplies are
up, refineries getting back on line slowly. Lowest rig count in the past 20
years. OK – so what. I listened to an interview with T. Boone Pickens and he
has a pretty good handle on the subject. He says that global oil production
is 84 million barrels a day. No more, no less. He also says that we are on a
decline in the world’s biggest fields. The math – 365 times 84 million = 30
billion barrels of oil. That’s what is coming out of the ground each year.
For the non-oil person, 1 barrel = 42 gallons. Or – 1,260 million gallons.
My guess is that’s a bit much to be replacing on a yearly basis. If you
believe in supply and demand, supply is going down and the demand is going
up. I’m trading lots of oil companies, oil services, and tanker companies.
- Greenspan. I’ve read
and reread the FOMC reports and all I can glean from it is this – I think
the Federal Reserve wants interest rates (intermediate and long- term) to
rise so that the speculative bubble in real estate subsides. I’m looking for
more rate increases. If you’re a real estate investor, be careful – be VERY
careful.
- I’m looking at putting
some money into hurricane related industries. Statistics show that these
industries have performed well in both relative and absolute returns for at
least 6 months after the storm hits landfall. Not brain surgery – those
industries are energy, home building, insurance and construction. Also
included are mini-sectors oil & gas drilling, construction materials and
retail/home improvement stocks. I’ll keep you posted. I’m building a list
and even though our bullish percent numbers are dicey, relative strength
remains strong. So far, I have 8 names and we’ll add them to the managed
accounts as their technical picture dictates.
That’s about it for today. If you haven’t
checked out the web site lately, I’ve made a number of changes. I’m curious as
to what you think.
Until next week, peace.
Bob Christy
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