Archive for January, 2011

Winter Makes an Appearance

Sunday, January 30th, 2011

We’ve been fortunate so far this winter.  We received a dusting or two of snow from previous storms, but nothing to be concerned about.  A couple of the storms actually tracked a weird right-hook-loop such that they clobbered the folks to south of us, to the east of us, and then big-time to the north of us.  We’ve been spared.

At least until this week.

It wasn’t a surprise.  All the meteorologists called it.  And sure enough, on Wednesday here it comes, roaring out of the west.  The Federal Government (the guidance of which my company follows) released employees two hours early.  I’m not sure if that was a blessing or a curse.  What it meant was everyone and their brother was on the road just as the storm broke hard upon us.

It was a fast, heavy, wet snow.  Traction disappeared in a hurry.  Those without 4-wheel drive quickly found themselves unable to make it up even the slightest grades.  And traffic very soon became deadlocked across the region.

I was okay.  I had my truck.  And even though the last five miles took two hours – making my total commute four and a half hours – at least there was electricity and a warm wood stove waiting for me once I finally made it.  A lot of people had the worst commutes of their lives – eight, ten, and twelve hour sagas.  And some people never made it home at all.

The next morning, upon discovering that the Federal Government was only on a two-hour delayed arrival, I took a vacation day.  The wet, heavy snow had brought down lots of trees and there was plenty of work to be done before my driveway would be passable again.

Here are a triplet of images.  The first was taken during that long drive home Wednesday night, during the storm itself.

sanctuary in the storm

This image gives an idea of how heavy the snow was, and how it weighed upon everything it touched.

the morning after

And finally, a day and a night later, after all the angst and weariness had mostly washed away, what was left behind was just a quiet beauty.

heflins store

Of Hope and Hubris and Silver Wheaton

Friday, January 14th, 2011

Like clockwork, the alarm commences its buzzing at 4:25am.  The reason is because I live not far from the foothills of the Blue Ridge Mountains and work in Washington, DC.  If I waited any longer my easy one-hour morning commute would double into a mirror of the ugliness that is my evening penance.

But I’m not complaining.  I was once unemployed for fifteen months.  Spending three hours a day on the road isn’t so bad.

Life’s blessings come in many forms.  When I began to reintegrate with the workforce after that 15-month involuntary sabbatical, the thing that most struck me was the frenzied energy I felt all around me during that morning drive in.  Everyone was in such a hurry.  The feeling of it washed over me like a strangling, angry tide.  Seeking respite from it, I sought what quietude I could find.  I put my pickup truck in the slow lane and kept the radio off and tried to find a measure of calm within my own thoughts.  And so it was that my daily trip up I-66, years on now, has been my own regular soliloquy.

Walking out of the Foggy Bottom Starbucks just a couple blocks from my office, first coffee of the day in hand, my eyes sweep down New Hampshire Avenue.  It’s the very same view I see every morning – a lazy, still-dark city only yet beginning to stir.  The construction workers are walking up the street, their breaths blooming in front of them on this cold January day, and I nod as I climb back in the truck.  In two minutes I’ll be in a warm office.

Turning the key, my mind drifts backward.  It wasn’t all that long ago – really just a spit in the wind – that much of the city was just a miserable bog.  No wonder the man after whom it was named wanted to go back to Mount Vernon after only two terms.

And before that… the mental images spin backwards like one of those old black-and-white newsreels, until it quickly runs out of film and the screen goes white.

To a man with maybe three score and change given, two millennia seems like such a grand sweep of time.  But if you lift your thoughts and squint at it, you quickly realize it’s not.  No, the march of the Roman legions and the dusty streets of Jerusalem and that first Easter really weren’t all that long ago.

And before that, add in just a few hundred years more and you’ve watched Alexander do his thing and the Greeks start to see the world in a different way and the Persians invent a whole bunch of stuff.  There’s that little tete-a-tete at a place called Thermopylae.

And then it all gets misty and mysterious.  Add in another couple of millennia – back to the age of that Ice Man they found a few years ago up in the Alps – and suddenly there’s most of the whole nut.  Nearly everything man has accomplished – the utter transformation of the planet – has happened across a measly five thousand years.

There’s your bull market.  The backdrop to everything.

Which is why I smile when people joke about me being a doom-and-gloom kind of fellow.  Nothing could be further from the truth.  It’s just that I recognize the hubris that also frequently attends our otherwise impressive rise from the marshes and the caves.  Our beneficent ascension has not been an unbroken line.

I’m the first one in the office.  I start the coffee and settle down at my desk.  Pulling up Outlook, I quickly scan my inbox.  Thankfully, there are no crises yet.  I can concentrate on the reports and meetings that await me later in the morning.

The hours pass quickly.  At ten o’clock I take a quick break and log onto Fidelity.  The buy order for a thousand shares of Silver Wheaton I put in last night was executed.  I nod, satisfied with the price.  Added to the thousand shares I bought on Monday, that gives me just enough stake in Sonny’s favorite company to make it interesting.  Just a little gambit.

I wrestled last night with where to put the limit.  Just like I did on Monday.  Just like, it seems, I do with every position I’ve ever bought.

Until I remembered half a dozen years ago.  Mentally debating the entry price of my first gold position and anguishing over fifteen bucks – the difference between $435 and $450.  In the fullness of even just a handful of years, how can you not laugh at that?  And so, shaking my head at the memory, I just plugged in fifty cents over the closing market.  Just to cover against one of those flash things.

Long before Sonny coined his “Trade of a Generation” moniker, I made basically the same call, labeling mine “The Financial Bet of a Lifetime.”  I like Sonny’s description better.  Seems to have a hint of cultured gravitas to it, whereas mine sounds rather more like a craps game your alcoholic brother-in-law would be playing back in the alley.

But same difference.  After twenty years of being a hundred percent in equities, fully bought into the notions of long-term-buy-and-hold and stocks-never-lose-in-the-long-run, I began to see things that gave me pause.

It was hard at first.  A secular equities bull is perhaps the loveliest thing in all finance.  It makes you feel like a genius.  Letting go of it must be something like what addicts endure when they knock on the door at the rehab center.

I succeeded, though.  Over a few months I pulled everything out and went to cash.  Treasuries, where I could find them.  And then, after that, slowly, I began to think about gold.

The first step into a pool is the hardest.  After that it gets easier.

Years on now, 75% of my investment portfolio is gold.  No miners.  No leverage.  Just plain old bullion.

I know, I know.  That’s just insane.

And so, of course, the last thing I need is a middling position in a silver streaming company.  Especially one that brings a fair bit of leverage and volatility to the table.

But you know what?  People don’t change.  You can read any of those ancient texts, those earliest bits of written insight into our forbears, stretching back across those five millennia, and it’s all there.  All the wonders that we people bring.  And all the foibles.

The financial landscape is one we’ve seen before.  I won’t say I know with certainty what the exact details will look like.  Or the exact timeline.  But I do know what the endgame will be.  I know that with absolute certainty.  It will rock our world.

I know saying that sounds incredibly arrogant.  Like I’ve been blessed with some sort of omniscience or something.  That’s not it at all.  It’s just a math problem.  Not a particularly hard one.

And then that too shall pass.  Gold will blow up.  As will Silver Wheaton.  And maybe then, finally, we can get back to another one of those lovely secular bulls in stocks.

I surely do miss it.

Welcoming the New Year

Tuesday, January 4th, 2011

I don’t much care for winter.  Once my week of hunting is done I’m ready for spring – and warm weather.

But I do like the New Year.  The turn of the calendar always seems such an opportune time to reflect on things both in the past, and in the future.  To start with a clean slate.

Here are a few images from the last day of 2010.

Peyton Place Christmas

first night in Warrenton

girlfriends

.

And, finally, the first image from 2011….

train to the future...