The Deipnosophist

Where the science of investing becomes an art of living

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Location: Summerlin, Nevada, United States

A private investor for 20+ years, I manage private portfolios and write about investing. You can read my market musings on three different sites: 1) The Deipnosophist, dedicated to teaching the market's processes and mechanics; 2) Investment Poetry, a subscription site dedicated to real time investment recommendations; and 3) Seeking Alpha, a combination of the other two sites with a mix of reprints from this site and all-original content. See you here, there, or the other site!

30 March 2010

Business Etiquette: 101 Ways to Conduct Business with Charm and Savvy - A Review

Who knew the need for Ann Marie Sabath's, Business Etiquette: 101 Ways to Conduct Business with Charm and Savvy, still exists, leave alone a 3rd edition?

Well, I did not. I thought repeatedly while reading the book that the 101 'rules' all [to be] common sense... Right? Consider the following examples:
• How do I handle co-workers on the cell-phone or texting all day?
• What, exactly, am I supposed to wear on dress-down day?
• What’s the best way to compose an e-mail to my most important prospective client?
• How do I handle people who come across too strong during meetings?

But I asked questions of other business people, and really looked at daily life around me; what I learned and witnessed mortifies me:
• Prospects for a job arrive knowing nothing about the company (Sabath covers this point);
• Prospects for a job arrive for the interview wearing inappropriate clothes (Sabath covers this point as well);
• I watched as an employee at a retail cookie store finished with one customer, and then just stared at the next customer in line, as if to say: "Hurry up!"  Such... surliness is inappropriate; it discourages the customer from returning. I would have fired that employee on the spot, although his behavior is equally an example of bad management practices as it is his bad attitude.
• Unrelated, I know, but it amazes me to watch people stroll through the tourist attractions in my city dressed like pigs. 
• Again unrelated, but when did it become okay to wear pajamas when flying? 
(The last two items do not pertain to business relationships, but they are germane on making positive impressions on other people.)

Common sense does not equal used by all, though, and Sabath is not scanty on excellent ideas, such as
Rule #32: ... Observe e-mail courtesy. Excellent suggestions in this Rule that requires 3+ pages to limn. Absolutely necessary, as evinced by terrible grammar, syntax, length, etc;
Rule #48: Be specific when leaving a phone message. This one strikes me as particularly sensible, but is violated with alarming frequency;
Rule #62: Rework the "Do Not Disturb" sign. "Employees should set parameters for when they are available to other employees..." Really, an excellent suggestion and application!
Rule #108: Make the right first impression at the job interview. Mentioned above.

Ann Marie Sabath's, Business Etiquette: 101 Ways to Conduct Business with Charm and Savvy, is essential reading, and thus warrants your attention -- especially if you want to make a positive first impression on other people (business, social, and personal).
-- David M Gordon / The Deipnosophist

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25 March 2010

The Great Conundrum of 2010

I would not isolate yesterday as the bond market’s “turning point” because the trend to lower bond prices and higher yields has been in force for ~18 months now; yesterday’s action is just another step along the way (to higher yields). And increased peril to valuation measures for equities.

Money flows from one asset class to another (to bonds from equities, in your example) is... well, let’s name it the Great Conundrum of 2010. All asset classes have been bid to sky high valuations, well beyond normal, traditional, and typical measures. This situation could be due to any number of causes, but I prefer the simple: a global hunt by portfolio managers for yield in a low (or no) yield environment. The result is high prices/lessened value; bottom line = increased risk.

Thus, the question: where does the money (liquidation funds) flow, if it does not follow the traditional path? My answer, such as it is: First a reversal of the carry trade positions, second a rush into those reversal flows, and third... well, I do not know.

I will explain the preceding paragraph:
1) Reverse the carry trade; for example, long resources/short US$ becomes sell resources/buy US$ (cover short). This action should bring some disarray (sloppy price action or decline), which means
2) A new carry trade: short resources/LONG US$.

Thus begets a change and a new trend, now (or finally) obvious to all market participants.

But that ‘answer’ itself is too facile: in a fiat currency world, the US$ rises against other declining currencies... until the game of musical chairs ends. What happens then? Your guess is as good as mine.

Full Disclosure: This post is my reply as part of a conversation on Investment Poetry. Join the discussions here.
-- David M Gordon / The Deipnosophist


18 March 2010

Introducing ALikeList

I receive many questions; several asked so many times they can be grouped under broad topic headers. One such topic would be the source of my investment ideas. How do I get my investment ideas? Below I limn one such situation...

Many of you might recall my friend, Jim Delli Santi, from his level-headed participation on George Gilder's Technology forum (GTF), several of you might recall he was one of two forces behind my long-ago trading seminar (Bailey Williams being the other), and a few of you know him to be a great guy, a wonderful friend and husband, and with a storied professional history. Well, Jim has co-founded (with Michael McConachie, another friend) the new company, ALikeList...

Introducing ALikeList

You know that I love Google/GOOG's algorithm, which I view, simply (bluntly), as the wisdom of the crowd. What Jim and Michael have created with ALikeList inverts that thesis, as Jim mentions in the 2-part interview below...

I bet you figured out ALikeList's entire story within the first 5 minutes of part 1, but stuck around for the entire, exciting story. (Or as much as the interviewer allowed Jim to reveal.) 

ALikeList has already received its first round of VC funds, as Jim notes in the interview. Ingeniously, ALikeList relies upon the network effect, but builds upon it by delivering value that you trust and that you assign. Do I use ALikeList? Yes. The product is in its initial phase of release, which makes it too early for the network effect to build to full momentum (it will). Jump aboard now as a user -- build your list of likes, invite your friends and family to build their lists of likes -- and come to know well a company that will change the way we live, how we interact with other people.

I know ALikeList, recognize its value, one I trust (because its paradigm is itself trust), and whose executives have a tried and true pedigree as talented people. What more could I ask for as an investor?

Well, its IPO. And likely make my list of winning long term investments.
-- David M Gordon / The Deipnosophist


17 March 2010

This moment

This particular, peculiar moment in market history is among the most difficult of all for investors -- but especially for intermediate to long term investors. This occurs because the moment is fraught with peril (are they not all?), but also because it encourages investors to shift priorities, to change their strategy.

What change? Primarily time frame. You think, and I believe, the markets are headed for a swoon. So you sell off holdings, raise cash, stand aside, and watch all the ups and downs of the market's squiggles. "Look, I could have owned that one! I could buy that today and sell for a profit tomorrow." But the effort rarely works so perfectly. I used to attempt these 'little' trades, thinking I would be out quickly only to moan because the position took longer than I thought... or, worse, declines. And my preferred long term investments rise... without me aboard. Frustrating. After many years of misbegotten trades, though, I learned finally that I prefer long-term investment opportunities. Always be on the right side of the primary trend.

Sometimes a short to intermediate term opportunity comes along too good to allow slip by. Although almost everything points to a break lower, I truly do not know which way the market will break. My doubt occurs due to the fact that I monitor the best of the best, so these stocks tend to be stronger than the overall market; they mask the market's weakness. I must always remind myself of this perceptual fact to retain an objective perspective.

Let's assume me to be correct: the market declines for the next ~6-8 months (and likely begins within the next few weeks); the low of that decline could prove the low of the entire high level consolidation I mention repeatedly. Unless the March 2009 low proves to be THE low. This coming low (again, assuming me correct) might be analogous to the December 1974 low, but remember the market during that last secular, high level consolidation required another 8 years of base trading -- albeit with an upward tilt -- before finally breaching the 1966 highs in 1982.

Obviously I have a scenario, a vision, in mind. Strategy and tactics follow that vision, and those bases also are covered. Tactically, you purchase the new leaders at an advantageous moment. One company that appears especially promising, at this moment, is...

This post continues, with discussion, on InvestmentPoetry. See you there!
-- David M Gordon / The Deipnosophist


07 March 2010

Back home

And strive to catch up with everything, especially the markets. I will post asap.

Thank you for your patience and understanding.
-- David M Gordon / The Deipnosophist


01 March 2010


I must be away from my desk, and this blog, for the next few days.

I apologize for the suddenness of my leave, but will check in immediately upon my return.
-- David M Gordon / The Deipnosophist


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