Consider The Children’s Game “Bouncy, Bouncy Ballie”

Ballie is played in a circle, leader in the middle bouncing a Spaulding. Players must flop to the floor when the bouncer stops his bouncing. Last one to flop becomes “It”, the new ball bouncer. 

Even at age 9, I termed this a silly game and wouldn’t join in. But, the image stuck to me. Reward someone for his quick panic.  But, Market operators who hang in can end up with all the money. I’m thinking of Buffett’s hold of American Express, Coca-Cola et al. 

I bought AmEx same time as Warren, when they got in trouble warehousing full but fictional salad oil tanks for an operator who had lost his head and made bad trades. I sold out my AmEx after a couple of years while Warren hung in. It's one of his biggest and most profitable holdings. 

In an iffy market, I’ve a major position in Goldman Sachs, but find bank stocks pricey and dangerous in a weak economic setting. Let someone else own J.P. Morgan whose premium over book value is substantive. Same goes for Citibank and Bank of America. I did add Morgan Stanley for its corporate deal muscle. 

Never ever consider the FRB is in place to take care of you. They are fighting inflation and could destroy you with surging interest rates that compress price-earnings ratios and lead to recession. Paying 9% interest on my debit balance when I was an odd lot schlepper is a recurring image. If long term Treasuries hit a 5% yield, I’m a player. Let somebody else ponder the appropriate price-earnings ratio for Tesla and its ilk. Tesla can trade 50 million shares before lunch is served. 

Some 50 years ago, we bought an apartment in the Dakota, one of New York’s truly landmark sites facing Central Park. There was a deep recession going on then, 1973-’74, and everyone told me I was insane. 

Who knew? Nobody knew.  But, when everyone is wringing his hands in tears,  you’re supposed to step in and buy something you’ll love forever. 

The art market, in the fifties, when abstract expressionism filled the New York gallery scene, you coulda bought great canvases for a couple a thousand bucks. I’m talking Jackson Pollack and dozens of others .There was hardly any connoisseurship among collectors like David Rockefeller and Peggy Guggenheim. Even late fifties the art market was fragile and volatile.  Decades later, Basquiat came along and was selling canvases for 1,000 bucks with few takers. 

The painter, Pierre Soulages, pointed out in his later work that the color black is most expressive of all colors. Soulages filled the Paris museum with scores of black paintings that overwhelmed viewers and collectors including me.  

Polaroid and Xerox weren’t bought for color expressiveness, but for the surging way of compounding capital. Stocks after all are just pieces of paper signifying value but nothing more. 

“Don’t cry for me Argentina” is the mournful song of its dying queen who has experienced the best and the worst of life’s offerings. For me, she says to discard the worst of your life experiences but hold onto the memories of the best of times. Not easy, but worth a shot. 

My position in the market remains 40% long plus lots of Treasuries stretching out 10 to 30 years. In other words Wait ‘n’ See. No time to plunge in. 

But, I have added to major positions in Apple, Microsoft, Goldman Sachs and Amazon. At the least, the market won’t go up without their participation. This is pure rally paper. 

I just heard a voice from the trading pits. “All right, wise guy, what would you have done as FRB chairman?

I’d lower rates by at least 75 basis points in 1 stroke then wait ‘n’ see if inflation is the major issue for the country.