David Stafford's  Instablog

Recently there have been discussions concerning different tax treatments for differently connotated cash flows. This can be succintly encapsulated in the debate concerning the levels of capital gains tax vs. income tax.

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I was recently watching a hearing in Washington on this matter, and of course there was the usual discussion, do taxes cripple business, tax shelters, Buffet Rule, etc etc.

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Amidst all these discussions there seemed to be kind of an obvious monkey in the corner, sitting calmly eating bananas. No, I was not attending the meeting, however, perhaps it is based on my own naivety, or my own ignorance, but when should businesses and individuals be treated as one in the same?

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Granted, there's all sorts of legal hedges that relate to treating corporations like individuals to limit liability and so on, however, perhaps this concept of an individual's investment related capital gains, and a businesses' capital related capital gains, seem to be two different things, as far as economic utility is concerned. ( Not that outside of this hedged pseudo-academic discussion it really maters to me personally.)

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Hence, as I watch these discussions, I wonder if behind all the discussions of marginal this that and the other, there lies a gentle chomping noise. The sound of rustling, and a sound of matted fur sliding over wooden surfaces, the sound of a monkey in the room, watching with glee, as his antics go unnoticed.

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Hence, not that I'm a proponent of one camp or another, but it seems this monkey's presence should be mentioned.

Well, the colorful Carl Icahn, an icon of the hostile takeover business, is progressing in the slow Trojan affair of hostile takeovers, in this case targeting none other than NAV. I'm sure this made some quant's head explode somewhere, but yes, NAV is also a ticker.

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This company in question is a company that makes engines for trucks and other heavy machinery. It is currently in somewhat of a predicament, because it took somewhat of a daedalian risk. It took some clever approaches to overcoming the increasing MPG ratings associated with "CAFE" standards imposed by Uncle Sam, and is hence treading water, in a pool that its competitors can swim through like they are Michael Phelps in Beijing.

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Needless to say, this somewhat sickly gazelle, has been targeted by those looking for "distressed" investments(see firing leadership, as a gesture of good will)(There's also the somewhat small stake relative to Carl and his compadres that is held by the board, something like 1.5% vs Carl's 15%).

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Does this mean that its share price will rise to somewhere near previous highs which are significantly higher than the current 25 or so, who can say. But either way, if one is a fan of Carl's coat tails, this might be a good stretch of linen to pry on to.

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For, Carl Icahn, presumably didn't make his billions by failing at inserting value into flagging corporations, and perhaps sometimes that's all the due diligence we need, but then again who can say.

Well, our old friend, MPW and his health care Reit buddies, have gone on to greener pastures. It seems like only yesterday that here on this very instablog his praises were sung in the most grandiose of terms.

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His crawls to the afternoon plateau, the occasional drop, or even sometimes rise after that formation, ah those were the days.

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But, fortunately, MPW now has a few more supporters in his camp, and thus he's gone on to the big time.

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Surely, MPW will still have a place in our hearts, and we in his, but he's moved on, and things are only looking brighter for him.

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Now, we have another question potentially. How to fill the void, that old friend of ours may have left in our attention span, and how to ensure that we don't forget the good times we had.

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Well, once you've got a star in your stable, it seems wise, to employ a few old horse-sense diversification strategies to keep the champs name in lights(maintain positive gains going forward), while all the while suring up the rear(hiring a publicist)(metaphor within metaphor, my apologies).

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In this sort of situation, it might be a good idea, to throw around some strategic exposures, and hope you're choices are tactically sound.

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Another good long term investment could be in shipping. It might not be good shorter term, like the old champ(MPW), but perhaps if sat on for long enough it may reap some rewards. At least shippers seem to think so with their numerous projects expanding foreign ports etc.(at least as of the past few years).

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Another good way to keep our memories of our times with MPW glistening like morning dew, perhaps high yield bonds, and high yield municipal debt.

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With these two sectors covered we could be able to start building our own little boxing gym that could pump out more semi-sensational champs into the future.

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Either way, one had might as well, not let good gains go to waste, and hence we should probably not rest on our laurels, but instead, should start adding some strategic(there it is again) shine to our little island in the sun.

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Thus, apart from the St. Jude's beneficence requiring OTT, it may be time to start exploring new ways to sure up a portfolio, full of investment ideas as proposed here on this, ye old instablog.