Morg

After Bill Miller's Legg Mason Opportunity Trust (LM) fund returns a stunning 48% in Q2, Larry Swedroe wonders: Is Miller regaining his touch, or getting lucky?

He only needs to gain another 250% from the funds current value to get back to his '07 high. The fund is still down almost 72% from there as of yesterday.

Some tense debate in the U.S. House as a final vote on cap-and-trade nears. Rep. Devin Nunes of Calif.: The bill is designed to "satisfy the twisted desires of radical environmentalists." Texas' Joe Barton: "An economic disaster bill." President Obama stated the charge to consumers would be "a postage stamp per day" over 10 years. (previously)

That 43 cent stamp per day is $156.95 a year I don't want to pay.

I am not amused with the Democrats penchant to just slam bills through with little if any debate.

This is the problem when one party has way to much control. A balanced government is way more preferable in my opinion.

Then again I also prefer it when they are in stalemate and can't get anything done.

Here's one way to lower the moral hazard of bank bailouts: have the banks pay for their own bailouts by levying an industry fine after the crisis ends.

I would think that fines for the offenders would be appropriate. It would discourage bad behavior in the future.

Fining the industry as a whole would punish the good eggs (and there are some) along with the bad.

The Senate vote hasn't actually taken place yet, but cramdown legistlation is effectively dead on the Hill. Update: It's now official.

Hooray!

Pres. Obama announces Chrysler Chapter 11 filing, in tandem with a Fiat alliance. GMAC agrees to finance new Chrysler sales. Warranties are safe. Gov't to provide ~$8B to help the process. Meanwhile the holdouts, demonized by Obama, speak out.

Why exactly is Obama the one announcing this. Isn't it up to the company to announce its own bankruptcy.

The government involvement in what used to be private enterprise is really starting to terrify me.

Three great reads for lunchtime: 1) Recession's end won't make investing easier 2) The last temptation of risk 3) The extortion economy

Another important read on how Obama signed off at the the April G20 meeting on an idea to submit our financial institutions to a foreign regulating body. This Financial Stability Board could end up superceding our own regulating bodies (FINRA and the SEC) as well as have the power to arbitrarily determine finanicial companies compensation packages. Why no one is talking about this is beyond me.

investorsinsight.com/b...

Scary Stuff. I have written all my Congressional representatives in protest already.

StubHub (EBAY), the largest online reseller of tickets, has met with regulators over Ticketmaster's (TKTM) proposed merger with Live Nation (LYV), says CEO Chris Tsakalakis. He's concerned the combined company will try to freeze out resellers.

Last I checked reselling tickets was called scalping.

Obama's newest idea to stave off foreclosures: mortgage subsidies.

More of the same BS we can believe in!!!

Market Currents Poll: With gold trading around $950, where does it head first - $900 or $1000? Speak up in comments.

With or without the stimulus it will likely hit $1,000 again this go around. At that point it will be near previous highs and resistence. At that point profit taking and technical selling will take hold and some retracement will likely be in the cards. If it can maintain and consolidate at a higher low it will likely head toward the $1,200-$1,500 range. If not, gold will likely head back for the previous range in the $800-$900 for awhile until inflation rears its head or deflation takes hold.

GE's (GE) Immelt wants Congress to pass stimulus now. "The U.S. is in the eye of its most severe financial storm in nearly a century and urgent action is needed... Time is absolutely of the essence."

Probably doesn't hurt his feeling that GE will probably greatly benefit from the stimulus package.

Meredith Whitney Needs Some Historical Perspective

The best and brightest didn't cause the financial calamity, it was the idiots. Now there are likely quite a few idiots on wall street making to much bloody money, but if you can't properly compensate the good people they are going to recruited away. All we will have left in the end is the idiots to run our banks.

Just this week 8 analysts left BofA for UBS. Compensation limitations was the given reason. One has to assume that UBS did its homework before hiring these guys away from BofA which means that our domestic bank just lost 8 good people and the foreign bank gained them. What we have left are the people it didn't want or hasn't lured away yet.

UBS being a foreign bank has recieved no TARP funds and is not subject to its compensation restrictions or Obama mandates. Companies like UBS are not going to recruit away our Chuck Princes (Former Citi Bank CEO and confirmed idiot) they are going to take away our Meredith Whitneys (who is a very intelligent and capable individual).

On a side note the author states Meredith Whitney is ignorant of the historical perspective but then provides no historical evidence to show why compensation limits will improve the current situation.

Is Buy-and-Hold Dead? Hardly

For another opinion check this out:

www.investorsinsight.c...

Is Buy-and-Hold Dead? Hardly

Intelligent active management will always beat buy and hold. Hence why my account is down less than 10% for the year while the market is somewhere in the 40% range (depending where you look). The trick is getting out intelligently and unemotionally and getting back in intelligently and unemotionally. I just started putting money back into the market (about 20%) in various assets and if the market continues to improve I will gradually add more (somewhat of a DCA process like Bricki descriped).

The problem is most people (especially amateurs and know nothing do it yourself investors) don't have the time or know how to actively manage there money. This is where buy and hope...I mean hold comes in.

The biggest arguement against buy and hold: After the high of 1929 it took approximately 19 years for the market to return to the same level of value. Anybody want to wait around 19 years to get there money back?

This year the market dropped 40% as I previously pointed out. In order to break even the market must gain a return of +66.67%. If the market continues to return the average 11% it has over the last 30 years then it will take somewhere between 4-6 years of normal compounded returns to get it all back.

On the other hand my 10% loss will require me to gaina mere +11.11%, or a 1 year standard historical market return to get it all back. Even if I sat out or missed the first 20% of market return off the bottom I will still be breakeven or better by the time buy and holders have 25-30% still to recoup.

I of course have no intention of missing the first 20%. Following a very disciplined approach will help me get in at decent prices just like it helped me get out at good ones.

Best of luck to you all who subscribe to buy and hold, but I have feeling I will do much better.

Market Currents poll: The Dow's 140 points off its low, but 300 points from its high. With just under 2 hours to go, where do we finish? Tell all in comments.

I think it will likely end mixed with some subsector stregth. There is money to be made in the right places.

Market Currents poll: Do buyers mount a late-afternoon rally, or are we headed for new intraday lows? Weigh-in in the comments.

New lows heading into tomorrow employment report.