The Real Charlie

Reallocationmania

So this past week was a much quieter week compared to the previous one's snow stranding, toddler rash (Roxanne had a reaction to some antibiotics and ended up looking like a cross between a giraffe and the kid from "Mask," but much whinier) and general high stress level. Partly, one of my bosses is away, which helps reduce that somewhat lucrative background noise of life that I call work, and partly it is that I am about to start one big project and have just finished about three others. The calm before and after the storm, so to speak.

I will revisit my recent investing thinkings aloud, as I have finally taken some actions. I terminated the long municipal bond manager - they just weren't doing anything, and my adviser was losing confidence in them. I took the cash and allocated it as follows:

15% will stay as cash and actually will get spent down over the next year on things like my mortgage, bills, gifts to my girls for their 529 plans, etc., which lets me leave other cash alone.

35% is getting given to my remaining manager, the 3-7 year municipal bond manager who is doing much better.

50% is getting put into an account that I personally manager for "opportunities to be named later," probably a mix of equities, alternative-style funds and maybe some option driven strategies. Given where the market is at, I am in no big hurry to buy anything at all right now, and figure I'll be investing this chunk of it over the next 4-5 months. I am also considering, albeit pretty casually, moving this money to am entirely new manager, depending on what my current adviser comes up with between now and the end of January.

It is an example of where this market is at that I am now spending brain power worrying about the health of my money market fund (MMF). People think of these as "safe cash" but they really are not - they invest in all sorts of commercial paper, asset backed securities and other out of favor sorts of things. Some, though, invest only in T-bills and short term US government securities. So I am considering taking a major hit on yield (like 150 basis points) and switching to a treasury MMF, as well as buying a few more FDIC insured CDs (I picked up a four month 4.75% late last week to park some extra cash) for money that I don't need anytime soon. I guess that in this market I want my safe to be really, really safe.

Finally, we are not Christmas people here in the House of The Real Charlie , but I am admiring the beautiful lights on the house across the street as I blog tonight, and it reminds me to wish those of you who celebrate a merry and joyous one.

Pretzelmania

It took all of Friday, but I recovered from my traumatic day on Thursday. My plow guy came Thursday night at 10, just in time for me to get my car off the street before the town plow entombed me. On Friday I learned that Abby's car had been towed, bailed it out and arranged for it to be repaired, discovered that, in fact, it was right where Abby left it, got it towed for real, fixed (new alternator and battery) and returned. I thanked the people at Lower Falls Wine Co. for saving my family and took Roxanne to the doctor with a nasty rash (antibiotic allergy). A busy day, and I missed work to accomplish it all.

Today, it #$@&^ing snowed again. So we stayed home this time and I needed a project. I decided to bake pretzels from scratch based on a recipe in the October 2007 issue of Beer Advocate magazine. I used Blue Point Brewing's "Hoptical Illusion" as the beer in the recipe. It looked like it wasn't going to work - the dough didn't rise very much - but I stuck with it, got some help rolling and knotting the pretzels from Abby, parboiled the pretzels in water with baking soda in it and baked them. To my surprise, they were huge, puffy and delicious. Both Stella and Roxanne (still covered in a rash, thank you very much) loved them. Baking is a mystery to me, I have to tell you, but these results were worth the angst:

If you have a beer drinker in your circle of gift recipients this holiday season, I recommend a subscription to Beer Advocate. Reviews, interviews, recipes, snark - all good things and enough pictures of tasty beer to make you thirsty.

The Most Frightening Day of My Life

I don't think that I am exaggerating as I title my blog tonight. As you may know, we had a rather dramatic snowstorm today in Boston that hit mid afternoon, right around the time that everyone was sent home from work and school early, getting those people stuck in traffic, in freezing temperatures, amidst car wrecks and chaos. I was one of those people, but that isn't the scary part.

I left my office around 4, later than I would have liked because of office policies related to the need to make sure that there were enough people in the building to take care of our patients. Meanwhile, Abby had picked up the Roxanne from nursery school at 1:30, with Stella in the car. They were in bad traffic moving very, very slowly toward home.

By around 4:30 I was in deep trouble, stuck in a parking lot on Route 9 in Newton, barely creeping forward. I traveled a mile or so in an hour and a half. At 6 PM I got a call from Abby. She was just about to enter Wellesley. A few minutes later she called again: her car had broken down and totally died.
She was stuck on the side of a busy street, cars swerving all around her, two scared, tired little children crying in the back seat, no heat. She called 911, but they were overwhelmed and couldn't help her. Meanwhile I called a nearby (to her) wine shop called Lower Falls Wine to see if they were open, and I asked if she could shelter there. They agreed, and she got the kids out of the car and went to Lower Falls Wine, where they gave them food, access to the bathroom and looked after my girls very well.

Meanwhile I consulted with my boss Marsha and got off Route 9, wending my way through the snow clogged and car packed streets of Newton until I got to a more open stretch of roads. I got into another traffic jam, took another detour, then got into another jam. It was now 6:45. Not too far away, past the broken down and wrecked cars, the blinking lights and the blowing snow, I could see the distinctive red building of Lower Falls Wine Co. As I got close, I saw Abby's car on the side of the road, covered in snow, dark and dead. I fought my way into the parking lot and accosted a customer. "Inside that store there is a woman with two little children. Whisper to her that Charlie is in the parking lot." I went to Abby's car and failed to start it, but got Stella's car seat (Roxanne has a seat in my car) and a few other things. I installed the seat and then marched in to the store. I have never been so happy to see anyone in my life. I said "sorry I'm late, some fool left a Subaru Forrester parked in the middle of the road." Roxanne cried, Stella told me my hat was "pretty," and we got everyone into my car.

Twenty minutes of treacherous but unobstructed driving later, we were home. Abby's car is  abandoned in Newton, they'll probably tow it and I'll spend the day tomorrow finding it and getting the battery charged. My driveway is impassable and my car is getting plowed in on the road. I am going to miss work tomorrow.

But my little girls are asleep in their beds, my wife is safe and I am home. I truly worried that I would never see them again. Today was the most frightening day of my life

Wintry Mix

A few things for an icy evening:

1) This was my first real nasty wintry drive in to nursery school with Roxanne today. We managed to skid off the road while trying to avoid colliding with an oil truck, skid into our parking spot while avoiding a nimrod standing in the middle of the road in Newton chatting with a friend and skid into the door of the temple. That last skid only involved Roxanne's head and not the car. In all accidents, no cars, children or daddies were harmed.

2) I am still pondering my next moves investment-wise. Now I am tossing the idea of re-evaluating my basic investment manager decision into the mix. I use a stockbroker with whom I have a "fee-based" relationship - he charges me an asset under management fee, but part of it is commission-based. He provides good but spare advice, access to good research to back up my own decisions and excellent customer service. Someone else I know uses a father & son team of all asset money managers. They charge a fixed fee, use a discount brokerage for custody, make all the investment decisions based on their own underlying strategy (which involves a lot of cash and treasury STRIPs, covered call writing on consumer staples, financial and technology stocks, little international exposure and some shorting), generate superb returns even in down and choppy markets, but offer weak customer service (due to the discount broker, which stinks) and some limited options on certain things (like smaller sub-accounts for IRA rollovers, etc.).  I feel like I am at a crossroads where I need to either get way more involved in day to day management of this money or just dump it all on somebody else.

3) Hanukkah is winding down. One more night of gelt, candles and gift-mania. It has been fun to watch Roxanne enjoy it, singing the songs and prayers and getting mesmerized by the candles, and watching Stella start to learn that something special is going on.

Hope your holiday has been, or will be, as much fun.

I Am Starting Another Post With The Word "I"

Books tend to be streaky things for me. I'll read a bunch of good books in a row, then slog through some boring crap, then read a bunch of good ones, back to crap, repeat ad nauseum. I am either in the midst of or at the end of a good streak as follows:

The Day of Battle by Rick Atkinson. An excellent, thorough account of the Second World War in Italy and Sicily, one of the most forgotten theaters of the war for Americans (although not the most forgotten: that would be China-Burma-Indian). He won the Pulitzer for his previous book in this series of three on America and the Second World War in Europe -  it focused on North Africa. This is excellent. If you or someone you know likes military history, this is the book this year.

Hitler's Jewish Soldiers by Bryan Mark Rigg. A brilliant, detailed, exquisitely researched book with a premise almost too strange to believe: thousands, perhaps 150,000, men of Jewish descent, many classified as "mongrels" under Germany's hateful racial laws, fought for Germany in the Second World War. Many of them also fought like hell for the "privilege" of doing so. If you think that you understand the Holocaust, and the true evil and foulness of Nazism, read this book and know more than you imagined possible.

Better by Atul Gawande MD. I heard Dr. Gawande speak not long ago and was given this book as a gift at the event. A gifted writer whose careful, clear and touching descriptions of  the practice of medicine and surgery in particular remind me why I never could do what he does for a living. Bonus: I realized upon reading the acknowledgments that Dr. Gawande probably treated my father a few years ago - he and his partner are among the few surgeons in Boston who perform a particularly tricky procedure that cured my dad of an immensely painful problem.

My next two books are about hedge fund managers and a Kinky Friedman mystery. Those are two different books, I assure you. I'll report back soon.

I Made It Out of Clay

First of all, thanks to the nice folks over at the The Swellesley Report for the mention on their blog, and welcome to all the visitors from thereabouts. And I meant that you weren't  Universal Hub in  the nicest possible way. And no offense to Universal Hub either. Oh, I'm just going to move on now.

So Hanukkah starts tomorrow night at sundown. For those of you not so into the whole Jewish thing, Hanukkah is a minor Jewish festival. I don't get the day off, there is no special synagogue service and it just really isn't a big deal. It is no Sukkot, no Shabbat, certainly no Yom Kippur. It has sort of gotten a bit swollen up in this country, in the past hundred or so years, because of, shall we say, certain seasonal issues. My kids, of course, like the gift giving part, which is a very, very American enhancement to the festival. And hey, who doesn't like a holiday with fried potatoes as a ritual food?

My favorite part of the holiday is the element that talks about standing up and being Jewish when that isn't necessarily the mainstream thing to do. So our hanukkiot will be burning bright in my windows for the week, a neighborly, friendly, flickering reply to the beautiful Christmas lights all up and down my street.

So a Happy Hanukkah to all who enjoy it.