Sunday, August 19, 2007

Um, Wow

Well, after a gut-wrenching week -- which I spent mostly at the beach and the movies in various resorts along the coast of South Carolina - all is not well.

Our portfolio has lost about 10% in recent days. We're still around 12% up for the year, thanks largely to a stalwart performance by our friend, LDK Solar. But holy moly Miss Jolie, what are we to do?

Well, there's not much to do but mind the old trailing stops and we haven't gotten near any of them yet, thankfully.

Now what about Ben? Well, he's really trying not to futz with interest rates and that's good. And I'm always in favor of not toying with rates. That's pretty much what got us into this mess in the first place.

You remember the negative interest rates Greenspan was charging for home mortgages? Wasn't that COOL? Heck, you could buy a million dollar house on the shores of the Chesapeake for about $500 a month? I mean, what fun! The coolest guys in the world headed companies with names like Beazer.

That's pretty much over with now, huh?


So, will Bernanke play with the Fed Funds rate? Or will he stay put? If he stays put, he better get an iron cup for down there, because I would imagine that Steve Schwartzman will personally travel to Washington D.C. in his slightly tarnished, solid-gold Boeing Dreamliner and deliver a swift, New Yawk-style kick to BB's gonadal region.

I still think private equity is a good business. And I think it'll continue to be good for investors long after the current credit crunch is over. But for now, the PE guys got to be sweating bullets.

As for Bernanke, I think it all depends on what happens between now and the next Fed meeting. That will determine what he does. If the market volatility calms down - even if the indexes slide a bit overall - I think Ballsy Ben will do his Gambler impersonation and "hold em."

Till then, we'll be looking for some good ways to play this madness. Commodities? Gold? Silver? Perhaps a little of each. We shall see.


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