Change of Control

When ever there is a change of control it upsets almost everyone but the new leader. People/ employees scramble to find their new position in the new setting as just as many are being forced or choose to leave. This is happening at lightning speed not only in WDC but also corporate America.

The old expression "you are what you eat"....is never more true. Acquisitions, especially done in haste, always have new discoveries as they are integrated into the new company. This is exactly what is happening to the new now nationalized financial system, globally. All the mergers done in the fourth quarter 2008 had little or no due-diligence. Now after the fact managers, lawyers and shareholders are finding out just what has happened....probably the same for the new administration. Since the new president really did not articulate what it is exactly what he was going to do...now all the media is literally dying to find out. Amazing if you stand back and think about it that way.

Is this a contrarians delight?

1) The Gov. bond market has peaked....now starting to get crushed. (who will buy them now)
2) Oil has stopped going down..now starting to gap higher. (Mexican production is imploding)
3) The deflationists are calling for more for years to come. (What about supply side destruction happening faster than demand destruction)
4) The worst performing currency year to date? The Swiss Franc.
5) Gold in anything but the USD is setting new highs.
6) Obama's first executive order? Freeze his staffs salaries....how much fun is that?

We are aware of only a handful of bulls in this environment on US Equities. We know what to avoid....this seems to be easier for the time being......like Russia, India, most of Europe and the financials.....as well as government bonds.

That leaves hard assets that are well managed, over-capitalized and in leadership positions....at book value....that look great longer term....our perspective.

The trillion dollar question. How may more discoveries are there in terms of disclosure of liabilities......hard to believe we are not more than half way past.....

Danny Boy seen here watching out for his fuzzy friends on his left.