LA_MERC_Wetzny
July 31st, 2007, 10:50 AM
Whether or not you noticed by reading about it in the New York Times, hearing it on National Public Radio, or watching it on ABC News, the war against al Qaeda continues in Iraq.
Over the last few months I started posting links to articles from Michael Yon, a former Green Beret and current independent journalist, imbedded with forces fighting (successfully) face to face with AQI. Over the course of last 6 weeks or so, Yon has described in detail how the US surge under the leadership of General Petreaus, has created a fundamental change in the dynamics of the war. Now those reports are starting to hit the mainstream media. Recently an article was published in the New York Times, (by two of the harshest critics of Iraq policy) which essentially says we CAN WIN. It’s winnable and it’s happening.
As I mentioned in a previous thread on this topic, there is a dynamic I learned from my days at Morgan Stanley. Essentially it’s a simple theory where you evaluate the landscape of your situation, circumstance or investment; calculate what the “herd” is doing, saying, thinking or buying, and then you do the opposite.
There is a specific investment strategy that uses this theory very successfully. It’s called the Dow 10 theory. Simply you buy equal dollar amounts in the 10 highest dividend yielding stocks in the Dow and hold them for one year. At the end of one year you re-calculate and replace any of the 10 with what are now the 10 highest yielding stocks. It's a simple math equation/theory that FORCES you to do the OPPOSITE and buy beaten down and unpopular companies.
During the tech bubble of the late 90s, the high dividend stocks of the Dogs of the Dow were up 28.6% in 1996, up 22.2% in 1997, up 10.7% in 1998, and up 4.0% in 1999.
- During the difficult bear market years of 2000 - 2002, the Dogs of the Dow were up 6.4% in 2000, down 4.9% in 2001, and down 8.9% in 2002, and that was enough to significantly outperform the Dow, S&P 500, and Nasdaq.
- In 2003, the high dividend stocks of the Dogs of the Dow gained 28.7% and made new, all-time highs despite the massive bear market of 2000-2002!
- In 2004, the high dividend yield Dogs of the Dow remained in record territory with a 4.4% gain and then gave back 5.1% in 2005.
- In 2006, the Dogs of the Dow surged to new record highs with a gain of 30.3%. The Small Dogs of the Dow did even better with a gain of 42%!
I used the same theory of “herd” mentality when I moved most of my assets from equities in early 2000 and started Spartan Exploration. I invested most of my net worth into beaten down and unpopular oil and gas production. Mocked by most of my former colleagues and rejected by every potential partner, I got lucky. Now with the “experts” all predicting $100-$150 barrel oil, I’m going to take my chips off the table and find another opportunity. Maybe oil will go to $150, I don’t know. But when EVERYONE and I mean EVERYONE says it will, my instincts say go the other way and right or wrong that’s where I’m going.
WTF does this have to do with Iraq? Well I started to get the same “herd” mentality impression from what I was hearing, reading, and watching about Iraq. Talking head after talking head, Congressmen, Senators (however out of touch or illiterate they are) spouting on and on about “the war is lost! Runaway!!” Hell even some of my closest friends, who were die hard supporters started to go wobbly and suggest it might be time to pull the plug.
Interestingly it was a comment from my wife ("Lets's just get the Feck out") that caused me to stop and consider that the worst may actually be behind us in Iraq. So my friends (those who have the patience to stay with me here in this rant) I’ll say again, I support the mission in Iraq; I think we are making a difference. We’ve made mistakes and we will make more, but we have the capacity to learn and adjust. We are doing it better and faster than our enemy. We are winning, now hopefully we can do it before those with political agendas which will not support a military victory in Iraq, force us to surrender and snatch defeat from the jaws of victory!
Here are a few interesting links and maybe one to the New York Times article.
http://article.nationalreview.com/?q=YWQ5NDkwMDNiMzZhODNlNjdhN2JiM2EyMjQ1N2ZmMWQ=
http://www.nytimes.com/2007/07/30/opinion/30pollack.html?_r=3&oref=slogin&oref=slogin&oref=slogin
http://www.michaelyon-online.com/wp/bread-and-a-circus-part-i-of-ii.htm
David
Over the last few months I started posting links to articles from Michael Yon, a former Green Beret and current independent journalist, imbedded with forces fighting (successfully) face to face with AQI. Over the course of last 6 weeks or so, Yon has described in detail how the US surge under the leadership of General Petreaus, has created a fundamental change in the dynamics of the war. Now those reports are starting to hit the mainstream media. Recently an article was published in the New York Times, (by two of the harshest critics of Iraq policy) which essentially says we CAN WIN. It’s winnable and it’s happening.
As I mentioned in a previous thread on this topic, there is a dynamic I learned from my days at Morgan Stanley. Essentially it’s a simple theory where you evaluate the landscape of your situation, circumstance or investment; calculate what the “herd” is doing, saying, thinking or buying, and then you do the opposite.
There is a specific investment strategy that uses this theory very successfully. It’s called the Dow 10 theory. Simply you buy equal dollar amounts in the 10 highest dividend yielding stocks in the Dow and hold them for one year. At the end of one year you re-calculate and replace any of the 10 with what are now the 10 highest yielding stocks. It's a simple math equation/theory that FORCES you to do the OPPOSITE and buy beaten down and unpopular companies.
During the tech bubble of the late 90s, the high dividend stocks of the Dogs of the Dow were up 28.6% in 1996, up 22.2% in 1997, up 10.7% in 1998, and up 4.0% in 1999.
- During the difficult bear market years of 2000 - 2002, the Dogs of the Dow were up 6.4% in 2000, down 4.9% in 2001, and down 8.9% in 2002, and that was enough to significantly outperform the Dow, S&P 500, and Nasdaq.
- In 2003, the high dividend stocks of the Dogs of the Dow gained 28.7% and made new, all-time highs despite the massive bear market of 2000-2002!
- In 2004, the high dividend yield Dogs of the Dow remained in record territory with a 4.4% gain and then gave back 5.1% in 2005.
- In 2006, the Dogs of the Dow surged to new record highs with a gain of 30.3%. The Small Dogs of the Dow did even better with a gain of 42%!
I used the same theory of “herd” mentality when I moved most of my assets from equities in early 2000 and started Spartan Exploration. I invested most of my net worth into beaten down and unpopular oil and gas production. Mocked by most of my former colleagues and rejected by every potential partner, I got lucky. Now with the “experts” all predicting $100-$150 barrel oil, I’m going to take my chips off the table and find another opportunity. Maybe oil will go to $150, I don’t know. But when EVERYONE and I mean EVERYONE says it will, my instincts say go the other way and right or wrong that’s where I’m going.
WTF does this have to do with Iraq? Well I started to get the same “herd” mentality impression from what I was hearing, reading, and watching about Iraq. Talking head after talking head, Congressmen, Senators (however out of touch or illiterate they are) spouting on and on about “the war is lost! Runaway!!” Hell even some of my closest friends, who were die hard supporters started to go wobbly and suggest it might be time to pull the plug.
Interestingly it was a comment from my wife ("Lets's just get the Feck out") that caused me to stop and consider that the worst may actually be behind us in Iraq. So my friends (those who have the patience to stay with me here in this rant) I’ll say again, I support the mission in Iraq; I think we are making a difference. We’ve made mistakes and we will make more, but we have the capacity to learn and adjust. We are doing it better and faster than our enemy. We are winning, now hopefully we can do it before those with political agendas which will not support a military victory in Iraq, force us to surrender and snatch defeat from the jaws of victory!
Here are a few interesting links and maybe one to the New York Times article.
http://article.nationalreview.com/?q=YWQ5NDkwMDNiMzZhODNlNjdhN2JiM2EyMjQ1N2ZmMWQ=
http://www.nytimes.com/2007/07/30/opinion/30pollack.html?_r=3&oref=slogin&oref=slogin&oref=slogin
http://www.michaelyon-online.com/wp/bread-and-a-circus-part-i-of-ii.htm
David