In Anticipation of BRK Annual Letter this weekend...

Here's What Buffet Wouldn't Do, and Maybe You Shouldn't Either - Bloomberg

Why Seth Klarman is Sitting on His Wallet - PE4Fams.com

From Rob McCreary at PE4Fams.com

Whenever there is something written about Seth Klarman, or even more importantly, when the man speaks himself, I stop whatever I am doing to read or listen. Mr. Klarman is the founder of Baupost Group which is one of the best performing hedge funds of all time.

Rating Agencies the New Target of Matt Taibbi's Colorful Writing About the Financial Crisis

While his tong in cheek style can get a bit self serving, Taibbi scores for explaining complex concepts in a simple way.

http://www.rollingstone.com/politics/news/the-last-mystery-of-the-financial-crisis-20130619

June 7 Jobs Report

Today's jobs report from the BLS was interesting.  Non-farm payroll employment of 175,000 just beat consensus (167,000) for May and the unemployment rate was unchanged at 7.6% (with a slight uptick MoM).  The March and April numbers were revised slightly lower.  This appears in line with prior years' May trends.   Expect to see a fall in the estimate and the actual over the next three summer months.

The labor force participation rate (LFPR) was unchanged while the civilian labor force rose by 420,000 to 155.7 million in May.  That means a .04 drop in the LFPR (see my March 13 post on the LFPR effect on the economy).

Check out the charts Bill McBride at Calculated Risk develops that track the employment numbers. Take note of the spread between the employment population ratio and the participation rate!

It seems this economy will plod along for bit longer.  The is whether we are in Bill Gross' "new normal" or simply waiting at the gate as Dr. David Kelly at J.P. Morgan Asset Management says time and again?  From an investor's perspective, I anticipated sideways economic data and a prolonged recovery due to changes in the labor force, changes corporate labor/capital production ratios and a general sense of caution across the economy - even with the Fed priming the motor.  I thought it would be a sluggish economy through Q3 2013 with a pick up in Q4.  Let's wait and see. 

Predicting the economy, though entertaining, is a fool's errand.  Invest in good companies.

Memorial Day

My father served in the Air Force during the Vietnam War and we grew up with the highest respect for military, public and community service.  Deciding not to serve after college was a difficult decision for me, but that same call to service led me to Federal civilian service after graduate school.

While there is no greater calling a person's life than to serve his or her fellow man, today we remember those souls who gave their life in the line of duty for this great country.  I must say, this day has greater meaning to me as my younger brother spent the better part of this year on deployment as a Naval helicopter pilot.  He was deployed to most of the hot spots of the past 12 months and not a day went by that I not pray for his safety.

Today I want to thank those who gave their lives for our country.  Moreover, I want to thank the family members who carried on after they lost their loved ones.  We will never forget your sacrifices.  May God Bless you.



An editorial article titled simply "Memorial Day" from today's Wall Street Journal:

As Americans prepare to enjoy a Memorial Day of barbecues and beach trips, it's easy to forget why this day occupies a special place on the American calendar. A recent reminder comes, perhaps appropriately, from the "forgotten war."

Last month President Obama posthumously awarded the Medal of Honor to Father Emil Kapaun, a Catholic priest who served as a U.S. Army chaplain during the Korean War.

Enlarge Image

Associated Press

This image provided by the U.S. Army shows Army chaplain (Second Lt.) Emil Kapaun circa 1943.

Under a ferocious assault from Chinese communists at Unsan, Korea in November 1950, Kapaun repeatedly dodged enemy fire to pull comrades to safety, and to tend to their injuries. When he was ordered to evacuate, he stayed behind to care for the wounded until his capture. Witnessing an enemy soldier aiming his rifle and preparing to execute a wounded American, Kapaun shoved the enemy soldier aside, picked up the wounded man, and carried him for miles on a death march ordered by the communists.

Until his death the following year at a prisoner-of-war camp, Kapaun cared for his fellow prisoners and inspired them by defiantly practicing his faith despite brutal punishment. In presenting the medal last month to Kapaun's family, President Obama related Kapaun's celebration of Easter in 1951.

"He held up a small crucifix that he had made from sticks. And as the guards watched, Father Kapaun and all those prisoners—men of different faith, perhaps some men of no faith—sang the Lord's Prayer and 'America the Beautiful.' They sang so loud that other prisoners across the camp not only heard them, they joined in, too—filling that valley with song and with prayer." Many prisoners of the camp would later credit Kapaun with saving their lives.

His heroism occurred six decades ago. And of course the most recent decade has provided Americans with many more examples of selfless heroism. This weekend is also a time to remember men like Michael A. Monsoor, a Navy SEAL who saved the lives of his fellow soldiers by throwing himself on a grenade in Iraq in 2006. Or Robert J. Miller, an Army Green Beret who repeatedly charged over exposed ground and battled more than 100 enemy fighters to save the lives of his fellow soldiers in Afghanistan in 2008.

After the 2010 ceremony to award Miller's medal, his mother Maureen Miller said, "We want everyone to know he loved what he was doing. He was good at what he was doing. And he believed he was working for a good cause." It is among the greatest of causes, and Americans are fortunate to have been defended by such men.

Things I learned today #1-3

Thing #1

These are four things an investor ought to understand:

1. Know what you know
2. Know what you don't know
3. Know what you don't have to know
4. Realize there is always a possibility that you don't know that you don't know 

Thing #2

Charlie Munger says there are three reactions to new investment ideas:

1. Yes
2. No
3. Too Hard

...and he sticks to them.  Not to say one cannot be curious, but I refer you back to Thing #1.

Thing #3

From Uncle Warren: Understanding investing makes you a better businessperson and understanding business makes you a better investor. 

Goldman highlights LFPR as Fed target problem

Now the Goldman Sachs highlights the LFPR as a major issue for structural unemployment moving forward. Interestingly, they site the correlation between welfare programs and sustained unemployment in Europe and the U.S.

http://feedly.com/k/140LuJ3