Monday, September 11, 2017
I received an email last week from a former student of mine from Bogota, Columbia. We have been corresponding lately about possible career changes. He asked me a question I get asked often: “What is my favorite business book?”
That is a no brainer for me, “Business Adventures,” by John Brooks.
Today, four decades after it was first published—"Business Adventures" remains the best business book I've ever read. John Brooks is still my favorite business writer.
A skeptic might wonder how this out-of-print collection of New Yorker articles from the 1960s could have anything to say about business today. After all, in 1966, when Brooks profiled Xerox , the company's top-of-the-line copier weighed 650 pounds, cost $27,500, required a full-time operator and came with a fire extinguisher because of its tendency to overheat. A lot has changed since then.
It's certainly true that many of the particulars of business have changed. But the fundamentals have not. Brooks's deeper insights about business are just as relevant today as they were back then. In terms of its longevity, "Business Adventures" stands alongside Benjamin Graham's "The Intelligent Investor," the 1949 book that I believe is the best book on investing I have ever read.
Brooks grew up in New Jersey during the Depression, attended Princeton University (where he roomed with future Secretary of State George Shultz ) and, after serving in World War II, turned to journalism with dreams of becoming a novelist. In addition to his magazine work, he published a handful of books, only some of which are still in print. He died in 1993.
As the journalist Michael Lewis wrote in his foreword to Brooks's book "The Go-Go Years," even when Brooks got things wrong, "at least he got them wrong in an interesting way." Unlike a lot of today's business writers, Brooks didn't boil his work down into pat how-to lessons or simplistic explanations for success. (How many times have you read that some company is taking off because they give their employees free lunch?) You won't find any listicles in his work. Brooks wrote long articles that frame an issue, explore it in depth, introduce a few compelling characters and show how things went for them.
In one called "The Impacted Philosophers," he uses a case of price-fixing at General Electric to explore miscommunication—sometimes intentional miscommunication—up and down the corporate ladder. It was, he writes, "a breakdown in intramural communication so drastic as to make the building of the Tower of Babel seem a triumph of organizational rapport."
In "The Fate of the Edsel," he refutes the popular explanations for why Ford's flagship car was such a historic flop. It wasn't because the car was overly poll-tested; it was because Ford's executives only pretended to be acting on what the polls said. "Although the Edsel was supposed to be advertised, and otherwise promoted, strictly on the basis of preferences expressed in polls, some old-fashioned snake-oil selling methods, intuitive rather than scientific, crept in." It certainly didn't help that the first Edsels "were delivered with oil leaks, sticking hoods, trunks that wouldn't open and push buttons that…couldn't be budged with a hammer."
One of Brooks's most instructive stories is "Xerox Xerox Xerox Xerox." (The headline alone belongs in the Journalism Hall of Fame.) The example of Xerox is one that everyone in the tech industry should study. Starting in the early '70s, Xerox funded a huge amount of R&D that wasn't directly related to copiers, including research that led to Ethernet networks and the first graphical user interface (the look you know today as Windows or OS X).
But because Xerox executives didn't think these ideas fit their core business, they chose not to turn them into marketable products. Others stepped in and went to market with products based on the research that Xerox had done. Both Apple and Microsoft , for example, drew on Xerox's work on graphical user interfaces.
I know I'm not alone in seeing this decision as a mistake on Xerox's part. Many other journalists have written about Xerox, but Brooks's article tells an important part of the company's early story. He shows how it was built on original, outside-the-box thinking, which makes it all the more surprising that as Xerox matured, it would miss out on unconventional ideas developed by its own researchers.
Brooks was also a masterful storyteller. He could craft a page-turner like "The Last Great Corner," about the man who founded the Piggly Wiggly grocery chain and his attempt to foil investors intent on shorting his company's stock. I couldn't wait to see how things turned out for him. (Here's a spoiler: not well.) Other times you can almost hear Brooks chuckling as he tells some absurd story. There's a passage in "The Fate of the Edsel" in which a PR man for Ford organizes a fashion show for the wives of newspaper reporters. The host of the fashion show turns out to be a female impersonator, which might seem edgy today but would have been scandalous for a major U.S. corporation in 1957. Brooks notes that the reporters' wives "were able to give their husbands an extra paragraph or two for their stories."
Brooks's work is a great reminder that the rules for running a strong business and creating value haven't changed. For one thing, there's an essential human factor in every business endeavor. It doesn't matter if you have a perfect product, production plan and marketing pitch; you'll still need the right people to lead and implement those plans.
"Business Adventures" is as much about the strengths and weaknesses of leaders in challenging circumstances as it is about the particulars of one business or another. In that sense, it is still relevant not despite its age but because of it. John Brooks's work is really about human nature, which is why it has stood the test of time.
FALL MOVIE PREVIEW - FBI battles with the White House. Revelatory government leaks on the front page. Soldiers haunted by unwinnable wars. Courtroom clashes over civil rights. Movies take years to make, but many of this fall's films may feel almost preternaturally programmed for the President Trump era.
Writer-director Peter Landesman ('Concussion') found himself making a film about the FBI battling White House interference while a curiously similar conflict played out between Trump, James Comey and the FBI.
His movie, 'Mark Felt: The Man Who Brought Down the White House' tells the story of Felt (played by Liam Neeson), the legendary Watergate source known as Deep Throat, who was the No. 2 official at the FBI during the scandal. It's been in the works since 2005.
The film, [out] Sept. 29, gives a close-up to the man previously seen ... as the shadowy figure in the parking garage of 'All the President's Men.'
Similar parallels may also follow Steven Spielberg's keenly awaited 'The Post,' (Dec. 22). Spielberg's drama is about The Washington Post's 1971 publishing of the classified Pentagon Papers, which revealed many of the government's lies about the Vietnam War.
The film, starring Meryl Streep and Tom Hanks, is like an all-star team assembled as Hollywood's response to Trump.
Clint Eastwood, who has previously voiced support for Trump, is prepping 'The 15:17 to Paris' about the 2015 Thalys train attack in France, with the real-life heroes playing themselves.
‘Thank You for Your Service' (Oct. 27) ... is about three soldiers returning from Iraq, adjusting to civilian life and fighting post-traumatic stress disorder.
‘Marshall' (Oct. 13), stars Chadwick Boseman as a young Thurgood Marshall defending a black chauffeur in 1941 against his wealthy socialite employer in a sexual assault and attempted murder trial.
Rob Reiner's 'LBJ' (Nov. 3) stars Woody Harrelson as the 36th president, taking office after the assassination of John F. Kennedy and passing the Civil Rights Act.
Put all these on your to see list in the coming months.
COLLEGE CHRONICLES – COLLEGE HOCKEY INTRIGUE - All-America goaltender Kyle Hayton made it official last week, that he's leaving St. Lawrence and will play for Wisconsin this season as a graduate.
It had been one of the worst-kept secrets this summer that Hayton's intention was to transfer. However, he had to first pass enough courses during the summer at St. Lawrence to graduate. That wasn't known for sure until this past week. I bet one of those courses was Geography.
According to Wisconsin, Hayton passed about a year's worth of courses over the summer, and got 'As' in all of them (hmmm right, a goalie?).
As a graduate transfer, Hayton does not have to wait the usual one-year transfer period. He has one more season of NCAA eligibility remaining and can do that immediately with the Badgers.
"Basically I just wanted a new challenge," Hayton said.
Two weeks ago, Matt Jurusik had announced he was leaving Wisconsin to return to the USHL, signaling Hayton's impending arrival.
"I am lucky enough to have the chance to continue my collegiate career with one of the best coaching staffs in the country and an extremely talented group of players," Hayton said. "I am so excited to get rolling towards a Championship as a Badger."
Hayton, 23, is a native of Denver. His best season statistically came as a freshman, when he posted five shutouts and a .937 save percentage. His save percentage was .935 as a sophomore and .929 last season as a junior.
Hayton is an undrafted free agent in the NHL's eyes.
"I think he's a confident kid, a kid that looks at our program and the goalies we've produced and he wants to be one of those guys," Wisconsin coach Tony Granato said.
Wisconsin's other goaltender is sophomore Jack Berry. Last season as a freshman, Berry started the most games of anyone on the team, but finished with a save percentage of just .898 as the Badgers fell just short of making the NCAAs.
As Wisconsin's publicity office pointed out in a news release, star NFL quarterback Russell Wilson made a similar move after three years at North Carolina State, playing his final season of college football for the Badgers.
"Big shoes to fill," Hayton said. Not too many quotes coming out of the St. Lawrence camp.
Wisconsin plays St. Lawrence in two games in Madison early in the upcoming season, Oct. 27 and 28.
BIRTHDAYS THIS WEEK – Birthday wishes and thoughts this week Maria Bartiromo (50) Brooklyn, N.Y.; Virginia Madsen (56) Chicago, Ill.; Tommy Lee Jones (71) San Saba, TX.
POTUS WEEK - Hurricane Irma: President Trump's week will be dominated by the storm response. Trump said he plans to visit Florida "very soon," according to CNN, but the travel schedule hasn't been finalized, according to a senior administration official.
House agenda: Because so many members will be out of town due to Hurricane Irma, no votes are expected in the House on Monday. Later in the week, House Republicans will pass their eight remaining appropriations bills (sending the full package of 12 spending bills over to the Senate.)
Senate agenda: The defense authorization bill — John McCain's baby — is expected to come up this week. It's unclear how long this traditionally bipartisan bill will take to get through the amendment process.
9/11 remembrance: Monday is September 11. President Trump and the First Lady will lead a staff-wide moment of silence at the White House. They'll then visit the Pentagon.
Foreign visitor: Malaysian Prime Minister Najib Razak visits the White House on Tuesday.
Hill outreach: Trump hosts a bipartisan dinner with senators on Wednesday night.
Earlier that day, South Carolina Sen. Tim Scott, the only African-American Republican in the Senate, will have a one-on-one meeting with Trump at the White House. The topic: race in America. Scott has been harshly critical of Trump on racial issues — especially post-Charlottesville — and plans to expose the president to his own moving life story in forceful terms.
CREDIT HACK - Credit-reporting company Equifax said Thursday that hackers gained access to some of its systems, potentially compromising the personal information of roughly 143 million U.S. consumers. The hack is second in size only to the pair of attacks on Yahoo disclosed last year, which potentially affected as many as 1.5 billion customers. The Equifax breach could prove especially damaging given credit-reporting companies’ gateway role in determining which consumers gain access to financing and how much they get. The attack differs, too, in that the attackers in one swoop gained access to several pieces of consumers’ information—names, Social Security numbers, birth dates and addresses—that could make it easier to commit fraud.
THE NEW iPHONE - Called 'iPhone X: Strings of software code inside of the leaked operating system ... show the expected three new phones will be called the iPhone 8, iPhone 8 Plus, and iPhone X.
The iPhone 8 and iPhone 8 Plus are successors to the current iPhone models, while the iPhone X is the premium version with an all-new design, crisper OLED screen, improved cameras, and a 3-D facial recognition scanner for unlocking the device.
The 'X' in the iPhone's name may be a reference to this model being a special 10th anniversary edition."
This [iPhone] iteration could prove a test of [Apple's] consumer tech dominance as it faces a bevy of challenges: Samsung seems to have resumed its smartphone momentum with the new Galaxy Note 8, Apple trails competitors such as Google in the home hub space, Siri's artificial intelligence isn't as advanced as others, and it is losing to Amazon.com as an entertainment innovator.
Is this the moment [Apple and CEO Tim Cook] reclaim the mantle as tech's top innovator?
Apple fans, who crave the days when the company changed the world with revolutionary products, are eager to see more ... industry-disrupting ideas.
MARKET WEEK - Investors will focus this week on the biggest U.S. company by market capitalization.
Apple Inc. is expected to roll out three new iterations of its popular iPhone on Tuesday, including a larger and more expensive 10th anniversary showcase edition and updates to its two iPhone 7 models that started selling last year.
Excitement for the unveiling has grown all year among investors. The stock is up 37% in 2017, nearly four times the gain of the broader S&P 500 index.
The hype is a perennial feature of Apple releases: The stock has gained 21% on average in the six months leading up to past iPhone launches.
But history suggests that the momentum is likely to fade after Tuesday. In the week after a new launch, Apple shares have averaged a 1.6% fall, according to The Wall Street Journal's Market Data Group.
September is a historically tough month for Apple's stock. It has averaged a 4.2% drop during the 36 Septembers since it went public, according to Schaeffer’s Investment Research. The company has also rolled out new iPhones in September in recent years.
Such performance matters for investors in more than just Apple. The company, valued at $819 billion, makes up 3.9% of the market value of the S&P 500, the highest of any of the index’s companies. That means Apple has an outsized impact on the S&P 500’s performance.
A disappointing product launch could drag on major U.S. stock indexes during an already-volatile month. The S&P 500 is down slightly in September as investors have fretted about a range of issues from conflict with North Korea to recent soft inflation readings and the impact from the hurricanes that have hit the U.S.
That said, Apple has tended to rebound pretty quickly from a post-iPhone launch slump. A month after the release, shares gain 1.3% on average, and six months later they're up almost 14%.
The stock has averaged a 31% increase during the period between new iPhone releases, but not every cycle has been a winner. Shares fell 21% during the 3G cycle, though they rose 94% during the 3GS cycle that followed, the best run on record for an iPhone release. More recently, shares have gained 43% in the current stretch of the 7 and the 7 Plus cycle.
GRAY BEARDS - The NFL season begins with 7 starting quarterbacks who are 35 or older.
The dean, New England Patriots' Tom Brady (40), is joined by the New Orleans Saints' Drew Brees (38), the New York Jets' Josh McCown (38), the Arizona Cardinals' Carson Palmer (37), the New York Giants' Eli Manning (36), the Steelers' Ben Roethlisberger (35) and the L.A. Chargers' Philip Rivers (35).
The Green Bay Packers' Aaron Rodgers — who, inspired by Brady's diet and stretching, thinks it's "realistic" to play past 40 — is 33.
The reason for the crop of graybeard QBs: Quarterbacks are delaying retirement while making more money, eating better, working out year-round and benefiting from rule changes that have resulted in fewer hits and less wear and tear on their bodies. Bolstering veterans' value is the paucity of QBs running the pro-style system in college.
The spate of rule changes over the last two decades that fed the offensive explosion is bearing fruit now that quarterbacks are elongating their peak performance years and prolonging their careers.
P.S. Sports Illustrated's pick for Super Bowl LII, on Feb. 4 at U.S. Bank Stadium in Minneapolis: Patriots 31, Packers 27 (Steelers and Vikings also in the final four).
SWAMI’S WEEK TOP PICKS –
NFL Football Pick of the Week – Sunday 9/17, 1:00 PM ET, CBS: Buffalo Bills (1-0) visit Carolina Panthers (1-0). Can Buffalo stay in first place in the AFC East (NOT), Carolina wins in Charlotte 24 – 14. (Season to date 1-0).
College Football Pick of the Week – Saturday 9/16, 8:00 PM ET, ABC: #3 Clemson Tigers (2-0) visit #14 Louisville Cardinals (2-0). Not an easy early season schedule, last week Auburn, now Louisville. Clemson wins in Louisville 38 – 30. (Season to date 1-1)
D-III Football Pick of the Week – Saturday 9/16, 4:30 PM PT: #1 Mary Hardin-Baylor Crusaders(1-0) visit #7 Linfield Wildcats (1-0). A good cross country test for the defending National Champ Crusaders. The purple will be out in full force at Maxwell Field in Oregon, but not enough, Crusaders win 27 – 21. (Season to date 1-1)
SCIAC Game of the Week (Men’s Soccer) – Saturday 9/16, 7:00 PM PT: University of La Verne Leopards (3-1) at University of Redlands Bulldogs (2-3). First place is on the line in the SCIAC Conference, Leos win a big one on the road 3 – 2. (Season to date 2-0)
MLB Game of the Week (9/16) – Los Angeles Dodgers (92-51) at Washington Nationals (88-55), by this time on Saturday if the Dodgers have not stopped their losing streak the Dodger band wagon will be officially empty. Nats win 6 – 2.
Season to Date (53 - 22)
ON THIS DATE - “Star Trek” premiered on NBC today 1966—was a favorite of Martin Luther King for its diversity.
Next Blog: Words of the month and the search committee.
Until next time, Adios
September 11, 2017
CARTOON OF THE WEEK – “Never Forget”
Friday, September 8, 2017
Happy Friday…In the last few weeks there have been widespread fires in Montana, Los Angeles and Oregon. Two historic hurricanes have barreled toward the United States and the Caribbean, leaving mass devastation in their wake. And the worst earthquake in a century just hit Mexico, bringing with it tsunami-like waves.
And this - “Haven't seen anything like it before,' said Sen. John McCain (R-Ariz.), who has served in the Senate for three decades. Of Trump, McCain said: 'I have no way of divining his motives. I'm a pretty intelligent guy, but I don't understand this.'"
Are we relaxed?
With a new academic year new challenges in maintaining the balance of old school learning with new technology. The constant battle of non-cellular classrooms and high tech platforms to teach online, hybrid, and tele-presence: students at all levels demand real time learning with traditional lecture and hands on problem solving.
Over the years, at least for me over the past 30 or so, I can see how technology has grown tremendously and has made us as a people change; it’s changed the way people act, the way we go about everyday tasks, and the way we work, learn and communicate. A lot of it has to do with how easy it is to gain access to online information. We use email instead of physically mailing letters, we book our vacations online instead of using a local travel agent, and we plug digital cameras into our PCs, downloading pictures instead of going to a local retail store to have someone develop them; these tasks all make our lives a bit more convenient and make us a bit more self-sufficient.
But is this always a good thing, to be more sufficient and get things done quicker? Quicker isn’t always better when you think about it; not in the long run, and certainly not to everyone. Sending email instead of placing a stamp on an envelope doesn’t help the post office get out of debt (not that anything would at this point). Using an online travel arrangement site doesn’t help the small business owner in town who relies on me for booking that next trip to Disney World, or that cruise to the Bahamas. Most importantly, do not ever tell my 85 year old father that he will have to get used to his 20+ grand-kids using email only. I still write notes every week.
Just one more note to mention here, from an education/learning standpoint. I do not know how many students would have been able to have furthered their education if it were not for technology and online schooling. The demands of work and family traditional brick & mortar school to earn undergraduate, graduate, and post graduate degrees a few years ago would never have happened if that were the only option. Many simply do not have, or care to make the time, for that form of learning.
From eighteen year old college freshman to fifty year old graduate students, the technology demands in the workplace and in society insist on learning platforms to provide study, research, and above all else the discipline of thinking, interpretation, and common sense. One huge problem in these demands is how to maintain curriculums and course offerings to keep up with these changes and demands. We enter the new academic year with these challenges.
SMARTPHONES???? - Have Smartphones Destroyed a Generation? More comfortable online than out partying, post-Millennials are safer, physically, than adolescents have ever been. But they're on the brink of a mental-health crisis," in The Atlantic, by Jean M. Twenge (Adapted from her book, "iGen," out Aug. 22):
"The more time teens spend looking at screens, the more likely they are to report symptoms of depression. Eighth-graders who are heavy users of social media increase their risk of depression by 27 percent, while those who play sports, go to religious services, or even do homework more than the average teen cut their risk significantly."
"The allure of independence, so powerful to previous generations, holds less sway over today's teens, who are less likely to leave the house without their parents. The shift is stunning: 12th-graders in 2015 were going out less often than eighth-graders did as recently as 2009."
"Today's teens are also less likely to date. The initial stage of courtship, which Gen Xers called 'liking' (as in 'Ooh, he likes you!'), kids now call 'talking'— an ironic choice for a generation that prefers texting to actual conversation. After two teens have 'talked' for a while, they might start dating. But only about 56 percent of high-school seniors in 2015 went out on dates; for Boomers and Gen Xers, the number was about 85 percent."
COLLEGE CHRONICLES – A problem never discussed on many college campuses is many students do not eat properly. To analyze food insecurity across college campuses, a new report from the Urban Institute details findings from the October and December supplements to the Current Population Survey. The report says that levels of food insecurity — usually defined as limited or uncertain access to enough food — differ based on factors such as race, age, and whether a student is attending a two- or four-year institution. Here are some statistics from the report:
From 2011 to 2015, one in five students attending a two-year college lived in a food-insecure household.
28 percent of black students attending two-year colleges reported experiencing food insecurity during the previous 12 months.
13 percent of women attending four-year institutions were food insecure during the previous 12 months, along with 8 percent of their male counterparts.
23 percent of adults ages 31 to 50 attending two-year institutions reported experiencing food insecurity during the previous 12 months, the largest percentage of any age group.
Many students have no disposable income to even afford a simple meal every day.
DYSFUNCTIONAL WELLS FARGO - Wells Fargo's board, facing continuing revelations of customer abuses, said on last week it will replace Chairman Stephen Sanger with former Federal Reserve governor and current board member Elizabeth Duke, effective Jan. 1.
"Sanger will retire from the board at the end of the year after a 14-year tenure, according to the bank, along with Cynthia Milligan, who joined the board in 1992, and Susan Swenson, who joined in 1998. Duke has been a member of the board since 2015 and was named vice chair in October 2016. Karen Peetz, who was appointed to the board earlier this year, will replace Enrique Hernandez as head of the Risk Committee. Hernandez and Sanger both only secured a narrow majority of support for reelection at Wells Fargo's annual shareholder meeting in April."
Recap: Last September, Wells paid a $185 million fine to regulators because thousands of its employees had opened accounts without customers' permission. Shortly afterward, then-Chairman and CEO John Stumpf stepped down from the bank. The number of accounts potentially affected - originally estimated to be as high as 2 million - might actually be much higher. More recently, the bank disclosed that it had charged hundreds of thousands of customers for auto insurance they didn't need, following a report in the New York Times.
Things are looking bad for Wells these days. The bank had decent political cover at the end of last year and the beginning of this year when Democrats' fervor around Trump's nominees and policies put Wells considerably lower on their to-do list. But now, the auto insurance revelations place CEO Tim Sloan - who was supposed to clean up after Stumpf - in the hot seat, put the specter of more regulatory sanctions on the table, and provide fodder for the bank's fiercest critics who say it's too big to manage. And it's not even clear this is the last shoe to drop from Wells. But for the time being, it's unclear how Republicans will play this.
BIRTHDAYS THIS WEEK – Birthday wishes and thoughts this week to Heidi Bravo …famous word puzzle competitor; Bob Newhart (87) Beverly Hills, CA.
LA LA LAND – Los Angeles Mayor Eric Garcetti started the week toying with a 2020 presidential run on a trip to New Hampshire, but the Los Angeles mayor is still keeping his options open for a 2018 run closer to home. That includes next year's open governor's race, and possibly a Senate race, should Sen. Dianne Feinstein decide not to seek a fifth term. 'I never say no,' Garcetti said this week when asked about the governor's race, which he said he'll make a decision about in September. 'I realize that I need to, because I have enough people who have said, 'Are you in that race, or not?' I need to definitively give them an answer. I need to definitively think it through.”
HOUSTON HUMANITY - New Yorker cartoonist Chris Ware "singled out moments of grace as inspiration for this week's cover. Ware, a graduate of the University of Texas at Austin, reflected on his experience in the Lone Star State":
I lived in San Antonio in high school, in the mid-nineteen-eighties, and attended college in Austin ... I liked Houston for its big buildings, its diversity, and its slack zoning laws, which made neighborhoods unpredictable and surprising.
One night, my cartoonist friend John Keen and I stopped at a restaurant-bar that was about halfway to Houston, in the very Texas-sounding town of Winchester. The parking lot was locked and loaded with about two dozen pickup trucks, and, as scrawny liberal Austinites, we braced ourselves and pushed open the saloon doors, only to find black and white farmers talking and laughing, playing poker, and shooting pool together. In a corner, an interracial couple quietly ate barbecue. This Winchester bar, we realized, was more integrated than the University of Texas we'd just left.
TELEVISION - The Vietnam War," a 10-part, 18-hour documentary by Ken Burns and Lynn Novice, premieres on PBS on Sunday, Sept. 17. Watch the trailer.
The $30 million film, more than 10 years in the making, offers an intensely immersive, often head-spinning history lesson, combining grand sweep and archival depth with sometimes devastatingly emotional first-person interviews with people from all sides (including more than two dozen Vietnamese, from both the winning and losing sides).
There are scenes covering 25 battles, 10 of which are examined from multiple perspectives.
Every word of the script, written by the historian Geoffrey C. Ward, was carefully weighed. And perhaps none were as carefully debated as that opening narration, which describes the war as ending in 'failure' (not 'defeat,' Mr. Burns noted, though he used the word himself). 'I think we probably spent six months on the word 'failure.
"As for 'begun in good faith,' Mr. Burns said he stands by those words, which he said reflect the intentions of those who fought the war, even if they are perhaps 'too generous' to our leaders."
Worth the click: Shot by Shot: Building a Scene in Ken Burns and Lynn Novick's Vietnam Epic.
JACK ASS OF THE MONTH - N.Y. Daily News: "First, SpyGate. Now, iGate."
Investigators for Major League Baseball have determined that the Red Sox, who are in first place in the American League East and very likely headed to the playoffs, executed a scheme [!] to illicitly steal hand signals from opponents' catchers in games against the second-place Yankees and other teams.
The Yankees, who had long been suspicious of the Red Sox' stealing catchers' signs in Fenway Park, contended ... video showed a member of the Red Sox training staff looking at his Apple Watch in the dugout [apparently getting texts from video spotters]. The trainer then relayed a message to other players in the dugout, who, in turn, would signal teammates on the field.
Baseball investigators corroborated the Yankees' claims based on video the commissioner's office uses for instant replay and broadcasts.
The Red Sox ... admitted that their trainers had received signals from video replay personnel and then relayed that information.
For this, we congratulate the Boston Red Sox our Jack Ass of the Month.
MARKET WEEK - The month of September is historically the weakest month of the year for the U.S. stock market. Investors shouldn’t sell based solely on the calendar, of course, but this seasonal quirk is another reason to be wary heading into what could be a busy month for traders.
The S&P 500 has averaged a monthly decline of 0.5% in September since 1950, according to the Stock Trader’s Almanac, by far the worst. June and August come in a distant second and third, averaging essentially flat long-term monthly performance.
Why are Septembers so bad? Market watchers don’t have a convincing explanation. This year, however, there are at least three major market-jolting events awaiting investors.
Tech traders will be watching closely when Apple Inc. unveils its 10th anniversary iPhone, expected Sept. 12, according to the Wall Street Journal. Shares of the largest U.S. company by market capitalization are widely owned and consumers’ reaction to new products could determine the near-term trajectory of the whole tech sector. Tech remains this year’s best-performing group but momentum has stalled over the past month.
Of note, Septembers have not been kind to Apple investors. The stock has averaged a decline of 4.2% in September since going public in 1980, according to Schaeffer’s Investment Research. Apple is the ninth-worst-performing S&P 500 component in September over the past decade.
And then there’s the Federal Reserve. Central bank officials have signaled they will begin to unwind holdings of more than $4 trillion in bonds this month after the rate-setting meeting that concludes Sept. 20. Most investors expect this process to be orderly but the risk is that any surprise spooks bond traders and long-term interest rates rise sharply.
Finally, fiscal wrangling on Capitol Hill begins this week when lawmakers return from their August recess. They’ll have just 12 working days to authorize new spending for fiscal 2018 and raise the debt ceiling in order to pay outstanding bills. Economists and market strategists expect that both will happen, perhaps at the last moment, but the risks are impossible to ignore. Beth Ann Bovino, the U.S. chief economist at S&P Global Ratings, minced no words Wednesday when she said that that failure to raise the statutory debt limit could be worse for the U.S. economy than the 2008 failure of investment bank Lehman Brothers.
But there's hope. Long-term market momentum has recently made a big difference for stock performance in Septembers, a positive for the current market. The S&P 500 ended last week about four percentage points above its so-called 200-day moving average, a pivot point that traders say can be indicative of long-term trading trends.
Ryan Detrick at LPL Financial observed that nine out of the past 14 Septembers that began with the S&P 500 above its 200-day moving average resulted in gains for the benchmark.
SWAMI’S WEEK TOP PICKS –
NFL Football Preseason Rink Rats Picks:
AFC East - New England Patriots AFC North – Pittsburgh Steelers
AFC South – Tennessee Titans AFC West – Oakland Raiders
AFC Wildcards – Kansas City Chiefs, Baltimore Ravens
AFC Champs – Pittsburgh Steelers
NFC East – Dallas Cowboys NFC North – Green Bay Packers
NFC South – Atlanta Falcons NFC West – Seattle Seahawks
NFC Wildcards – Tampa Bay Buccaneers, Detroit Lions
NFC Champs – Seattle Seahawks
Super Bowl Champs – Seattle Seahawks
NFL Football Pick of the Week – Sunday 9/10, 4:25 PM ET, Fox: Seattle Seahawks (0-0) vs. Green Bay Packers (0-0), two potential tournament teams, Seahawks are not a good road team. Pack in Lambeau, too tough, Packers cover the line (-3), win 27 – 20.
College Football Pick of the Week – Saturday 9/9, 7:30 PM ET, NBC: #15 Georgia Bulldogs (1-0) at #24 Notre Dame Fighting Irish (1-0). First time since 1980 these two teams have met; we go with the Irish when they have home field, Irish win 31 – 30. (Season to date 1-0)
D-III Football Pick of the Week – Saturday 9/9, 7:00 PM PT: #7 Linfield Wildcats (0-0) visit Chapman Panthers (0-0). Huge early season test for a SCIAC club out of conference, no such luck, Wildcats win 40 – 17. (Season to date 0-1)
SCIAC Game of the Week (Women’s Volleyball) – Saturday 9/9, 9:00 AM ET: #15 University of La Verne Leopards (4-0) visit Springfield College Pride (5-0) at the MIT Invitational in Cambridge, Mass. Good out of conference match for the Leopards, they win 3 – 2. (Season to date 1-0)
MLB Game of the Week – Colorado Rockies (75-65) vs. Los Angeles Dodgers (92-48), the Dodgers are struggling, can they right the ship??? We think not, Rockies 5 – 4.
Season to Date (49 - 26)
ON THIS DATE - The first electronic TV signal on Sept. 7, 1927, and the man behind it, Philo T. Farnsworth. The website (here) includes a "virtual museum" of photos, videos and stories.
In the 1930s, Farnsworth waged a successful legal battle to be recognized as the inventor of electronic television.
The largely unsung scientist, a Utah native, died in 1971 at age 64.
Next Blog: Fall movie preview and college hockey intrigue.
Until September 11, Adios
September 8, 2017
CARTOON OF THE WEEK – New Yorker