The Market

• The market could not hold it’s gain and sold off starting about 2:30pm.
• After the close Alcoa slashed it’s dividend, announced a convertible offering and generally said things don’t look so hot.  Shares are down 10% in the aftermarket.  I own a bit of this and will wait to see how it behaves after the convert is sold.  Usually, convert traders short the common during an offering.
• The decline at the close is not encouraging.  Profits will probably be taken over the next day or two.  You will recall that I bought TWM, an inverse ETF, to protect my long positions and that seems to be working well.  Although the market had to roll over for it to work.
• Market internals were pretty good but were really good earlier.
• General Mills (GIS) reports quarterly earnings on Wednesday.  Estimates are $0.88 versus $0.87 in ’08.  This seems like a luke-warm increase but shares are acting very well, up 1.5% today.  It has risen about 5% over the last week.  This defensive company is trading at 14x trailing earnings and 12.5x forward.  It yields 3.4%.  Certainly, not super cheap but cereal may provide a reasonably defensive idea.

Sidebar

This morning George, Mr. Kay and I boarded the good ship Maffett which was docked in downtown Wilmington, on the Cape Fear River.   Our destination was a boatyard about thirty miles north.  We left the dock at 9:15am under overcast skies and as I threw the bow line on and hopped aboard it started to rain.  It is still raining.  It was a cold, damp, rainy day but it was a terrific adventure.  We were making ten knots as we went under the high level bridge.  The roar of the trucks and cars overhead interrupted the calm of a flat river.  Cormorants, maybe a thousand of them, scattered in front of our approach.  The sky had grown dark but the small pilot house provided shelter from the rain and wind. The Maffett was built in 1943 as a tender to Victory ships.  It has been an excursion boat on the Cape Fear for years.  George has been piloting it, off and on, for a couple of years.  George lives around the corner and makes a specialty of odd jobs.  When we first met he was a flight attendant on a private Boeing 737.  He went all over the world with rock stars and princes.

Leaving the river the markers change to Intracoastal numbers and colors.  We had a little trouble orienting ourselves to that.  Red, right return all of sudden was green.  We headed through the man-made cut to Carolina Beach, under another huge bridge.  We were now reduced to 8 knots as we faced the tide.

At Wrightsville Beach we decided not to call the bridge tender to open up.  It opens every hour on the hour but that was forty minutes away. We could have invoked our commercial status (as opposed to recreational) but George thought we could get under OK.  He directed me to the bow and I peered up to see if we would clear. At one point I barked and motioned that we were going to hit.  He slammed into reverse and yelled “the smoke stack?!”; no, I replied the antennas.  He was now fighting the current going backwards, not an easy or good thing, so he put in forward.  I watched from the bow as the antennas slapped against the underside of the bridge.  They were shredded.  At one point I was concerned they would topple on me so I ducked under the shade roof.

The rest of the trip was uneventful.  About five hours after we started we spied marker 90 and finally saw our destination, the boat yard.  We did have a tough time with the channel to the yard dock and hit bottom once.  But George backed off, churning up brown scum.  The yard had the slings in the water and George neatly put the Maffett into them and the yard master began lifting us up with great roars from the lift’s engines.

I will try to post photos later.  George’s wife, Kelly picked us up.  We were all wet and cold to the bone.  I found one of those little bottles of Scotch (12-year old Dewar’s!) in George’s knapsack and administered to myself on the drive home.

BTW, Maffett was a US officer who switched to the Confederacy and captained a side wheeler during the war.  He was under no specific instructions other that menace the North.  He was very effective with his speedy little craft.  He darted in and out of coves and waited for the Yankees and is credited with creating a lot of mayhem.

George and Kelly: