Monday, September 15, 2008

Ultra High-Stakes Gambling

September 15th, 2008

We’ve got some gamblers in the news. On ESPN this morning, I saw coach Mike Shanahan go for the two-point conversion for the win, when the extra point would have forced an easy overtime. The Schwam was going on and on about how brave it was and how confident he must be in his team and his QB. Nonsense. It was a bone-headed play. He fails at least 50% of the time with that gamble, and the media would have ripped him a new ass for the play. I suppose the gamble may pay off in the long run with more support from an energized team. We’ll see.

Despite my solemn vow to no longer talk about MLB, I saw the highlights of Carlos Zambrano pitching his no-hitter. He got the count to full with two outs in the 9th. His last pitch was a ball WAY outside. At first I thought he was throwing for a perfect game, in which case that pitch would certainly have been in the strike zone. Throwing a ball in that situation would have been the most impressive gamble ever, but it was still a big risk for Sweet Lou (Go University of Tampa!) to leave him in for the complete game. It worked.

Goldman Sachs took a big risk and got a Fed bailout. How embarrassing it must have been to be the first one to ask for help. I bet Lehman Bros wished they had asked for help first! The Fed was all too willing to help GS, but they gave the Heisman to Lehman, and presumably to any other big brokerage firms that may want to ask for help. Merrill Lynch, watching from the sidelines, said, “We’re screwed!” and sold themselves to the first available bidder (Bank of America - go Liss!).

I like to gamble, too. Of course, that’s why being married to an accountant is such a good thing. We sold all of our individual stocks years ago and instead just put money into an Index fund (VFINX) every month. We’re down 12% for the year, but way up over the last 5. It takes all the stress out of the daily nonsense and sets us up for our long term plan for early retirement. I challenge anyone out there to compare their portfolios with us in 20 years. If you beat us by more than 2%, I’ll pay up.

In the meantime, I’ll keep my gambling (relatively) low-stakes.


Anonymous said...

I read a comment from Ken Lewis (Bank of America CEO) today regarding the BoA buyout of ML. When his decision to make the buy was called into question his answer was an arrogant "We've done this before. We're good at it." Hua. Bank Of America Headquarters is in Charlotte, NC. It's tower the tallest building on the Charlotte skyline. When it was being built, the CEO of BoA was a guy by the name of Hugh McCall. At the same time he was building it, what used to be First Union (now Wachovia) was building their HQ building on the same street. When they were both finished, First Union was taller by something miniscual, like 2 floors, but Hugh McColl had an additional secret blue print for a tower topper that he waited to put on until after First Union completed their construction. It put the BoA tower significantly higer than that of First Union's. In all Charlotte banking circles, the BoA Tower has since been known as "Hugh McColl's Erection". That's a true story.

Anonymous said...

Would like you to remember the circumstances surrounding Zambrano's no-no. The Astros were summoned late from their homes, bussed 4 hours to Dallas to catch a flight to Milwaukee for a "home" game surrounded by classless Cub fans(is that redundant?) Their minds were not on this game. These 2 games should have never been played. We have bigger problems down here than baseball.
I found your blog thru Sean at IT. Glad to have you home, and a very belated thanks for all you have done for our country.