Daily catch

All you fishermen out there, how would you like to hook THIS? or THIS?

Think you could land him with 10 lb. test, an ugly stick and a zebco?

Here's another incredible photo.

Case for a stock market bubble in China

This article makes the case that the Chinese stock market is currently in a bubble. Some of the descriptions might remind you of the bubble in the U.S. in 1999-2000. "10 times as many accounts were opened in first quarter 2006 as for all of 2005."

Tennessee Titans Draft Day 1

I'm a Titan fan and have looked forward to the draft. I gotta say I'm disappointed overall right now. Going in the Titans have a ton of holes to fill, including safety, cornerback, defensive end, runningback, and wide reciever.

I really like the pick of a safety with the first pick, although I thought we would take Reggie Nelson from Florida when he was there on the board for the 19th pick. Instead they took Michael Griffin from Texas. But if Griffin can play it definitely upgrades us at probably our weakest defensive position. Current starter Lamont Thompson seems to get burned badly several plays a game, often costing us a touchdown.

The second and third round picks I'm less happy with. Chris Henry RB out of Arizona and Paul Williams WR of Fresno state both seem like workout warriers with good workout numbers, but whose collegiate performance levels seem poor to be considered as 2nd and 3rd round picks. Chris Henry had less than 1000 yards rushing in his entire career at RB. Paul Williams WR had just over 1000 recieving yards in his career at Fresno.

Thought 1 - Chris Henry was the 4th Running Back taken in the draft and he couldn't even win the starting job in college. I'm concerned we've drafted some great workout stats, but not much of a football player.

Thought 2 - Paul Williams has a great highlight film, but Fresno doesn't exactly play the best competition, and he didn't exactly perform even at that level. Like Henry he has some good physical stats, but is that going to translate into football production?

Here's the NFL.com draft page for the Titans.

Moon orbits in a tilted plane

When I posted the photo of the earth and moon a couple days ago, it struck me that based on the position of the earth and moon and the implied position of the sun, it seems like the moon orbits in tilted plane to that of the earth and sun.

The thought kept bugging me, so I did a little web searching and found this link which has a really good picture of the model I'm thinking of.

If I'm understanding correctly from Wikipedia the moon's orbit wobbles, but the average tilt of the moons orbit vs. that of the earth-sun is around 5% - so it's close to "flat", but not quite. The picture above makes it look more extreme.

It's strange that I get to be 36 years old and for some reason I'd not considered the angle of the moon's orbit to be anything other than "flat" along the plane of the sun. Come to think of it - eclipses would be alot more common if the orbit was flat though, but as it is its rare that everything aligns.

The other 3 tenors

This is just a little bit different. I haven't heard anything quite like it and thought you might like to listen.

Where are they?

The discovery of another planet in the "zone" capable of supporting life seemingly increases the chance of life out there, it does bring up the consideration of why despite looking for years, SETI hasn't detected radio emissions from other civilizations.

Here's a potential reason that gave me a laugh. Maybe they're trying to avoid us.

Potential earth-like planet discovered

Here's an image from the NASA.gov site of the earth and moon taken by the voyager probe as it sped away.

Apparently scientists may have found another similar planet around a nearby star. I find it incredible that scientists have the means to make discoveries like this, but apparently a red dwarf star (Gliese 581) about 20.5 light years away has a potentially earthlike planet around it.

Calculations based on planetary formation models anticipate that the planet should have an atmosphere and may likely have water (based on prevailing planetary formation models). Temperature may be potentially similar to earth, although a thick atmosphere could make it hotter.

It's diameter is probably 1.5 times that of earth, and gravity would be about 1.6 times that of earth. That means I'd need trim down if I wanted to vacation there.

Given the planet's proximity to it's star it's possible the planet doesn't have day and night but instead one face of the planet may always point toward the star (like one side of the moon always faces the earth).

Another article indicates that future developments may enable scientists to block the light of the star itself and take direct spectrographic images of the planet itself to determine if the planet has water or materials common to life.

Here's another good link with a bit more info.

Hanson Natural HANS analysis

I came across this bullish analysis of Hanson Natural on the SeekingAlpha website. Anyone interested in the outlook for HANS should take a look .

Disclaimer: I own shares in Hanson and it's one of my favorite stocks at the moment.

PE by market capitalization

I've seen several recent discussions concerning large cap stocks seeming to be relative bargains at current market prices based on price/earning (PE) ratios. Always missing in these types of "talking head" discussions seems to be the data that might inform a reasonable decision.

So first I wanted to see the current relative PE of stocks with different market capitalizations - from the smallest of companies to the largest. Median PEs are shown (median is not the average)

I'm not sure how folks in the industry look at the stats so I've included median PE for all companies (both + and - earnings) and the median PE for only companies with positive earnings. Based on what I'm seeing the smaller company PEs don't really seem out of line with what I might expect.

Next to place the information in historical context I've plotted relative PE ratios over time, going back around 7 years. (Click the image to enlarge).

The green line is representative of the largest companies (over 30 Billion mktcap.). The red line represents the group of the next largest companies (10-30 Billion mktcap), and so forth...

From the graph it's clear that the largest companies (30B+) have seen a significant devaluation of earnings since 7 years ago, falling from a PE of nearly 25 to below 15 currently (40% decline in the value of earnings).

For other market caps it seems the valuation of earnings on a PE basis is fairly constant since about 2003. Even the large 10-30B stocks (red line) have had a fairly steady PE since 2003.

Conclusion: It does seem that the earnings of the largest cap stocks are at a lower valuation than those of stocks of other market caps. What's unclear to me is whether that's the way it should be. The benefit of the bigger companies is the predictability of earnings - in the past year 99% of stocks with $30B+ mkt cap had positive earnings. On the other hand the largest companies don't tend to grow as fast and probably don't deserve as high of a multiple as the historicals suggest.

I guess while I could see a slightly higher PE multiple assigned to the largest stocks, based upon historicals the relative valuations seem only modestly out of line in aggregate. Maybe if some more largely undervalued individual stocks in the largest market cap range could be identified I'd feel better about the statement, but as a group the case isn't compelling to me.

Overall I'm pretty bearish on the markets right now and am more inclined to limiting exposure (I'm over 50% cash in my accounts outside of my 401K), but short of that this might cause me to consider shifting a bit of my 401k more toward the S&P500 vs. the smaller Russell 2000 index where I have most of my 401K funds currently, but I'm not going to do anything drastic.

Market returns since Dec 31 1999

Wow. I saw this on "The Big Picture" Blog. It provides interesting perspective on the stock bubble we were in back in 1999-2000.

Since Dec 31 1999 the S&P500 index is up a whopping 0.15%. More stunningly, the Nasdaq 100 is still down over 50%. On the other hand small and mid-Caps have performed well though.

I've recently been reading commentary suggesting moving money back into the large cap stocks and am investigating relative valuations now. Based on the above the last 7 years have been terrible for the S&P500 stocks in aggregate. I have most of my 401k in a Russell 2000 index and and International index, so perhaps redistribution is in order.

Building Permits

I enjoyed this cease and desist letter, and the reply from the landowner.

Good times...

Somebody flush, the toilet's on fire!

One more thing to worry about: In case you haven't heard, there is a massive toilet recall underway in Japan. Apparently some high end toilets have been catching on fire.

The manufacturer of the toilet is named Toto, bringing disgrace to Dorothy's dog. Ironically in naming the company the founder was inspired by the 1980s grammy award winning band Toto. OK, so I made some of that up, but seriously, the band's music is smoking hot - just like a flaming toilet.

I'm going to go into the back and dig out my Toto cassette tape from around 1983. Songs like "Africa", "Roseanna", and "Love isn't always on time" were some of my favorites when I was about 13 years old. I got their cassette after joining the Columbia music club (remember the little stickers in TV Guide?). Some of the tunes play from the bands's website - good stuff.

In closing, be sure to follow all safety preceedures in the John. Until the danger has passed wear your safety goggles and keep the extinguisher at the ready. And please turn on the vent fan or open a window as we don't want an unfortunate explosion to result from methane accumulation.

Airline seating design

I'm a big guy and every time I've been on a plane I've wondered why seating isn't staggered somewhat to allow more shoulder room. Basically the seating design in airplanes seems poorly optimized to take advantage of the space in the cabin.

Click on the image below to enlarge the image of what I'm talking about.


The image on the left shows current standard seating with everybody's shoulder bumping into each other, and the variation on the right shows a proposed staggering of the seating to free up space. (Yes it's supposed to represent an airplane ;-) )

This doesn't even consider potential staggering in the "up and down" dimension but there is opportunity there also.



I saw another variation of this theme that prompted me to make this post, but this variation sits some people forward and some people backwards.

Quote of the day

First graders were asked to complete some common sayings.

Here's my favorite:
"The pen is mightier than the....pigs."

Runner up:
"A miss is as good as a .....Mr."

Read the rest here. Thanks to the Steve-Olson blog for the link.