## Compromise, and ultimate results

Grant did not compromise with Lee, but demanded unconditional surrender, and today the South is a better place for it, because the cancer at its heart — slavery — was destroyed. MacArthur did not compromise with Hirohito, but demanded unconditional surrender, and today Japan is a better place for it, because the cancer at its heart — a brutal military dictatorship — was destroyed. Today there are three cancers at the heart of the Republican Party. (1) The belief that they can subvert the legislative process by blackmailing the government into not enforcing a law that was properly passed, signed and approved by the Supreme Court. (2) The belief that our government can function properly under constant threat of shutdown. (3) The belief that debts need not be paid. Demand unconditional surrender! Destroy these cancers, and the Republican Party will be better for it.

## Liveblogging Gettysburg: June 5, 1863

Of Lee’s original three corps around Fredericksburg, two are now converging on Culpeper, leaving the third behind to keep watch on Hooker’s army. Hooker sent one division across the river downstream of Fredericksburg and captured some prisoners, but they advanced no further when that third corps of Lee’s started to fight back.

Word of the movement filtered down to the troops today, in particular to Col. Gates of the 20th NY. He wrote a good account of the day’s events in his diary that evening, and had time for two games of chess.

## Liveblogging Gettysburg: June 4, 1863

As Lee continued moving troops out of Fredericksburg, they were spotted by Union army balloonists. Joe Hooker, the Union commander, was not one to dither around wondering what his enemy was going to do. Troops were evacuating Fredericksburg — there must be a reason. But those were the troops that were keeping him out of Richmond, the Southern capital. Should he worry about what his opponent was going to do, or should he strike south at Richmond and perhaps end the war before Lee could do anything at all?

Of course, Hooker was defending Washington just as much as Lee was defending Richmond. A counterattack could end up “swapping queens”, with each army occupying the other’s capital city. What would happen then? Hooker’s reputation was in tatters after his loss at Chancellorsville a month ago. What did he have to lose?

## Liveblogging Gettysburg: June 3, 1863

Introducing a series of posts on the Gettysburg campaign of the US Civil War, and specifically the 20th NY Militia.

In the Spring of 1863 most of the action was in the West. General Grant, after many trials and failures, had gotten across the Mississippi and was closing in on Vicksburg from the east, with little interference from Joe Johnston’s outnumbered troops in Jackson.

In Virginia, the two sides faced each other across the Rappahannock River at Fredericksburg. The Union army had tried crossing the river in December at Fredericksburg, and in May at Chancellorsville, and been beaten back both times. By June, everything had quieted down.

The 20th NY were headquartered at Falmouth, but the troops were spread out over a dozen miles or so to the Potomac River. “My men guard trains and stores here.” wrote Col. Theodore Gates, their commanding officer, in his diary on May 15. No enemy crossed the river to challenge them.

But the South didn’t need quiet — it needed victories if it were to get any help from England or France, its customers in the cotton trade. Some thought it obvious that the victory should be at a reinforced Vicksburg, preserving the last link between the old South and the lands beyond the Mississippi. But Robert E. Lee was not among them. He wanted relief for Virginia, his native state that he had followed into secession and war. Its northern edge, including Lee’s own home at Arlington, was under enemy occupation and the much of the state had suffered under two years of battle.

His proposal was to carry the war to the north, out of Virginia into Maryland and Pennsylvania. If the North still wanted to fight him, let them do it on their own land. He had tried the same thing last summer, and been stopped. But his reputation carried the day in the Confederate cabinet meeting. Vicksburg would get no reinforcements. On June 3 Lee started to withdraw his men from Fredericksburg, starting them on the long road to Pennsylvania.

For the 20th, life went on as normal. Col. Gates had the previous day entertained “Miss or Mrs. Doctoress [Mary] Walker … young, pretty & a great talker”. Today: “Seized a large quantity of liquors.” Gates was a believer in the Temperance cause, as was Dr. Walker.

## So much for don’t be evil

Now Google is corrupting search results by devaluing information from sources who they haven’t coerced into signing up for G+.

## George E P Box 1919-2013

“All mod­els are wrong but some are use­ful”

## One year of spam

Daily spam counts at my gmail account, together with 7- and 30-day exponential moving averages, and a long term cumulative average.

## Sunrise

Sunrise shows to us
twenty clouds across the sky,
in parallel lines.

## Graham number

One of the hot stock analysis tricks around now is the Graham number, named after that wild and crazy investor, Benjamin Graham. It even comes with a sexy formula:

$$G = \sqrt {22.5 \times earnings \times book \; value}$$

As with all such formulas, the first question to ask is, WTF? Followed closely by the second: 22.5 — WTF? Fortunately, Graham is a clear and precise writer, so we can answer these questions by going back to the source: The Intelligent Investor, by , HarperCollins 1973; ISBN 0-06-015547-7.

A simple rewrite begins to lift the fog (note that $$22.5 = 15 \times 1.5$$):

$$G = \sqrt {(15 \times earnings) (1.5 \times book \; value)}$$

Graham thinks that $$15 \times earnings$$ is a reasonable target price for a strong, safe, “defensive” stock. Likewise, $$1.5 \times book$$ is a reasonable target price. If the company is earning 10% on book value, these target prices will be the same (and G will have the same value). Otherwise, G, the Graham number, is their geometric mean.

Now that we know what the formula is saying, we can decide whether, and how, to use it. The first clue is to be found in the title of chapter 14, where this concept is developed: “Stock Selection for the Defensive Investor”. Are you a defensive investor? Are you willing to forego speculation, and growth stocks? For at least a part of your portfolio? If the answer to these questions is no, then stop reading. This formula is not for you — move on to chapter 15: Stock Selection for the Enterprising Investor. (And if the answer to the last question is no, *head-slap*.)

A statue with dessert, photo by kattebelletje

Defensive investing goes beyond a simple buy and hold. For one thing, you focus on strong, safe, stodgy, boring companies, that are respectably large, with a strong balance sheet, strong earnings history, and strong dividend history. You’re not buying the market as a whole. Then, among those, you want to find the stocks trading at a significant discount to their Graham number, presuming (against Keynes) that the market will return to rationality while you are still solvent. Then you get safety from the balance sheet and earnings, income from the dividends, and dessert from the capital gains. And a little statue in an alcove at the Church of Value Investing.

The last part — waiting for the market to come to you — is the iffy part, of course, but if Ben Graham and Warren Buffet say it works, I’m not the one to tell them they’re wrong.

## IQ ‘a myth,’ study says – thestar.com

People can still take the tests at cambridgebrainsciences.com/theIQchallenge. Owen said he hopes that 1 million people across the globe will eventually participate.

This has been my opinion for a long time.