I write this column not to give advice to my readers — but to clarify in my tiny brain the hardest subject I’ve ever tackled in — investing. It’s hard because I’m investing in businesses I’m not managing. I’m simply a bit player, watching from the sidelines.
I survey trends — Amazon is killing traditional retailers, wind and solar are replacing fossil fuels, the Internet is enabling businesses like Netflix, Expedia, Facebook, Square and Google, more Americans renting homes than buying, banking is going online, etc.– and I make my buying decisions.
Steve Bannon’s father worked for AT&T for 48 years. He had all his savings in AT&T stock. He had huge faith in his employer, the king-pin and monopoly provider of telecommunications services. Or so it was until the 1968 Carterfone decision, the 1969 MCI Decision and the 1984 Divestiture, which broke the whole thing apart.
AT&T thrived when it had monopoly control. But it lacked the management to deal with a competitive world. I know a lot about this because I started the first magazines and trade shows dedicated to competitive telecommunications. And they thrived.
Steve Bannon’s father was wrong to put all his savings into AT&T stock. And he was wrong to sell all his AT&T stock without talking to a financial advisor or his sons.
We have all made bad investment decisions. But we have learned several things: It’s not a good idea to listen solely to one “guru” — like Jim Cramer or Harry Newton. They’re human and they make mistakes. It’s not a good idea to be concentrated in one investment, like AT&T stock. Stuff happens to wreck things. AT&T had more than its share of black swan events. But they all hurt the company. Today’s AT&T bears zero relationship to the company I remember when I first got dropped into the telecom industry in the fall of 1969.
The worst part is that Steve Bannon’s father’s dumb decision to sell his AT&T stock at the wrong time has somehow had a major affect on forming Steven Bannon’s global economic views. We now appear to be living with Steve’s ultra-screwy interpretation of what his father’s dumb decision means for formulating economic policy for the United States of America. Bannon is number 1 advisor to President Trump.
Steve Bannon has publicly promised “The deconstruction of the administrative state.” I have no idea hat that means. It sounds good for rich guys, maybe.
The whole story is even weirder when you understand that Steven Bannon has made pots of money — from his years at Goldman Sachs, from his 18 films and from numerous successful entrepreneurial ventures, including a stake in five television shows, including Seinfeld. Oh yes, he’s also an MBA from the Harvard Business School.
OK, let’s start with a piece from BusinessInsider
Trump adviser Steve Bannon attributes his worldview to a simple stock-investing mistake his dad made after listening to Jim Cramer
by Bob Bryan of Business Insider
Steve Bannon, the White House chief strategist under President Donald Trump, has described his view of the US economy as “economic nationalism.”
Bannon, a former Goldman Sachs banker and editor of the far-right website Breitbart, has advocated greater trade protectionism, large government investment in infrastructure, and negative interest rates – policies that many economists have said could harm the US economy.
In a profile by The Wall Street Journal’s Michael Bender, Bannon attributed his shift in economic ideals and distrust of institutions in part to a “Today” show segment featuring financial advice from CNBC’s Jim Cramer.
In October 2008, in the throes of the financial crisis, Cramer, the host of “Mad Money,” told people during a “Today” show appearance, “Whatever money you may need for the next five years, please take it out of the stock market right now.”
Marty Bannon, Steve’s father, had been accumulating stock in AT&T – where he worked – throughout his career to give to his children. Marty, however, saw the Cramer segment and decided to sell all his shares, at a loss of about $100,000, according to The Journal.
According to Bannon, this move shattered his confidence in institutions and helped form his brand of “economic nationalism.” He told The Journal that during the recession, “the Marty Bannons of the world were getting washed out to sea, and nobody was paying attention to them.”
As Financial Times’ Matthew Klein noted, Cramer’s advice wasn’t necessarily bad – if you need cash, pulling funds out of the market is a viable way to raise that money. But panicking and selling during downturns is one of the basic mistakes that any investor should avoid.
Despite this, the losses sustained by his father clearly left Bannon feeling as if the elites of the US had advantages over average Americans.
Bannon felt that Wall Street had created the bubble that ultimately led to his father’s mistake, according to The Journal.
“The government created this problem,” Marty Bannon told The Journal. “The elites, they got bailed out. Everybody else in the country, whatever happened, happened, and they just had to move on.”
But Cramer is not a financial adviser, and Marty Bannon sold his shares of his own accord, knowing the price of AT&T stock. Additionally, the opinion Steve Bannon holds about the relative beneficiaries of the postcrisis recovery is typical of many Americans.
Regardless, one of the most influential voices on US economic policy could be based on one stock-investing mistake made on the advice of a financial-TV host.
Read the full BusinessInsider article here.
The Wall Street Journal’s piece is headlined. (I’ve also excerpted several paragraphs from the piece):
Steve Bannon and the Making of an Economic Nationalist
The controversial White House counselor says his father’s 2008 financial trauma helped crystallize his antiglobalist views and led to a political hardening; `I’m going to be totally wiped out’
…His five children, including current White House counselor and chief strategist Steve Bannon, had often joked growing up that their devout father, a product of the Great Depression, would sooner leave the Catholic Church than sell those shares. The stock symbolized his deep trust in the company and had doubled as life insurance for his children.
… There were many factors that turned Steve Bannon into a divisive political firebrand. But his decision to embrace “economic nationalism” and vehemently oppose the forces and institutions of globalization, he says, stems from his upbringing, his relationship with his father and the meaning those AT&T shares held for the family.
…Steve Bannon idealizes the bygone corporate era that gave his father the kind of stability that he himself never pursued. Marty Bannon, who voted for Mr. Trump, sought a life of security, while the thrice-divorced Steve Bannon craves chaos and drama. He has served in the Navy, dabbled in penny stocks and was briefly in charge of Biosphere 2, a domed terrarium in Arizona.
…Marty Bannon says he lost more than $100,000 because he sold the shares for less than he paid for them. It was a decision he made without consulting a broker or his family, including his two sons with investment backgrounds, who only learned about the sale days after it was finished. The shares subsequently regained much of their value.
Read the full Wall Street Journal piece here.
NOBODY does better than Donald Trump:
For the “ultimate,” self-proclaimed expert, here’s a video which someone painstakingly put together of President Trump telling us 24 ways in which he knows more than we do:
For the video, click here.
+ Do not allow Windows to download and update your computer automatically. If you do, it can destroy stuff you’re working on. Turn Windows Update to this:
+ Check. Check. Check. I scheduled tennis this morning for 6:15 AM — only to find it was pitch black. I’d forgotten how daylight savings pushed the sun one hour forward.
+ The less food I eat, the better I feel.
+ The second time always take five minutes. The first time takes two hours.
+ Please turn on WiFi Calling on your cell phone. It will make your cell phone calls sound like a landline, not a cell phone.
+ Go visit a dermatologist and ask the nurse practitioner to freeze off all the stuff on your body that looks “iffy.” All of it. She took stuff off my nose, but said it wouldn’t make nose smaller. Drat!
+ There seems to be a mini price war going on in cell phones and cable/satellite TV. Which means you’re overpaying on all your bills for cell and cable/satellite.
+ Hold on. Take it slowly. Don’t do stupid. Associated Press reports older people are falling and suffering concussions and other brain injuries at “unprecedented” rates.
+ A Bucket Travel List is a good. Here is a slideshow of the most beautiful sights in the world. I picked one shot that appealed, but there are many others just as beautiful.
Please read Ann Coulter’s “American Gigolos (GOP Watch List, Part 2).” An excerpt:
While Trump was making billions of dollars building skyscrapers, developing golf courses and starring on a hit reality TV show, members of Congress were slowly working their way up the political ladder – interning at think tanks and congressional offices, taking some small government job, then running for the House or Senate, and, hopefully, marrying a woman with a large inheritance.
A stunning number of senators and congressmen are supported by rich wives – Sens. John McCain, Mitch McConnell, Richard Blumenthal, John Kerry and Ron Wyden, and Reps. Michael McCaul, Scott Peters and Paul Ryan, to name a few. Is there any other profession with as high a percentage of men sponging off their wives’ inheritances?
Then a self-made billionaire came along, violated all the rules they had lived by, and swept aside more than a dozen experienced politicians just like themselves! Not only did Trump make his own money, but he beat them at the one thing they thought they knew how to do.
Coulter’s piece is in Human Events, Powerful Conservative Voices. For the full piece click here.
Favorite headline. From Barron’s:
The good old days (???)
Peter, at a New Year’s party, turns to his friend, Ken, and asks for a cigarette.
‘I thought you made a New Year’s resolution to quit smoking,’ Ken responds.
‘I’m in the process of quitting,’ replies Peter with a grin.
‘Right now, I am in the middle of phase one.’
‘Phase one?’ wonders Ken.
‘Yeah,’ laughs Peter, ‘I’ve quit buying.’
Harry Newton, who’s been indulging himself playing tennis every day and thinking he’s improving. (Ha!) Indian Wells Tennis is on ESPN and ESPN2 today, with the finals this weekend. Right this moment ESPN is playing a re-run of the incredible Federer/Nadal match of earlier this week. This is Federer playing like you’ve never seen him play. Amazing tennis.