Commentary: We're all in danger of motion sickness

October 20, 2008

(Author's note: I submitted this column Oct. 14, with full knowledge that the world may have come to an end by the time it is published.)

It's swing time.

Candidates for office, state and federal, are swinging and slinging mud at one another. In a last-ditch effort to scare voters, Sarah Palin accused Barack Obama of hanging out with Bill Ayers, co-founder of the Weathermen, a militant group of the 1970s. In reality, by the time Ayers met Obama, his Weathermen days were a faded memory.

Likewise, in an effort to stain her opponent's administration, Jill Long Thompson threw up the nonsense accusation that Mitch Daniels used state of Indiana aircraft for political purposes. All the candidates are endeavoring to win the uncommitted voters, the ones who may decide the outcome of these elections-fittingly referred to as the swing vote.

The market is swinging.

Oct. 10 was the first time in history that the market, as measured by the Dow Jones industrial average, fluctuated more than 1,000 points in one day. This came after seven straight seesaw days ending a period described by The Wall Street Journal as the worst decline in history. On Oct. 13, the market roared back, gaining 936 points, the largest gain in history. I suspect when it's all charted, the last few weeks will be considered one of the most volatile markets since the first share of stock was traded on the New York Stock Exchange.

Borrowers want to swing, too.

Many conversations at the banks that have any money left are with business owners who are requesting temporary additional funding in order to deal with what this economy has wrought. That's called a swing loan. (Bankers will tell you that, on swing loans, the only party that's swinging is the bank.)

Meanwhile, many on Wall Street should be swinging-in the breeze.

Incompetence, avarice and disregard for consequences have reigned too long and taxpayers are footing the bill for these extravagances. According to The Washington Post, American International Group, the beneficiary of congressional largesse, has continued to reward the executives responsible for its near demise. Joseph Cassano, the former financial products manager, is receiving $1 million a month in consulting fees, and, incredulously, Martin J. Sullivan, the former CEO, is receiving a $5 million performance bonus.

You can swing, too.

In times of trouble and distress, opportunity lurks. If you believe our leaders will quell our fears and right the system, now may be a time to swing for the fences. Look, for example, at Calumet Specialty Products Partners LP. It produces specialty hydrocarbon products, including lubricating oils, solvents and waxes. The company also processes crude oil into a variety of fuel and fuel-related products, including gasoline and its byproducts.

According to SEC filings the business is controlled by the Fehsenfeld family, who, along with other insiders, owns almost a third of the outstanding common stock. Many of the shares were undoubtedly acquired at prices higher than current market value. Calumet has recently traded as low as $7. Even in its current trading range ($9-$11), the dividend yield exceeds 15 percent. The Street behaves as if the dividend cannot be sustained, but if you believe the company is sound and the dividend will not be reduced, this is a winner.

Incidentally, you have a profit in the two stocks I previously touted, Steak n Shake Co. and Finish Line Inc.- even in this market. I told you when to buy. I'm not smart enough to recommend when to sell.

During the Great Depression, a movie appeared starring Fred Astaire and Ginger Rogers called "Swing Time." The movie featured many great dance scenes and the Academy-award-winning song "The Way You Look Tonight." If you're dizzy from all this swinging, you might take a hint from a line in another great song from that movie and, "Pick yourself up, dust yourself off, and start all over again."

Maurer is a shareholder in IBJ Media Corp., which owns Indianapolis Business Journal. His column appears every other week. To comment on this column, send e-mail to mmaurer@ibj.com.
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