Recent Work

Katherine asked me to photograph some of her paintings recently. Here is one of them.

(The photos had to be taken with film so that slides could be sent to the judges of a show that Katherine wants to enter. Then I scanned the slides producing a high resolution TIFF copy. From that I made a JPEG to upload to the web. I am surprised that even with all that fooling around, the colors on the screen are very true to the original.)

The Stock Market

You have not seen much about the stock market on this 'blog recently. I have been taking an asset allocation approach. The general idea is to divide your investments into a fixed percentage of different, uncorrelated, asset classes. One class might go down but another would probably go up, smoothing things out. Every now and then - maybe once a year - you should re-balance the portfolio selling and buying to maintain your target allocation percentages.

With this approach, you do not try to predict whether "the market" will go up or down. You just rely on the fact that historically it has gone up over the long run.

(Of course, as Keynes said, "In the long run we are all dead." I was born seven years after the stock market crash of 1929. I was a Sophomore in college by the time that the Dow Jones average recovered to the 1929 level. But wait! Taking inflation into account, it took 30 years for the Dow Jones to recover. By then I had graduated and was married. That's a long time to wait to get your money back.)

I have explained this in simple terms, but there is a lot of academic study and common sense that says it is a good strategy. It's called Modern Portfolio Theory and you can find it in investment textbooks. My target allocations are: 12.5% energy stocks, 12.5% gold stocks, 20% international stocks, 12.5% raw material stocks, 12.5% REITs, 25% other US stocks, 5% cash, and 0% bonds.

Historically, these asset classes have been uncorrelated. The ups and downs of the different classes should more or less cancel each other out and it should be easy to sleep at night. Well, that has not been so recently - at least in the short term. If the China stock market goes down suddenly, US markets do also. Gold and oil seem to be chained together.

So, I'm confused. It could be that the mysterious actions of hedge funds have made previously uncorrelated asset classes more correlated. If so, an asset allocation approach to investing will not work very well. On the other hand, it could be that asset classes that appear to be correlated on daily or weekly basis are much less correlated on a longer term basis.

Kentucky Hot Brown Strata

Yesterday we had a particularly successful Sunday breakfast - "Kentucky Hot Brown Strata" from Cheryl and Bill Jamison's breakfast cookbook. The idea comes from a sandwich served years ago at Louisville's Brown Hotel called the Hot Brown. The sandwich combined smoked turkey, bacon, tomato, and cheddar cheese sauce. The strata combines the same flavors.

I made it in individual (one cup size) ramekins. It could serve very well as a brunch item. Somewhere there is probably a bed and breakfast inn that serves it. It's that kind of thing.

Katherine said that she liked it very much. Probably so, but she is a little bit biased toward encouraging me to keep cooking Sunday breakfasts.

I notice that I have been avoiding making blog entries unless I have a photo. So you have not read much in the way of stock market commentary recently. If I continue talking about recipes, I'm going to have to get better at food photography. This would have looked much more appetizing if the ramekin was photographed against a seamless white background.

The Class of 1957

Last weekend we went down to Scripps College to attend Katherine's 50th Alumnae reunion. Katherine and I met quite a few of her old friends. This photo gives a feel of the occasion. Left to right (by maiden name) are Nancy Springer, Nan Adams, Betty Cartwright, and Kathy Barrows.