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| GILLESPIE RESEARCH ASSOCIATES UPDATE MEMORANDA (Last Updated 4/5/06) - Apr. 5, 2006 |
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Material Posted in this Section
* Memo Dated 04/05/06 (#3)
* Memo Dated 01/22/06 (#2)
* Memo Dated 01/22/06 (#1)
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Foreword
These periodic memoranda are designed to apprise everyone of developments at Gillespie Research Associates, in addition to what is going on here at the GRA website. We hope these communications will help people share our enthusiasm for what is planned for the months ahead, as well as gain a sense of how what is planned or is in progress should result in incremental benefit to all in our client base, one way or another.
Because what we do and how we do it is a moving target under constant review, feedback not only is welcomed, it is highly encouraged. Please don't hesitate to pass along any comments or suggestions you might have, either to me directly at gsrdr@aol.com or through the website's "Contact Us" link. --Doug Gillespie
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April 5, 2006 (#3)
"GRA Running Commentary & Data"
* I added this feature to the website last November (found in the middle column, under the "Latest Missives" heading). I am still tinkering with it, but thus far, it has been a huge success.
* Entries generally are made daily, sometimes more than once a day. They tend to be very market oriented and often quite short-term in their outlook. This is an effort to add to the website more material possessing a market-timing orientation.
* This feature has a fixed URL and is available at "GRA Running Commentary & Data." Bookmark it and visit it often.
* I also occasionally use this vehicle to get in some trouble with personal political observations and analysis. For instance, later today, I'm going to take my latest shot at Rush Limbaugh! (NOTE: I am a devout political conservative, but one who has no qualms about ratting out the right when it is appropriate to do so.)
* "Commentary" currently is open content, but it will become available to subscribers only, probably at the end of April.
Subscription Special
* For appropriate parties (new subscribers), I will be offering an exceptional subscription opportunity. This will be done directly with appropriate parties, so watch carefully for further information. It will be arriving soon.
Internet Radio Project
NOTE: You do not have to be a GRA client to participate in this project.)
* The radio/music and related material available on the Internet is nothing short of fabulous. Better yet, it is all available at a cost of -- nothing! (There is also a good deal of financial-market audio content available on the 'net.)
* A few years ago, I undertook a special project to acquaint interested parties about this incredible medium; the overall interest was phenomenal. There's lots of water over the proverbial dam since then, so I am contemplating repeating/updating the project. If you even think you might have an interest, please read the accompanying attachment and respond accordingly.
(Following is an excerpt of the attachment. Except as noted, the the text was originally written on 11/2/2002.
In my younger days, I was a genuine audiophile. I spent as much time fiddling with adjustments, speaker location, etc. as I did listening to music.
Times change. I'm definitely older, maybe a bit wiser, and I now spend a lot of hours at a computer keyboard. Undiminshed, though, is my love for music of many genre, but the way I listen to it much of the time has changed significantly. And as something of a sports as well as news/talk-radio junkie, the world -- quite literally -- has now become my oyster in these areas, too.
What makes this possible is having acquired at least a rudimentary knowledge of what is available through internet radio and related resources. Also required in the process was gaining some knowledge of necessary software. Since I am only marginally computer literate, I can assure you this was not terribly difficult. In addition, all the necessary software is easily available, and it is absolutely free!
(NOTE, 4/2006: As I write this, I am listening in real time to KING, an absolutely wonderful classical music station in Seattle.)
Here's the deal. I have come to find that many of my clients are not exceptionally conversant in this medium but have a desire to learn more. Therefore, I'm thinking about doing a series providing some basic information on the subject. If there is insufficient interest, I'll abandon the idea. All I am asking now is for you to indicate whether or not you have an interest. If you do, merely indicate such by sending a reply to this memorandum.
(NOTE, 4/2006: Even if you participated in this project when I did it a few years ago, there have been many changes/improvements since then. And again, you do not have to be a GRA client to participate in the project.)
I'm not sure when I will get around to this. However, if you like music, etc. and are not aware of the depth of what is available in this area, I believe you will be impressed with what is. In addition, you can put all this in place completely cost free!
When you have a moment, please let me know. Do so either by e-mailing me at gsrdr@aol.com or by using the GRA website's "Contact Us" link. Be sure to include your e-mail address.
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NOTE: The following two communications were originally written and distributed in late Novmeber and early December. However, to adapt them to what will follow them here, I have amended the November/December material as if it had been written on January 22, 2006.
January 22, 2006 (#2)
INTRODUCTION
* Several Gillespie Research projects of significance either are in progress or are about to be; this is a good time to bring everyone up to date on what is happening.
* This correspondence also provides an opportunity to reaffirm some of the more important principles that underpin our activities.
* This memo covers a number of topics. Some that are touched upon in a cursory fashion here will be discussed more fully in later communications.
* We are pleased with the overall development of the GRA website since it went live in early May of 2004. But the time has arrived to enhance its strengths and shore up its weaknesses, in our continuing effort to fashion one of the more unique vehicles of its kind on the Internet.
* The GRA website already plays a crucial role in our overall research efforts. In coming months, this role will become a good deal more prominent.
INVESTMENT-RELATED MATTERS
Research Philosophy
(1) The basic philosophy guiding our research process is simple enough: fundamental economic and related developments are ultimately the forces that drive financial-market pricing.
(2) However, we also believe an indispensable role exists for sane technical analysis, especially in helping to improve overall timing. Improved timing is an area that will receive much attention in the period ahead.
(3) A multi-market approach best serves what it is we are out to accomplish. Thus, our work will continue to concentrate on the three primary financial markets -- debt, equity and currency. Appropriate commodities also will receive appropriate attention.
(4) Domestic and international political considerations fall within the "related developments" referenced in number one, above. These are areas on which we will be placing increased emphasis in coming months, the timing of which fits well with what are likely to be critical US mid-term elections next November.
Research Goal
(1) Our overall research goal is also simple enough: to produce the most accurate, intellectually honest forecasts and related judgements possible.
(2) Please note the inclusion of "intellectually honest" in the above statement. Much of today's research simply is not intellectually honest. This is especially so for the material originating in the broker-dealer community. Conflicts present there can and often do compromise the views and recommendations that are presented to investors. We do not have a structure fostering these kind of organizational and cultural conflicts. (There is additional discussion of Wall Street's research conflicts in the later section dealing with the work of John Williams.)
Forecast/Market Timing
I am generally pleased with the overall accuracy of "big-picture" forecasting outcomes of the last year, give or take. I am exceptionally pleased with the accuracy of both the forecasting outcomes and the predicted time frames incorporated into those forecasting outcomes of the three to four years preceding the past year. However, I am not satisfied with the timing element of the last year or so. This area will receive material attention in coming months. (More on this later in the memorandum.)
Candor
Candor and intellectual honesty are awfully close to being the same animal. I've always taken great pride in expressing opinions in an outspoken, unequivocal manner. The opinions are not always correct, of course, but it is usually pretty clear where I stand on something. This style surely ruffles a feather or two along the way, particularly in the political area. Be assured, though, that the style will be maintained!
John Williams' New and Vital Role
(1) Something about which I've been exceptionally outspoken in the past is my concern about the decreasing accuracy (even outright honesty) of government economic data. This has become an extremely weak link in the overall analytical process, a link that continues to grow ever weaker. You simply cannot produce good research with bad numbers!
(2) In the practiced propaganda of totalitarian states, the lack of alternative information makes it difficult to quantify manipulations. In contrast, what is happening with the US statistics can be demonstrated with alternate data sources -- often and ironically, from within the government itself.
(3) The poor and deteriorating quality of government data now has gained acceptance with little protest from a large segment of the financial community, but especially from the broker-dealer sector. Regrettably, the financial community's acceptance of poor data is far more related to self-interest than to an honest assessment of economic and financial-market conditions and prospects.
(4) Late last year, we did something about this, through the formation of our first "SIRA" ("Strategic Independent Research Affiliation"). This was established with John Williams, who I have known for many years. John is an outstanding business economist. In addition, though, he also is expert in the area of the degradation of the quality of the government's key economic data -- in terms of both the history and the methodology surrounding this unfortunate phenomenon.
(5) John now publishes a comprehensive monthly newsletter, John Williams Shadow Government Statistics. These are posted at his website and can be accessed at www.shadowstats.com/. Definitely pay his site a visit.
A Growing Synergy Between GRA and SGS
(1) In coming months, an even greater interrelationship will be evolving between John Williams' website/work and my website/work. Although John's monthly material is very comprehensive, gaps come about because of the newsletter's publication date and the timing of various data releases by the government and others. To foster continuity, I already cover many of these releases; I plan to add additional ones during 2006.
(2) Although the GRA coverage of the government items frequently includes critiques of the perceived "distortions" portrayed by the numbers, the extensive data tables provided in GRA work comes from the numbers as rendered in the government releases.
(3) Keeping close track of these numbers remains important, since these are the data most visible to the public. They are the numbers hyped incessantly in places like "Tout TV" and the other venues in the regular propaganda loop, and they also are among the numbers most frequently cited by Alan Greenspan and other Federal Reserve officials as the basis for Fed monetary policy.
(4) Having a good grasp of these data also makes John Williams' monthly analysis and critique of them easier to follow.
Economic Work, Vs. the Work That
Is More Financial-Market Oriented
(1) John Williams' research will continue its comprehensive economic orientation, with appropriate mention of how key economic data might influence market behavior.
(2) However, overall financial-market behavior will receive significantly greater coverage in my research activities and on the GRA website. I point out, though, that although it is rare, John and I sometimes disagree. Thus, our conclusions may sometimes be at variance.
(3) Several months ago, I inaugurated a publication entitled, "Last Week in the Markets: A Look Back to Assess What Might Be Ahead" (recently renamed, "Market Thoughts"). In coming months, I intend to use this vehicle more actively with regard to discussing shorter-term financial-market developments and behavior.
Renewed Emphasis on the Gillespie
Model Portfolios (Fixed-Income and Equity)
(1) The model fixed-income and equity portfolios have suffered serious neglect over the last year or so. This will change significantly in 2006 and beyond, when these vehicles will assume very significant renewed importance regarding bond- and stock-market forecasts and timing judgments. In turn, we believe the active use of the model portfolios will be of material help in enhancing correct timing judgments.
(2) A section already exists on the GRA website (in the lower part of the middle column) to accommodate model portfolio activity, etc.
Fees
(1) Considering the existing scope and frequency of the work provided by Gillespie Research as well as John Williams, the respective subscription rates at least border on being "dirt cheap." Over the next several months, with increased scope of the material covered, subscription value will be enhanced even further.
(2) In addition to occasional individual special pricing arrangements offered by GRA and JWSGS, subscribers to both services have been and will continue to be accorded an appropriate discount, to encourage dual subscription.
GUEST CONTRIBUTIONS
(1) We are indeed fortunate to have close contact with many people possessing distinguished backgrounds and significant, diverse talents. We have shared some of their knowledge with readers through the GRA website's "Guest Contribution" section (www.shadowstats.com/cgi-bin/gra/garchives). It is our plan to become a good deal more active in this area in the immediate future.
(2) In coming months, there will evolve a great deal of synergism between GRA's "Networking Program," and the "Guest Contributions" section of the GRA website. (Additional mention of this later in this memo.)
(3) While the majority of the guest offerings will deal with some area related to finance, all will not. For some pleasurable diversity, I already have lined up contributions that have little or nothing to do with finance.
* As one example, anyone who has partaken of the joys of trout fishing in Montana, or who might be thinking about it, will find immensely enjoyable material docketed for February from Craig Mathews, one of Montana's topnotch guides and one of America's outstanding fly-fishermen.
* Also scheduled is something we will present in a serial format, from my close friend, Michael A. Endicott. Mike had a distinguished, unique career with the US Secret Service. We are going to take some of the fascinating experiences covered in the two books he is writing and share these with our readership.
(4) At present, depending on the topic, guest articles posted on the website are read by anywhere from a few thousand to several thousand people within a reasonably short time of publication. Because guest material is archived, additional "reads" continue indefinitely. This residual exposure is aided by search engine references created by Google and other services.
(5) If you would like to explore the possibility of writing an article for the website, feel encouraged to contact:
* Nancy Stevenson at NanStevenson@aol.com, or
* Doug Gillespie at Gsrdr@aol.com, or
* let us know via the GRA website's "Contact Us" link.
Nancy Stevenson
At present, GRA is exceptionally fortunate to have the services of Ms. Nancy Stevenson of Providence, Rhode Island. If you have had an opportunity to speak with Nancy, you know she is a smart, articulate person, who possesses a solid, working knowledge of the financial markets. We've conferred upon her the functional title of "Associate Contributions Editor," since this has been the area in which she has been most involved on our behalf.
NETWORKING
(1) The future memorandum will contain a major explanation and discussion of the Gillespie Research "Networking Program." When fully implemented and properly integrated with the GRA website's "Guest Contributions" section, networking promises to be one of the site's more dynamic and unique features.
(2) As currently envisioned, the networking activities will represent an exceptionally effective way to present goods and services to a large and broad cross-section of potential buyers/users of those goods and services. Moreover, the envisioned structure will permit a good deal of direct interaction between and among appropriate parties.
(3) In a developmental format, a general idea of where networking is heading is currently available at the GRA website's "Networking" link.
(4) What is presently posted on the site is the proverbial tip of the much, much larger, far more sophisticated iceberg to come. You do not have to be either a GRA or SGS client to participate, and if you would like to be included, please forward the relevant information to Doug Gillespie at Gsrdr@aol.com, or to Nancy Stevenson at NanStevenson@aol.com, or via the website's "Contact Us" link.
(NOTE: If you have provided this information in the past, please do so again -- thanks!)
ADDITIONAL STRATEGIC INDEPENDENT RESEARCH AFFILIATIONS ("SIRAs")
(1) Our relationship with John Williams has worked out even better than we had hoped, and believe me, the expectations for this affiliation were very high to begin with. As discussed earlier, there are areas on which we continue to work to utilize John's talents even more effectively.
(2) Concurrently, we are in discussion with other parties about creating similar affiliations. I want to emphasize, however, that we are not looking to create these for the mere sake of doing so. In this regard, the operative word is "strategic."
(3) It would be premature to discuss these situations in detail right now, but possibilities currently being explored are unique and would add material diversity and value to our overall efforts. Two of these situations are financial-market specific, which is consistent with our goal of increasing emphasis in this area in the months ahead.
Some Specifics
(1) We believe there are some GRA website characteristics that make the site particularly valuable. Two of these are the archive sections, one for data, the other for past research missives.
(2) The data section ("Data & Charts") provides clients a convenient place to turn to access a large body of current and historical financial-market and economic data.
(3) The general archives section ("Archives") provides access to all past research missives, with material indexed both chronologically and topically. Thus, if a client does not have the opportunity to read an article when it is originally sent via e-mail, or wishes to go back to it again at a later date, the material can be accessed indefinitely on the website.
(4) In the period ahead, the text accompanying the "Welcome" and the "Networking" links located on the site's navigation bar will undergo major revision. In the case of the "Welcome" link, the revision will likely include an overall "Site Map."
(5) Our current plans also include more extensive use of the website's "Other Links" section, currently located in the lower left-hand column of the site's home page. This will create greater convenience for website users to access other sites and services we deem of interest and value.
CONCLUSION
There's more to be covered, and it will be, but what is here provides a decent starting point. If there is any material here that raises questions or comments, please feel encouraged to share them.
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January 22, 2006 (#1)
Just one item to cover in this memo...
In late November, I began the then-experimental "GRA Running Commentary/Data" section, found in the "Latest Missives" area (middle column} on the GRA website home page, for those who would like to bookmark it.
Entries generally have been made daily, sometimes more than one per day, and they have tended to be market oriented and relatively short-term in nature. This has been an effort to add to the website more material possessing a market-timing orientation. In addition, the column has served as a bulletin board of sorts.
I had suspected that over time, this addition would serve an exciting, highly valuable purpose. Based on the traffic it has generated as well as the positive feedback I've received, it has thus far been a measurable success.
Since much of the material highlighted in this section represents proprietary analysis and forecasts, I have decided that in fairness to paying clients, "GRA Running Commentary/Data" will go closed content (available to subscribers only) between the end January and mid-February.
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