TSC Readers
TheStreet.com publishes selected email received by the publication and its staff members. To send an email intended for publication in this section, write to letters@thestreet.com and include your full name and city. Letters may be edited for length, style, clarity and accuracy.
Broad-Based Demand
George Mannes: In response to your column There May Be Plenty of Tomorrows for AOL in Its Bid for Cable Access, I was once an America Online (AOL Quote - Cramer on AOL - Stock Picks) customer. I was once a customer of IDT (IDTC Quote - Cramer on IDTC - Stock Picks). I had both via phone, and both were unsatisfactory ISPs. Why? In a word, frustration! Get on? Maybe. Stay on for any length of time? Not! I had the 56K modem service, but it was still very slow. How do I know? I took a chance and signed up for Cablevison's (CVC Quote - Cramer on CVC - Stock Picks) Optimum online, which farmed out the service to Excite@Home (ATHM Quote - Cramer on ATHM - Stock Picks). I pay a little more but free up one phone line, with lower phone bills, and more importantly, I have zero frustration. I go online in the morning, stay on all day -- and all night, if I wish. Unbelievably quick downloads, limited only by the site's ability to deliver. It's simple to operate, and since January of this year, I have experienced only two minor downtimes, which were automatically corrected in short order. When the world discovers broadband, it'll go wild. No doubt about it! -- Michael Gordon (received 8/16)George Mannes: I have a caution for AOL. The company should be worried about those vendors that are trying to offer free Internet access. If the argument is there are no applications around compelling enough to warrant high-speed access, then it stands to reason that the vendors which are offering free service have a strong argument: Why pay for dial-up service when you can get it for free? I am inclined to believe AOL is more serious about broadband access than it's willing to admit. No company that big could be that short-sighted. Yes I am long AOL, but I am looking for the right selling opportunity. The company's public rhetoric is not giving me a warm fuzzy feeling about its strategy. -- Paul Lue (received 8/16)
George Mannes: From which planet did you write about the modest demand for broadband? I'm now hearing things like, "I'd only move into a town that offers broadband Internet access" from people, and they are not tech geeks! AT&T's (T Quote - Cramer on T - Stock Picks) MediaOne/RoadRunner service is great, and it is a bargain relative to inferior ISPs and dial-up phone lines. You are whistling past the graveyard on this issue. Get out and talk to consumers more, portfolio managers less. -- John Beckos (received 8/16)
The Good, the Bad or the Lucky
Joe Bousquin: In response to your story Is Ryan Jacob Good or Just Lucky? We Run the Numbers, I wish you had constructed a more revealing test of how Jacob did vs. what a trained seal or dart-throwing chimp would have done because it's an intriguing question and I'm left with the feeling that I don't really know the answer. Consider a simple test, a coin is flipped once and comes up heads. Based on that performance do we conclude that heads is the 100% likely outcome? Since our benchmark said there was only a 50% likelihood of heads, are we to conclude that the coin flipper is one of those highly skilled individuals who is able to control the tumbling coin to produce desired results that other managers only dream about? Could this be the veritable Peter Lynch of coin flippers? Of course not. A one-time snapshot is a very poor test because something has to happen, and the odds are pretty high that the result won't politely land on the mean just to spare us the heavy lifting of doing enough repetitions to determine a pattern. Since we can't repeat Jacob's performance, why not let the seal have a few more tries? Run a few hundred simulations where turnover is matched to the average turnover for Internet funds. And use a market-cap-weighted list to govern the random selections. Don't make the mistake The Wall Street Journal does with its dart throwers of giving every name equal weight, so that the darts are about 100 times more likely to land on MicrocapCrap.com instead of Amazon.com (AMZN Quote - Cramer on AMZN - Stock Picks) or Yahoo! (YHOO Quote - Cramer on YHOO - Stock Picks) -- when real-world portfolio managers are about 100 times more likely to own significant amounts of the latter and very little (if any) of the flotsam and jetsam that exists on the fringes of the market. Now you'll have a suitable peer group universe to compare him with. And I'll bet you a couple of sardines that Jacob's 100% outperformance in this volatile arena doesn't get him into the top quintile of trained seals. -- Steve Lipson (received 8/16)Responding to the Poll
John J. Edwards III: In response to your You Said It: A TSC Weekly Poll: Which Candidate Would Be Best for Wall Street?, that's a no-brainer: Steve Forbes, with his revolutionary flat tax and his commitment to letting private industry continue to expand to include even the previously unemployable. The only caveat is that his lack of experience in foreign policy could lead to some disruptions in world markets a la the Asian meltdown last fall. After Steve Forbes, it's got to be George W. Bush, who is 10 times the capitalist his father is. But even if a Democrat wins, as long as Republicans hold the House and Senate, the economy will do well. If you check back on the charts, you will see that the current economic expansion really took off after the Republicans gained control of the House in 1994 for the first time in nearly 50 years, an important factoid that the liberal media never wants to recognize or even discuss. -- Vester Mapp (received 8/15)Linens and Things
Christopher Byron: In response to your column From Balance Sheets to Linen Sheets, Martha Stewart Is a Bona Fide Business Genius, you dedicate three entire paragraphs to emphasize the point that Martha Stewart, at 57 years of age, may soon die or become infirm, potentially destroying the value of her franchise. Actually, your concerns are quite justified. But you failed to mention the most relevant example for these arguments. That would be drkoop.com (KOOP Quote - Cramer on KOOP - Stock Picks), which is typical of the richly valued dot-com companies that you bash on a regular basis. Dr. C. Everett Koop is the very foundation for all of their branding efforts. He is 82 years old, and, statistically speaking, should die any minute now, though I sincerely hope not. Hopefully, drkoop.com and MarthaStewart.com are not doomed to become anachronisms. -- George Nichols (received 8/14)Investing for Income
Elizabeth Roy: In response to your column Why Is My High-Yield Fund Sucking Wind?, a point to be made is that people who buy bond funds for income and not for an interest-rate trade should simply ignore short-term changes in net asset value, because the income stream from the fund changes much more slowly. Even though the net asset value of the fund has gone down, the income stream will have budged only slightly, unless there are massive defaults and will probably be trending up. So, focus on the income stream -- not the net asset value or total return -- if you have invested for income and do not need to sell shares. -- John Jones (received 8/13)Spotting Price Indices Trends
James Padinha: In response to your column Trendspotting on the Producer Price Indices, that is a very interesting theory on inflation. If your expectation theory on inflation is right, then there would be little danger of inflation until the inflation really showed up in the economy. Once the inflation showed up in the economy, it would be there for a long time because the expectation on inflation would feed on itself. -- Ruibin Meng (received 8/13)It Bogles the Mind
James Cramer: In response to your column Mind-Bogle-ing Changes at Vanguard , thanks to you and Joe Bousquin for his Vanguard's Bogle Miffed at Board's Stance article for bringing this fiasco at Vanguard to our attention. I have a small amount of money there, but it is the lion's share of what I have invested, so they wouldn't even notice if I disappeared off the face of the earth. But this sort of thing really disappoints me, and I am considering moving my money. It really is a shame after what John Bogle has meant to the investment community -- in particular for the small investor. In the text of the message Vanguard sent via its Web site, it made the mistake of having a place for suggestions. I say, let the man serve as long as he wants. -- Greg Starks (received 8/13)Jim Cramer: I understand your feelings from an emotional and personal level. However, one of the most difficult things to do is enforce company policy consistently in order not to discriminate. Why was the rule there to begin with? Assuming that the board originally implemented the rule with sound intent, then I commend the board for making this difficult and nondiscriminatory action. I would venture a guess that Bogle was involved with the rule's implementation. It is not easy to implement policy consistently. If the rule does not make sense, then revoke or amend it -- but it must be applied consistently. -- Michael Zaiontz (received 8/13)
James Cramer: I couldn't agree with you more. Maybe it's because I'm from Philly as well. I put my father-in-law into Vanguard funds many years ago, and just convinced my 86-year-old mom to move out of money-market funds into some mutual funds, Vanguard, of course. I trust Jack not to screw us. If they'll assassinate their creator, what will they do to us? Guess I need to re-evaluate my recommendations. -- John Baycich (received 8/13)
Joe Bousquin: I am an admirer of John Bogle, both for his investment wisdom and his strong sense of ethics. I'm also an investor in Vanguard funds and believe Jack Brennan and associates would be well advised to invite John to continue to counsel with them as a director. -- Gene Mulligan. (received 8/12)
The Price of Access
Kevin Petrie: In response to your article As ISPs Shift Their Business Models, MindSpring's Got Access Pricing on the Brain, as a longtime subscriber to (MSPG Quote - Cramer on MSPG - Stock Picks) as well as a stockholder, I want to put in a word of praise for its customer service. A novice friend of mine, having problems getting properly connected, finally succeeded after a MindSpring service tech spend nearly three hours on the phone with her. My personal experiences with tech support have been equally satisfactory. I rarely get a busy signal or a disconnect. The only complaint I have is with its desktop, which insists on updating the weather, etc., whenever I sign on. This sometimes takes as long as 30 seconds. You know what is said about Americans: Instant gratification takes too long! Its new software, due out soon, may take care of this. For these reasons, I would not switch service providers to save $20 a month, particularly if I would be subjected to streams of advertising as a cost. Furthermore, MindSpring is rolling out DSL in Atlanta and other major cities. From those who have this service, I hear that using a standard dial-up connection is like going back to a Model T Ford. I wonder if the free providers will offer high-speed lines at no cost? I'm hanging in there. -- Michael Halpern (received 8/13)Reading Greenspan
Justin Lahart: In response to your story Greenspan Not About to Shuffle Off the Monetary Coil, I believe you will prove to be inaccurate in your assumption that Alan Greenspan will stay another year. He once was a programmer and understands the horrid legacy of the legacy computer code. He will get out before the Y2K debacle fully hits the fan on Jan. 1. Y2K will be a very big deal. -- Brent Long (received 8/12)The Geek Squad
James Padinha: In response to your column The First Step: Overcoming Denial, productivity is driven by technology? I don't think productivity is rising. Employment is rising because of technology. Why? Well, unless you are a geek, it takes a squad to service the technology. Since there are so few true geeks, voila, there is higher employment! -- Darby Hebert (received 8/11)Seeing the Bottom
James Cramer: In response to your column We Haven't Hit Bottom Yet, I love your articles. However I disagree with this one. Markets love to climb a wall of worry and never do what you think they're going to do. Therefore, if all the brightest minds on Wall Street are thinking the same way you are, this market could run away from everyone. It may end up being too late for you to jump in. In my opinion, all it takes is a weaker than expected PPI number Friday for this market to take off. I personally think that 10,550 is the bottom, and we hit it Tuesday. With any good inflation news, we're headed back up the channel to 11,100. I'm putting some money to work. -- Jim Oin (received 8/11)James Cramer: Thanks for your column on hitting bottom. It was just the column I needed to regain a bit of confidence. I've been sitting on some cash from selling my Net and small-cap tech a few weeks ago. I then kicked myself for being unable to shake the feeling it wasn't over yet, and so I missed today's rally. Being patient is a lot easier after your timely piece. -- Gwilym Archer (received 8/11)
Retelling the Story
Jeff Bronchick: In response to your column A Tale Oft Told, I must say, it was one of the best pieces I've read on the site. While I would like to see our current bubble slowly float back to earth, I fear instead that it will burst with a tremendous thunder and wreak havoc on our economy, as bubbles have done in the past. We have no one to blame for the current situation but ourselves. I lump myself together with all investors in this market. Thank you for your attempt to return us to reason. -- Eric Wells (received 8/10)Jeff Bronchick: Your column really hit the mark for me, having just finished Anthony Trollope's novel, The Way We Live Now; one of the main characters is a sleazy money man who starts a railroad syndicate, hypes it up, gets all kinds of investors and sells all kinds of shares, but there is no real railroad! -- Rose Thomson (received 8/10)
Doing for Yourself
James Cramer: In response to your column DIY: Not Just a Financial Craze, it made a lot of sense. I have met with three different financial planners over the course of the past 10 years. I have not been happy with the advice of any of them. I am grateful that with the resources available on the Net I can now do my own research and investing online. I am not a daytrader, although I do occasionally make short-term buys. Most of my investments are for the long term. I look for buying opportunities during market dips, and there have been many lately! I have learned the hard way that sometimes that button on the computer is too easy to push, and I have gotten into a few investments that I wish I wouldn't have. On the other hand, the ease of online investing has gotten me into some great stocks at the right time. I bought America Online (AOL Quote - Cramer on AOL - Stock Picks) and General Electric (GE Quote - Cramer on GE - Stock Picks) last fall after the big market correction and, even with the recent decline, am still up almost 100% on AOL and more than 50% on GE. I don't think I would have the stomach to be a daytrader. Watching my net worth slip more than 30% last fall was tough, and I don't think I could go through those gyrations on a daily basis. -- Sharon Berglund (received 8/10)James Cramer: Amen and amen to your column on people handling their own finances. I used to scout out stocks and then ask my Merrill Lynch contact to buy them. After a while, I realized that there was no need to pay that big commission when it was my time and energy that picked the stock! -- Alison Hopper (received 8/10)
Marching to a Different Beat
Marc Chandler: In response to your column Global Briefing: Marching Out of Step, you wrote "Milton Friedman, the patron saint of monetarism, argued that inflation is once and always a monetary phenomenon. While it sounds nice, in reality inflation is just as much a psychological phenomenon. Fed tightening is meant not to combat current inflation, which according to most measures of general price levels like the GDP price deflator and personal consumption deflators is quite benign. The Fed, should it move, will be targeting investors' inflation expectations." You make light of Milton Friedman as if he doesn't understand a complex problem, which you believe you do. You are like the man playing poker, looking around to decide who is about to be taken by the pros -- and it is Friedman. Our current situation is tracking, as Friedman would explain it, not as a proponent of the Fed's Phillips Curve would predict. -- Bennet S. Simonton (received 8/9)Making Sense of the Mishmash
James K. Galbraith: In response to your column In Politics, the Summer of Reruns, you begin with an exceptionally titillating gem by Karl Marx. Its relevance to the rest of the article is in doubt by the time we have retreaded John Maynard Keynes and George McGovern. Such a disarming admission at the end of an article isn't an excuse for being so unoriginal within its body. U.S. politics is already an extremely confusing mishmash of ideas devoid of ideology, mandated by the constantly shifting demands of giving the people what they want. If George W. Bush has all but won the Republican nomination, it is because he has better handled the press and his own image. I wonder how the Democrats will muster the moral fortitude to attack his drinking and carousing? Are radical propositions about reforming the Federal Open Market Committee, raising the minimum wage (again), abolishing the Social Security Trust Fund, putting children on Medicare, and restructuring the military supposed to make it simpler for Americans or any overseas well wishers to make sense of the whole shebang? It has been said that a camel is a horse designed by a committee, and it wasn't Marx! It sounds like we're on the way again to building a bigger, better camel. I always thought that democracy wasn't designed to help people get things done, but rather to keep people from doing something stupid. You wouldn't know it watching this political process! -- Dino William Ramzi (received 8/9)James K. Galbraith: Thanks so much for your refreshing views amid the usual terror of raising wages. I agree with you about Bill Bradley. All of it is clear and sensible, so of course it will be ignored unless there's some progressive oversight in regulating globalization. I don't want to have to wait for Bill Gates to write checks for Social Security. -- Laurie Stone (received 8/8)
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