It has been something like 8 or 9 years since I spent quality face to face time with Don Coxe at a dinner at my home with Suzanne and one of our sons David. I have, of course, been religiously reading his monthly Basic Points, oftentimes reliving in my mind his masterful presentations as a sell side strategist.
What a surprise it was the other day when, watching the remarkable Daniel Day-Lewis personify Abraham Lincoln telling one of his great stories to a captivated audience, I suddenly visualized Don at the end of our conference table narrating parts of ancient or modern history relevant to the investment context of the time.
Similar voice, similar tone, intonations, measured pauses, perfectly timed and crafted looks.
It reminded me how much I loved Don’s presentations and, after getting to know him better, how much I appreciate the man. It also reminded me of his announcement in his November 2012 Basic Points, the 20th Anniversary Issue:
On this anniversary, we, Januslike, look both backward and ahead, as we prepare to cease publishing this journal, and begin thinking about how our research views will be disseminated in the future.
Don Coxe is one of the best investment strategist of our times, a great historian, a gifted writer and an exquisite speaker. He has a fabulous memory and a delightful vocabulary which he keeps expanding along with unfolding events. Above all, he is a great person.
Like Lincoln, Don is passionate about history, biographies and poetry, to name just a few, always artfully and pointedly including stories and quotes within his thoughtful financial analysis.
Don, thanks for some 30 years of good advice delivered in such enriched and delightful ways. Best wishes of good health and happiness to you and your family.
Salut mon ami!
A few excerpts from his 20th Anniversary issue to treat us all:
- The euro
We first raised doubts about it in February 1997, when we reported on
the work of the committee set up under the Maastricht Treaty to choose
the European heroes and heroines whose faces would appear on the new
banknotes that would displace all those eurocurrencies. The challenge was to pick the Europe’s greatest contributors to civilization, demonstrating the Continent’s gifts to the world—in arts, letters, science and peacemaking.
After two years, the committee announced it had given up: it could not
reach unanimous agreement on any European worthy of being engraved. This evoked disbelief. What about Beethoven? He dedicated a concerto to Napoleon. What about Leonardo? His personal sexual practices were deemed too controversial. What about Mozart? He was a Mason. Marie Curie? She did atomic research and look what that led to!
We asserted that if those Europeans collectively couldn’t agree on any European that, through history, hadn’t deeply offended some other Europeans, then this currency would probably not survive a serious recession.
More recently, we have discussed its endogenous risk as the only tradable
currency that is not specifically backed by any government, taxation system, army or navy. It is a postmodern meta-currency, like a Pirandello play, or to take a recent Irish literary example, David Mitchell’s Cloud Atlas, which is a challenging tour de force set in the past, present and future. (To our amazement, it has been made into a movie, which we can hardly wait to see.)
The euro is thus, a currency born, not in realism, but in the elites’ conviction that more than a millennium of rivalries and wars could be repealed by a committee.
It recalls for us a classic European military blunder created entirely by elites.
This week, exactly 158 years ago, (Another Anniversary!) in the Crimean War, due to the gross incompetence of British officers, the six hundred members of Britain’s Light Cavalry Brigade charged into the main Russian cannons at Balaklava. A disbelieving French officer memorably said, “It is magnificent, but it is not war.” (One might make the same observation about the euro.)
As for the longer-term impact of that military horror, it proved to be primarily sartorial: the two top British blundering officers gave their names to British sweaters—Cardigan and Raglan—and the woolen helmets of the British troops knitted by British ladies who wanted to help the brave soldiers were called balaclavas. It also inspired one of Tennyson’s more memorable poems. Whether the euro will leave such harmless legacies is doubtful.
A key difference is that the slaughter of the British Cavalry was over in minutes, whereas the euroelites keep doubling down on their disastrous decisions made more than a decade ago. (…)
The euro’s effect on the rest of the global economy ranges from nuisance
to threat to peril. As long as the various eurocrats and politicians occupy
themselves in holding meetings and in creating new bailout agencies, the
euro is a mere nuisance. If interest rates on bonds issued by Portugal, Spain and Italy climb to levels that begin to hammer European bank stocks and send gold skyward, it becomes a threat. If some nation other than Greece defaults and the share prices of dozens of large European banks collapse, then the euro becomes a peril for the entire global economy.
- Nobel prizes
Other notable recent winners, with our (possibly-inaccurate) reasoning for them: newly-installed Barack Obama, for not being George Bush and for closing Guantanamo; Al Gore, for opposing George Bush and for fighting global warming; Jimmy Carter, for opposing Reagan; and Mikhail Gorbachev, for ending the Cold War (and for restraining Thatcher and Reagan from launching a nuclear war).
- The prophets
Nevertheless, colorful national and regional behavior patterns will continue to charm tourists with a sense of history. Major tourist magnet Italy will retain its charm. In a land where it is hard (and personally perilous for prosecutors) to send a mafioso capo to jail, the courts can still nail other malefactors. A court in Rome this week sentenced seven prominent seismologists to six years in jail for manslaughter for failing to warn people in an earthquake prone region of a coming quake that would later kill more than 300 people. The spirit of ancient Rome lives. Soothsayers who failed to warn of coming disasters tended to have suddenly-shortened lives, because the gods had clearly rejected them. In that pre-seismograph society, haruspices often relied on the innards of owls, which, from time-to-time, gave bad calls. Impalement or drowning were frequently the fates for false prophets.
This new judicial venture raises the alluring prospect that the Italians might try to jail bankers who profited from false formulas that led to the crash.
We hope the emerging Teutonic ascendancy across the eurozone does not
eradicate such charming cultural traditions with such deep historical roots.
- Barry Bonds
Eight years ago, we coined the phrase The Great Symbiosis to explain the
emerging economic/financial relationships among the three leading Non-European trading nations—China, Japan, and the USA…
“That seemingly spontaneous and undirected Vendor Financing process
permits the US, Japan and China to grow faster collectively than the rest of the world through rapid increase in trade, much of which involves integration in supply chains. The core process is the financing of the US’s Twin Deficits [fiscal and trade] by Asian acquisition of astounding volumes of Treasurys. That cornucopia prevents the dollar from crashing and keeps US interest rates at minimal levels, subsidizing overextended American borrowers (including Washington). The armies of thrifty Asian ants keep the American grasshoppers jumping with joy. One result is that the benchmark Treasury bonds…have become the Barry Bonds of the global bond market—outperforming with a lot of help from their friends.”
- The arthritic octogenarian
The US has been experiencing the biggest deficits and lowest interest rates
of all time. Both the Keynesian and Friedmanesque stimulus policies are
being employed on a scale never seen outside banana republics or the
Weimar Republic. Yet the economy moves at the speed of an arthritic
octogenarian. The eurozone’s biggest contribution to the global economy
is to make the US economy look good in comparison, thereby justifying
the S&P’s lofty valuation. We grow increasingly doubtful. Caution is in