April 2007 - Perkins Capital Management

April 24, 2007
Dear PCM Clients and friends:
MESSAGE FROM PERK
Spring is finally here; everyone we know has been patiently waiting for warmer weather.
We all got a bit of a shock when daylight saving time came along early, which gave us
more daylight at the end of the day, but so what—it was too early, and cold, to do anything
outside with that daylight which was subtracted in vain from our morning light.
Last quarter’s MESSAGE FROM PERK elicited a few e-mails and telephone calls, all
favorable and supportive of my posture concerning retirement as well as some of the other
homilies contained therein. And several readers asked, perhaps tongue in cheek, since I
was so old and had spent so many years in the investment business, surely I must have
some “chestnuts” to share. And I do, hence this message. There is no surefire recipe for
success in this business and, in fact, success can be defined in several ways. It is usually
equated with making money, achieving good performance versus benchmarks, but it may
also mean preservation of capital. There is no special formula or Holy Grail which can be
followed to achieve superior performance, but there are measures which, taken together,
can over time achieve performance results which are satisfactory and well beyond what
could be achieved randomly.
You cannot follow the herd and do the same thing as everyone else and expect to do
better than the others. Going with the crowd will lead to average performance. The
majority is usually wrong, which of course is what creates the extremes of market highs
and lows. It is usually very difficult to go “against the grain,” for it is natural to go with the
flow of prevailing opinion. One needs to think about being unconventional or contrarian on
occasion. This is not easy to do because if the need for contrary thinking on a subject is
obvious, it is obvious to others also, and therefore, is unlikely to succeed. It is the
unobvious that we are seeking. It is said that market peaks occur when there is no one left
to buy, and bottoms occur when everyone who wants to sell has sold. Truer words were
never spoken. And the corollary is that when everyone wants to buy the same thing, it is
likely to be overpriced, and when virtually no one is willing to buy something, it is probably
underpriced. This is a cycle we have witnessed over and over again.
The Perkins Capital Management investment philosophy, written over 22 years ago, says
our approach to stock investing is a search for opportunity, a focus on finding companies
whose shares are perceived by us to be undervalued, partly because they may not have
been recognized by other investors, and therefore, “undiscovered.” Sometimes we are
730 East Lake Street
Wayzata, MN 55391-1769
Telephone (952) 473-8367
Facsimile (952) 473-4702
www.perkinscap.com
INVESTMENT MANAGEMENT
PCM Clients
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April 24, 2007
early finding them, and therefore, must wait a while, but eventually when others do find
them we can expect a rising share price, assuming the companies continue to perform as
expected. We are literally on a fishing expedition looking for the fish that others have not
found. The trout fishing season opens in Minnesota on April 15 of this year. A good
analogy of our investment “fishing” compares with that of trout fishing. On opening day
there will be many fishermen hoping to catch a trout or two, not just any trout, but
preferably a large one. But most of them will fish near the bridge where they parked their
vehicle, not wanting to walk upstream in search of a less crowded area. When Dick and
Dan were young, we fished Minnesota streams for trout like many others, but we soon
learned to walk upstream, often to the very place where it began. Why? Because it was
not crowded, and in fact, we rarely saw other fishermen and we caught more fish and
larger ones because they had grown there without the pressure of other fishermen. It took
extra effort, but it was always worth it. Ditto for looking for investment ideas. Go further
upstream than others are willing to go and take the risk of exploring parts of the stream
which others are not willing to explore. We like to do our investment fishing where others
are not.
Finally, I did get a few comments that were supportive of working at my age, which made
me feel worthwhile. But consider Mr. Jack Weil, the subject of this newspaper article.
Isn’t that great? Still going strong at 106!
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April 24, 2007
LAST QUARTER IN PERSPECTIVE
Once again, small-cap stocks led the parade; the S&P 500 and Dow Industrials were at the
bottom, with the S&P essentially flat and the Dow off nearly 1%. The quarter’s
performance was no doubt skewed markedly to the downside by the February 27 drop in
the DJIA of 416 points and 9.3% panic plunge in the Chinese stock market. As Stephen
Roach of Morgan Stanley said afterwards “It seems that stock market corrections are now
made in China along with everything else.” But
%
Indexes
Return
the catalyst for the Chinese decline was probably
1Q
the February 21 increase of 25bp to .50% in
2007
Japanese interest rates which reduced the return M-Star Small-Cap Growth Total Return
+3.85
+3.21
from yen-carry trades. The carry trade borrow S&P Small-Cap 600 Total Return
Line Composite
+3.01
yen at a near zero interest rate, sell the yen and Value
M-Star Small-Cap Total Return
+2.52
then invest the proceeds in a variety of higher NYSE Composite
+1.34
+1.28
yielding global investments, usually fixed income, Russell 2000 Total Return
Russell 1000 Total Return
+1.21
but to some degree in stocks. The Bank of Wilshire 5000
+1.06
Japan’s rate hike was what got the correction M-Star Large Cap Value Total Return
+.82
+.26
started in various high flying markets in the Far NASDAQ Composite
S&P 500 Composite
+.18
East and it spread around the globe. There are Dow Jones Industrial Average
-.87
those who feel it was a correction engineered by
the Chinese government which has become increasingly concerned about speculation in
the Chinese stock market and the economy. Whatever the reason, it was severe, and the
result in the U.S. market was as well. The advance decline ratio of S&P stocks on
February 27 was 99.5:1, the highest ratio ever recorded, higher even than on Black
Thursday in 1929, higher than at the time of the Nazi invasion of France in 1940, and
higher than the worst day of the 1987 crash. Many commentators called the drop a
“normal correction” which we think is equivalent to the ostrich hiding its head in the sand.
We view it as a warning shot over the bow.
LOOKING AHEAD
In our The Year Ahead section of our January 25 letter, we postulated that since the midterm decline had not taken place on schedule in 2006, the second presidential year, it
would be shifted to 2007. We included a table which we think is important enough to print
again, showing that if the decline didn’t come in the 6th year of the decade it came in the 7th
year. As you can see, there has NEVER been a 6-7 year period that did not suffer a
serious decline and since we did not have a meaningful decline in 2006, it therefore must
come in 2007. This has happened before; in the second Reagan term, the 1986 bottom
was virtually non-existent, and the Dow went up to 2700 by mid-year 1987, topped, and
then swooned in October to about 1750. In fact, the 1986-87 market, along with the 196062 market are the two markets which Walter Deemer has labeled as “bull market
extensions” which is how he also views the current market, which he says is in a similar
bull market extension. In his opinion, the current market is in the process of building a top,
but of course no one, including the omnipotent Walter Deemer, can know exactly when
that top will be completed. There are historical criteria, however, which can help us
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determine when that decline might
come. Ron Greiss, the helpful proprietor
of the Chart Store has kindly given us
permission to show you an exceptional
chart. It compares the DJIA and its 20year, 2-month (482-month) bottom-tobottom cycle, and then the amount of
time from that bottom to the next top.
As you can see from the chart, the
1942-46 rise took 4 years, 1 month, the
1962-66 rise took 3 years, 8 months,
and the 1982-87 rise took 5 years. If the
rise off the 2002 bottom lasts 5 years, it
will terminate in October and would
equal the August 1982 to August 1987
rise. Obviously, since the others were
shorter that could imply that the top of
the market could come as early as the
present time and still be well within past
parameters.
The 7th year has not been kind to the market as the table on the following page shows;
even if there was not a big decline there was one of some importance.
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In our January letter we produced the Dow
Jones Industrial Cycle Composite for 2007, with
the kind permission of Ned Davis Research.
The projected top in that chart was midsummer.
Below we show you the S&P 500 Cycle
Composite for 2007, which is very similar to the
DJIA chart with a top also in midsummer and a
bottom in October. All of this dovetails very
nicely with the prognostication that one can
glean from The Chart Store chart. We might
mention here that Steve Puetz has determined
that the panic phases of all 12 stock market
crashes were encompassed within two time
frames, namely February 4 - April 5 and September 3 - October 29.
Year 7
1887
1897
1907
1917
1927
1937
1947
1957
1967
1977
1987
1997
Market Result
May-October 14% decline
September-October 20% decline
January-November 45% drop
June-December 33% decline
October 11% decline
August-November 40% crash
February-May 9% drop
July-December 19 decline
September-November 10% decline
Market fell steadily all year: - 18%
October 20% market crash
16% August-October decline
Our readers know that we can point to the 5th and 8th years of the decade as the best
years. In fact, if you refer to the table on page 5 of our January letter, you will see that 10
of 11 5th years were up, with a total gain of 1,698% since 1905, while the 8th year had 9
gaining years out of 11, and was up 476% since 1907. In fact, years ending in 5 and 8
have been so good that they have contributed about 96% of all gains in stocks since 1885.
So as we have said before, we need that 6th or 7th year correction to prepare us for the
almost certain 8th year rise. Obviously, the greater the correction and the lower the market
goes, the odds increase for a large upside gain thereafter. And how might we pinpoint
when that rise will begin and end? Many dates of highs and lows have been predicted well
in advance by the Princeton Economic Institute Economic Confidence Model, which was
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developed decades ago and finally copyrighted in 1997. This model is shown below. Note
that the dates in time calculate out to 3 decimals and represent days in the year, e.g., the
2002 low was projected at 2002.85 or .85 of 365 calendar days or 310.25 days, which in
fact equates to November 6, and as we know the low came on October 10. The 2007.15
high shown would have been 54.75 days of 365 or February 23.75 (February 24), which
missed the February 27 worldwide sell off by 3 days, although in his written material
Armstrong used February 27. Armstrong’s work, of course, is what makes us wonder, as
stated earlier, if we have not already seen the top of this market in February 2007. You
can check the other dates to see how close he was to other significant economic or market
dates. Fibonacci time relationships also projected February 24 as a possible peak, as
described by the Elliott Wave Theorist. Recall that the 1962-66 top was in February, so a
top does not have to be in May or October. Armstrong’s model shows the next bottom as
March 23, 2008, which means the 8th year rise would begin then. His next top is set for
April 19, 2009, plus or minus one day with a final bottom November 6, 2011. Incidentally,
Walter Studnicki, author of the Turning Point and a Fibonacci devotee, thinks March 21,
2008 will be the termination of that move up and April 19, 2009 the next top prior to the
decline and the final November 2011 bottom.
The Martin Armstrong story is unusual and sad. He was a money manager who founded
The Princeton Economic International Institute in 1981. He became enamored with
economic cycles and in 1979 published a chart called the Economic Confidence Model
which he developed as part of his studies and which was based on a 51.6-year economic
cycle and shorter 8.6-year economic cycles (6 x 8.6 = 51.6) which presumed to chart the
ebb and flow of economic activity. He used 1929.75 as his beginning reference point
which may very well be why his cycles often coincide with market junctures; he really
viewed them as junctures of economic activity. Thus many of his turning points have
marked dramatic changes in markets, both U.S. and foreign, while others have tied closely
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to changes in economic activity. By the mid-90s he was very successful and had $3 billion
in client assets, but in 1999 Republic Bank was being acquired and trading losses were
discovered at Republic New York Securities, the brokerage firm where his accounts were
domiciled. He claimed the losses were generated without his knowledge and that he had
nothing to do with them. That was probably substantiated later after two Republic officers
pleaded guilty to fraud in a related case and the client losses were made whole. But the
government, at the start, insisted he had been responsible and the judge ordered him to
produce the assets which he said he did not have. The judge held him in contempt of
court and he has been in jail since January of 2000 on that contempt of court charge. This
is a bizarre situation where he cannot produce assets he claims he does not have, but
cannot even get to a trial to prove his innocence. While we probably don’t have all of the
facts, this seemingly is a huge miscarriage of justice. Go to The New York Times article of
February 16, 2007 for more information.
Evidently, we are not alone in our view that there can be a market correction this year. Mr.
William Rhodes, a Vice Chairman of Citigroup, and a very knowledgeable person
concerning emerging market debt wrote an op-ed column in the March 30 Financial Times,
wherein he outlined his fears concerning the world economy. His comments are
reproduced here:
By William Rhodes
Published: March 29, 2007
The recent market turmoil should not have been unexpected. We are living in an increasingly interdependent world. Times
have been good, even with the volatility of the past few weeks sparked by the Shanghai market and then fuelled by the
subprime sector in the U.S. We have been living in extraordinary times in a global “Goldilocks” economy – not too hot, not
too cold. The macro-economy still looks pretty good but the shaking of the trees over the past few weeks has, it is to be
hoped, awakened investors and lenders to the risks in the marketplace.
High growth in emerging markets continues, as exemplified by the tremendous growth in China and India. Western and
Eastern Europe are growing. The Russian economy, driven by energy, has been strengthened well beyond what was
expected a few years ago. The Middle Eastern oil-exporting countries are going through a boom fueled by oil and gas: it is
different from earlier periods of high oil prices because this time a substantial amount of the money is staying in the region,
rather than being invested elsewhere as in the 1970s.
However, much of the good news has come as a result of extraordinary levels of liquidity pouring into opportunities around
the globe. To a large extent this is due to the Federal Reserve’s expansionary monetary polices early in the decade and the
U.S. administration’s fiscal stimulus. The yen carry trade has also facilitated the buoyant expansion of investments and
leverage evident everywhere today. The low spreads, the tremendous build-up of liquidity, the reach for yield, and the lack
of differentiation among borrowers have stimulated both dynamic growth and some real concerns.
Pockets of excess are becoming harder to ignore. Problems in the housing and mortgagee area such as the subprime sector
in the U.S. are one such example of excess that should come as no surprise. As lenders and investors inevitably become
more discriminating, liquidity will recede and a number of problems will surface. Too many countries and companies with
vastly different risk profiles are still commanding similar pricing.
It has been my experience that periods of economic expansion tend to last between five and seven years. We are entering
the sixth year of expansion in the U.S. Against that background, I believe that over the next 12 months a market correction
will occur and this time it will be a real correction. I said as much last spring during the Inter-American Development Bank
meetings in Belo Horizonte, Brazil. Soon afterwards, in May 2006, the markets did experience a correction but it was so
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mild and short-lived that it was in a way less effective than no correction at all. I say that because it left the inexperienced
with the impression that it would be smooth sailing from there on.
Market developments in the past few weeks should be seen as a warning. What has been evident for a number of months is
that, in the U.S., we are seeing lagging inflation and slower growth. Whether this means that we are going to have to fend
off recessionary tendencies is not yet clear. However, what is clear to me is that in the next year a material correction in the
markets will occur.
During the last big adjustment that started in July 1997 in Thailand and spread to a number of Asian economies including
South Korea, followed by Russia in 1998 – and led ultimately to the bail-out of Long Term Capital Management, the U.S.
hedge fund – a number of today’s large market operators were not yet in the mix. Today, hedge funds, private equity and
those involved in credit derivatives play important, and as yet largely untested, roles. The primary worry of many who make
or regulate the market is not inflation or growth or interest rates, but instead the coming adjustment and the possible
destabilizing effect these new players could have on the functioning of international markets as liquidity recedes. It is also
possible that they could provide relief for markets that face shortages of liquidity.
Either way, this clearly is the time to exercise greater prudence in lending and in investing and to resist any temptation to
relax standards.
At this point we are reminded of a verse from Ecclesiastes:
“That which has been is that which will be, and that which has been done is that which will be
done. So, there is nothing new under the sun.”
Ecclesiastes 1:9
WHAT? ME WORRY?
We think of the famous face of Alfred E. Neuman and his ability to brush aside worries.
The subprime mortgage problems, a product of low interest rates and liquidity perpetuated
by the Fed over several years, fueled the housing market and
will now obviously force a crisis in real estate as foreclosures
accelerate. The most recent count showed that 44 subprime
mortgage organizations have closed and likely there are more
on the way. Other mortgage banks have announced plans to
discontinue lenient mortgage programs and are tightening
their standards even for prime credit risks. Thus tightened
liquidity and more stringent appraisals will likely put builder
backlogs at risk and cancellations of condo purchases and
down payment forfeitures will increase. The real risk is that
this could spill over into other areas of the economy, such as
auto sales, which are floundering anyway.
Worrisome also is the record amount of margin debt as shown in the chart on the following
page, which is higher now than it was at the top of the market. GDP is very anemic,
growing at about 2%, and Bernanke has it backwards in his recent testimony that he is not
worried about a recession, but sees inflation as a risk. We think it should be the other way
around, a likely recession and a small risk of inflation which could easily turn into deflation.
We believe problems, once they start to be found, are like cockroaches. There is never
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just one. There are other
non-economic cockroaches
out there also, with Iran being
the largest one, and Pakistan
second. Then there is the
price of oil which certainly will
go
higher
as
tensions
increase in the Middle East.
Inflationary?
Yes, maybe,
but certainly higher gas
prices could contribute to an
economic slowdown. In our
view, interest rates are not
going up; rather the Fed will
lower them in an attempt to
forestall a recession, which is
already baked in the cake. Of course, that would not be good for the dollar, so the Fed is
truly between a rock and a hard place.
It is well to remember that stock markets operate in anticipatory fashion; investors base
their market action on the future, not the present. This is why it is so frustrating to hear
news announcers trying to relate up or down markets to the events of the day. It just does
not work that way. The stock market is always discounting the future. Investors do not
buy or sell because of today’s news, but because of what they believe the news will be six
to nine months in the future.
There are times when you can take money from Mr. Market, but there are also times when
Mr. Market tries to take it away from you. Certainly, we have had a period where it was
relatively easy to take money from Mr. Market, but now times are changing and it could
very well be the other way around pretty soon. As we said last month, we are not going to
panic in our accounts because we think we may have a bad market, but we will let cash
build from the routine sales of stocks that we believe are getting overpriced and which we
might hold a little longer under other circumstances; we will use this cash for attractively
priced new ideas as they come along or at a market bottom when we may be able to buy
them more cheaply. Fortunately, we always seem to find new ideas for investment despite
our cautious attitude.
THE SECRET
At the top of the New York Times “self help” best seller list for twelve weeks now, “The
Secret” is perhaps the most popular “feel good” book since Norman Vincent Peale’s “The
Power of Positive Thinking.” Perk was intrigued enough with the title to buy the book at
the airport book shop and then read it on his Belize trip. While Perk says he does not
purport to be a book reviewer, he says it is a worthwhile read (mostly) and that each
reader will doubtless have a different conclusion as to what the secret really is as it
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pertains to him or her. For what it is worth, it is Perk’s opinion that the Secret is a thought
process, the ability to generate results through thinking about them and wanting them. In
other words, the wish is the father of the thought, and the thought is the father of the result.
Put another way, it is the power of positive thinking without the theological aspect. One
message, among many, is that each person is the master of his or her own life and should
take responsibility for it. That makes sense. The book talks about the “law of attraction”
which empowers people to choose what they want to experience and with whom they wish
to experience it. The book espouses that one should focus on the positive, and therefore,
view the glass as half full and not half empty. Again, good advice. The book espouses the
view that one can take control of his or her life, and that positive thinking can bring change
that will be pleasurable, and therefore, will further encourage the process, and so on.
Each reader will recognize someone they know who knows the secret, whatever it may be
for each of them. Perk says he saw his dear deceased Aunt Hilma in the book, who
obviously knew the secret. Hilma, a spinster, lived a plain life on the family farm, never
complaining about her lot in life. Perk recognizes now that she had that “attitude of
gratitude” described in the book. Hilma was always grateful for what she had and was
willing to share it with others both physically and in her poetry. Perk says he remembers
Hilma telling him when he was a very young lad and was complaining about something
(probably trivial), about the man who felt sorry for himself because he had no shoes, until
he met a man who had no feet. Her view was that there is always someone worse off than
you, so stop complaining. Obviously, Hilma knew the secret, at least as it applied to her.
And so if you choose to read this book, you may recognize people you know who have
found the secret. Many—perhaps the majority, have not.
Have you found the secret? Read the book and you may find it.
CAMP BELIZE 2007
We have given you a book review in this letter so we may as well also include a travel log.
Perk and Dana did the early February Jerry Jeff Walker Camp Belize thing again this year,
and as in prior years, it was a hoot. They arrived on a Sunday and hopped on down to
Wet Willie’s Bar (via golf cart) to look at the schedule to see when Jerry Jeff was playing.
That also happened to be the day of the Super Bowl and the place was packed with fans
watching TV. Perk spied Steve Leuthold and went over and sat down next to him, and
Steve commented that he had been there the previous week for all the Jerry Jeff concerts,
and was heading home on Monday. Steve is a fan, and he commented on Camp Belize
and Jerry Jeff in his current issue of Perception, in which he mentioned that Perk was the
oldest Jerry Jeff fan there. Now Perk doesn’t know if he is supposed to be thankful for that
comment or not. Wet Willie’s is a bar on the water with an open air area which seats 250
or so Jerry Jeff fans, and he sings and plays from a corner stage. All this is under the
stars, listening to the waves and holding a Belikin beer. Jerry Jeff lost his voice about
halfway through the performance on Monday night and so his son, Django, took over for
his dad. Django is not Jerry Jeff, but nonetheless did a credible job and will doubtless turn
out to be a great musician. Jerry Jeff’s voice was better on Thursday night, but still a little
raspy. But no matter, he is still the best.
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As usual, Perk and Dana stayed at the Belize Yacht Club on the South end of the island
(Ambergris Caye) renting a small condo looking at the Caribbean and the Barrier Reef.
Like last year, the club provided their private room off the second floor bar for a “picking
party,” which was held on Jerry Jeff’s first night off—Tuesday this year. The usual
“pickers” were there: Jay and Cookie McDowell, Fred and Karen Sheftell, Conrad Olson
(sans Trisha), Gary Kroeker, Kent and Patches DeShazo, and Frank and Judy Still, new
additions from Dallas. Of course, Fran Berry and Gin Hale, the singing twins, did their
part. The spectators (non-pickers) included Rita Harmon, Teri Jackson, Jeff and Chris
Matern, Erik and Georgia Peterson and, of course, Sandie “Pop Tart” Roberts as well as
many others. This is a great party with gifted guitarists playing the songs which they like,
and Fran and Gin singing along. As you would expect there was an adequate supply of
Belikin beer and Pina Coladas to add to the enjoyment. The same group did the picking
party all over again the next night at the Palapa Bar on the North end, about one mile north
of the cut and the new bridge. The Palapa is like Wet Willie’s, but much smaller, and on
the second floor of a wood structure built right out on the water. We all watched stingrays
swimming below as we enjoyed the
atmosphere of guitar, songs, and Belikin
beer. And the group did it again on
Friday at the Victoria House bar, the
upscale place on the island. This party
started just after lunch and went on for
hours. The big event that day was the
celebration of Sandie Roberts’ 50th
birthday, which is actually in November,
but as they say “any excuse for a party.”
Jay McDowell had written a song about
crazy Sandie’s escapades, which are
well known to Jerry Jeff fans and, in fact,
to Jerry Jeff. You will recall that a year
Perk, Jerry Jeff and Dana at Wet Willie’s
ago we talked about Sandie jumping off
the railing at Wet Willie’s when Jerry Jeff was playing “The Cape” about the guy who
thought he could fly. Anyway, crazy as she is, everyone loves Sandie, a wonderful person
who would do anything in the world for you. We took a lot of pictures; some of them are on
the first addendum page.
PASSINGS
There are two famous entertainers we would like to honor with one of our mini-obits.
Anyone who was listening to popular music in the 1940s and 50s probably was a fan of
Frankie Laine, who died February 6 at age 93. He had a rough voice which he compared
to Louie Armstrong’s cornet. That voice was evident in his big hits “Mule Train,” “Ghost
Riders in the Sky” and “That’s My Desire.” But those and other songs were only the tip of
his iceberg as he sold over 100 million records. He was the voice in many movies such as
“Gunfight at the O.K. Corral” and “3:10 to Yuma.” He was born Francesco Paolo
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LoVecchio, the eldest son of a Chicago barber. After singing in a church choir, he knew he
wanted to sing, and did so, city to city, and club to club for small change until he got a job
at radio station WINS in New York and changed his name to Laine. From then on, it was
one success after another and he even starred in several movies. He will be remembered.
And who could forget Betty Hutton, the blond bombshell of musicals and comedies of the
1940s and 50s. She passed away March 13 at the age of 86. An energetic performer with
a strong voice, she starred in numerous films, such as “Annie Get Your Gun” and “The
Greatest Show on Earth.” Two of her most famous songs were “Murder, He Says” and
“And the Angels Sing.” She was a big star during the war years of the early 1940s, in such
popular films as “The Fleet’s In” and “Miracle of Morgan’s Creek” with Eddie Bracken. But
as with many singers and stars, she became addicted to sleeping pills and alcohol and
ultimately became destitute. Friends helped her recover from that bad period in her life,
and she eventually resumed work in the 1980s. She was married four times, none of them
successful as they all ended in divorce. On a melancholy note she said “My husbands all
fell in love with Betty Hutton, but none of them fell in love with me."
Even though St. Patrick’s Day is gone, along with the green beer, we thought we might
honor the Irish with some Irish humor in our addendum pages.
The cartoon is the last in our “The End is Near” series.
Sincerely,
Richard W. Perkins, C.F.A.
President
Senior Portfolio Manager
RWP:RCP:DSP/jah
Richard C. Perkins, C.F.A.
Executive Vice President
Portfolio Manager
Daniel S. Perkins, C.F.A.
Executive Vice President
Portfolio Manager
Pickin’ at the BelizeYacht Club
Perk at the Palapa Bar entrance
Pickin’ at the Victoria House bar
Fred, Jay and Conrad at the Yacht Club
Pickin’ at the Palapa Bar
Serenading Sandie at Victoria House
IRISH HUMOR
Paddy was driving down the street in a sweat because he had an important meeting and couldn't
find a parking place. Looking up to heaven he said, "Lord take pity on me. If you find me a parking place I will go to Mass every Sunday for the rest of me life and give up me Irish whiskey."
Miraculously, a parking place appeared. Paddy looked up again and said, "Never mind, I found
one."
Father Murphy walks into a pub in Donegal, and says to the first man he meets,” Do you want to
go to heaven?" The man said, "I do, Father." The priest said, "Then stand over there against the
wall." Then the priest asked the second man, "Do you want to go to heaven?" Certainly, Father,"
was the man's reply. "Then stand over there against the wall," said the priest. Then Father
Murphy walked up to O'Toole and said, "Do you want to go to heaven? O'Toole said, "No, I don't,
Father. The priest said, "I don't believe this. You mean to tell me that when you die you don't
want to go to heaven?" O'Toole said, "Oh, when I die, yes. I thought you were getting a group
together to go right now."
Paddy was in New York. He was patiently waiting and watching the traffic cop on a busy street
crossing. The cop stopped the flow of traffic and shouted, "Okay pedestrians." Then he'd allow
the traffic to pass. He'd done this several times, and Paddy still stood on the footpath. After the
cop had shouted "Pedestrians" for the tenth time, Paddy went over to him and said, "Is it not
about time ye let the Catholics across?"
Gallagher opened the morning newspaper and was dumbfounded to read in the obituary column
that he had died. He quickly phoned his best friend Finney. "Did you see the paper?" asked
Gallagher. "They say I died!!" "Yes, I saw it!" replied Finney. "Where are ye callin' from?"
An Irish priest is driving down to New York and gets stopped for speeding in Connecticut. The
state trooper smells alcohol on the priest's breath and then sees an empty wine bottle on the floor
of the car. He says, "Sir, have you been drinking?" "Just water," says the priest. The trooper
says, "Then why do I smell wine?" The priest looks at the bottle and says, "Good Lord! He's
done it again!"
Walking into the bar, Mike said to Charlie the bartender, "Pour me a stiff one - just had another
fight with the little woman. "Oh yeah?" said Charlie "And how did this one end?" "When it was
over," Mike replied, "she came to me on her hands and knees." "Really," said Charlie, "now that's
a switch! What did she say?" She said, "Come out from under the bed, you snivellin' little
coward."
MORE IRISH HUMOR
Definition of an Irish husband: He hasn’t kissed his wife for twenty years, but he will kill any man
who does.
Murphy told Quinn that his wife was driving him to drink. Quinn thinks he’s very lucky because
his own wife makes him walk.
The late Bishop Sheen stated that the reason the Irish fight so often among themselves is that
they’re always assured of having a worthy opponent.
When the Irish author, George Moore, was asked to explain his 80-year longevity, he replied, “It
is due to the fact that I never smoked, drank excessively, or touched a girl until I was ten years
old.”
An American lawyer asked, “Paddy, why is it that whenever you ask an Irishman a question, he
answers with another question?” “Who told you that?” asked Paddy.
Bingley went to trial for armed robbery. The jury foreman came out and announced, “Not guilty.”
“That’s grand!” shouted Bingley. “Does that mean I can keep the money?”
Mrs. Feeney shouted from the kitchen, “Is that you I hear spittin’ in the vase on the mantelpiece?”
“No,” said himself, “but I’m gettin’ closer all the time.”
Finnegin: “My wife has a terrible habit of staying up ‘til two o’clock in the morning. I can’t break
her of it.” Kennan: “What on earth is she doin’ at that time?” Finnegin: “Waitin’ for me to come
home.”
Slaney phoned the maternity ward at the hospital. “Quick! He said. “Send an ambulance, my
wife is goin’ to have a baby!” “Tell me, is this her first baby?” the intern asked. “No, this is her
husband, Kevin, speakin’.”
“O’Ryan,” asked the druggist, “did that mudpack I gave you improve your wife’s appearance?” “It
did surely,” replied O’Ryan, “But it keeps fallin’ off!”
Father Duffy roared from the pulpit to his parishioners: “Drink has killed millions—it rots their
stomachs and they die in agony. Smoking has killed millions—it coats your lungs and you die in
agony. Overeating and consorting with loose women have also killed millions…” “Scuse me,
Father,” hollered Reagan from the back, “but what is it that kills the people who live right?”
THE SINNER IN THE CONFESSIONAL
"Bless me Father, for I have sinned. I have been with a loose woman."
The priest asks, "Is that you, little Tommy Shaughnessy?"
"Yes, Father, it 'tis."
"And who was the woman you were with?"
"I can't be tellin' you, Father. I don't want to ruin her reputation."
"Well, Tommy, I'm sure to find out sooner or later, so you may as well tell me now.
Was it Brenda O'Malley?"
"I cannot say."
"Was it Patricia Kelly?"
"I'll never tell."
"Was it Liz Shannon?"
"I'm sorry! , but I'll not name her."
"Was it Cathy Morgan?"
"My lips are sealed."
"Was it Fiona McDonald, then?"
"Please, Father, I cannot tell you."
The priest sighs in frustration. "You're a steadfast lad, Tommy Shaughnessy,
and I admire that. But you've sinned, and you must atone. You cannot attend
church for three months. Be off with you now."
Tommy walks back to his pew. His friend, Sean, slides over and whispers, "What'd you get?"
"Three month's vacation and five good leads," says Tommy.
JUST A WEEEEEEE BIT! TOOOOOOO FUNNY!
"An extraordinarily handsome man decided he had the responsibility to marry the perfect woman
so they could produce beautiful children beyond compare. With that as his mission, he began to
search for the perfect woman.
Shortly thereafter, he met an Irish Farmer who had three stunning, gorgeous daughters that
positively took his breath away. So he explained his mission to the Farmer and asked for
permission to marry one of them.
The Farmer simply replied, "They're lookin' to get married, so you came to the right place. Look
'em over and pick the one you want."
The man dated the first daughter. The next day the Farmer asked for the man's opinion.
"Well," said the man, "she's just a weeeee bit, not that you can hardly notice...pigeon-toed."
The Farmer nodded and suggested the man date one of the other girls; so the man went out with
the second daughter.
The next day, the Farmer again asked how things went.
"Well, "the man replied, "she's just a weeeee bit, not that you can hardly tell...cross-eyed."
The Farmer nodded and suggested he date the third girl to see if things might be better. So he
did.
The next morning the man rushed in exclaiming, "She's perfect, just perfect. She's the one I want
to marry."
So they were wed right away. Months later, the baby was born. When the man visited the
nursery he was horrified. The baby was the ugliest you can imagine. He rushed to his father-inlaw and asked how such a thing could happen considering the beauty of the parents.
"Well," explained the Farmer..."She was just a weeeee bit, not that you could hardly tell...
pregnant when you met her."