Invest-Notes continues to forcefully urge that individual investors anchor their investment and retirement portfolios around exchange-traded funds (ETFs). Specifically, indexed funds of the S&P 500 and international blue-chip stocks. Around this central component, it might make sense to add specialty funds, like those comprised of medical companies (for growth) or utilities (for yield). For the truly adventurous, and being mindful of the risks involved, having a handful of individual stocks can also make sense.
Individual stocks of major companies will find that on September 30, 2018, the description of what business they are in will change. This is not as odd as it might sound. Netflix started as a business to rent DVDs by mail. Disney made cartoons. AT&T was the phone company. Today Netflix has something like 125 million subscribers to a streaming video service that not only offers the same movies they used to rent but creates more custom content than the three TV networks combined. Disney now owns theme parks and ESPN. AT&T just bought Time Warner, go figure. As businesses evolve, so should the way in which we invest in them.
During the formative years of Invest-Notes, there was often discussion of specific trades. After the market mayhem of 2008-2009, not so much so. The shift in focus went from what to trade, to how to trade. This idea of talking about ways to make smart investments by thinking about our behavior will continue, but right now we’re going back to being very prescriptive about a specific investment idea.
New kid on the block
There is about to be a brand-new industry sector that will be composed of big companies coming from other sector funds. This matters, because the Big Daddies of indices, S&P Dow Jones and MSCI, use the GICS stock classifications to determine things like whether Home Depot should be identified as a Consumer Staple, or a Consumer Discretionary stock. In their turn, the Big Daddies of exchange-traded funds, like State Street and Vanguard, use these sector definitions of the S&P 500 and MSCI to decide what stocks will be included in the ETFs that individual investors are buying in ever-increasing amounts.
As a quick reminder, the Global Industry Classification Standard (GICS), is a worldwide standard for stock classification. Established in 1999 with ten sectors, the GICS started with: Consumer Discretionary; Consumer Staples; Energy; Financials; Health Care; Industrials; Technology; Materials; Telecom; and, Utilities.
The only change to this line-up occurred in August of 2016 when the Financial sector was bifurcated to create a Real Estate sector. Discussed here at that time in our article, “The Difference Between Banks and Buildings“, it should be noted that while Invest-Notes correctly identified the pros and cons of the change, we totally whiffed on guessing the subsequent performance of the two sector funds.
The transition taking place on September 30, 2018, is more impactful since it will see three sectors facing major changes to their composition. First, Telecom Services will be renamed Communications Services. Currently, the smallest of the eleven GICS sectors composed of only the stocks in the S&P 500, when Telecom becomes Communications it will grow from 2% of the index to around 10%. The challenge for investors is determining what to do with current sector holdings when some of the biggest stocks in the S&P get shuffled around. Google, Verizon, and Disney are not niche investments. In point of fact, the top holdings in the soon to be Communications Services sector comprise about 10% of the S&P 500.
Now, what happens to the Information Technology Sector when Google, Facebook, and other heavy hitters are no longer part of Technology ETFs and become components in the new Communication Services Sector? Or the Consumer Discretionary Sector (a sizable ETF holding in my personal accounts), where Netflix, Disney, and other big companies will be moving out. And is it a good bet to add one of the big Telecom ETFs – IYZ or VOX – in advance of the reshuffle?
Electricity was in the air when trumpeters Miles Davis and Donald Byrd heard a buzz. Miles was first to noticeably respond to the stimulus with his 1968 release, In A Silent Way. Though George Benson had appeared on one cut from Miles previous album, Miles in the Sky (“Paraphernalia”), it was on In A Silent Way that the electric guitar of John McLaughlin made Miles’ jazz start to rock. The impact of McLaughlin being turned loose on Bitches Brew – along with three electric keyboards, and one electric bass – reverberates among jazz aficionados even today. No need to run down that voodoo here since the story of Bitches Brew and its aftermath is an oft-told tale.
Donald Byrd was also moving away from hard bop at this time, recording some exciting music equally as controversial if less remarked upon. With the 1970 release of Fancy Free (recorded in the spring of 1969), Byrd uses an electric piano (played by Duke Pearson) for the first time. Subsequently, it is often suggested that Byrd was mostly emulating what he heard on Bitches Brew with his exploratory album Electric Byrd in 1970. I disagree.
Miles Davis and Donald Byrd’s Drawn Influences
That many of Byrd’s sounds from the addition of electric instrumentation reflect some influences from Miles at this time is certainly correct. Yet Byrd was moving in a very different direction than Miles, as a critical listening of their music reflects clearly. Not only was the composition of the band’s instruments distinct, more important is the way each went with their subsequent output. And the case can be made it was In A Silent Way that Byrd referenced while recording Electric Byrd. Bitches Brew was released less than a month before Byrd recorded Electric Byrd, hardly enough time to have been an influence.
Much is made, especially by Miles himself, of the impact musicians like Jimi Hendrix and Sly Stone had on Miles’ music of this period. Yet for a guy who was reputed to have fired band members for “practicing” between gigs, Miles’ music doesn’t really reflect the sound of a Sly Stone or James Brown number, just their attitude. Byrd on the other hand, actually plays the groove, rhythm and funk heard on Sly’s There’s A Riot Goin’ On. Which, it should be noted, came out in 1971.
A quick look at “who played what instrument” on the two albums, Bitches Brew and Electric Byrd, make comparisons difficult to support. Byrd credits nine musicians, with one flute player appearing on a single song. Again, Duke Pearson on electric piano is the only electric sound. Though it could be argued that Airto, an artist appearing on many Miles recordings, brought a certain sensibility influenced by Miles. Yet it only takes a couple of minutes to get past the space-rock to find a funky jazz groove in “Estavancio”, Electric Byrd’s opening cut. Then along comes two flutes, reverb notwithstanding, to fully ground a jazz fan and later provide a Latin tinge. “Essence” plays with some of the Bitches Brew tropes, but without ever getting lost in them. The closer, “The Dude” speaks to what comes next in Byrd’s output.
The title cut of Bitches Brew has an entirely different sensibility. Nearly three times longer than “Estavancio”, “Bitches Brew” covers an extreme range of velocity and timing without ever finding a groove. Uncomfortable at times, the song glorifies an improvisational method that verges on cacophony as each musician blazes his own trail. Three electric pianos and a bass with McLaughlin again on electric guitar drive this crowd of thirteen. Oh yeah, and two drummers. The music on this album is magical, maddening, often incomprehensible and cannot be hummed. The biggest difference between these two pivotal albums is what happened next.
A variance in approach
Miles chased his electric bunny down a hole most people had a hard time fitting into. His next recording, Jack Johnson, remains a personal favorite and is a more listener-friendly effort likely for being a movie soundtrack. As for Live-Evil and On the Corner, 1972 and 1973 respectively, history has not been so kind. I listen to a lot of jazz with a lot of jazz enthusiasts far more sophisticated than me, and I cannot ever recall somebody playing either of these two albums, even during Miles music marathons. Frankly, these albums don’t sound so good today, just harsh. This was not music for the hoi polloi, an audience Miles sought, but instead suitable mostly for the jazz cognoscenti and die-hard fans.
In contrast, Byrd next released Ethiopian Knights, where groove and funk moved back into the forefront. The addition of Bobby Hutcherson and Harold Land helping to move the dial back toward a more approachable jazz sound. In 1972 Byrd managed to find a sound that would drive his next musical phase with the release of Black Byrd. This album, panned in the community of traditionally minded jazz fans, went on to become for decades the biggest selling album in the Blue Note catalog. With help from the Mizell brothers, Byrd started playing a music everyone seemingly wanted to hear – except hardcore jazz-heads.
Interestingly, a look at the time demonstrates that the 1969 album In A Silent Way was also a likely influence for other terrific musicians like Freddie Hubbard and Carlos Santana. Hubbard’s 1970 Red Clay is widely considered one of his stand-out efforts and features Herbie Hancock on electric organ and Ron Carter on electric bass. Santana’s 1972 release Caravanserai is considered a turning point in his career, jazz sensibilities clearly on display. In 1973 Santana recorded an album with John McLaughlin (famous for his edgy work on Bitches Brew) called Love, Devotion, Surrender that couldn’t stand in starker contrast to the electric guitar McLaughlin played while with Miles.
Donald Byrd understood that it was incumbent upon musicians – whether jazz, rock, or pop – to create pathways to their music using every means possible. Miles made music for his muse, ultimately at the expense of many fans. As he stated on the cover of Bitches Brew, his was new “Directions in Music.” For Byrd, this period was about bringing future jazz enthusiasts into the club, with a kind of music that’s inclusive, not exclusive.
Privateering as an Investment Strategy
(Hint: The Only Yields are Literary)
By: Gerry Scott
A friend’s generous and thoughtful gift of a print depicting a late 17th century sailing ship led me to consider what I might contribute to his site by way of a thank you. Since the site deals with thoughts on art, jazz, and investments, and frequently discusses books that deal with those subjects, I thought bringing his readers’ attention to three books on the unlikely union of high-seas adventure in pursuit of wealth and English literature might be appropriate.
In the early 18th century there was a great deal of interest in England in the possibility of reaping financial reward from trade with what was then known as the South Sea, on the model of the success of British trade with the East Indies. At the time the South Sea comprised the southern Pacific Ocean that washed upon the shores of South and Central America from Tierra del Fuego (and Cape Horn) as far north as California. While there was indeed wealth to be made in trade with the region, there was a major flaw in the scheme for British investors in that it overlooked the strict proprietary interest the Spanish Crown maintained over its colonies. So, despite the formation of the South Sea Company along the lines of the Honorable East India Company, and the extraordinary investment in it that ultimately led to the financially disastrous “South Sea Bubble,” it was highly unlikely that there would be much financial gain for British investors in the company’s stock.
There was, however, another tried and true way for loyal Britons to reap financial rewards from Spain’s colonies on the South Sea. This method was known as privateering, in which a civilian ship captain would outfit a vessel as a warship, similar to that shown in the print, and sail it on behalf of the British government against the sovereign’s foes, seizing enemy merchant ships and plundering them along the way. While this might sound like piracy, it was made perfectly legal by the ship captain obtaining a Letter of Marque from his government. It was a plan that adventurous English sea dogs had followed since the days of Sir Francis Drake.
It was this second scheme of investment that a group of London merchants decided to follow when they banded together and outfitted two vessels as privateers, the Speedwell, and the Success. The resulting voyage of the Speedwell was to ultimately play a role in the creation of one of the best-known English narrative poems of the 19th century, while the voyage of the Success would present a brief moment in time, only recently discovered, when history and literature intersect in an extraordinary way. Each of the three books dealing with these vessels has a role to play in recounting the events.
Of the three, the account written by one of the privateer captains is especially engaging. A Privateer’s Voyage Round the World by George Shelvocke has been reissued in the Seafarer’s Voices series by Seaforth Publishing. If you are unfamiliar with the series but are interested in accounts of life at sea told by those who lived it, then this series is well worth your notice. Each volume is an abridged and edited version of the original, with footnotes and a useful introduction. Vincent McInerney, who served in the merchant marine and worked for the BBC, provides the notes and introduction to Shelvocke’s account.
Shelvocke, who had been a lieutenant in the Royal Navy before undertaking his privateering voyage, originally published his account in 1726, four years after his 1719-1722 voyage. He did so largely to counter legal charges (including piracy, ironically) brought against him by the Gentlemen Adventurers after his return to England, and to refute the character assassination job done against him by the former commander of marines aboard the Speedwell, William Betagh, who had published an account the previous year.
Shelvocke’s work is an interesting tale of lashing storms, a troublesome and untrustworthy crew, outlandish battles fought at sea and ashore, great privation and near starvation, and even a shipwreck on a deserted island, the same island that Alexander Selkirk – the model for Daniel Defoe’s Robinson Crusoe – inhabited. But Shelvocke’s work is more than an adventure story, for he takes pains to include descriptive passages of the things he has seen that address natural history, anthropology, and geography, helping to place him in the category of the literary gentleman-scholar and appealing to Europe’s keen interest in reading travel literature describing the wider world at the time.
What gains Shelvocke’s real contribution to literature, however, is a brief passage in which he records that while rounding Cape Horn, his second in command, Simon Hatley, in a melancholy fit, shot a solitary albatross that has been accompanying them for several days. Some seventy years later, William Wordsworth was reading Shelvocke’s book at precisely the time that his friend Samuel Taylor Coleridge was working on The Rime of the Ancient Mariner and was in need of a deed that would render the protagonist of his poem cursed.
The second book of the three is The Speedwell Voyage by Kenneth Poolman, who served in the Royal Navy during World War II and went on to work for the BBC. Poolman blends Shelvocke’s narrative with that of the antagonistic Betagh and the journal of George Taylor, Chief Mate aboard the Success to give a fuller account of the voyages of the two vessels. While the differences in the interpretation of events between Shelvocke and Betagh, as each strives to tarnish the other’s image as much as possible, is unresolved, the harrowing stories of both vessels make interesting reading. Additional insight is also given to the curious relationship, or lack thereof, between Shelvocke and the commander of the Success, Captain Clipperton, who may likely have been unhinged.
The third book to deal with the voyage is The Real Ancient Mariner, Pirates and Poesy on the South Sea by Robert Fawke. The author has set himself the task of trying to flesh out the life and career of Simon Hatley, Shelvocke’s melancholy second in command who gains his place in history by potting the unfortunate albatross looking for companionship in desolate seas. And, remarkably, he succeeds in putting quite a bit of flesh on Hatley’s bones. In doing so, he casts a wider historical net describing earlier voyages, the privateering literature of the day, and discovering, along the way, that during the brief time that the Speedwell and the Success cruised in company, Hatley was aboard the Success to represent Speedwell’s interests and so were the models for two other literary characters, Alexander Selkirk, the inspiration for Robinson Crusoe, and William Dampier, whom Jonathan Swift used as inspiration for his Gulliver.
For interesting nautical reading with a literary flair, these three books each pay dividends.
|As a longtime fan of Jim Nutt, I’ve much enjoyed seeing some of his earlier works, but it was his recent portraits that literally took my breath away.|
One of the more memorable exhibits of the new millennium was at the Museum of Contemporary Art Chicago in 2011. Essentially a retrospective of the painter Jim Nutt, it was the first public showing of his work in about a decade. As a longtime fan of Nutt, and as much as I enjoyed seeing some of the earlier works again, it was his recent portraits that literally took my breath away.
Comparatively intimate in scale, and most accompanied by an original pencil preparatory drawing, the work is masterful. Layers and layers of color applied in ways that created both striking textural patterns and an inner luminosity. These life-size portraits of women could easily be dismissed as a “slicker” version of earlier work where faces and figures are distorted to an extreme that is regularly described as grotesque. But the colors and patterns serve to provide focal points that make the imagery playful rather than malicious. Regrettably, the handsome and competently printed catalog just can’t do these portraits justice.
Recently spending time looking at a book of the handful of known paintings by Leonardo Da Vinci and glancing up at work of Jim Nutt above my desk, I was reminded of the other show I saw on that spring day in Chicago. Pure serendipity, and the kind of coincidence that keeps life interesting, earlier that same day I had wandered through a show at the Art Institute of Chicago with medieval art that included, to my absolute delight and surprise, a small Madonna and child by Leonardo Da Vinci known as Virgin with Yarnspinner. It was the first time this work had been on public display since being purchased by a private collector in the early 1970’s. Even a background reminiscent of the Mona Lisa but poorly executed by assistants, could not diminish the power of the two figures. I was intrigued by the similarities between the Da Vinci and the Nutt portraits, including the bizarre foreshortening on the face of the child, and the luminosity of the Madonna’s face.
When I later shared my observation of the similarities between his portraits and those of Leonardo Da Vinci, Nutt disagreed. I defended my idea by explaining that I stood enthralled for so long while staring at the Yarnspinner a museum guard warily inquired, “is everything okay?”. The same evening found me at the CAM show where the similarities of the many portraits by Nutt with the Yarnspinner seemed so obvious. After a brief back-and-forth between the two of us about the differences in mediums and techniques, Nutt remained skeptical of my conclusions. I’ll stand my ground and reiterate a surprising affinity can be found when comparing the originals – it does not work to compare reproductions.
|It was a presentation Glass gave while I was a student at the Minneapolis College of Art and Design that altered the trajectory of my intellectual pursuits.|
A recent rereading of his 2015 biography, Words Without Music: A Memoir, served up a reminder of the many ways in which Phillip Glass has had an outsized impact on my life. His music is, of course, fascinating and often very good. Though it really started with the movie Koyaanisqatsi which I had the good fortune to watch accompanied by a live orchestra playing the soundtrack, it was the discovery of the album Glassworks around the same time that kick-started a collection that has since grown substantially.
Personal favorites also include collaborations with Brian Eno and David Bowie, Low and Heroes, as well as the Concertos and other works conducted by Dennis Russell Davies, with the oddly titled Saxophone Quartet Concerto being quite engaging. However, despite the effort expended, his operas (like those of another favorite composer of both Glass and myself, Mozart) have just never found a place in my musical world.
The book describes in vivid detail what living in New York was like at a time when fine art and music were undergoing huge shifts in form and function. Phillip Glass worked to pay the bills as a studio assistant with artists like Richard Serra. Glass did some of the heavy lifting involved with creating some of Serra’s early molten metal works. The involvement of Glass within the New York dance scene of the 1970s was a surprise. His subsequent visibility and ultimately well-deserved respect and commercial success were hard earned and long in coming, with bills being paid by doing manual labor and driving a taxi instead of earning music royalties. An early interest in Buddhism and work with Tibetan refugees, set in motion passions that have endured throughout his life and career. Glass talks about his spirituality in an engaging manner that persuades without lecturing.
It was a presentation Phillip Glass gave while I was a student at the Minneapolis College of Art and Design that altered the trajectory of my intellectual pursuits. Coming a few years after the (relative) success around 1976 of his first major opera, Einstein on the Beach, he was at the time of the lecture working on another major project, the opera Akhnaten, which would debut in 1984. His discussion of Akhenaten’s life and place in history stoked the fires of both my imagination and intellect. That his account turned out to be more fanciful than factual proved unimportant. The life and times of Akhenaten remain an enduring interest of mine.
|It was while reading Belzoni’s description of his work at Ybsambul (now Abu Simbel) that I was first reminded of Borges’ story of the immortal one.|
Among the best stories that Jorge Luis Borges wrote is a particular favorite of mine, The Immortal. Originally published 1947, it was subsequently reprinted to a wider audience in the first edition of El Aleph in 1949. It is possible that the current state of literary criticism and analysis regarding this work is at best incomplete, and possibly irrelevant.
Whether this narrative is about the reputed author Marcus Flaminius Rufus, the book dealer Joseph Cartaphilus, or someone else who has achieved temporary immortality may not matter. Of the many observations discussed in the Postscript of The Immortal, most significant is likely, “He infers from these intrusions or thefts that the whole document is apocryphal.” In point of fact, it is not.
Recently, a friend and noted Egyptologist acquired all of the plates – with original watercolor – that accompanied 1820, 1821 and 1822 versions of Giovanni Battista Belzoni’s narrative of his time in Egypt. Handsomely rebound by the Cairo bookbinder Mr. Fahti (who has worked magic on many antiquarian volumes in my personal collection) I took advantage of our friendship to borrow both the enormous plate volume (measuring 40 inches by 24 inches when open, with fold-out plates) as well a first edition of the more practically sized text volume.
Narrative of the Operations and Recent Discoveries Within the Pyramids, Temples, Tombs, and Excavations in Egypt and Nubia; and of a Journey to the Coast of the Red Sea, in Search of the Ancient Berenice; and Another to the Oasis of Jupiter at Ammon by G. Belzoni was first published by John Murray, Albemarle-Street, in 1820. The copy temporarily sitting on my desk once belonged to the collection of Keith C. Seele, responsible for the successful completion of the first UNESCO project in the early 1960’s – moving the enormous temple of Abu Simbel out of harm’s way prior to the completion of the Aswan High Dam (see obituary; Journal of Near Eastern Studies, volume 32, January-April 1973).
It was while reading Belzoni’s description of his work at Ybsambul (now Abu Simbel) that I was first reminded of Borges’ story of the immortal one. Later, descriptions of abandoned temples, references to troglodytes and feral people living in pits led me to open my copy of Labyrinths and read, yet again, The Immortal. Which in turn led me to reread chapters in Narrative. Which in turn… Finally tiring of this dizzying cycle, the unmistakable similarities between these two works led me to write this brief note.
Belzoni notes in his Preface that his career was made in Thebes. Marcus Flaminius Rufus notes that his fate was sealed in Thebes. Mysterious peoples, the desert and protagonists unable to manage their fate appear in both Narrative and The Immortal. Beset by antagonists and problems both fearful and often fanciful, the only thing immortal in either of these tales is the past.
That a fantastic story conceived by a proud Argentinian during the 1940’s was heavily influenced by a boastful description of work undertaken by an Italian with British sympathies in Egypt during the 1810’s is obvious.
This short note is inspired by the fact that Sol LeWitt died in April 2007, and since then exhibits of work created after his death continue to occasionally pop-up.
“The idea itself, even if not made visual, is as much a work of art as any finished product.” LeWitt wrote this in 1967 and it remains, perhaps, the most insightful expression of what his conceptual artwork was about; the idea, not the object. Further, LeWitt was widely known for his (even now!) use of other artists to actually create his “finished product” so it is not unreasonable that people assume LeWitt was above the dirty work of putting pen-to-paper or brush-to-wall. This notion of the artwork itself, not being the point, dogged LeWitt throughout his career. Yet his later work is so colorful and lyrical that the label of conceptual no longer seems appropriate. His comment from 1982, “I would like to produce something I would not be ashamed to show Giotto,” may better speak to LeWitt’s true sensibilities as an artist.
|Sol LeWitt art should not be defined by hard logic and cool detachment. LeWitt’s work is better appreciated for the humor, color, and inventiveness that Giotto would have certainly enjoyed.|
LeWitt’s process of seeking every combination of a series served among other things, to ensure that he had plenty of material to work with. Seemingly endless variations of bands in four directions were turned out in seemingly endless varieties of mediums. The consistency of the form allowed for an opportunity to fully explore the interaction of colors, or in the case of sculpture, the interaction of light and shadow. LeWitt repeatedly set strict limits that allowed for infinite variety. Or, to use a phrase attributed to many but best expressed by Jorge Luis Borges, LeWitt created “an infinite sphere whose center is everywhere and whose circumference is nowhere.”