July 2007 - Perkins Capital Management

July 24, 2007
Dear PCM Clients and Friends:
MESSAGE FROM PERK
The end of July in Minnesota is pretty much the middle of summer; the hot summer
months are July and August here, while June compares best with September, and April
with October, and so on. In July and August, Mother Nature is giving the farmers the heat
and moisture (hopefully) necessary to grow tall corn and other crops. In April she is
awaking, but in October, preparing for sleep. And so on, throughout the year, each month
serves to compare with another in the opposite season. This year, July has been hot (as
well as June actually) and we expect the same for August. Everyone into the pool!
Last quarter’s MESSAGE FROM PERK included some of my thinking on contrariness as
well as comparing our search for opportunity to a venture upstream for more and bigger
trout. There was some feedback that our trout fishing example sounded a little like Ralph
Wanger’s philosophy. Wanger, President of Acorn Investment Trust, wrote a book ten
years ago titled A Zebra in Lion Country. His philosophy is similar to that which we
espoused last month and I agree with it so much that I am reprinting the summary of his
philosophy as it appeared in chapter one of his book:
A ZEBRA IN LION COUNTRY
Zebras have the same problems as institutional portfolio managers like myself.
First, both have quite specific, often difficult-to-obtain, goals. For portfolio managers, above-average
performance; for zebras, fresh grass.
Second, both dislike risk. Portfolio managers can get fired; zebras can get eaten by lions.
Third, both move in herds. They look alike, think alike, and stick close together.
If you are a zebra and live in a herd, the key decision you have to make is where to stand in relation to
the rest of the herd. When you think that conditions are safe, the outside of the herd is the best, for
there the grass is fresh, while those in the middle see only grass that is half-eaten or trampled down. The
aggressive zebras, on the outside of the herd, eat much better.
On the other hand—or hoof—there comes a time when lions approach. The outside zebras end up as
lunch. The skinny zebras in the middle of the pack may eat less well but they are alive.
730 East Lake Street
Wayzata, MN 55391-1769
Telephone (952) 473-8367
Facsimile (952) 473-4702
www.perkinscap.com
INVESTMENT MANAGEMENT
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July 24, 2007
A portfolio manger for an institution such as a bank trust department, insurance company, or mutual
fund cannot afford to be an outside zebra. For him, the optimal strategy is simply: stay in the center of
the herd at all times. As long as he continues to buy the popular stocks, he cannot be faulted. On the
other hand, he cannot afford to try for large gains on unfamiliar stocks that would leave him open to
criticism if the idea failed.
Needless to say, this inside zebra philosophy doesn’t appeal to me as a long-term investor.
His point is that if you are a “middle of the herd” investor, you should be in an index fund
for your performance is likely to be no better than the overall market.
Another subject worth discussing is diversification or rather overdiversification. Quoting
from our Perkins Capital Management investment philosophy, on page eight of our
brochure, written when we started out at the end of 1984: “Overdiversification can result in
poor performance because the holdings of the winners are too small to have a significant
impact. Excessive concentration, however, can reduce performance because so few
issues are held that inevitably some winners are missed.” We tend to keep the number of
stocks in a portfolio between 15 and 30, depending upon its size. A larger portfolio, say $5
to $10 million, might have 40 stocks. Even in our mutual fund we try to limit the number of
holdings to 50 or 60. As Seth Glickenhaus, the 92-year-old investment genius who still
runs Glickenhaus and Co. ($1.3 billion under management), said in a September 2006
Barron’s article that “The greatest error made on Wall Street is diversification.
Diversification inevitably leads to mediocrity and average performance.” As noted in our
investment philosophy, if you concentrate your shots too much and have only a few stocks,
you can win big if they all perform, but you have the risk of missing some big winners.
Conversely, if there are too many issues in a portfolio, the big winners can’t give you
performance because the ownership thereof is inadequate. In summary, it is rather like
the Goldilocks porridge—not too hot, not too cold, but just right.
THE HALF-TIME REPORT
Indexes
Dow Jones Industrial Average
NASDAQ Composite
M-Star Small-Cap Growth Total Return
NYSE Composite
M-Star Large Cap Total Return
Russell 1000 Total Return
S&P 500
Value Line Composite
Wilshire 5000
S&P Small-Cap 600 Total Return
M-Star Small-Cap Total Return
Russell 2000 Total Return
%
Return
2Q
2007
+8.53
+7.50
+6.62
+6.60
+6.26
+5.90
%
Return
YTD
2007
+7.59
+7.78
+10.72
+8.03
+6.71
+7.18
+5.81
+6.00
+5.58
+5.56
+5.18
+5.07
+4.41
+9.69
+6.68
+8.56
+7.72
+6.45
This past quarter there was little difference
between the various averages, although
large-cap stocks did slightly better than
small- or mid-caps. The market was strong
overall, trading higher in the face of slightly
higher interest rates and a weak dollar.
The market has had several nervous days
as it dealt with the debacle of the Bear
Stearns hedge funds which faced collapse
due to highly leveraged (over 20-1)
positions in complex debt instruments
backed by subprime mortgages, but which
were ultimately bailed out by a highly
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criticized loan by their parent, Bear Stearns Corp.
Markets throughout the world were up with the All Countries World Index up 6.52% for the
quarter and 8.78% for the six months. Very impressive, but how long can it last?
THE (ROCKY?) ROAD AHEAD
Our readers know we have been expecting a buying opportunity this year, most likely in
the autumn. In our January letter and again in April, we presented a table showing the
declines that occurred in the sixth and seventh year of each decade from 1856; the
average decline was 30.6%. So far we have been wrong, but we are not willing to join the
crowd just yet. Read on.
The famous W.D. Gann, one of the most successful traders of all time, and a student of
market cycles, referred to the 7th year of the decade as the “Death Zone.” This came from
his astute observation of time factors noting 10-, 20-, 30-, 60- and 90-year cycles. For
example, the 1987 top culminated in a decline matching the decline that followed the 1937
top 50 years earlier. That 50-year cycle was noted in the Bible, where the 50th year or
“Jubilee” year was referred to in the Old Testament: “You are also to count off seven
Sabbaths of years for yourself, seven times seven years, so that you have the time of the
seven Sabbaths of years, namely, forty-nine years. You shall then sound a ram’s horn
abroad on the tenth day of the seventh month: on the day of atonement you shall sound a
horn all through your land. You shall thus consecrate the fiftieth year and proclaim a
release through the land to all its inhabitants. It shall be a jubilee for you, and each of you
shall return to his own property, and each of you shall return to his family.” The 10-year
cycle was noted in 1978 by the English economist, William M. Halbert, in a publication
titled “An Exploration of Economic and Financial Science based upon a Cycle of the
Seasons in Each Decade,” and in the U.S. by W. Stanley Jevons, who at about the same
time observed that depressions occurred at regular intervals of about 10 years. It was his
original work that prompted Edgar Lawrence Smith in the first half of the 20th century to
make a stock market chart in 10-year segments and place them one above the other to
see if there was a recurrent pattern. From this he developed the theory that a “decennial
pattern” existed, with stock prices duplicating price patterns in previous decades.
From such research it was possible to see the bottoms which occurred in the second year
of each decade (i.e., 1932, 1942, 1952, 1962, 1972, 1982, 1992, and 2002) and likewise
the 7th year decline. Today we are in the middle of another 7th year with markets that have
been exceedingly strong throughout the world, especially China, and the U.S. markets
have not been an exception. Ron Griess, the ever helpful proprietor of The Chart Store
(www.thechartstore.com) has chosen three markets and started them from their bottoms in
1942, 1982 and 2002 to see how they are tracking. As may be seen in the chart, the three
markets are remarkably similar and our present market may be in an area of a top, if not
now, then later on in the year. Could 2007 be an exception? Of course, that is possible,
but if we do have a serious correction, it will be an opportunity to become fully invested for
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the eighth and ninth year because as we know those are typically “up” years as in 1998
and 1999, with a top in the “zero” year as in 2000 and other past zero years.
And let’s not forget the 75-year cycle with its bottom in 1857 and 1932, which adding 75
years equals 2007. The 75-year cycle is actually three 25-year cycles. As we know, each
25-year bottom has marked a low point which has never been penetrated again.
Specifically, the lows of 1907, 1932, 1957, and 1982 were very precise bottoms and the
market has never again gone below those lows. So here we are today with a very strong
market which is flying in the face of all of the above mentioned cyclical precedents.
Perhaps it is time to be contrary for as we know investors often are wrong about the stock
market’s direction at major turning points. Investors tend to assume that what has
happened will keep happening and they become aggressively more bullish as the stock
market rises. Market tops are reached when there are very few investors holding negative
sentiment. Almost everyone who has wanted to pursue the trend by investing in the stock
market has already done so, therefore leaving little money to send the market higher.
When there is no one left to buy, the market declines.
Let’s also take a look at an entire 10-year period as shown in the accompanying chart
courtesy of Ned Davis Research. Here we can clearly see the seventh year decline and
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bottom and then the eighth and ninth year rise culminating in a top in the ninth or zero
year, then a decline into the second year bottom and the subsequent rise and the very
strong fifth year, leading again to the seventh year decline.
Today we are in the midst of a huge boom in M&A activity. Leveraged buyouts and initial
public offerings of the buyout firms themselves, such as Blackstone and KKR (Kohlberg,
Kravitz, Roberts). There seems to be an endless supply of dollars to fund this boom with
much of the investment supplied by pension funds, especially public funds. Witness the
LBO of Bell Canada by the Ontario Pension Plan and two private equity firms. While this
M&A activity is hard to quantify, Ned Davis Research has provided a bar chart which
shows “deals” from 1962 to the present time. Too bad the chart does not go back further
for if it did, it would show a large M&A boom from 1898-1903 (the Robber Baron era), the
1920s with its “Trust” and “Holding Company” boom, especially in utilities, for as we know
it was the era of the Insull dynasty and, in fact, Minneapolis’ own Foshay Tower was built
then by a utility holding company magnate. We are more familiar with the 1965-1969 GoGo Era with its conglomerate craze, ala Charlie Bluhdorn, William Geneen and many
others. The 1982-1989 era was marked by hostile takeovers fueled by junk bonds and
green mail. Of more recent vintage, the Internet bubble fueled an extreme market top in
2000, especially in NASDAQ stocks. Today the boom is different, led by private equity
firms and hedge funds, but the outcome is likely to be the same as all of the others in the
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past--excessive optimism followed by a bear market. While history may not repeat itself
exactly, it usually is close enough to rhyme.
ANOTHER PERSPECTIVE ON IRAQ
In our October 2006 client letter we printed a dissertation written by Victor Davis Hanson
titled, The 1930s, Again: A hard rain is going to fall. Victor Davis Hanson is a Senior
Fellow at the Hoover Institution, Stanford University and a professor emeritus at California
University, Fresno, as well as nationally syndicated columnist for Tribune Media Services.
We recently came across this essay written by him titled Eye of the Beholder:
EYE OF THE BEHOLDER
War-torn Iraq has about 26 million residents, a peaceful California perhaps now 35 million. The former
is a violent and impoverished landscape, the latter said to be paradise on Earth. But how you envision
either place to some degree depends on the eye of the beholder and is predicated on what the daily media
appear to make of each.
As a fifth-generation Californian, I deeply love this state, but still imagine what the reaction would be if
the world awoke each morning to be told that once again there were six more murders, 27 rapes, 38
arsons, 180 robberies, and 360 instances of assault in California — yesterday, today, tomorrow, and every
day. I wonder if the headlines would scream about “Nearly 200 poor Californians butchered again this
month!”
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How about a monthly media dose of “600 women raped in February alone!” Or try, “Over 600 violent
robberies and assaults in March, with no end in sight!” Those do not even make up all of the state’s
yearly 200,000 violent acts that law enforcement knows about.
Iraq’s judicial system seems a mess. On the eve of the war, Saddam let out 100,000 inmates from his vast
prison archipelago. He himself still sits in the dock months after his trial began. But imagine an Iraq
with a penal system like California’s with 170,000 criminals — an inmate population larger than those of
Germany, France, the Netherlands, and Singapore combined.
Just to house such a shadow population costs our state nearly $7 billion a year — or about the same price
of keeping 40,000 Army personnel per year in Iraq. What would be the image of our Golden State if we
were reminded each morning, “Another $20 million spent today on housing our criminals”?
Some of California’s most recent prison scandals would be easy to sensationalize: “Guards watch as
inmates are raped!” Or “Correction officer accused of having sex with underaged detainee!” And
apropos of Saddam’s sluggish trial, remember that our home state multiple murderer, Tookie Williams,
was finally executed in December 2005 — 26 years after he was originally sentenced.
Much is made of the inability to patrol Iraq’s borders with Iran, Jordan, Kuwait, Saudi Arabia, Syria, and
Turkey. But California has only a single border with a foreign nation, not six. Yet over 3 million
foreigners who snuck in illegally now live in our state. Worse, there are about 15,000 convicted alien
felons incarcerated in our penal system, costing about $500 million a year. Imagine the potential tabloid
headlines: “Illegal aliens in state comprise population larger than San Francisco!” or “Drugs, criminals,
and smugglers given free pass into California!”
Every year, over 4,000 Californians die in car crashes — nearly twice the number of Americans lost so far
in three years of combat operations in Iraq. In some sense, then, our badly maintained roads, and often
poorly trained and sometimes intoxicated drivers, are even more lethal than Improvised Explosive
Devices. Perhaps tomorrow’s headline might scream out at us: “300 Californians to perish this month
on state highways! Hundreds more will be maimed and crippled!”
In 2001, California had 32 days of power outages, despite paying nearly the highest rates for electricity in
the United States. Before complaining about the smoke in Baghdad rising from private generators, think
back to the run on generators in California when they were contemplated as a future part of every
household’s line of defense.
We’re told that Iraq’s finances are a mess. Yet until recently, so were California’s. Two years ago,
Governor Schwarzenegger inherited a $38 billion annual budget shortfall. That could have made for
strong morning newscast teasers: “Another $100 million borrowed today — $3 billion more in red ink to
pile up by month’s end!”
So is California comparable to Iraq? Hardly. Yet it could easily be sketched by a reporter intent on doing
so as a bankrupt, crime-ridden den with murderous highways, tens of thousands of inmates, with wideopen borders.
I myself recently returned home to California, without incident, from a visit to Iraq’s notorious Sunni
Triangle. While I was gone, a drug-addicted criminal with a long list of convictions broke into our
kitchen at 4 a.m., was surprised by my wife and daughter, and fled with our credit cards, cash, keys, and
cell phones.
Sometimes I wonder who really was safer that week.
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July 24, 2007
PERK’S LONDON CLUB IS SMOKE FREE
Perk is still a member of the City of London Club in Old Broad Street, despite the fact that
he has not set foot in it for years. He says he pays his dues as an overseas member
because he may want to go back again someday, and besides, it provides lots of
memories. As readers of our letters know, we have raved on for years about the bad
ramifications of smoking and secondhand smoke. We have written about this in many
letters, including October 1996, January 1998, April 2001, January 2004, and April 2005.
In the January 2004 dissertation we reviewed the ban on smoking in Irish pubs, which we
were not sure would really stick, because of the lobbying ability of the Vintners’ Federation
of Ireland, but in the end it did.
So it was of some interest recently when Perk received a letter (notice) from the City Club
addressing The National Smoking Ban which is to begin on July 1. We have reproduced
that letter here. Somehow we have missed any media coverage, presumably because we
don’t live in Great Britain, but
surprisingly have not seen mention
of it in the U.S. papers that we read,
not even The New York Times. No
matter.
If it does not exclude
private clubs, we doubt it would
exclude bars or restaurants as is
common in the U.S. In the U.S.
each state, and seemingly each city
or county, or other jurisdiction within
each state may pass its own antismoking legislation.
Here in
Minnesota, Hennepin County was
declared smoke-free in bars where
food is served, but Ramsey County,
where St. Paul is situated, had no
such rule so bar owners in
Hennepin County were suffering as
their business moved to Ramsey
County, in some cases only a short
distance away. This will all change
on October 1, 2007, as Minnesota’s
new smoking ban takes effect. A
much more evenhanded approach,
we think, as smoking will not be
permitted in any bar or restaurant.
San Francisco, for example, has
even banned outside smoking in
city parks and other gathering
places as well as within a certain
distance of a building. There is a
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July 24, 2007
movement afoot to make the entire planet smoke-free and while that is a laudable goal, it
is unlikely to happen, despite the fact that tobacco is the world’s leading cause of death
and disease and it is preventable. Here are some facts:
•
Approximately one-third of the global population aged 15 and over smokes. More
than 15 billion cigarettes are smoked around the world every day.
•
Over 5 million people die prematurely of tobacco-related illnesses around the world
each year, including 438,000 in the United States.
•
Each male and female U.S. smoker loses, on average, 13.2 and 14.5 years of life,
respectively. About 6.4 million youths now under age 18 will die prematurely
because they began smoking as adolescents.
•
Health-related economic costs associated with U.S. tobacco use exceed $167
billion annually.
•
Smoking causes an estimated 21 percent of cancer deaths worldwide.
•
If current smoking trends continue, by 2030, tobacco will cause 10 million deaths
annually, 70 percent of them in developing countries.
Source: World Health Organization; U.S. Centers for Disease Control and Prevention; Action on Smoking and Health
But it is moving forward as each year more countries ban smoking in work places and
other indoor public places. Here is a partial list with the year of effect:
Europe
Ireland 2004
Norway 2004*
Italy 2005*
Malta 2004*
Sweden 2005*
Iceland 2007*
United Kingdom (with Scotland
leading in 2006) 2007
Lithuania 2007*
France 2008*
Finland 2009*
Asia
Bhutan 2005**
Iran 2007
Hong Kong, 2009
Africa
South Africa 2000*
Uganda 2004*
North America
Canada (9 provinces and territories
out of 13)
Manitoba, New Brunswick,
Northwest Territories 2004
Newfoundland, Labrador,
Saskatchewan 2005
Nova Scotia, Nunavut, Ontario
2006
Quebec 2006*; 2008
United States (17 states out of 50,
plus Washington, DC, and Puerto
Rico)
California 1998
Delaware 2002
New York 2003
Connecticut, Maine,
Massachusetts 2004
Rhode Island, Vermont,
Washington 2005
Colorado, Hawaii, New Jersey,
Ohio 2006
Arizona, Minnesota, Puerto
Rico, Washington, DC, 2007
Montana 2009
Utah 20099
Bermuda 2006
British Virgin Islands 2007
Oceania
New Zealand 2004
Australia (7 states and territories
out of 8)
Australian Capital Territory
2006
Tasmania 2006
Queensland 2006
Western Australia 2006
New South Wales 2007
South Australia 2007
Victoria 2007
South America
Uruguay 2006
Key: *Possibility of designated, enclosed, ventilated smoking rooms allowed **Ban on tobacco sales
So, country by country and state by state, a smoke-free world may still be in our future.
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July 23, 2007
ISLAMIC FANATICISM
We read a lot these days about the fanaticism of the Islamic religion. This was brought
forward very clearly in a recent Wall Street Journal editorial, which commented favorably
on the knighthood of Salman Rushdie, a recent event when he was recognized by the
Queen for his narrative works. Rushdie, you will recall, was the recipient of a fatwa (to be
killed) in 1989 by the Ayatollah Khomeini for the crime of apostasy, because of his
mockery of the prophet Mohammed in his book “The Satanic Verses.” Rushdie went
underground to hide, surfaced in the U.S. for a time, but ultimately managed to lead a life
in the open. Over this time, he wrote eight novels and collections of essays as well. Great
Britain recognized this and granted him knighthood so that forevermore he will be
addressed as Sir Salman Rushdie.
Hard-line Islamists are up in arms over this affront to Islam and thus burn his effigy as well
as those of Queen Elizabeth and Tony Blair in the streets of cities in Pakistan. These
same fanatics protested the Danish cartoons which supposedly insulted Mohammed, but
which we have never seen as newspapers around the world have refused to print them for
fear of reprisal. The Egyptian parliament speaker, Fathi Sorour, said “honoring someone
who has offended the Muslim religion is a bigger error than the publication of caricatures
attacking Prophet Mohammed.” This leads us to the real import of the editorial, wherein
Great Britain is characterized as standing-up to radical Islam and showing some good old
fashioned British backbone. The editorial noted that over time Great Britain has given in to
many fundamentalist Islamic demands, e.g., allowing the burqa in schools and colleges to
re-orienting prison toilets to face away from Mecca. Britain has arguably done more to
accommodate Islamists than any other country, perhaps even more than the Netherlands
or France, who are likewise heavily populated by Muslims. This permissiveness has been
a folly for all it does is further more demands. Now the pendulum may be swinging the
other way, and the more bombings and acts of extremism there are, the further and further
the pendulum will swing the other way. A recent New York Times article points out clearly
that the British limits of tolerance are being severely tested. There are growing efforts to
place legal limits on the niqab or full-face Muslim veil, and British education authorities are
proposing a ban on it in schools. Tony Blair has called the niqab a “mark of separation,”
and David Sexton, an Evening Standard columnist, says “It’s abusive, a walking rejection
of all our freedoms,” and infers that Britain has been “too deferential.” The head scarf, or
hijab, is perhaps less offensive than the nigab, which is banned in French schools, but still
allowed in Britain. This is sure to change, especially as there are more potential car
bombs such as recently found in London, and the unsuccessful Glasgow Airport incident.
The more the extremists attempt to do harm, the wider the chasm will become, and the
further the pendulum will swing.
All of which brings us around to looking at our own situation here in the U.S. Nearly one
hundred years ago, in 1919, Theodore Roosevelt wrote the following about immigrants in
America: “In the first place, we should insist that if the immigrant who comes here in good
faith becomes an American and assimilates himself to us, he shall be treated on an exact
equality with everyone else, for it is an outrage to discriminate against any such man
because of creed, or birthplace, or origin. But this is predicated upon the person’s
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July 23, 2007
becoming in every facet an American, and nothing but an American… There can be no
divided allegiance here. Any man who says he is an American, but something else also,
isn’t an American at all. We have room for but one flag, the American flag… and we have
room for but one sole loyalty and that is a loyalty to the American People.”
PASSINGS
Sadly, we report the passing of Bo Perkins, Perk and Dana’s black lab, whose business
card titled him as “Executive Watchdog.” Bo was born on February 11, 1995, and died
peacefully on Friday, May 25, 2007 at the age of 12 after a diagnosis at the University of
Minnesota Veterinary Medical Center of a malignant tumor which was interfering with his
bodily functions. In human
terms, Bo was about 84,
because for large breeds
one dog year equals about
seven human years. In the
early years, Bo’s vet was
Dr. John Hotvet (yes, that is
his name) of Village Animal
Hospital, but in later years
he was a patient of Dr.
Pierce Fleming at Plymouth
Heights Animal Hospital.
Besides being an excellent
vet with a pleasant attitude
he was a dog acupuncturist.
Bo loved acupuncture as it
relieved his aches and
pains. Dr. Fleming was with
Bo at the end, a calming
Bo’s Last Butt Scratch
friend who helped him make
his trip to dog heaven. Bo
had an interesting life. To begin with, Tony Rocheford, Dana’s son, brought Bo home one
Saturday in April 1995 as his “new puppy” from the Humane Society. But when Tony
learned that his apartment did not allow pets, Bo was farmed out to Perk and Dana. They
were not excited at the time having vowed not to have another dog after Perk’s black lab,
D D (Daring Duke of Orono or sometimes just Dad’s Dog) had gone blind and had to be
euthanized. But it was a blessing in disguise for Bo was to become a true friend, a part of
the household. And not only the household, but the office as well, where he was in charge
during company meetings. Bo even had his own e-mail address, getting a message now
and then from friends like Roger Bensen. Everyone loved Bo. Harry Lindberg said that Bo
helped keep things in perspective and never second guessed any of our decisions. What
is not known to Bo’s friends, however, is that the vets always referred to him as “the dog
who should not be alive.” He had been diagnosed early on with puppy parvovirus, which
young dogs rarely survive. Bo was lucky, therefore, to be alive and to have lived an
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July 23, 2007
exciting life loved by his guardians and all those who met him along the way. Bo will be
missed, not only by family and friends, but business associates as well.
Perk got some good press in May as, once again, he was selected as Minnesota’s Hardest
Working Board Member. The article from the Business Journal is reprinted here.
Following that are three pages of laughs for those readers who think that is the best part of
these letters. The picture is pertinent to our paragraph on Islamic Fanaticism.
As a reminder, for those of you who want to read what we said in past letters, those of the
past five years are on our website, www.perkinscap.com, and in color, of course!
Sincerely,
Richard W. Perkins, C.F.A.
President
Senior Portfolio Manager
Richard C. Perkins, C.F.A.
Executive Vice President
Portfolio Manager
RWP:RCP:DSP/jah
What is the point of this?
Daniel S. Perkins, C.F.A.
Executive Vice President
Portfolio Manager
TROUBLE IN WASHINGTON
A Washington, DC, airport ticket agent offers some examples of why our country is in trouble!
1. I had a New Hampshire Congresswoman ask for an aisle seat so that her hair wouldn't get messed
up by being near the window (on an airplane!)
2. I got a call from a candidate's staffer, who wanted to go to Capetown. I started to explain the length
of the flight and the passport information, then she interrupted me with, "I'm not trying to make you
look stupid, but Capetown is in Massachusetts." Without trying to make her look stupid, I calmly
explained, "Cape Cod is in Massachusetts, Capetown is in Africa.” Her response - click.
3. A senior Vermont Congressman called, furious about a Florida package we did. I asked what was
wrong with the vacation in Orlando. He said he was expecting an ocean-view room. I tried to explain
that's not possible, since Orlando is in the middle of the state. He replied, "Don't lie to me, I looked on
the map and Florida is a very thin state!" (OMG)
4. I got a call from a lawmaker's wife who asked, "Is it possible to see England from Canada?" I said,
"No." She said, "But they look so close on the map." (OMG, again!)
5. An aide for a cabinet member once called and asked if he could rent a car in Dallas. When I pulled
up the reservation, I noticed he had only a 1-hour layover in Dallas. When I asked him why he
wanted to rent a car, he said, "I heard Dallas was a big airport, and we will need a car to drive
between gates to save time." (Aghhhh)
6. An Illinois Congresswoman called last week. She needed to know how it was possible that her
flight from Detroit left at 8:30 am and got to Chicago at 8:33 am. I explained that Michigan was an
hour ahead of Illinois, but she couldn't understand the concept of time zones. Finally, I told her the
plane went fast, and she bought that.
7. A New York lawmaker called and asked, "Do airlines put your physical description on your bag so
they know whose luggage belongs to whom?" I said, "No, why do you ask?" She replied, "Well,
when I checked in with the airline, they put a tag on my luggage that said (FAT), and I'm overweight. I
think that's very rude!" After putting her on hold while I looked into it (I was laughing). I came back
and explained the city code for Fresno, CA is (FAT - Fresno Air Terminal), and the airline was just
putting a destination tag on her luggage.
8. A Senator's aide called to ask about a trip package to Hawaii. After going over all the cost info, she
asked, "Would it be cheaper to fly to California, and then take the train to Hawaii?"
9. I just got off the phone with a freshman Congressman who asked, "How do I know which plane to
get on?" I asked him what exactly he meant, to which he replied, "I was told my flight number is 823,
but none of these planes have numbers on them."
10. A lady Senator called and said, "I need to fly to Pepsi-Cola, Florida. Do I have to get on one of
those little computer planes?" I asked if she meant fly to Pensacola, FL on a commuter plane. She
said, "Yeah, whatever, smarty!"
11. A senior Senator called and had a question about the documents he needed in order to fly to
China. After a lengthy discussion about passports, I reminded him that he needed a visa. "Oh, no I
don't. I've been to China many times and never had to have one of those." I double checked and
sure enough, his stay required a visa. When I told him this he said, "Look, I've been to China four
times and they always accept my American Express!"
12. A New Mexico Congress woman called to make reservations, "I want to go from Chicago to Rhino,
New York." I was at a loss for words. Finally, I said, "Are you sure that's the name of the town?"
"Yes, what flights do you have?" replied the lady. After some searching, I came back with, "I'm sorry,
ma'am, I've looked up every airport code in the country and can't find a Rhino anywhere." The lady
retorted, "Oh, don't be silly! Everyone knows where it is. Check your map!" So I scoured a map of
the state of New York and finally offered, "You don't mean Buffalo, do you?" The reply? "Whatever! I
knew it was a big animal."
Now you know why the Government is in the shape that it's in!
YOU CAN’T MAKE THIS UP!
AIRPLANE TRIVIA
After every flight, Qantas (the Australian airline) pilots fill out a form, called a "gripe sheet," which tells
mechanics about problems with the aircraft. The mechanics correct the problems; document their repairs
on the form, and then pilots review the gripe sheets before the next flight. Never let it be said that ground
crews lack a sense of humor. Here are some actual maintenance complaints submitted by Qantas' pilots
(marked with a P for pilot) and the solutions recorded (marked with an S for solution) by maintenance
engineers. By the way, Qantas is the only major airline that has never had an accident.
P: Left inside main tire almost needs replacement.
S: Almost replaced left inside main tire.
P: Test flight OK, except auto-land very rough.
S: Auto-land not installed on this aircraft.
P: Something loose in cockpit.
S: Something tightened in cockpit.
P: Dead bugs on windshield.
S: Live bugs on backorder.
P: Autopilot in altitude-hold mode produces a 200 feet per minute descent.
S: Cannot reproduce problem on ground.
P: Evidence of leak on right main landing gear.
S: Evidence removed.
P: DIME volume unbelievably loud.
S: DIME volume set to more believable level.
P: Friction locks cause throttle levers to stick.
S: That's what they're for.
P: RIFF inoperative.
S: RIFF always inoperative in OFF mode.
P: Suspected crack in windshield.
S: Suspect you're right.
P: Number 3 engine missing.
S: Engine found on right wing after brief search.
P: Aircraft handles funny. (I love this one!)
S: Aircraft warned to straighten up, fly right, and be serious.
P: Target radar hums.
S: Reprogrammed target radar with lyrics.
P: Mouse in cockpit.
S: Cat installed.
And the best one for last ..................
P: Noise coming from under instrument panel. Sounds like a midget pounding on something with a
hammer.
S: Took hammer away from midget.