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Give an man to fish, feed him for a day. Teach a man to fish, feed him for a lifetime.

We all heard that saying. We all understand its wisdom (and maybe, too, it's limitations). “Aren't there things really better left to 'experts'?” Well, brain surgery comes to mind, and things of that nature. But what about investing? Is that something better learned for one's self, or better left to experts? To focus the discussion more sharply, let's ask about just a tiny portion of bond investing.

Should rating bonds be left to the experts, such as S&P, Moody's, Fitches? Or should investors learn to do their own?

Are you familiar with Frost's poem, “Two Tramps in Mud Time”? Curiously, in the way that everything is related to everything else, the same issues he raises in the poem are present in the question above: "What do you do for yourself, and what do you permit (or require) that others do for you?" The poem is long (and since I found it online, I'm assuming no copyright laws will be broken by my reproducing it here).

Out of the mud two strangers came
And caught me splitting wood in the yard,
And one of them put me off my aim
By hailing cheerily "Hit them hard!"
I knew pretty well why he had dropped behind
And let the other go on a way.
I knew pretty well what he had in mind:
He wanted to take my job for pay.

Good blocks of oak it was I split,
As large around as the chopping block;
And every piece I squarely hit
Fell splinterless as a cloven rock.
The blows that a life of self-control
Spares to strike for the common good,
That day, giving a loose my soul,
I spent on the unimportant wood.

The sun was warm but the wind was chill.
You know how it is with an April day
When the sun is out and the wind is still,
You're one month on in the middle of May.
But if you so much as dare to speak,
A cloud comes over the sunlit arch,
A wind comes off a frozen peak,
And you're two months back in the middle of March.

A bluebird comes tenderly up to alight
And turns to the wind to unruffle a plume,
His song so pitched as not to excite
A single flower as yet to bloom.
It is snowing a flake; and he half knew
Winter was only playing possum.
Except in color he isn't blue,
But he wouldn't advise a thing to blossom.

The water for which we may have to look
In summertime with a witching wand,
In every wheelrut's now a brook,
In every print of a hoof a pond.
Be glad of water, but don't forget
The lurking frost in the earth beneath
That will steal forth after the sun is set
And show on the water its crystal teeth.

The time when most I loved my task
The two must make me love it more
By coming with what they came to ask.
You'd think I never had felt before
The weight of an ax-head poised aloft,
The grip of earth on outspread feet,
The life of muscles rocking soft
And smooth and moist in vernal heat.

Out of the wood two hulking tramps
(From sleeping God knows where last night,
But not long since in the lumber camps).
They thought all chopping was theirs of right.
Men of the woods and lumberjacks,
The judged me by their appropriate tool.
Except as a fellow handled an ax
They had no way of knowing a fool.

Nothing on either side was said.
They knew they had but to stay their stay
And all their logic would fill my head:
As that I had no right to play
With what was another man's work for gain.
My right might be love but theirs was need.
And where the two exist in twain
Theirs was the better right--agreed.

But yield who will to their separation,
My object in living is to unite
My avocation and my vocation
As my two eyes make one in sight.
Only where love and need are one,
And the work is play for mortal stakes,
Is the deed ever really done
For Heaven and the future's sakes.

(Robert Frost, 19XX)

Today, Portland is such a day as he describes. The calendar says March, not the April of in his poem. But a flurry of wet, fluffy snow flakes blew through my yard not an hour ago. Now they are gone, without a trace, the sun peeking though the clouds again. Are we back in January, or looking ahead toward May? With regard to bond ratings, I ask myself the same question Frost does with his wood-chopping. "Should work done by the bond-rating houses be trusted, or should the investor learn to do his own?"

Of course, that can only be an individual decision, something each person must make on her own. But the more I dig into bond ratings, the more I see the need for would-be investors to become their own bond-raters, and I also see ways of doing so. So that's the direction of my next flurry of papers. I propose to take a two-sided approach: from how the market itself is pricing debt, and from the company's financials. Furthermore, rather than the 17 or so notches used by the rating houses, I'd like to reduce the scorecard to the more familiar “A” through “F” we are familiar with from our school days.

That's my research and writing plan for the week or two ahead. Enjoy the day. Charlie
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