We individual investors truly admire Warren Buffett. I’m sure it’s not only because of his enduring investment successes, but partly because we all see him as someone with whom we can identify. We admire that he’s not caught up with the excesses many other of the extremely rich are caught up in, such as multiple mansions, cars, yachts, or the ever infamous $6,000.00 shower curtain. He’s about as honest, forthcoming, unassuming and unpretentious as they come.

Like every other investor out there, I too admire Warren Buffett. But, there happens to be another, less well-known, successful long-term investor with whom I can identify even more. Someone whose qualities I admire even more than Warren Buffett’s.

Nope, it’s not Peter Lynch, George Soros, Rupert Murdoch, Benjamin Graham, or even Donald Trump. It’s someone who’s overcome tremendous odds to become successful, someone who lives frugally, but someone who finds happiness with the simple things in life… someone like me.

It’s time to visit the “other” Warren Buffett, the investor that every average individual American can identify with. Someone who can truly make you believe that you can succeed.

It’s time we re-visit my hero, Mr. Earl Crawley.

It wouldn’t be right if I didn’t own up to being wrong about my last couple of forecasts. Plus, how could I bash the experts if I hypocritically excluded my own faults? So, let me highlight my mistakes:

1. About a month ago I predicted the market would quickly take a turn for the worse. The market did just the opposite, and is now close to making up it’s first quarter losses.

2. The past few weeks I predicted corporate profits would tumble. While earnings were mixed and lower than last year’s results, earnings came through much better than I expected.

3. At the beginning of last year I celebrated being “back in black“, but now I’m back in the red after this past month’s comeback.

Three bad calls.

Now call me crazy, but I still don’t think my forecast is wrong on the economy and where the stock market’s headed. I believe it’s only my “timing” that’s incorrect. I’m still of the opinion that the stock market’s headed south, and I’m still 100% in cash.

I’ve been invested in cash for a while now. Time will tell if I’m correct.. or just plain crazy. So, stick around to find out. Until then, I think the following music video best describes my feelings about this past month.

The first is AirNet Systems, Inc. (ANS)

AirNet Systems, Inc. provides time-critical air transportation services (express delivery) for small package shippers and banking customers to more than 100 cities nationwide. They are a premium transportation service provider for industries that require immediate turn-time and specialized handling: international financial institutions, organs for transplant, blood products, media and tapes for distribution, aircraft parts, security sensitive material, even charter service for vacationing families, surgical teams, or corporate professionals.

The stock price has been performing poorly over the last year due to a variety of factors, including the banking credit crunch and escalating oil prices. However, that all changed on March 31st of this year when ANS announced that it entered into a definitive merger agreement to be acquired by an affiliate of Bayside Capital, Inc. for $2.81 per share in cash.

I won’t go into the minutia of the merger agreement or the fundamentals of the company, but a very small profit opportunity could be had based on Friday’s closing price of $2.67, without having to lay out a large amount of cash while waiting for closure.

The second is National Atlantic Holdings Corporation (NAHC)

Simply put, National Atlantic Holdings Corporation and its subsidiaries provide property and casualty insurance and insurance-related services to individuals, families and businesses in the State of New Jersey.

NAHC was a company that I previously presented on my old blog. It’s stock price has performed poorly over the past year basically because of what I mentioned about it previously: poor management. IMO, their downfall started when NAHC “required” it’s “independent” agents to become shareholders of the company in order to sell it’s products. I believe most of their problems can be attributed to this one management error in judgment.

Regardless, the stock price has dropped far enough for Palisades Safety and Insurance Association to find value in NAHC. On March 13th of this year, NAHC entered into a definitive merger agreement to be acquired by a subsidiary of Palisades Safety and Insurance Association, a New Jersey licensed insurance exchange. Under the terms of the agreement, each outstanding share of common stock of NAHC will be canceled and converted into the right to receive $6.25 in cash per share.

Like ANS, a small (but better) profit opportunity could be had based on Friday’s closing price of $5.84, without having to lay out a large amount of cash while waiting for closure. Details of their merger can also be followed through the SEC website.

You can create a new portfolio each Friday for 12 weeks at 5:00 PM ET through Monday at 9:29 AM ET beginning April 4, 2008.

Participants are provided with a fictional account, two hundred fifty thousand ($250,000) fictional U.S. dollars and the fictional ability to select five (5) individual stocks from the NYSE, NASDAQ and/or AMEX exchanges (individual stocks traded on OTC and other exchanges do not qualify as valid portfolio selections) to create a portfolio. Fictional dollars will be applied in equal amounts against the 5 individual stocks selected. Read “How to Play” for detailed information.

There are 12 prizes available (one for each weekly Game): $5,000 (awarded as a check). The first game starts Monday, so if you’re interested, hurry to get your picks in by this weekend.

Let’s hope my results aren’t also fictional. See you in the winner’s circle.

Hedge funds control large amounts of money and don’t have the limiting rules of mutual funds. They can move quickly in and out of investments of their choice. But, hedge funds must provide returns much better than mutual fund returns in order to justify their costs (and jobs).

There’s extreme competition between the many hedge funds to capitalize on certain technical readings. This is just my speculative opinion, but now that the market has turned south, there’s high anxiety on their part NOT to show losses (oops.. I mean negative growth). The more the fundies compete to be the “first in” or “first out”, the higher the volatility.

So, as long as this happens, I’m expecting more volatility.

When I made my decision to move my retirement portfolio into cash a little less than two years ago, I jumped the gun and got out too soon. If I’d have waited just a few months, I could have gotten out at a higher level. But, you know what they say.. hindsight is 20-20.

Regardless, it turned out that I’m ahead of the game now because I stuck to my guns in my belief of the recession-predictive qualities of the inverted yield curve theory, which states that a recession will occur within 2-6 quarters after the occurrence of an inverted yield curve. So far, this prediction is becoming reality. We’ll only “know” retrospectively.

The good thing is that I’ve learned my lesson about jumping the gun too soon. Now, that I’m back in the black, I’ve been itching to get back in the stock market, but only because of fear that I may be left out if I made the wrong choice.

This fear is powerful, but I’m trying to remain on course until everyone else realizes that we’ve entered a recession, and the stock market falls even further. Between this week and the next few months, I believe investors will come to that realization, and at that time I’ll make my move.

Although I’m tempted to get back in right now, I just have to keep in mind…