In Search of the Perfect Investment

The Dow. Up 254 yesterday. Nice. But in perspective, not huge:

Does it signal that we should pile back in? No.

Are we still in a bear market? Yes.

So, how do we make money? You don’t. Today is about preserving your assets:

1. Do the things you’re good at and have control over — like your work.

2. Manage your few preferred, favorite investments by writing covered calls.

3. Buy bonds or bond funds. We won’t see interest rates rising in the U.S. for a long, long  time.

4. Buy your favorite stocks on dips.

5. Steer clear of stocks that don’t pay dividends. High dividend payers make sense.

6. You should have some money in gold — e.g. GLD, SGOL or FSAGX.

7. Keep your stops tight. 8% looks good to me for today’s squirrelly market.

8. Above all, don’t wreck your health trying to beat this market.

My obsession with health. As we get older (I am 68) I obsess. My friends are dying, or about to. They don’t exercise. They eat too much.  They eat too much salt. They drink to much coffee. They work too hard.  They pop too many pills. The usual suspects.

Yesterday I wrote about falling. It can really mess up your life. Yesterday a longtime reader Guido Pagnacco, Ph.D. , a professor of engineering at the University of Wyoming, emailed me:

Dear Mr. Newton,

I’m writing to you because of your comments in today’s column about falls. This is a topic very dear to me, one about which my wife and I have dedicated a great part of our professional lives.

It’s great that you are warning your readers about the dangers of falls. All too often people do not realize how serious the consequences can be until it’s too late. I find that most do not think of falls as a serious health hazard, although almost everybody has had relatives or friends that suffered serious injuries because of falls.

Being able to stand on 2 feet without falling is an incredibly important part of our humanism. We are the only being that spend its life in an unstable bipedal stance. Although standing up and moving around comes to us so naturally that we don’t even think about it, it is a very complicated task, so much so that the control of postural balance develops fully only in the mid teens, and interesting enough healthy adults reach their best performance in their mid 40s, not in their 20s!

It is such an important part of humanism that nature gave us multiple redundant systems to balance ourselves and not fall. To understand where we are in space we can use vestibular (inner ear), visual, and somatosensory (nerve endings in muscles, skin and joints) information, we then process that at various levels of the nervous system, and we react and compensate by moving almost all parts of the body. Practically, not falling or having good balance involves the whole body. One of the consequences is that anything that makes any part of the body function below healthy levels does affect balance in some way, and therefore reducing the risks of falls is very difficult. According to a very recent CDC study (http://www.cdc.gov/nchs/data/databriefs/db31.htm) 75% of Americans over 70 years old have a balance impairment! In our experience 1/3 of the general adult population (20 years and older) has a balance impairment. Unfortunately, most health professionals do not want to tackle the problem because they have to look at the overall functioning of the entire body. It takes too long and nobody pays for it!

And the consequences are actually even worse than what you mentioned in your column: according to a CDC study a few years ago, more than 50% of those over 65 why fall and are injured (even non severely) end up dead or in a nursing home within a year!

To try and help with this problem my wife and I almost 10 years ago started developing and marketing a balance platform (a sophisticated scale that measures not only the weight but also the sway or movements of the weight of a person). In 30 seconds, the time it usually takes to weight somebody, the device can give an health professional not only the weight of a person, but also the Body Mass Index and, most importantly, a “balance score” and how well that compares to healthy subjects in the same age range. Granted we might not have had the greatest marketing, but so far the interest has been very modest, with only a few hundred units in the field. Perhaps it will change!

For now, I’d like to give you some advice regarding falls:

+ Most medications and over the counter drugs affect balance. Besides obvious ones, like any drug that makes you drowsy or sleepy, keep in mind that even aspirin reduces balance. Blood pressure medication also often reduces balance significantly, especially if the blood pressure gets too low.

+ Most people with an hearing loss also have associated a vestibular loss because the structures and nerves are so closed together. This means that the brain can’t perceive the position of the head in space very well. Normally this deficit is compensated using vision, but if that is compromised now the back-up system is gone too! The advice here is to have the vision checked regularly, always use the glasses/contacts prescribed for intermediate/far distance vision correction when moving around, and turn on the lights when moving around in the dark. Actually, many fall when walking around the house (or even worse hotels or unfamiliar rooms) in the dark (for instance to go to the bathroom) because they do not want to turn on the lights to avoid disturbing the spouse/children or others.

+ Do as much movement with your body as possible. Walk, move your arms, hands and fingers, turn your head, dance around. This not only helps the muscles, but it provides a lot of stimulation of the sensory pathways as well as the motor control part of the nervous system keeping them in shape. It is not important to do strenuous things, rather varied movements.
have enough sleep. Lack of sleep, like loosing a night, is worse on balance and motor control than being drunk!

Keep up the good work.
All the best,
Guido Pagnacco

Booming economy rest of the world would kill for by Peter Martin of the Sydney Morning Herald.

September 2, 2010

THE Australian government is claiming vindication after a surprise jump in economic growth delivered one of the strongest growth rates in the developed world, exceeding those in the US, Britain and most of Europe.

At an annual rate of 3.3 per cent, boosted by a 1.2 per cent jump in the June quarter and revisions to earlier quarters, Australia’s growth rate is back to its long-term average and exceeded among developed economies only by nations such as Canada and Germany that are recovering from recessions.

”Finance ministers elsewhere and prime ministers elsewhere would kill for a set of outcomes such as these,” said the Treasurer, Wayne Swan. ”This is an endorsement of what we’ve done to support the economy.”

The figures show consumer spending and private construction growing strongly to take the place of government spending, which has plateaued after soaring 39 per cent in the past year to fund stimulus building programs.

”Key parts of the Australian economic story now look set in concrete,” said the Commonwealth Bank economist Michael Blythe. ”The income flow from the commodity boom is moving out of forecasts and into the real world. The evidence includes the spike in company profits, rising wages and trade surpluses.”

… Much of the nationwide boost in spending was on motor vehicles, assisted by the January cut in tariffs and delayed deliveries of cars ordered using the business investment tax break that expired in December.

Real spending on cars climbed 22 per cent, real spending on travel 9 per cent and spending on shoes 13 per cent.

”It’s fantastic. The economy is as strong as an ox,” said the Macquarie Group economist Brian Redican. ”It’s also well balanced, with household consumption much stronger than anyone thought. From here, business investment should pick up the baton and drive growth for the next 12 months.” …

For the full article, click here. The easiest way to participate in Australia is EWA.

The U.S. Tennis Open is into its fourth day. In the old days, the tennis wa only good towards the end. But now there are so many good players, most matches are great. You can watch the tennis 24/7 on the Tennis Channel, ESPN2 or CBS. Make sure you’re watching in high-def. The TV Schedule is here.

Your web site is so important. I’m staggered at how many intelligent people tell me they’re too busy to pay attention to their web site. I’m also staggered at how much money gets paid to “consultants” to fix web sites. And what a lousy most consultants do.

Your web site is your window to the world.  Please respect it.

If I can learn how to fix a simple web site, you can too.

My friend Dave Arden rebukes me.

“I’m sick of seeing your fat pictures. Give me something pleasing to the eye.”

Dear Dave, If I can’t provide you the perfect investment, I can provide you the perfect breasts:

She wasn’t at the tennis. But I wish.. I wish. We’re going again next week. I’ll see what eye candy I can photograph.

Sam telephones Abe
Sam telephones Abe and says, “Oy vay, Abe. Am I in shtook. My best customer has just gone bankrupt and I have lost $100,000 with him.”

“Although you’re my main competitor,” says Abe, “I’m still sorry to hear that, Sam. So who is he?”

“Huh, nice try Abe,” replies Sam. “Do you think I’m meshugga (crazy)? I’m going  tell you the name of my best customer?”

Harry Newton, who has discovered the benefits of texting. It’s much faster than emails for people who are not near a computer or who don’t have a BlackBerry or i Phone  — like my tennis partner.