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9:00 AM EDT, Friday, September 11, 2009: The market continues to go up because it continues to go up. The economy is perceived as getting better, perhaps. New investors may be climbing abroad for fear of missing the boom. No one knows why. No one will ever. That doesn't stop the financial press from musing. My latest favorite musing is this chart:

And what does this chart show? Here are the words:

For some perspective on the current rally that began back on March 9th, today's chart presents the Dow divided by the price of one ounce of gold. This results in what is referred to as the Dow / gold ratio or the cost of the Dow in ounces of gold. For example, it currently takes 9.7 ounces of gold to “buy the Dow.” This is considerably less (78% less) than the 44.8 ounces it took to buy the Dow back in 1999. Since 2007, the Dow / gold ratio has declined at an accelerated pace (see dashed lines). As a result of the recent rally, the Dow (priced in gold) has moved up significantly and is currently testing resistance of its accelerated downtrend.

I have absolutely no idea what this means, except it sure sounds insightful. Maybe I'll develop an index where I divide the Dow by the number of blonde anchors on BubbleVision (CNBC, Fox Business , Bloomberg, etc.) . If there are more blondes and thus my Dow/Blonde index declines, then it is sending me a signal that the market is about to take a tumble -- judging by the fact that this sorry collection of the news media perceives the need to crank up its appeal. (Their viewership rises and falls with the market. But blonde anchors are perceived to help.) Sorry, I don't have a chart, replete with trendlines and 50-day moving averages.

My line of perceptive thinking may have another cause. My wife says my gray hair has too much yellow in it, and hence, it's ugly. I have this shampoo which clearly isn't working. So, as for all problems, it's to the Internet for in-depth, accurate "research." The first solution suggested is to cut my hair shorter. This has a double charm; it's easy, and cheap. Another solution is to check with my doctor. Some of my medications could be messing with my hair. Nup. No medications. The final solution is to see my "stylist." The problem with my "stylist" is he's an overweight, Azerbaijani, Hasidic Jew who can only speak Russian, Farsi and Hebrew.. Communicating the following solution might prove beyond my Farsi:

As another option, you could consider seeing your stylist about bleaching the yellow from the hair, or do it yourself at home by mixing your favorite conditioner with equal parts of 30-volume peroxide and applying it to the hair, leaving it on for 20 minutes under a plastic cap. Afterwards, shampoo the hair carefully and condition it again. You should see a lessening of the yellow. Follow up with continued use of the brightening shampoo and conditioner. You can repeat the peroxide/conditioner process as needed, but I would wait at least a week between. ©

If get bored with messing with wearing a plastic cap for a week, I can always "increase the value of my home."

How I got on the junk mailing list for vinyl siding escapes me. Maybe, in someone's eyes, it's "the perfect investment." There's no question, the new vinyl siding is good. You have to tap it to figure it's plastic, not wood. Around our place, vinyl siding is lower class since we have a bunch of strong believers in the theory that something is worth what they paid for it. This theory makes all my friends on Madison Avenue cringe with happiness, since their craft is clearly working.

Everything I've recommended in recent weeks has gone up. That hasn't made me the genius I'd like to be since so has everything else. And companies continue to rush to Wall Street to raise money, especially in secondaries. Today's deals include CenterPoint Energy (CNP), Cree (CREE), Entegris (ENTG)., Phototronics (PLAB), Penn Virginia GP Holdings (PVG) Ramco-Gershenson (RPT), RTI International (RTI), Union Bankshares (UBSH), and Horesehead Holdings (ZINC), Most of these should work, which means the price will rise after the secondary. I like CNP, CREE and ENTG, Do your own research. Mine is cursory (what Wall Street "research" isn't?).

Liqiuidity remains the name of the game. The cost of investing in something long-term, like a private equity fund, is that your hoped-for rewards come in the next business cycle (polite term for next financial crisis). Hence there is HUGE charm in investing in things you can sell instantly, if not sooner. And that basically leaves publicly-listed stocks. Exhibit 1 is the Wall Street Journal today:

Harvard, Yale Are Big Losers in 'The Game' of Investing
It's a tie in the Harvard-Yale investment game. Both schools were thrown for colossal losses.

The universities on Thursday said their endowments, higher education's two largest, each lost 30% of their value in the year ended June 30. Combined, the pair of investment pools shrank by a staggering $17.8 billion.

Declines in the endowments have forced the two schools to cut budgets and delay plans to expand facilities and hire staff, as even the country's top colleges are being forced by the financial crisis to retrench. The pain is being felt widely across higher education. While many private colleges are getting less help from their endowments, public universities are suffering because of state budget cuts.

Harvard University and Yale University, such fierce rivals that their fall football contest is known to both sides simply as "The Game," badly trailed the results of the typical college in the latest year. The dismal returns have exposed weaknesses in their exotic approach to investing, which after turning in chart-topping performance for years has proved to be highly risky.

The schools were hurt by investments in assets that can't readily be sold, such as private-equity partnerships, which were pummeled in the past year after stellar results over the previous decade. In the category Harvard calls "real assets," including timber, commodities and real estate, annual losses neared 40%.

Harvard was already budgeting for a 30% decline, but hadn't released a final tally. On Thursday, it said its endowment shrank to $26 billion on June 30 from $36.9 billion a year before. The decline also reflects spending from the endowment and donations. The Cambridge, Mass., university's investment loss itself was 27%, dwarfing the 18% drop in the median return for large endowments calculated by Wilshire Associates, an investment consulting firm.

Yale said its endowment fell to $16 billion on June 30 from $22.9 billion a year before. The New Haven, Conn., university didn't break out its investment results. Yale had projected a drop of only 25% and Thursday warned of further budget cuts. In a letter to Yale faculty and staff, Richard Levin, the school's president, and Peter Salovey, its provost, said it now projects an annual deficit of $150 million each year from 2010-11 through 2013-14.

Last winter, Yale cut staff and nonsalary expenses by 7.5% for the 2009-10 academic year and signaled it would ask for further cuts in nonsalary expenses of 5% for 2010-11. On Thursday, the university said it would ask for the 5% cut this year instead. The administrators pledged to preserve financial aid, but said otherwise "no area of expenditure will be immune from close scrutiny." Messrs. Levin and Salovey said most major construction would be halted until donor support could be found or financial markets recovered. They said Yale would also slow the pace of faculty recruitment.

Facing a cash crunch last fall, Harvard has laid off staff, suspended some faculty searches and delayed a major expansion of its campus.

Other wealthy schools, including Stanford University, Princeton University and Massachusetts Institute of Technology, have predicted losses similar to Harvard and Yale's. They all follow an investment model that de-emphasizes traditional stocks and bonds and instead loads up on alternatives unavailable to the average investor.

Yale and Harvard pioneered the approach, arguing they could afford to take big risks, because they were investing for decades, even centuries. Many copied the schools, saying they had found a high-return, low-risk strategy. But Eric Bailey, managing principal of CapTrust Financial Advisors LLC, a Tampa, Fla., firm that advises college endowments, says, "If it looks too good to be true, it probably is."

Mr. Bailey says typical colleges outperformed Harvard last year, because they stuck to a plain-vanilla approach, typically allocating 60% of their holdings to stocks and 40% to bonds. That strategy would have generated a loss of roughly 13% in the year ended June 30. Harvard aims to have only 4% of its investments in U.S. bonds, which were one of the few safe havens over the last year. It has cut by more than half its target for investments in U.S. bonds since 2005.

The University of Pennsylvania's endowment, by contrast, loaded up on Treasury securities in 2008 and reported a more moderate 15.7% decline. In New York City, Cooper Union for the Advancement of Science and Art, which charges no tuition, ratcheted down the risk of its investment portfolio three years ago and expects its endowment to hold steady for the year.

Yale and Harvard say their long-term results justify the strategy. Harvard's endowment remains the largest in higher education. In fact, the $10.9 billion it lost last year is bigger than the 2008 value of the endowments of all but six colleges.

In Thursday's report, Jane Mendillo, Harvard's endowment manager, noted that Harvard achieved an average annual return of 8.9% over 10 years, three times its peers' -- adding $18 billion in value over what would have been earned by a 60%-stock, 40%-bond portfolio.

Ms. Mendillo said the school is better off than it would have been if it had "pursued a more conservative investment strategy over the longer term."

In Thursday's report, Harvard said its private-equity funds, which generally represent about 13% of its endowment model, fell almost 32%. Its real-asset segment, representing nearly a quarter of the endowment, lost 38%. Investments in "absolute return" hedge funds, designed to generate positive results in good times and bad, instead posted a 19% loss.

The report showed Harvard trimmed its endowment's risk profile by raising cash, cutting by $3 billion its future commitments to invest in private-equity and other investment funds, and reducing its real-asset category to 23% from 26% of its model portfolio. Harvard also said the school now aims to hold 2% of its assets in cash. Previously, it targeted a negative-5% cash position, reflecting its use of borrowed money to expand its investments. Ms. Mendillo said endowment managers had learned to better reflect "the risk tolerance of the university."

Ms. Mendillo pledged to manage more of the school's money in-house, giving it readier access to securities to sell for cash. Currently, 70% is farmed out to outside managers. That move could focus more attention on its managers' multimillion-dollar paychecks, which have provoked controversy on campus. Ms. Mendillo said "a substantial number of portfolio managers" had portions of their bonuses, awarded for past years, "clawed back" into the endowment because of poor performance.

Harvard and Yale, like other schools, also signed contracts that committed them to huge future investments in private-equity and other funds at exactly the time they could ill afford them. In Thursday's report, Ms. Mendillo said Harvard cut its "uncalled capital commitments" to $8 billion from $11 billion.

2009 U.S. Open Tennis Schedule: Today and this weekend are the end the US Open. Make sure you watch in high def -- which is often on a different channel. For example, our low def Tennis Channel is 455. Our high def Tennis Channel is 465. There'll be extra tennis today, I'm guessing, since last night was rained out.

Today is the 8th anniversary:

Take a minute to think of the 2,993 people who died. Take a moment to think of the profound changes that day has brought -- from wars in Iraq and Afghanistan to new controls on money transfers to fingerprinting of visitors. The good news is that all the fears about a nuclear bomb in Times Square haven't been realized. We've had eight years of homeland safety.

It's clearly time now to close down the wars in Iraq and Afghanistan. Neither of those wars is worth the life of one more American man or woman. Their safety mission has been accomplished.

Have a great weekend. Stay away from the North East. It's raining cats and dogs.

In 17th century England, houses had thatched roofs - - thick straw-piled high, with no wood underneath. It was the only place for animals to get warm, so all the dogs,
cats and other small animals (mice, bugs) lived in the roof. When it rained, it became slippery and sometimes the animals would slip and fall off the roof. Hence the saying "It's raining cats and dogs."

You finally learned something from this column.

This column is about my personal search for the perfect investment. I don't give investment advice. For that you have to be registered with regulatory authorities, which I am not. I am a reporter and an investor. I make my daily column -- Monday through Friday -- freely available for three reasons: Writing is good for sorting things out in my brain. Second, the column is research for a book I'm writing called "In Search of the Perfect Investment." Third, I encourage my readers to send me their ideas, concerns and experiences. That way we can all learn together. My email address is . You can't click on my email address. You have to re-type it . This protects me from software scanning the Internet for email addresses to spam. I have no role in choosing the Google ads on this site. Thus I cannot endorse, though some look interesting. If you click on a link, Google may send me money. Please note I'm not suggesting you do. That money, if there is any, may help pay Michael's business school tuition. Read more about Google AdSense, click here and here.