In Search of the Perfect Investment

I sold BestBuy (BBY) and Facebook (FB) short yesterday. They’re not big positions. My biggest equity positions remain long in mortgage REITs — AGNC, ARR. MITT, NLY and TWO. My biggest positions are in muni bonds. My most successful short is RadioShack. I tried to short Accretive Health, but no online service wants to sell me the short. Which brings me to lesson number one. You need several online accounts. Fidelity is miserable at shorting. It won’t let you short virtually anything. TDAmeritrade is slightly better. I should open an account elsewhere? Any ideas?

My old commodities fund is up 1.04% year to date. But oil is up much more. Another reason I don’t like funds. You get average performance. And it’s usually awful.

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The mice got to our AC chiller units. This is our super technician Rob Remler (from Dells Plumbing, Heating & AC in Ghent, NY) having opened our three AC chiller units.

This is what he vacuumed out — mice nests and mice poop. No babies. No mice. They nest in winter and vamoose in Spring. they chew wires and stop things like fans from moving.

Everyone who lives in the suburbs or the country has a problem with mice. Talking about solutions to the mice problem is favorite cocktail fare up my way. Some “solutions:”

+ Seal all holes, no matter how small. Use a sealant putty. Be zealous. Seal everything, no matter how small.

+ Stuff all equipment with Bounce dryer sheets, the smellier the better. Use them liberally. RV owners use them to keep the critters out of motors and living units, reports one reader called Jim. He says they’ve worked for him for five years.

+ Ring AC units, and all cars and other vehicles parked in garages with zillions of baited mousetraps. Peanut butter works best.

+ Don’t bother with the high-frequency sound devices that (allegedly) scare off the mice. They don’t. Trust me on this one. I have evidence.

Rob replaced the mice-chewed wires. Bingo, the units worked. One has a wonky control board he’s replacing. Rob is good and we were lucky.

There is real joy in working with professionals, like Rob. The pity is there are so few of them — as evidenced by the semi-awful original installation of our AC system — no filters in two of the units, no sealing of the mice-friendly holes, etc.

This is for my son , Michael, and my favorite daughter in law, Anne. Guess where they live?

Top nine embarrassing comments allegedly made by NBC sports commentators during the Summer Olympics:

1. Weightlifting commentator: “This is Gregoriava from Bulgaria . I saw her snatch this morning during her warm up and it was amazing.”

2. Dressage commentator: “This is really a lovely horse and I speak from personal experience since I once mounted her mother.”

3. Paul Hamm, Gymnast: “I owe a lot to my parents, especially my mother and father.”

4. Boxing Analyst: “Sure there have been injuries, and even some deaths in boxing, but none of them really that serious.”

5. Softball announcer: “If history repeats itself, I should think we can expect the same thing again.”

6. Basketball analyst: “He dribbles a lot and the opposition doesn’t like it. In fact you can see it all over their faces.”

7. At the rowing medal ceremony: “Ah, isn’t that nice, the wife of the IOC president is hugging the cox of the British crew.”

8. Soccer commentator: “Julian Dicks is everywhere. It’s like they’ve got eleven Dicks on the field.”

9. Tennis commentator: “One of the reasons Andy is playing so well is that, before the final round, his wife takes out his balls and kisses them… Oh my God, what have I just said?”

Harry Newton who hasn’t figured how feels about the November line-up, yet. Our sluggish economy clearly needs a push. The only entity that can push is the Federal Government. It has run its monetary tools. The Fed can’t reduce interest rates any lower. And the Federal Government can’t spend stimulus money because all legislation is blocked by gridlock in Congress. And government is firing people to cut deficits, further hurting the job situation. I don’t believe that the economy is being held back because of regulations or the prospect of higher taxes. Businessmen start new businesses and expand old ones when they  see opportunity. There are opportunities today. I see half a dozen new startup ideas a week. I don’t throw money at them with the reckless abandon of 2004-2005. I’m more cautious. I guess that goes for everyone else, who wants to preserve their remaining  few precious shekels in the bank. However, I am putting money into new ideas. And some will prosper and make jobs. For now, the sluggishness is not fear of new taxes, concern over the Federal deficit, nor worry about what Romney or Obama might or might not do. It’s that simple thing called caution. It will ebb over time. Of course, if I knew what Obama and Romney had precisely in mind, I’d feel a little happier. Vague promises and strident railings against your opponent are what today’s politics are about. I live with the vagueness, but I keep searching for those new ideas, new startups and handsome listed securities — there are some, not many.

Today the New York Times’ Andrew Ross Sorkin writes:

Everything Wall St. Should Know About Ryan
He could be mistaken for a Wall Street banker. Or perhaps a hedge fund manager. Or even a managing director at a private equity firm, like Bain Capital.

Paul Ryan, with his clean-cut Brooks Brothers looks and wonky obsession with spreadsheets, could be just the archetype of a Wall Streeter.

Mitt Romney’s new running mate even trades stocks in his spare time. He’s a fan of the nation’s blue chips: among the stocks he owns are Apple, Exxon Mobil, General Electric, I.B.M., Procter & Gamble, Wells Fargo, Google, McDonald’s, Nike and Berkshire Hathaway, according to his latest disclosure filing.

Mr. Ryan is a disciple of Ayn Rand and Milton Friedman, two figures long associated with free markets.

And he has the support of some powerful backers in finance: his top donors include employees of Wells Fargo, UBS, Goldman Sachs and Bank of America. For his 2012 Congressional race, he raised about $179,000 from securities professionals (not a large sum, but certainly the single largest sector that donated money to his campaign).

One of the biggest contributors to his political action committee is from Paul Singer’s hedge fund, Elliott Management. And Dan Senor, recently an investment adviser to Elliott Management, was just named Mr. Romney’s new adviser. But what does Mr. Ryan think about Wall Street? His views may surprise you.

Mr. Ryan, who voted in 1999 to repeal parts of the Glass-Steagall Act, allowing commercial and investment banks to merge, now appears to be in the same change-of-heart camp as Sandy Weill, the former chief executive of Citigroup, who recently declared that the banks should be broken up.

“We should make sure you can’t get too big where you’re going to become too big to fail and trigger a bailout,” Mr. Ryan said during a meeting with constituents in May in Wisconsin. “If you’re a bank and you want to operate like some nonbank entity like a hedge fund, then don’t be a bank. Don’t let banks use their customers’ money to do anything other than traditional banking.”

With a view like that, Mr. Ryan faces a challenge winning the support of the likes of Jamie Dimon, the chairman of JPMorgan Chase and a vocal supporter of the big bank model. (Mr. Dimon, a onetime supporter of President Obama, had recently been hinting he could vote for Mr. Romney, regularly calling himself “barely a Democrat.”)

Mr. Ryan is also an ardent critic of the Dodd-Frank Act, the postcrisis Wall Street legislation. But, oddly enough, the provision he dislikes the most is the one that has the greatest support of the industry: a tool known as resolution authority, which gives the government the authority to dismantle a failing bank without wreaking havoc on the rest of the system. It was a provision that was supported by the former Republican Treasury Secretary Henry M. Paulson Jr. “We would have loved to have something like this for Lehman Brothers. There’s no doubt about it,” Mr. Paulson told me two years ago. The provision was also supported almost universally by Wall Street as a way to end the “too big to fail” problem.

Mr. Ryan’s 2013 budget proposal sought to remove the resolution authority provision saying, “While the authors of the Dodd-Frank Act went to great lengths to denounce bailouts, this law only sustains them.”

It is worth noting that Mr. Ryan voted in favor of the bank bailout in 2008, known as TARP or Troubled Asset Relief Program. Ahead of the vote, he encouraged his colleagues in the House to vote in favor of it to avoid “this Wall Street problem infecting Main Street.”

He added: “This bill offends my principles, but I’m going to vote for this bill in order to preserve my principles, in order to preserve this free enterprise system. We’re in this moment and if we fail to do the right thing, heaven help us.”

While Mr. Ryan may appear to be a friend of business, he doesn’t agree with the industry’s biggest talking point these days, the Simpson-Bowles deficit reduction plan. He was a member of the commission and voted it down, arguing that it did not go far enough in overhauling health care entitlements.

He later criticized President Obama for not supporting it. That prompted Gene Sperling, director of the National Economic Council under President Obama, to retort on CNN:

“Paul Ryan, talking about walking away from a balanced plan like Bowles-Simpson is, I don’t know, somewhere between laughable and a new definition for chutzpah.”

Oddly enough, Erskine Bowles, a Democrat, praised Mr. Ryan’s proposed budget in a speech in 2011, saying, “I always thought that I was O.K. with arithmetic, but this guy can run circles around me.”

Mr. Ryan also bucked the conventional Wall Street wisdom on how to deal with the debt ceiling. Many investment managers are wringing their hands about the uncertainty that the debate over the “fiscal cliff” is creating for markets. Last year, three months before the debt ceiling debate reached a peak, Mr. Ryan said that he was prepared to let the government default on its debt for at least several days if it would force Democrats to accept deeper cuts.

“They all say, `Whatever you do, make sure you get real spending cuts,’ ” Mr. Ryan told CNBC about the way investors, including the hedge fund manager Stanley Druckenmiller, wanted him to vote. “Because you want to make sure that the bondholder has the confidence that the government’s going to be able to pay them. You’re putting the government in a better position to pay them.”

James Pethokoukis, a columnist for the American Enterprise Institute, which has traditionally supported Mr. Ryan, sent this Twitter message in April. “I hear what G.O.P. support there was for Obama/Bowles/Simpson debt panel plan is collapsing thanks to Ryan Plan.”

So while financiers may cheer Mr. Ryan’s pro-market policies, they may want to reassess just what those policies mean for their businesses.