In Search of the Perfect Investment

More birthday presents:

From Cliff:

1). Apple
2). TFR
3). Apple

Cliff, what’s TFR?

From Bill:

+ First Republic Bank — Hdq.  San Francisco- also two offices in New York.  Branches in Massachusetts, Connecticut. Founded in 1985, First Republic Bank and it’s subsidiaries provide private banking, private business banking and private wealth management services. California. Stock symbol.-FRC

 + AES Corporation  — Provides affordable and reliable energy to consumers around the world through it’s distribution businesses and thermal and renewable power generation facilities. In 21 Countries across five continents. 37 GW of Generation Capacity. $16 Billion in 2013 annual revenue. Own and manage $40 Billion in total assets. Global workforce of approx. 22,000 people. Stock symbol.  AES.

From another Bill:

+ SFTBY. Softbank.

+ GLD. SPDR Gold Trust (ETF). Personally I prefer SGOL. — Harry.

+ PPLT. ETFS Physical Platinum Shares.

+ GOOGL.

From Ed:

+ SAN (Banco Santander, S.A. (SAN), SLW ((Silver Wheaton Corp.) and MZOR (Mazor Robotics).  Check ’em out.  They all will rise over the next 1-2 years.  They are a play on Europe’s recovery and a recovery of gold and silver plus one high tech neurosurgical device that is on the cutting edge. Have a great weekend.  I’ll be flyfishing in Idaho for 8 days starting this Saturday.

From Deutsche Bank this morning: (One of my favorite stocks):

The Blackstone Group (Buy, CP: $33.54, TP: $40.00, BX.N, Brian Bedell)
BX: Key Takeaways from Investor Day
Reiterate BX as Top Pick after Investor Day
After presentations by several business unit leaders at Blackstone’s investor day, we continue to view BX as best positioned among the alternative asset managers for stronger growth in distributable earnings (DE) over 2014-15 as well as unit price outperformance. Despite material unit outperformance vs. peers YTD (up 6.5% vs. -8.4% for median large-cap alternative manager), BX P/E on our 2015 DE estimate is just 10.7x, only a slight premium to median 10.3x P/E for the group.

Maintaining strong growth forecasts
While we are not changing estimates as a result of the presentations, we reaffirm our view that BX should have the strongest growth in DE/unit vs. peers in 2014 (at 61% vs. 14% group median) and 2015 (at 25% vs. 8% for group median). We also see more upside potential to our BX estimates than downside risk given stronger recent performance in equity market and ample capacity for realizations in both near- and long-term, reaffirmed by several presenters. We also continue to expect BCP V to reach carry in 3Q14 (and we believe further progress has been made in 2Q so far) and thus could be a positive catalyst upon either 2Q earnings conf call or 3Q reported results.

Key positive takeaways from the presentations
We note the following key positive takeaways: 1) Head of Real Estate Jon Gray stated that the pace of realizations in RE funds will continue to accelerate and there remains plenty of compelling deployment opportunities, while the RE business should continue to grow upon strong fundraising, 2) LP allocations to private equity & debt should continue to increase, 3) the retail (mostly HNW) opportunity is substantial (2-3% ‘retail’ allocation to alts) and BX outlined good traction in flows (nearly 15% of 2013 BX inflows from ‘retail’); and distribution strategy with large financial advisory firms, 4) strong performance across most BAAM investments plus new initiatives should continue to enhance growth in recurring fees, as well as incentive revenue, and 5) BX’ leadership positions in key businesses (real estate, private equity, private credit, hedge fund advisory) along with greater diversification vs. peers remain substantial positives.

A few areas of caution
Negative takeaways from the day in our view, were: 1) Head of Private Equity Joe Baratta was especially cautious on high market valuations that were making deployment more challenging & high valuations in certain real estate areas & credit were also cited by Jon Gray & Bennett Goodman, and 2) the political/regulatory backdrop remains uncertain in some areas, though mgmt believes BX is well-positioned amid recent concerns around monitoring fees.

Reiterate Buy Rating & $40 price target
We think BX will trade at 13x 2015DE of $3.12, driving our $40 PT. Risks are: 1) a global economic slowdown, 2) a prolonged equity market correction, 3) a significant drop in real estate values, & 4) a major slowdown in fund raising.

 Things I learned yesterday

1. DSL works on thin copper wire that was designed for voice 100+ years ago. The wire is on poles and underground. It gets affected by wear, weather, etc.  My DSL line sounded like bacon frying. We changed the pairs from the telephone company to me and, bingo:

But when I turned on a second computer’s browser, the speed dropped to:

When I turned off the browser the speed returned to:

In short, DSL  divvies up the speed.

Some phone companies have levels of DSL — normal, premium, etc. They won’t give you the faster speed if you live too far away — unless you beg.

I begged and I’m much faster now. Before I was topping out at four megs down. The downside to this is ultra-hot weather which causes the copper wires to expand, get thinner and drop my new speedy connection. It’s not hot yet.

The downside to DSL is the miserable slow upload speed — awful for sending photos to my favorite photo site, Phanfare.

If I lived in Kansas City, Austin or Provo, I could get Google Fiber, which is what the Internet should be:

That’s 98.65 times as fast as I’m getting up here in the boonies, and 16 times as fast as I get in New York City on Verizon FiOS.

The faster the better. As the speed increases, your world improves. You can do more, enjoy more, work better. Trust me on this one. Call your provider and see if they can boost your speed. See if they will give you a faster modem. The older ones won’t work on newer faster speeds.

2. Always get the cell phone number and email address of any technician who works on anything of yours.

3. Get yourself a new email address every six months. Use it for your online buys. Then kill it. Your brain cannot afford life-long spam.

4. Don’t give your phone number to anyone — except your bank. You don’t need the surveys, the free reports, the magazine subscriptions, the ballet seats, etc. You do need peace and quiet.

5. Granddaughter Eleanor’s sleep habits were destroying her parents’ sanity until they discovered:

Get  it from Amazon. It will put your kid to sleep — but not you. It was prime dinner-time conversation last night. The book is magic. Click here.

6. I sent bank wires from Fidelity and JPMorgan Chase yesterday. Boy, what a pleasure. This is the way banking is supposed to be. Remember the old days? You had to schlepp to the bank, fill in paperwork, correct typos in the printout, sign more paperwork and finally half an hour later, your wire went out. No more. Now five minutes on line. And it’s done. It’s magic.

7. Learn to say NO. Practice in front of a mirror this weekend. Never give a reason. If you do, you’ll start an endless unpleasant discussion.

Ramblings of a Retired Mind

+ I spent a fortune on deodorant before I realized that people didn’t like me anyway.

+ There’s a fitness movie for folks my age. They call it ‘Pumping Rust.’

+ I’ve contracted the dreaded furniture disease. My chest has fallen into my drawers.

+ When people see a cat’s litter box, they ask, ‘Oh, have you got a cat?’ I reply. No, it’s for company!’

+ The easiest way to find something lost around the house is to buy a replacement.

+ If you can smile when things go wrong, you have someone in mind to blame.

+ He who hesitates is right.

Harry Newton who  is amazed at how beautifully we messed Iraq and Afghanistan up. I bet Iraq’s new boss will be far worse than Saddam Hussein. What do you figure — another couple of weeks before Islamic State of Iraq and al-Sham (known as ISIS) takes over Iraq (except Kurdistan). The ISIS guys are ruthless, disciplined fighters and ultra-efficient businessmen. They keep the oil flowing in places they take over and use the money they get from selling it.

This weekend I go through all my stock recommendation birthday presents. I report back on Monday with my favorites. This is a big job. All my readers — thank you — have done a sterling job sending their favorites. If you didn’t already, there’s still time. Send them today. To see previous reader recommendations go back to the columns of the last few days. Click here, and here and here. See you Monday.