In Search of the Perfect Investment

Jon Markman of Traders Advantage wrote:

Stocks went full Mario today, ripping higher after the European Central Bank (ECB) announced its first round of American-style quantitative easing at a level and pace — 60 billion euros a month — that was stronger than expected.

George Soros got quoted in MarketWatch last night. The headline was “Hellish” markets make his less bullish.”

Soros says since the crash of 2008, financial markets and international affairs have been closer and closer intertwined, making things hairy.

“This has greatly increased the level of uncertainty, volatility and unpredictability, both in financial markets and international affairs… So the increased interaction between the two is experienced as external shocks by both,” Soros said, speaking at a dinner in Davos yesterday. For example, together, financial sanctions and the collapse of oil prices have caused a financial crisis in Russia. But on their own, neither would trigger that. …

“This has made the job of hedge-fund managers hellishly difficult. Great opportunities mostly missed or experienced as shocks,” says Soros. Owen Li, your excuse-ship has come in.

Still, between his favorite topics of Russia and Ukraine, he also snuck in a market prediction: “The heightened uncertainty and volatility makes me less bullish than the markets because they militate against risk taking and reinforce the lack of investment demand,” Soros says.

MarketWatch continued:

ZeroHedge was also hopping on the “Apocalypse Now” theme: “When credibility in central-bank omnipotence snaps, buckle up. Risk will get re-priced, markets will fall apart, losses will mount, and politicians will seek someone (anyone, dear God, but them) to blame.”

Yes, lots of slow-clapping for the ECB this morning, with Lindsey Group’s Peter Boockvar joining in: “What investors witnessed yesterday was “the final climax in the more than 6 years of historic central-bank action, and thus asset prices are extremely vulnerable, particularly the riskiest kind – stocks – if the underlying economic and underlying fundamentals don’t support current multiples, which I believe they don’t.”

But for now, things look set to fall apart in currencies. And we’ve still got Greek elections to get through before U.S. investors can mind their own business again.

Oil is low. Here’s the chart. Roll your cursor over to get different time frames:

The Euro is at an 11-year low. Russia is a basket case. From the Economist:

In the first two weeks of the year, when Russia was on holiday, the rouble fell by 17.5% against the dollar. Inflation is up into double figures. The price of oil, Russia’s main export, has slid below $50 a barrel, prompting economists to revise their forecasts down. GDP is now expected to contract by between 3% and 5% this year. Russia’s credit rating is moving inexorably towards junk.

 My position is clear: Where else, other than the U.S., is there to invest? The easiest way, for busy people to invest is a simple index fund of the S&P500, like VFIAX.

Which brings me to… Months ago Morningstar gave a very positive rating to a fund called the Fidelity New Milennium. Last night I compared it over the past two years to a simple S&P500 fund — Vanguard’s 500 Index Admiral Shares, VFIAX. Amazing how FMILX fell recently out of bed:

Other large mutual funds have suffered the same fate as FMILX. Check your own over this period. I drew these charts using the latest version of Fidelity’s Active Trader Pro version 10.3. It’s free — even if you have only $100 with them.

Going public soon?

Shake Shack and BOX. Get in on either or both, if you can. Read more about BOX here and here. Read more about Shake Shack here. I’m addicted to their hamburgers. What I call “designer hamburgers.” BOX is coming this morning.

Latest life tips:

+ The flu season is on us with a vengeance. Don’t believe me? Go visit the Emergency Room of your local hospital. Don’t believe me? Google flu deaths. People are dying from the flu. You need a flu shot. And you need to read what the CDC says about how not to get the flu. Click here.

+ Priceline and Hotwire are fine for hotels. Priceline does OK on car rentals. But, maybe better are travel codes which big corporations use to get their car rental discounts. Excerpt:

For a fuller list read this discussion on FatWallet.com.

News from the Middle East.

+ King Abdullah died. There’s an engrossing obituary in the New York Times. in at least two telephone calls he castigated President Obama for encouraging democracy in the Middle East, saying it was dangerous. So far, he’s been right. Click here.

+ Yemen’s government fell. It’s now in the hands of the Houthis. While Yemen is mostly Sunni, the Houthis belong to an offshoot of Shiite Islam known as Zaydism. Yemeni officials and diplomats say the Houthis, now led by Abdul-Malik al-Houthi, 33, are backed by Iran. The Houthis deny that link, but the oldYemeni authorities have seized ships carrying Iranian weapons that they say were being sent to the Houthis. All this worries Saudi Arabia which is overwhelmingly Sunni and hates the Iranians, who are primarily Shiites.

The Australian Tennis Open continues this weekend on The Tennis Channel. Reminding you (and me) gives me a great opportunity to google “Top Australian models.” This morning’s choice:

Doing this research is hard, but someone’s got to do it?

Investing in art

The lawyer says to the wealthy art collector: “I have some good news, and I have some bad news.”

The tycoon replies: “I’ve had an awful day, let’s hear the good news first.”

The lawyer says: “Your wife invested $5,000 in two pictures today that she figures are worth a minimum of $2 million.”

The tycoon replies enthusiastically: “Well done, very good news indeed! You’ve just made my day; now what’s the bad news?”

The lawyer answers: “The pictures are of you screwing your secretary.”

Harry Newton who wonders if JNJ has lost the plot…. But he’s hanging in for now. Have a great weekend. Kiss the spouse and the kids — not if they’ve coughing and sneezing. Stay away from coughers and sneezers. Wash your hands regularly and don’t touch your eyes.