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Some rules on a difficult market

Picking winners is hard in an investing world of no-forgiveness, viz:

WFMYearDown

Twitter

Fortunately I never recommended TWTR and my stop loss rule pulled me out of WFM eons ago. The organic food retailing biz is over.

But good technology hangs in. We’ve done well with stocks like:

goproyeartodate

NikeYeartoDate

 FBYTD

There are two ways to protect yourself against the unpredictable:

1. Buy what makes sense. But protect yourself against the unpredictable, by limiting your exposure. Some say one stock shouldn’t be more than 4% of your portfolio. You should have a rule.

2. Dump the stock if your inviolate stock loss rule hits a 10%. Don’t fall in love with any of your stocks — for whatever reason.

A friend send me this:

During a long, and at times contentious, Senate Armed Services Committee hearing on Wednesday, Chairman of Joint Chiefs of Staff Gen. Martin Dempsey admitted some deep disagreements with the White House over Iran policy. One big argument the chief lost was over lifting sanctions on weapons and ballistic missile shipments to Iran as part of the nuclear deal reached earlier this month. He opposed it, but the provisions made it into the final agreement anyway. He also rejected President Barack Obama’s July 15 statement that, “Without a deal, we risk even more war in the Middle East.” Dempsey flatly told Sen. Joni Ernst (R-Iowa) that “at no time did that come up in our conversation, nor did I make that comment.”

So, buy some defense stocks. This one is the biggest:

MLMTThisYear

What is wrong with Microsoft? The Wall Street Journal’s Walt Mossberg reports:

The near-final build (of Windows 10) I’ve been testing proved surprisingly buggy.

They desperately need a beautiful Windows 10 to arrest the decline in Windows PC sales… And yet, they release one that’s buggy.

As I wrote earlier this week, do NOT go to Windows 10. If you have Windows 7 and it works for you — it does for me — stick with it.

The Microsoft nonsense continues.

Windows Secrets is an old-time newsletter. Their latest words: “Windows Secrets does not recommend immediately installing Win10 on your primary PCs.

My favorite bit of their Windows Secrets latest newsletter:

somethinghappened

It is imperative that you check today that your PC will not automatically “upgrade” you to Windows 10. If you’re running Windows 8 (God forbid), you may be in danger. If you’re running a recently-upgraded version of Windows 7, you may be in danger. I have turned off automatic updates on all my machines.

Microsoft is nuts. After all these years, how could it release yet another buggy version of Windows. Surely six months more of testing is not too much to ask?

Do not buy Microsoft stock…. Think about this: They’re giving away Windows 10 for free. How do you make money on that?

Sell Microsoft short?

Q: What’s wrong with Venezuela?

A: Most everything.

From the Economist (this is really sad):

As the government prints money, hyperinflation looms

THIS month Venezuela’s currency, the bolívar, passed a melancholy milestone: its value on the black market is now a hundredth of what it is supposed to be at the main official exchange rate. The government insists that there are 6.3 bolívares to the dollar, but it will cost you 630 to buy one from a willing seller. As the country’s stock of hard currency shrinks and the central bank prints money to plug a huge budget deficit, the bolívar’s collapse is accelerating (see chart). It is worth a thousandth of what it was in 1999, when Hugo Chávez, Venezuela’s late autocrat, came to power.

The country may be on the verge of hyperinflation. Most economists reckon that the inflation rate is already 120% a year (the central bank stopped publishing price data, so no one is sure). Some expect it to reach 200% by the end of 2015.

The government uses a labyrinthine system of price and exchange controls to shield Venezuelans from soaring prices. But these make matters worse. Price ceilings have devastated local production; factories are operating at half-capacity and more than two-thirds of food is imported. Affordable goods are in short supply.

With a dollar’s-worth of bolívares, you can in theory buy 33kg (73 pounds) of maize flour, the national staple. But only if you can find a supermarket that has some and you are willing to queue for hours (repeatedly, since flour is rationed). For the same price, consumers could fill the tank of the family car 140 times with subsidised petrol. That amount of fuel is worth $5,000 across the border with Colombia. Guess what? Enterprising Venezuelans smuggle it across.

Venezuelans check prices on the Twitter account of DolarToday, a Miami-based outfit which publishes updates based on transactions in the Colombian border town of Cúcuta. This is where Colombians go to exchange pesos for bolívares, often to buy cheap fuel and other price-controlled goods in Venezuela for smuggling across the border. Transactions are few; the dollar rate is calculated indirectly, from the value of the Colombian peso. The result is erratic, but more realistic than the three official rates. Although it is illegal, many Venezuelan retailers mark prices based on deals struck in the Colombian backwater.

The government of Nicolás Maduro, Chávez’s hapless heir, calls the website a conspiracy to sabotage the economy and has tried repeatedly to block it. This month Elías Jaua, the influential “minister of communes”, said the government would ask the United States to arrest and extradite the “fugitive bankers” he thinks are behind it. Venezuela’s banking and stockbrokers’ associations condemned the “manipulation” of the exchange rate and called on Venezuelans to ignore all unofficial rates-and presumably also the law of gravity.

The “spiral of inflation and poverty” will not be resolved by asking Venezuelans to undertake “an act of faith”, wrote Angel Alayón, an economist and blogger. That will happen only when Mr Maduro reforms the economy by reducing the deficit, overhauling the state-owned oil company and eventually dismantling exchange controls. With parliamentary elections due in December, and the government trailing in the polls, he is likely to balk at the short-term pain such measures would cause. He is caught between a left-wing faction, which thinks that the economy needs still more controls, and a military-based mafia that profits from arbitrage under the current rigged system. Poor Venezuela.

Totally tasteless. But funny.
So, I was walking through the mall in Portland and I saw that there was a Muslim bookstore. I was wondering what exactly was in a Muslim bookstore so I went in.

As I was wandering around taking a look, the clerk stopped me and asked if he could help me?

“Do you have a copy of Donald Trump’s book on his U.S. Immigration Policy regarding Muslims and illegal Mexicans?”

The clerk said, “F— off, get out and stay out!”

I said, “Yes, that’s the one. Do you have it in paperback?”

HarryNewton
Harry Newton who wonders whatever happened to salesmanship. Why is it so hard to buy something these days? “Salesmen” don’t return phone calls. They don’t answer emails. They don’t follow up. I’m guessing the economy is booming and they don’t need my business?

2 Comments

  1. Big Fan says:

    Walt and Kara left the Wall Street Journal 2 years ago to form their own company ReCode.

  2. pahowley says:

    It’s fun to watch Venezuela going down the tubes. Leftist dictatorships get what they deserve, usually sooner than later. I’m enjoying every minute of it. And of course, our great president treats them with loving respect. What BS.