In Search of the Perfect Investment

Good news:

+ Unemployment is down. Lowest since May 2007. Employment is up.

+ Joe Terranova of Virtus Investment Partners reported on CNBC this morning:

Of the 405 companies in the S&P 500 who have reported so far:

+ 8.2% revenue growth.

+ 15% EPS growth.

+ Profit margins up to 9.05%

Said Joe “This is what matters to the market. Pricing power. Revenue growth. Companies have it.”

Don’t believe all the good news? This chart gives pause:

Berkshire Hathaway’s annual meeting is tomorrow.

It will be broadcast live on Yahoo Finance and reported on Business Insider. Buffett, Munger and Bill Gates will be on CNBC on Monday morning from 6:00 AM to 9:00 AM. They’re among the smartest guys around.

Don’t do stupid, this weekend, or ever

What could possibly go wrong?

Understanding Engineers #1

Two engineering students were biking across a university campus when one said, “Where did you get such a great bike?”

The second engineer replied, “Well, I was walking along yesterday, minding my own business, when a beautiful woman rode up on this bike, threw it to the ground, took off all her clothes and said, “Take what you want.”

The first engineer nodded approvingly and said, “Good choice: The clothes probably wouldn’t have fit you anyway.”

Understanding Engineers #2

To the optimist, the glass is half-full. To the pessimist, the glass is half-empty. To the engineer, the glass is twice as big as it needs to be.

Yesterday I plagiarized, according to one reader

I corrected my error on this web site — but only after I’d emailed out my egregious plagiarism. Here’s the full, attributed, piece. It’s a neat story:

How to negotiate, New York style.

This delicious piece comes from Art Cashin’s Market Commentary of May 4, 2016:

On this day in 1626, a Dutch explorer stepped out of a long-boat onto an island teeming with rich green vegetation and local fauna. The explorer was Peter Minuit and the island was Manhattan. Three days later Minuit would begin a 300 year tradition in Gotham by trying to buy wholesale. He paid a group of Indians about $24 (or 60 Dutch Guilders) in shiny trinkets for the whole island.

Little did Peter realize that the Indians were starting another New York tradition – selling something they didn’t own. Rather than being the locals, the group that sold the island was a tribe from Long Island called the Canarsees. They were only in Manhattan on their way to the huge and rich oyster beds which lay where the Statue of Liberty now stands. And the chief of the Canarsees, one Seyseys, was not going to let a simple thing like not owning the property get in the way of a good sale. So he took his loot and went home – – leaving Minuit to renegotiate with the Weckquaesgeeks, the tribe that really owned the joint. (Actually a subdivision of the Weekquaesgeek tribe called “the Manhattes”.) Chronicles do not say if the Canarsees introduced Minuit to another New York tradition involving a cardboard box and three bent playing cards.

To celebrate have a Manhattan (a drink) and ponder the fact that if the Indians had invested the trinkets at a nominal compound rate, they would now have ten times more money than Donald Trump regardless of which source you cited. Invested at 6% compound interest the value today of the $24 would be approximately $120 billion dollars today.

Harry Newton, who’s excited the House passed Trumpcare. I’ll soon enjoy huge tax savings. Pity about the collateral damage. But, heh, I’m healthy, for now. Good luck with the Senate.