In Search of the Perfect Investment

Diversification is the only free lunch. That’s an old maxim.

Diversification limits your risks, but limits your returns.

Concentration maximizes your returns, but also your agita.

This morning one stock account of mine (at Fidelity) was up $20,000. Now it’s lunchtime and it’s down $5,000. That’s because Square, Alibaba, Netflix, Facebook and Amazon are having a bad day. I’m depressed. I feel agita.

That will undoubtedly all change by 4 PM… I hope.

Diversification and allocation are intertwined.

The ultimate diversification is an index fund. Look at this 5-year chart. It shows Amazon versus the Dow Jones and S&P500. Big difference!

The lesson here: If you really, really believe in a stock, put your money in. Presently, I have outside positions in BRKA, AMZN, SQ, FB, NFLX, GOOGL, BABA, MSFT, UNH and TSLA. I believe in these companies and their ultra-talented CEOs.

Sunk cost

If you ask your marketing guy what the problem is, he’ll say it’s a marketing problem.

If you ask your finance guy, he’ll say it’s a financial problem.

If you ask your generals what the problem is… well you get the idea. It’s a military problem.

I started Technology Investor magazine at the end of 1999. The following Spring the market for tech stocks collapsed and nobody wanted to buy ads in my gorgeous new magazine. I had budgeted $4 million for the startup. I spent the $4 million and closed the magazine in November 2000. My competitors kept their magazines open for years. One lost $15 million before they figured it was all over and they closed down.

Sunk cost is what you’ve put into the venture. It’s irrelevant going forward. What counts is what the future for your venture looks like. Is it worth another dollar? Will you get that dollar back and then some?

Which brings me to Afghanistan. It’s been nearly 17 years, the longest war in American history.

I have one leg up on our President. I’ve actually been to Afghanistan.

We’re about to invest more money and more lives. Ask the generals and they’ll tell you why.

The ultimate irony is that now is the perfect time to re-start Technology Investor magazine. Everyone is enamored with the future of technology –the cloud, AI (artificial intelligence) , AR (artificial reality), driverless cars, solar, batteries, drones, and all things digital.

Please don’t waste your money on Prevagen.

This is an image from a heavily-promoted advertisement for Prevagen, which  promises to help your brain. The image is a jellyfish.

Prevagen is not a drug. It’s a dietary supplement. Like all dietary supplements, it’s never been tested by the FDA — the Food and Drug Administration — as to whether it actually works. There are reports of not-nice side effects.

I wrote this warning because I was super impressed by the video’s quality and persuasiveness. Snake oil is always well-marketed. I’m always impressed.

Great travel gadgets.

This is the $249 Bose QuietComfort 20 Acoustic Noise Cancelling Headphones. It has a microphone. These Bose headphones are really good for making phone calls in noisy places. Much better than the $29 Apple earphones, which come with your iPhone and are not noise-cancelling. Get the Bose ones here.

This is the $26 Anker PowerCore 10000, a power external battery for your cell phone. You need this because apps like WAZE are running your iPhone batteries down too quickly. I bought one for Susan because she was always complaining her iPhone 7 was dying. Click here.

More stuff 

+ Our Whirlpool washing machine stopped. It gave an F1 error message. Whirlpool said “Unplug it. Wait two minutes. Plug it in again.” Bingo it worked. Everything with a computer needs rebooting. And everything today has a computer.

+ You can turn off your Check Engine dashboard light with black electrician tape. Or you can clean your gas cap and screw it in harder.

+ On backing your laptop, Richard Harrison writes

Marriage

+ She said… “What do you mean by coming home half drunk?”
He said… “It’s not my fault…I ran out of money.”

+ He said… “Since I first laid eyes on you, I’ve wanted to make love to you in the worst way.”
She said… “Well, you succeeded.”

+ Priest said… “I don’t think you will ever find another man like your late husband.”
She said…”Who’s gonna look?”

+ He said… “Let’s go out and have some fun tonight.”
She said… “Okay, but if you get home before I do, leave the hallway light on.”

The U.S. Tennis Open begins Monday August 28 for paying patrons.

Until then, you can watch qualifiers for free.

The BIG tennis story is how much Roger Federer has improved. This weekend the New York Times is running this cover story.

A couple of quotes from the long, adoring piece:

+ None of this might have mattered, however, if not for Federer’s unquenchable optimism. The international talent pool on the men’s tour is so deep that everyone in the Top 100 qualifies as an athletic freak. What separates the long-lasting stars from the rest is maintaining a good attitude. Set by set, game by game, sometimes even point by point, matches are strewn with frustrations – break points and game points frittered away, set and match points squandered, matches that seemed over all but ripped from your grip – and somehow you have to see the big picture, recognize how good your life is compared with the average civilian’s and not go dark.

+ For Wilander, it was simply a pragmatic tactical decision. “Against the top players, you can’t play the game you want to play,” he says. “You have to play the game they don’t like.”

Read the New York Times piece here.

Harry Newton, who is celebrating Sophie’s third birthday today. Time flies. Why it has been only three years since she was born!

But that’s not all. There’s more. Here’s Eleanor about to have her fourth birthday.

I am in the market for a small white pill which can keep them this age forever. I’ll even accept a pill made from the innards of a poisonous jellyfish. I’m a sucker for snake oil. Have a great weekend. I will.