In Search of the Perfect Investment

Start with the old adage: You can’t predict anything.

Many gurus are now saying …

We’d had a huge rise. Stocks are up more than 300% (including dividends) since the March 2009 bottom.

So?

Sell some stocks and …

+ Take some cash home. Cash is useful when we have lower stock prices. Coming soon!

+ Rebalance your portfolio back to 60%/40% stocks/bonds.  With the rise in stock prices, your allocation is probably up to 80/20 today.

+ Find something else. What might that be? Wall Street is now in full creative fervor. Private Wealth Management has emerged as Wall Street’s most lucrative business. That typically means creating a fund or product that will tie your client’s money up for as long as possible. That maximizes fees.

Clearly, the best advice is caution. Follow the adage, “When in Doubt, Stay Out.“

A reader and friend, keen for a little more income, sent me  a pitch for the Marketsafe Emerging Currencies CD.

If the currencies appreciate, you benefit. If they don’t, you get your money back.

I’ve seen these before. They tend to work out well for the insiders in the bank or institution, but not for the clients.

Seriously, who wants to bet on this desultory collection of countries — Brazil, Indonesia, India and Turkey. Yuch! China has its charms, but likes to keep its currency depressed, to benefit its export business.  And then there’s the seven times leverage. Figure a $1000 investment. You pony up $125. and borrow $875. What could possibly go wrong?

I’d rather play tennis.

Of course, there are other choices you could pursue. A friend daytrades a handful of stocks whose movement he has studied over several months. Studying charts for months for patterns gives boredom a whole new meaning — unless that’s your schtick. It’s his and he’s good at it. I’d rather play tennis.

Today’s New York Times has a story on a daytrader who’s turned $500,000 into $12 million by daytrading the VIX. The story is called “Day Trading in Wall Street’s Complex `Fear Gauge’ Proliferates.”

The story begins:

Each morning, at the market’s open, Seth M. Golden, a former logistics manager at a Target store, fires up the computer in his home office in northern Florida and does what he has done for years: Put on bets that Wall Street’s index of volatility, the VIX, will keep falling.

It has been a lucrative strategy as the so-called fear gauge has been, outside of the occasional spike, largely fearless – confounding experts by sloping persistently downward and in the process making Mr. Golden a multimillionaire.

“There has been a lot of white noise,” said Mr. Golden last Tuesday on a day that the VIX plummeted more than 10 percent, allowing him to lock in profits from short trades. “You had North Korea, Afghanistan, Trump people resigning. But I was never nervous – so today I just sat back, ate some popcorn and cashed in my profits.”

You can read the full, fascinating story here. 

 As with all things investing, knowledge and study pay.

It’s far too easy to jump in. And far too difficult to get out.

When in doubt, stay out.

Morgan Stanley’s insurers to be hurt by Hurricane Harvey.

Here are the insurers that stand to lose the most from Hurricane Harvey: ALL, TRV, HIG, PGR, and BRKA and BRKB.

These companies will probably drop, then bounce back. I own TRV and BRKA and am sticking with them.

Read more here.

I bought a Canon color printer.

It prints color photos brilliantly. It cost under $100. BUT… paper and toner are eating me alive.

Lesson: Pick a good online printer — e.g. MPIX — and send your photos there. Much cheaper. Less fiddly. Turnaround time is pretty good.

An insanely funny idea.

Valerie Plame wants to buy Twitter and shut down Trump. She’s trying to crowd-source $1 billion. She a bit short. Like nearly $1 billion short.

Don’t Do Stupid.

1. The Hurricane is coming. Time to fly your plane to somewhere, anywhere.

2. She won three-quarters of a billion dollars in the lottery. Time to put your money in a trust, and not tell anyone it was you. But she told the world.

The US Tennis Open started yesterday

You can watch it on all the usual suspects — ESPN, ESPN3, and the Tennis Channel, but mostly on ESPN.

The full TV schedule is here.

You can also download the free app:

It will tell you who’s playing, who played and how much they’re earning.

Roger Federer’s career prize money is $107,780,560. I’m guesssing he’s earned at least that in endorsements from the likes of Nike, Mercedes, Rolex, etc.

Wonderful T-Shirts

Harry and Susan Newton will be sending money to a Houston charity for hurricane relief. We’re looking for the best one. Meantime, the best piece I’ve read on the storm is “Harvey, the Storm That Humans Helped Cause.” The article includes this:

Even before the devastation from Harvey, southeastern Texas was enduring a year unlike any before.

The daily surface temperature of the Gulf of Mexico last winter never dropped below 73 degrees. You can probably guess how many previous times that had happened: Zero.

This sort of heat has a specific effect on storms: Warmer weather causes heavier rainfall. Why? When the seas warm, more moisture evaporates into the air, and when the air warms – which has also been happening in Texas – it can carry more moisture.

The severity of Harvey, in other words, is almost certainly related to climate change.

You can read the full article here.

I’m not writing this blog every day. If you want to keep up to date, sign up with your email address at the top of the left hand column. Or send me an email to Harry at TechnologyInvestor dot com. I’m being cute because I don’t want the trolling computers to grab my address and bombard me with spam. I promise I won’t bombard you. My list is too small to be of interest to a luggage purveyor or whatever.