Skip to content
 

Dumb luck. The dreadful K1 season, and lessons from dumb investments

I’m not shy. Yesterday was magnificent. I had no idea why the market bounced up so strongly.

I had nothing to do with it. I sat idly by and prayed it didn’t mess up. Which it didn’t.

Here’s the last five days. It’s fun playing with these charts. When you just chart the S&P 500, it looks great:

spx5daysagain

But when you add in our favorite Square, the gain in the S&P 500 looks puny — but not Square. The result is super great.

SPXversSQ

I’m not making any changes to my portfolio. You can see it in the right hand column.

Investments that go to zero

If you use my 10% to 15% stop loss rule you’ll never lose all your money in the stockmarket.

Sadly, stop loss rules don’t work with funds and syndications.

It’s now K1 time. I’m amazed how many of my erstwhile brilliant adventures went to zero. There was the biotech fund. There was the real estate fund that invested in over-priced, over-leveraged office buildings. There was the residential real estate development in the California desert.

And then there were the various individual ventures — a water bottling company (to compete with Avion), a gaming company, a mobile promotions company, a restaurant company.

They all ran out of money. Many could have made it, had they had the money.

As I get older, I realize that:

+ Ideas for new businesses are plentiful.

+ Management skills to run them are scarce.

+ Nobody listens, especially entrepreneurs whose company I put money into.

+ Your own venture makes sense. It’s got a higher chance of success. It’s your money. You’ll work harder and listen attentively.

+ For every $1 you spend on engineering, you need to spend $10 on marketing. Most people underestimate marketing.

From Quora.com, which I’m currently fascinated by

What are some harsh lessons every person should learn?

Answered by Srinath Nalluri, Research Assistant at Solar Energy Research Institute of Singapore

+ One wrong word from you can ruin a relationship you had built for years.

+ You may not be the best friend of your best friend.

+ Any human will give more importance to the person whom he loves compared to the person who loves him.

+ You will be replaced no matter who you are.

+ My favorite: There is no eternal happiness. All your life you will keep trying for one happiness after another. In other words, there will never be complete satisfaction.

+ The more intelligent you are, the fewer people you will have to interact with.

+ No matter how well you prove it, people around you will believe what they want to believe.

North Korea is not stupid.

The Australian news network, ABC, investigated how North Korea gets its money.

They published a piece on “How businesses from Europe to Asia fund Kim Jong-un’s lavish lifestyle.” It’s called “The Royal Economy.”

It exists under plain sight of all the sanctions on North Korea. Click here.

My favorite Paris hotel

This is the de Crillon on the Place de la Concorde at the bottom of the Champs-Élysées.

DeCrillon3

The new owners just spent $300 million on on it. It’s totally over the top:

DeCrillon2

DeCrillon1

I spent a romantic weekend there in the late 1990s with Susan. It was incredible. I remember three things:

+ The ironed sheets on the bed. That’s the one luxury no one should live without.

+ The fresh roses in the room that were changed every few hours.

+ The lady who sat outside our door and catered to our every whim. Susan actually complained to me that they delivered her breakfast too fast (under five minutes). She wasn’t ready.

We stayed in Suite 9. I was on  lecture tour and had an expense account. Ah. The good old days.

If you book the connecting Les Grands Appartements suites and salon designed by Karl Lagerfeld, you’ll pay $38,200 a night, breakfast not included.

If you book the Marie-Antoinette Suite,  the most stunning feature is the 400-square-foot terrace overlooking the Place de la Concorde—the very spot where the young queen was guillotined in 1793.

If that doesn’t float your boat, nothing will.

Get rich by not flying

Delta recently paid a nice lady $4,000 to give up her seat on their overbooked plane. For the full story, click here.

Buying something online?

I’m amazed at the discounts companies like LLBean, Eddie Bauer and Lands End are offering. And their stuff is good. Ways to get discounts:

+ Google “Savings coupon from XYZ Corp.” Amazing how often this dumb technique works.

+ Sign for their email list.

+ Call them on the phone. Email them.

Sloane Stephens was chill about her winnings –– until she received her check.

SloaneStevens

She played magnificently. I’m a fan.

Players received a total of $50.4 million in prize money —  the largest purse in tennis history.

May your children grow up to be tennis players.

This is wonderful.

Kim Jong-un announced in a news conference that North Korea would be sending a man to the sun within ten years!

A reporter said: “But the sun is very hot. How can your man land on the sun?”

There was a stunned silence. Nobody knew how to react.

Then Kim Jong-un confidently answered “We will land at night”.

The audience broke out in thunderous applause !

Back in the White House, Donald Trump and his entourage were watching the news conference on TV.

When Trump heard what Kim had said, he sneered – “What an idiot. There is no sun at night time !”

His cabinet broke up in thunderous applause !!

HarryNewton
Harry Newton, who notes with horror that they’re still selling Prevagen — that pill that improves your brain, courtesy jellyfish. Pevagen is classic snake oil. It doesn’t improve your brain and we have no idea what its long-term effects are. The dietary supplement industry — of which Prevagen is one product — can sell basically anything (it’s specifically not regulated) — though virtually everything the industry sells does not improve your health, and always hurts your pocketbook.

  • TomFromVa

    I think the market went up because:
    a. we didnt bomb North Korea
    b. they didnt bomb us
    c. the hurricane wasnt as bad as feared
    d. they passed a big rebuilding appropriation – lots of jobs