In Search of the Perfect Investment

Ten years after the collapse of Lehman Bros, the Economist ran a cover story:

Their conclusion: “The system is safer. But the right lessons have not all been fixed.”

Two areas not addressed: Dollar loans to emerging countries, many of which will default. Apparently the number is as high as $25 trillion between now and 2025. There’s also loans denominated in Euros. Business Insider had a piece: Emerging markets are about to suffer the consequences of dollar-denominated debt binges. Click here. Think Turkey and Argentina. But there are many others. I’ve written often about staying away from overseas with your hard-earned investments. Don’t be tempted by high interest rates.

The second area that has me worried is Trump’s escalating trade war, which increasingly seems purposeless. I’m sanguine on this one, since I think much will be “solved” by the November elections. The Republicans needs to keep the House and Trump knows it. Trade wars are not good for business or jobs.

Despite being worried by a repeat of the 1998 Russian Crisis with the dollar loans emerging countries, I’m not panicking.

Read the Economist’s two pieces: Here and Here.

I made a rule eons ago:

Sell when the founder leaves. Look what’s happening with Alibaba.

It’s bounced a couple of points since I did the chart earlier this morning.

Nike’s controversial ad

From John F., a reader:

When I worked in NY theater our Pr guy used to tell me. “It doesn’t matter what they say about you as long as they spell your name right”. He got me some silly placements in the gossip columns even though I was a lowly lighting guy. But they helped my career. Nike’s PR people are laughing their asses off and sales are through the roof.

From a professor:

That said, Nike’s stock is not cheap. P/E/ is over 70, which is much higher than its growth.

1031 Exchanges are the way real moguls become moguls

Swap one property for another. Defer paying the cap gains on the first. There are strict time limits. From the IRS web site:

What are the time limits to complete a Section 1031 Deferred Like-Kind Exchange?

While a like-kind exchange does not have to be a simultaneous swap of properties, you must meet two time limits or the entire gain will be taxable. These limits cannot be extended for any circumstance or hardship except in the case of presidentially declared disasters.

The first limit is that you have 45 days from the date you sell the relinquished property to identify potential replacement properties. The identification must be in writing, signed by you and delivered to a person involved in the exchange like the seller of the replacement property or the qualified intermediary. However, notice to your attorney, real estate agent, accountant or similar persons acting as your agent is not sufficient.

Replacement properties must be clearly described in the written identification. In the case of real estate, this means a legal description, street address or distinguishable name. Follow the IRS guidelines for the maximum number and value of properties that can be identified.

The second limit is that the replacement property must be received and the exchange completed no later than 180 days after the sale of the exchanged property or the due date (with extensions) of the income tax return for the tax year in which the relinquished property was sold, whichever is earlier. The replacement property received must be substantially the same as property identified within the 45-day limit described above.

Read more here.

How Apple Watch saved my life (a story on ZDNET).

It measured the reporter’s fluctuating heart rate and alerted him to afib. Read the story here. 

Foods to stay away from

Stay away from baking powder; baking soda and sodium bicarbonate.  Buy sour dough bread.

My friend, Steve, a cancer survivor said that rule has saved his stomach.

Read the ingredients label. My rule is: If you can’t pronounce it, don’t eat it.

Stay away from processed foods and vitamin supplements.

Check your spam folder

Gmail (and others) is putting many of your important emails into your spam folder.

I don’t know why

How to change a light bulb in a ceiling high hat.

You can’t get your fingers around them to remove the bulb. OK.

Take a piece of duct tape. Fold it like this:

Then bend it like this:

Then twist. Bingo, the bulb is out.

Don’t say you never learned anything useful from my blog.

The winning kiss

My favorite Internet cartoon

Harry Newton. Anyone like to buy a nice two bedroom apartment in a gorgeous building on Central Park West and 63rd Street? I’m selling one.