In Search of the Perfect Investment

But the worst: I didn’t recognize it was about to happen. I didn’t sell at the peak.

For example, I didn’t sell all my Amazon at $2,050, its peak.

I didn’t sell all my Square at $100.

I was sitting in warm pig do-do and thinking I was totally brilliant. I racked my brains at the time. What could possibly go wrong? I couldn’t think of anything.  The economy was doing wonderfully .

But something did change. Sentiment changed overnight. From euphoria, the talk flipped to recession…

I clipped some depressing headlines from this morning…

The New York Times leads its business section today with the headline:

A forgotten Indicator Is Also Flashing Red
The bond markets, much more closely linked to the actual economy than stocks, are sending ominous warning signals.

I read through the night and found these:

+ The weakness across assets is causing investors to question whether there is something “bigger and more sinister” happening in the global economy.

“We’re not just seeing it in oil and commodities. It’s happening across the asset space,” he said.”It’s very rare that you see stocks, bonds and commodities all down together.”

+ From peak to trough, WTI has lost 40 percent of its value since hitting a roughly four-year high in early October. The slump has brought WTI’s year-to-date losses to more than 23 percent. Brent has fallen as much as 35 percent since its October high and is down about 16 percent in 2018.

+ The central bank has a record of dangerous complacency late in economic cycles. Before the past two recessions it raised rates, pointing to low unemployment, despite signs in bond markets of a coming slowdown. Optimists explained away traders’ apparent pessimism using arguments that have started to crop up again today. In reality, markets were ahead of policymakers, as they probably will be the next time trouble strikes. Economists typically fail to predict downturns until they are imminent. (The Fed will render its December interest rate hike or not hike decision this morning.)

In part, this is because growth figures are “skewed”: economies usually expand slowly and steadily, but sometimes contract sharply. As a result, forecasters seeking to predict the most likely outcome expect growth. However, they adjust too slowly even once bad news arrives,

When it comes to GDP, the best guide is the adage that prediction is difficult-especially about the future.

Now comes my friend Ed, who says:

Some people think Bitcoin has been a good lead indicator for the stock market. Bitcoin has rallied 20% off the low in the last 2 days!

Here are two bitcoin charts — the first over the last year, the second over the last week:

I don’t profess to have an answer — except to keep away from bad stocks — and that obviously includes Facebook, Apple and all the energy players.

And keep considerable cash on hand — in case we get some strong signals that maybe Ed is right. He’s been right before.

Finally an answer

From yesterday’s press release (I get lots of them)

Is Johnson and Johnson a bargain?

Reader Jim Bracke writes:

Sorry Harry, but as a scientist skilled in interpreting tox studies and other scientific studies, I can assure you that J&J’s talc does NOT cause cancer. The studies are terrible and falsely analogous. They are the same as saying that seat belts cause fatalities, because seat belts are found in every single modern car that is involved in a fatal accident. It’s just terrible misuse of bad science. This is one of the most unfortunate attacks on a company in my lifetime. Remember, these are the same guys who set the bar with proper customer care with the Tylenol issue. It’s just wrong.

Does cutting back salt keep you alive longer?

Maybe yes. Maybe no. New study: Click here.

I gave up added salt exactly a year ago. I’m still alive.

Not exactly good science. But works for me!

My latest theories on health are:

+ Keep moving. Biking. Tennis. Walking. Swimming. Climbing steps. Whatever.

+ Watch how your body reacts to certain foods. I just discovered that marzipan chocolate upset my sensitive tummy.

+ Don’t do stupid — like do something over Christmas you don’t often do — like hang ornaments high up your tree. Ladders aren’t fun.

+ Stress is the worst. If this market is keeping you awake, sell more. Go to cash. Buy bonds. Todd has oodles of good ones.

+ Nap often. You CAN nap anywhere and everywhere. In planes, in cars, on trains. etc.

Favorite Christmas cartoons (continued)

Exemplary marketing in Arkansas

A gas station owner in Arkansas was trying to increase his sales. So he put up a sign that read:

“Free Sex with Fill-Up, just guess the right number between 1 and 10.“

A local redneck pulled in, filled his tank and asked for his Free Sex.

The owner told him to pick a number from 1 to 10. If he guessed correctly he would get his Free Sex. The redneck guessed 8, and the proprietor said, “You were close. The number was 7. Sorry. No Free Sex this time.”

A week later, the same redneck, along with his brother pulled in for another fill-up. Again he asked for his Free Sex. The proprietor again gave him the same story, and asked him to guess the correct number.

The redneck guessed 2 this time.

The proprietor said, “Sorry, it was 3. You were close, but no Free Sex this time.”

As they were driving away, the redneck said to his brother, “I think that game is rigged. I don’t think he really gives away Free Sex.”

His brother replied, “It ain’t no, Billy, It’s not rigged. My wife won twice…”

Harry Newton, who eyed this on his way to tennis this morning at the Roosevelt Island Racquet Club. It was 7:12 AM. The sun was just creeping through. Gorgeous. The Roosevelt Island Tram is a great ride.