Harry Newton's In Search of The Perfect Investment
Technology Investor. Harry Newton
AM EST, Tuesday, April 14, 2009. There
are two approaches to owning a portfolio of muni bonds: Laddered and barbell.
Laddered means you buy maturities for each year (or so). Barbell means you
own half short-term and half long-term. Which philosophy you go with depends
on what you think interest rates will do going forward. Several bond experts
are going with the barbell approach today because they think interest rates
may skyrocket soon.
is from Bloomberg recently:
Chairman Ben S. Bernanke is siding with John Maynard Keynes against Milton
Friedman by flooding the financial system with money.
is any guide, says Allan Meltzer, the effort will end in tears. Inflation
will get higher than it was in the 1970s, says Meltzer, the
Fed historian and professor of political economy at Carnegie Mellon University
in Pittsburgh. At the end of that decade, consumer prices rose at a year-over-
year rate of 13.3 percent.
gamble that the highest jobless rate in 25 years and the most idle factory
capacity on record will hold down inflation is straight out of the late
British economist Keynes. Should late Nobel-prize-winner Friedmans
dictum that inflation is always and everywhere a monetary phenomenon
prove right, the $1 trillion or more in liquidity Bernanke has pumped into
the financial system by expanding the Feds balance sheet may leave
him to cope with surging consumer prices.
So far, investors
and economic data both back up the Bernanke-Keynes view. The market in Treasury
Inflation-Protected Securities as of April 6 indicated long-term inflation
expectations of 2.5 percent, below the 2.8 percent average inflation rate
of the past 10 years.
be published April 15 will probably show that the March consumer price index
was unchanged from a year earlier, thanks to a steep decline in energy costs,
according to economists surveyed by Bloomberg News. In February, the index
rose at a year-over-year rate of just 0.2 percent.
mutual funds, it's not the return that counts. It's the assets
under management. This is from today's New York Times DealBook:
Wall St. Chief, a Super Payout in 2008
Street bosses got relatively meager payouts for 2008, but not Mario J. Gabelli,
the powerful mutual fund manager known as Super Mario for his stock-picking
to a proxy statement released late last week, Gamco Investors, Mr. Gabellis
publicly traded investment firm, paid him $46 million last year, even as
the value of his various funds sank with the turbulent market.
considerably lower than the $71 million Mr. Gabelli took home in 2007 or
the $81 million he was paid in 2002. Even so, the $46 million payout dwarfs
the 2008 compensation of many other Wall Street chieftains, who generally
got no bonuses for last year and saw the value of their stock-related pay
New York Business suggests that Mr. Gabelli may be able to claim the title
of the best-paid chief on Wall Street in 2008.
assets under management declined 33 percent to $20.2 billion from $31 billion
in 2007, as the value of its holdings shrank and investors withdrew some
of their money.
generated off the funds in the form of fees came to $245 million in 2008,
16 percent less than in the previous year. Mr. Gabelli and his fund managers
got $102 million in compensation, with nearly half going into Mr. Gabellis
For the year,
the firm reported a $25 million profit.
stock fell 61 percent in 2008 but has been on a rebound recently, gaining
44 percent so far this year.
majority ownership of a private company called Gabelli Group Capital Partners,
Mr. Gabelli has near total control over Gamco.
got no base salary, no bonus, no stock options and no restricted stock awards
receives 20 percent of the firms pretax revenues, which come from
charging management fees to investors in Mr. Gabellis various funds.
Mr. Gabelli also receives 10 percent of the firms pretax profits for
the year, which netted him $2.4 million.
the butt, the Chinese/Korean way. I need
to find a new printer for the next (25th) edition of my dictionary. Last year
I printed it in Baltimore. The printer was late and "forgot" to
include in his quote the cost of the boxes to ship the books! The total bill
I went on the Internet and found a printing broker. You fill in his form with
your specs. He sends your specs out to his book printers. They respond directly
to you. Neat.
filled in his form. Here are the responses I received:
TSE Worldwide Press in Rancho Cucamonga, CA emailed, "Good afternoon,
I just reviewed the printing specifications for the title: Newton's Telecome
Dictionary - 25th Edition, and was wondering if you have a budget in mind.
This will help me to recommend you the most suitable printing specification
that maximizes your cost-saving." ... In a second email, they wrote,
"If you are interested in receiving a printing quote from us, please
click the link below and fill out the form." They didn't call.
Kenyon Press of Sherburne, NY emailed me three questions, two of which had
been answered in my original specs and the third being irrelevant. I did
answer them and have heard nothing. They didn't call.
Doosan Printing in Korea sent a detailed quote on an Excel spreadsheet.
Sunquest Printing of Canada and Shanghai (where they do the printing) sent
a detailed quote in a PDF -- $34,000.
The bottom has
fallen out of the book business. Printers are starving. Yet not one U.S. printer
quoted or called (I had left my phone number). This is beyond depressing.
stupid can you be? Last night I sent the
president of our alarm monitoring note saying I wouldn't be needing his services
for the time being. His response: He faxed me a form
to fill in, asking for "the reason for discontinuation."
should he have done? How about a cheery personal phone call? What is wrong
with American business?
traveling NOW. My dear friend Amy just returned
from Puerto Rico. Her casita was half off and she was upgraded.
View of casita.
The place was deserted. The worst they've seen, according to locals.
View from casita.
had the golf course to himself. Amy paid $65 for a round of golf. That included
renting a cart. The normal price is north of $200. Discounts generally were
in the 45% range.
Mexico is even
cheaper. The drug problems have killed tourism. Literally.
charming fairytale with a moral.
Once upon a time, a young lad was born without a belly button.
In its place was a silver screw.. All the doctors told his mother there was
nothing they could do. Like it or not, he was stuck with it.
All the years
of growing up were real tough on him, as all who saw the screw made fun of
him. He avoided leaving his house . . . And thus, never made any friends.
One day, a mysterious
stranger saw his belly and told him of a monk in Tibet who could get rid of
the screw for him. He was thrilled. The next day, he took all of his life's
savings and bought a ticket to Lhasa.
days of climbing up steep cliffs, he came upon a giant monastery. The monk
knew exactly why he had come. He told him to sleep in the highest tower of
the monastery. The following day when he awoke, the screw would be gone.
During the night
while he slept, a purple fog floated in an open window. In the mist floated
a solid silver screwdriver. In just moments, the screwdriver removed the screw
and disappeared out the window.
The next morning
when the man awoke, he saw the silver screw laying on the pillow next to him.
Reaching down, he felt his navel, and there was no screw there! Jubilant,
he leaped out of bed . . . . And his butt fell off.
The moral to
around with things you don't understand -- You could lose your ass.'
New Concept Grocery Store.
Imagine the innovation, the brilliance, the entrepreneurial excitement
when launching this new business. .
A new supermarket
opened in Topeka , KS . It has an automatic water mister to keep the produce
fresh. Just before it goes on, you hear the sound of distant thunder and the
smell of fresh rain. When you pass the milk cases, you hear cows mooing and
you experience the scent of fresh mown hay. In the meat department there is
the aroma of charcoal grilled steaks with onions. When you approach the egg
case, you hear hens cluck and cackle, and the air is filled with the pleasing
aroma of bacon and eggs frying. The bread department features the tantalizing
smell of fresh baked bread and cookies.
live in Topeka don't buy toilet paper there any more.
This column is about my personal search for the perfect
investment. I don't give investment advice. For that you have to be registered
with regulatory authorities, which I am not. I am a reporter and an investor.
I make my daily column -- Monday through Friday -- freely available for three
reasons: Writing is good for sorting things out in my brain. Second, the column
is research for a book I'm writing called "In Search of the Perfect
Investment." Third, I encourage my readers to send me their ideas,
concerns and experiences. That way we can all learn together. My email address
is . You can't
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