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9:00 AM EDT, Tuesday, October 27, 2009: I like the present stockmarket less and less. Neither does the VIX. It's moving up strongly:

This is a time to be more in cash and gold. The rally since March has run its course, for now.

The Barron's effect. Weekend Barrons pushed Novatel Wireless (NVTL) on the basis of its cutesy MiFi product which it sells through cell phone companies Verizon, Sprint, Virgin Mobile and others. And, like a charm, the stock rose 11.5% yesterday.

I don't get Barron's enthusiasm. Novatel is losing money; its MiFi product is way overpriced by its cellular distributors and, worst of all, with the proliferation of much faster WiFi in coffee shops, hotels, airports (and even some planes) you need Novatel's products less and less.

Once upon a time, I employed a bunch of technology reporters. I can smell what happened with Novatel and its MiFi gadget.

Novatel's PR people loaned one to a Barron's reporter who used it to surf the Internet from a hammock in his backyard one pleasant Sunday afternoon. He fell in love with it, gave it Barron's "Gadget of the Week" and a strong recommendation for the stock, "Oh, My! Here Comes Portable Wi-Fi."

Not only are the carriers overpricing it, they aren't pushing the product. I defy you to find it and/or its pricing on Verizon wireless' semi-awful web site.

Meanwhile Verizon itself is doing awfully. It just announced its operating income plunged 58% from a year earlier -- largely as a result of losing landlines hand over fist. I've been begging Verizon to offer its long-suffering landline users -- like me -- an incentive for staying with its landlines. I can think of a million. But the company does a lousy job listening to its customers.

Verizon's yield is an attractive 6.63% and will probably be higher soon, once the latest horrible earnings are digested. The dividend has looked untouchable -- but, if earnings continue falling....

David Einhorn talks about his BIG lesson: Einhorn shorted Lehman Brothers and made zillions. I read his Lehman logic, followed him and make a few shekels, also. On October 19, he talked before the Value Investing Congress. The title of his talk was "Liquor before Beer… In the Clear." He begins:

The lesson that I have learned is that it isn’t reasonable to be agnostic about the big picture. For years I had believed that I didn’t need to take a view on the market or the economy because I considered myself to be a “bottom up” investor. Having my eyes open to the big picture doesn’t mean abandoning stock picking, but it does mean managing the longshort exposure ratio more actively, worrying about what may be brewing in certain industries, and when appropriate, buying some just-in-case insurance for foreseeable macro risks even if they are hard to time.

He talks about the huge macroeconomic risks -- the big risks in our present economy. And he says:

Now, the question for us as investors is how to manage some of these possible risks. Four years ago I spoke at this conference and said that I favored my Grandma Cookie’s investment style of investing in stocks like Nike, IBM, McDonalds and Walgreens over my Grandpa Ben’s style of buying gold bullion and gold stocks. He feared the economic ruin of our country through a paper money and deficit driven hyper inflation. I explained how
Grandma Cookie had been right for the last thirty years and would probably be right for the next thirty as well. I subscribed to Warren Buffett’s old criticism that gold just sits there with no yield and viewed gold’s long-term value as difficult to assess.

However, the recent crisis has changed my view. The question can be flipped: how does one know what the dollar is worth given that dollars can be created out of thin air or dropped from helicopters? Just because something hasn’t happened, doesn’t mean it won’t.

Yes, we should continue to buy stocks in great companies, but there is room for Grandpa Ben’s view as well. I have seen many people debate whether gold is a bet on inflation or deflation. As I see it, it is neither. Gold does well when monetary and fiscal policies are poor and does poorly when they appear sensible. Gold did very well during the Great Depression when FDR debased the currency. It did well again in the money printing 1970s, but collapsed in response to Paul Volcker’s austerity. It ultimately made a bottom around 2001 when the excitement about our future budget surpluses peaked.

Prospectively, gold should do fine unless our leaders implement much greater fiscal and monetary restraint than appears likely. Of course, gold should do very well if there is a sovereign debt default or currency crisis.

You can read Einhorn's speech here.

The car rental business stinks. The BIG two -- Avis and Hertz -- are ultra-pricey. The others are much cheaper. Reader Steve Sparrow writes:

I used to be a loyal Hertz customer, and I have to say they treated me very well. They did once try to charge me $500 to return a car to San Francisco airport instead of Oakland where I picked it up 2 hours previously (Manager at Oakland dropped that to $60)

However, the reason I stopped using them was that Thrifty’s rates are roughly 50% of theirs, with no appreciable loss of service. They have a “pot luck” option for $19.99 a day (compact or mid-size). I booked this the other day for a trip to St Louis. When I went to pick up the car, the guy offered me an upgrade for another $10 / day. I ended up with a fully loaded Toyota Avalon for less than $40 a day. The same car would probably have been $100 + at Hertz.

Yesterday I tried Thrifty: $57.67 for a two day airport rental versus $189.03 for the identical airport rental from Hertz. That's a huge difference. Hertz was three times as expensive.

Sparrow also writes:

Another trick I recently learned is to use American Express’ rental insurance scheme. It is free to enroll, and costs $25 per rental (much better that the $25 day the rental companies charge.) That gives $100,000 cover for any damage, and kicks in before any other insurance. I used to rely on my personal car policy, but that can leave you short for things like loss of use charges and of course your deductible, let alone a rise in your future premiums. More info here.

I am not writing a health column, but... I am healthy, but:

+ I went to the dermatologist yesterday. He removed five instances of actinic keratosis -- a precancerous skin condition caused by too much exposure to the sun. Solutions: Stay out of the sun, spray the back of my hands and face each day with sunscreen and visit the dermatologist once a year. Background: I have a friend who had moles, didn't go to the dermatologist. The moles developed into cancer. The cancer spread to his brain, where they're now treating it.

+ My dental home care has sucked. Fact is you can not get all the crap out of between your teeth with only dental floss and brushing. You also need these nifty gadgets:

This is called The Doctor's Brushpicks.

This is their explanation:

And you also need Butler's Gum SoftPicks.

And you also need Act Fluoride mouthwash:

I am now obsessive about something I should have been obsessive 50 years ago. Fortunately, I still playing tennis 1 1/2 hours each day and riding my bicycle for another half an hour each day. I plan on living until I'm 120. By then, this column may have something useful in it.

Here's why there are no "gentile jokes"
+ A gentile goes into a clothing store and says, "This is a very fine jacket. How much is it?"

The salesman says, "It's $500."

The gentile says, "OK, I'll take it."

+ Two gentiles meet on the street.

The first one says, "How's business?"

"Great! Thank you for asking!"

+ Two gentile mothers meet on the street.

Gentile mother 1 (with pride): "My son is a construction worker!"

A Gentile mother 2 (with more pride): "My son is a truck driver!"

The White House's new initiative.
"President Obama today agreed to commit an additional 40,000 troops to help fight Fox News." –Jay Leno

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 click on my email address. You have to re-type it . This protects me from software scanning the Internet for email addresses to spam. I have no role in choosing the Google ads on this site. Thus I cannot endorse, though some look interesting. If you click on a link, Google may send me money. Please note I'm not suggesting you do. That money, if there is any, may help pay Michael's business school tuition. Read more about Google AdSense, click here and here.