When the auction rate preferred auctions seized in February 2008, there was $360 billion outstanding. There’s now $110 billion still outstanding and not repaid. It’s a national disgrace. The Wall Street Journal is doing a piece on the remaining monies. I got interviewed. The point I tried to make: On Wall Street (and most other places) the squeaky wheel gets the most attention. I still run a site, www.AuctionRatePreferreds.com. Investors who are still stuck in the ARPS securities are a remarkably passive group. I talk to them and suggest strategies like “becoming squeaky” or selling their holdings on the secondary market and taking their lumps. But they sit, cogitate and procrastinate. It’s really depressing to me. There is a lesson here: The squeaky wheel does get the attention.
The Australian dollar has been down recently. This presents a good opportunity to pick up some 6%+ Australian bank CDs. Pressure on the Aussie dollar has come because of talk of China slowing down.
Meantime, this continues to do well:
The thieves and crooks in the telecom business. I admit. I was in telecommunications publishing for over 30 years. I still don’t understand bills I get from companies (like Verizon, AT&T or DirecTV). I know four things:
+ I’m being overcharged.
+ I’m lied to every time I call.
+ Services are bundled so I’m forced to pay for things I didn’t order and didn’t want.
+ Corporate phone bills are the worst. Corporations often get charged for equipment and services they removed years ago. They often get charged twice for the same thing/s. They often get charged a different price than what their salesman promised them. This is worst among cell phones. Corporations buy them in bulk but get charged as though they were buying individually. I have many friends in the telecom consulting business. They earn a handsome living by auditing phone bills and taking a percentage of the refunds they secure from the telecom provider.
All this drives me wild. I don’t have a good solution for you and me. Call the providers. They remove something off my bill. But next month, it still goes up. I’ll try again, not because of the dollars involved. But because I hate this stuff. I have this naive belief that vendors should be honest and their bills understandable. Sadly, not so in telecom. They’re all horrible.
Go figure Annaly. It reduced its quarterly dividend from 60 cents to 57 cents. Despite this awesome news, the shares went up.
Go figure. At last night’s close and figuring in the lower dividend, it yields 13.7%. Which, as they say in home country Australia, is better than a slap in the belly with a cold fish.
Harry’s Three Elements of Risk Management:
+ Tight stops.
+ Limited investment. Don’t take big bets on anything.
+ Don’t fall in love with any investment. Love should be reserved for the wife and the family.
A reader called Steve T. wrote yesterday:
Christ, Harry, get a clue. That hedge fund performance (shown in yesterday’s chart) comes during a ten year period when the market was flat. 6.6% return is SUPERB. I swear, you get dumber every day. And you’re implying that because muni funds had a good 10 year run that’s a reason to BUY more muni funds? Just the opposite is true.
I’ll ignore the gratuitous insults. A few words on hedge fund performance. If I pay 2% of my assets a year and 20% of the returns, I frankly expect better than 6.6%. I did better than that with muni bonds and real estate. Second, I do believe that today most muni bonds are overpriced, and hence too low yielding. But muni bonds trade by appointment. People dump them when they need money. Sometimes you can pick up bargains. I do occasionally. Get yourself a good trader.
Friends are falling and hurting themselves. We get older. We forget we’re getting older. One day we fall and tear our achilles tendon or break our hip. We fall down one miserable stair and break an ankle. My friends have suffered in recent months. Worse than the pain is the recovery and the physical therapy. It’s long and boring. No one likes shuffling around on a wheelchair.
There is a clear lesson here for all of us. Please be careful:
+ Hold the handrail going up or down stairs.
+ Take a flashlight when you’re walking at night,even if the street lights are on.
+ Lose weight, stay in condition and don’t think you’re 30, because you’re not.
The New York Times old people benefit. When you’re viewing a NYTimes story on an iPhone, you’ll sea the word “reader” in the browser line. Click on it and the story you’re reading will be more visible. Neat.
Favorite Christmas quotations.
+ “Santa Claus has the right idea. Visit people once a year.” – Victor Borge
+ “I once bought my kids a set of batteries for Christmas with a note on it saying, toys not included.” – Bernard Manning
+ “I stopped believing in Santa Claus when I was six. Mother took me to see him in a department store and he asked for my autograph.” – Shirley Temple
+ “You know you’re getting old, when Santa starts looking younger.” – Robert Paul
+ “Oh, for the good old days when people would stop Christmas shopping when they ran out of money.” – Unknown Author”What I don’t like about office Christmas parties is looking for a job the next day.” – Phyllis Diller
Harry Newton who loves New York City for its infinite photo opportunities. I met Bill yesterday in my favorite hamburger place:
He sported a nose ring and two bling ear plugs, the strangest haircut I’d seen in a while and a wonderful personality. After admiring his outfit, I asked him what he did for a living. He said he was a “poseur.”
Let’s drink to us all being poseurs. It’s a great life. I guess that’s what I do at tennis and what Steve T. would say I do with investing.
I bought a little Apple yesterday. I’m now short C (Citigroup), Dell and my present favorite short — RIMM (the BlackBerry guys). There’s a rumor around that Microsoft or Nokia will buy them. But despite that silly rumor, RIMM keeps, thankfully, falling.
+” Lose weight, stay in condition and don’t think you’re 30, because you’re not.”
Harry it does not cost much $$ to employ a physical
therapist to work with an individual each week.
It really assists a person to stay in “shape” and it works. Most gyms provide this service!
Your comments on the telephone giants explains why my old company Centex Telemanagement, Inc (NASDAQ: CNTX) did so well, ultimately serving 12,000 small businesses and isolated offices of larger companies (1985 until handsomely acquired in 1994). We were managers of their telecom services and a big part of our efforts, besides providing a single straightforward invoice and very helpful management reports, was correcting the phone companies' mis-charges and over charges. Made us the fastest growing service company in America, according to Inc. Magazine.
Your advice on flashlights at night works even more so for us runners, plus reflective clothing. Two hard falls on concrete recently made that point!
nly goes ex next tue go back many years and it has always gone up this week all but one of the last 7 it then drops into mid jan
Steve T sounds like a very unhappy person. The pursuit of financial acumen seems to have diverted him from the pursuit of truly important things, such as wisdom and happiness.
“Dont let the bath-turds get you down”
Harry, I think you might be flushing RIMM down the toilet prematurely. The fundamentals of the company appear sound; unlike much of what passes for “hot,” the company has assets (infra + customer base), cash, profitable operating revenue and no debt.
I am not aware of any product on the market that's as well suited for corporate/business use. Good Tech never really acquired a threatening footprint. Apple and Android devices are to a significant degree momentum-driven. The effort spent on moving the Blackberry to QNX will pay off – substantially, especially when competing against Google and fragmentation of the Android market.
While Apple's Siri acquisition isn't trivial, I don't think the feature will be a huge hit with users. Certainly not enough to cause a massive herd movement as when the iPhone first appeared. If I'm wrong, Siri has competition (not identical, but key speech recognition tech is there) – Vlingo.