In Search of the Perfect Investment

Super great articles to read:

+ O.K., Google, Take a Deep Breath. How Google teaches its people to better handle the stress of working there. From the New York Times. Click here.

+ Annals of Technology. Machine Politics. The man who started the hacker wars by David Kushner in the New Yorker.  Click here.

AGNC reaches new high.

I don’t quite know why it hit this high. At last night’s close, its dividend yield is a not shabby 17.45%.

Seeking Alpha has a piece today on “High Yield Mortgage REITs Are Still A Buy Despite Stagnant Housing Market.” Click here.

Chesapeake Energy — still a cockroach stock? Maybe not. It bounced a little following an upgrade:

Here’s the full story from Business Insider:

A BMO Analyst Just Made A ‘High Octane’ Upgrade To Chesapeake Energy

BMO Capital Markets’ Dan McSpirit announced today he was upgrading Chesapeake Energy stocks to “outperform,” and he set a new price target of $25 as shares hit what he describes as “peak negativity.”

Shares reached an all-time low of $16.87 Friday on continued revelations about CEO Aubrey McClendon’s controversial personal well stake program.

The McClendon controversy is “the driver” behind CHK’s underperformance. If one looks past the current mess, one will find a company with “a deep and wide asset base” that is fundamentally valuable, he says.

“This trade qualifies as high octane, but again that’s the point. We believe CHK shares could better reflect the underlying asset value once the smoke clears, one way or another. This upgrade is not about handicapping the likelihood of a change in management, but about a change in market sentiment.”

If the stock bounds up more, I’ll cover my short. No need to fight the tape. My Radio Shack short continues to do wonderfully. I still can’t find anything to buy when I visit my local Radio Shack store — except batteries (and they’re overpriced. I dropped by a Best Buy and actually found something I wanted to buy. Sadly, they were out of stock. I don’t make this stuff up.

Michael’s apartment investment is a no-go. Several readers suggested rejiggering our assumptions — like adding in a small percentage for annal capital gain. But why bother? To make his apartment building even remotely interesting an investment, the price would have to be $650,000, not $950,000.

My friend Jim Stanko, who’s trying to make a business of buying homes for investors emails me:

We look at approximately 50 homes before we find one that meets our criteria. The more you look the more you will develop a feel for what price and rental ranges will work. An initial method we used is not to pay more that XX times the annual rental. In San Francisco, it is as high as 18. Here in San Diego it’s around 10. The multiple is much smaller in midwest and south.

My nose tells me there are far too many people looking at houses and small apartments to rent and driving prices up with their ignorance and lack of experience.

Newegg has PC bargains. I like this company and have often bought from them. Their latest amazing bargains:

+ A Seagate Barracuda 1.5 terabyte hard disk for only $89.99.

+ A OCZ Agility 120 gigabyte solid state drive for only $99.

For Newegg, click here.

Favorite recent New Yorker cartoons:

Harry Newton who is 100% convinced that the Murdochs knew their people were hacking phones and paying bribes to the police.  Eons ago, I ran a publishing company. As an Australian publisher in New York, I was called “The Mini Murdoch.” I was very mini. I employed many reporters. We put out a lot of words. We came up with many fun ways to increase readership. We would never have countenanced phone hacking. It just wasn’t on the cards.  Had it ever cropped up — it didn’t – I would have heard about instantly. Heck, Rupert, it’s only a matter of reading your own publications and asking your editors “How did get that story?” It’s not rocket science.